PHILADELPHIA HOUSE PRICE INDICES May 2, 2013 KEVIN C. GILLEN, PH.D.
[email protected] Disclaimers and Acknowledgments: The Fels Institute of Government at the University of Pennsylvania provides this report free of charge to the public. The report is produced by Fels Senior Research Consultant Kevin Gillen, in association with the University of Pennsylvania Institute for Urban Research. The author thanks Azavea.com, the Philadelphia Office of Property Assessment, the Federal Housing Finance Agency, Case-Shiller MacroMarkets LLC, RealtyTrac, Zillow.com, Trulia.com and the NAHB for making their data publicly available. © 2013, Fels Institute of Government, All Rights Reserved. © 2013 Fels Institute at U. Penn.|
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House Price Indices 1980-2013: 1980Q1=100 Philadelphia County v. Philadelphia MSA and U.S. Average
550.0 500.0
Phila. County* Phila. MSA**
450.0
U.S. Avg.**
400.0 350.0 300.0 250.0 200.0 150.0 Q1
100.0
* Empirically estimated by Kevin C. Gillen, PhD © 2013 Fels Institute at U. Penn.|
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**Courtesy of the Federal Housing Finance Agency (FHFA). HPIs are available through 2012Q4 only. “MSA”=Metropolitan Statistical Area, which is the entire 9-county region.
Total House Price Appreciation Rates by Geographic Market Period
Philadelphia County*
Philadelphia MSA**
U.S.A.**
33-Year
134.4%
154.0%
115.9%
10-Year
39.2%
30.6%
13.9%
1-Year
4.5%
2.9%
5.3%
1-Quarter
0.9%
0.6%
1.4%
*Empirically estimated by Kevin C. Gillen PhD **Source: U.S. Federal Housing Finance Agency (FHFA). These numbers are through 2012Q4 only. “MSA”=“Metropolitan Statistical Area”, which is the entire 9-county region.
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House Price Appreciation 1987-2013: Philadelphia v. 10-City Composite 390.0
10-City Composite* 340.0
Philadelphia
290.0
% Change 10-City 1998 to Peak: +173% From Peak: -29%
Philadelphia +135% -17%
240.0
190.0
140.0
*Source: Case-Shiller MacroMarkets LLC. The 10-City Composite index includes Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco, and Washington, DC. It does not include Philadelphia. © 2013 Fels Institute at U. Penn.|
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2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
90.0
Philadelphia House Price Indices by Neighborhood: 1980-2013 1980Q1=100 700.0
CtrCity/Fairmount
600.0
Kensington/Frankford Lower NE Phila. North Phila.
500.0
NW Phila. South Phila. Univ. City Upper NE Phila.
400.0
West Phila.
300.0
200.0
Q1
100.0
* All indices empirically estimated by Kevin C. Gillen, PhD © 2013 Fels Institute at U. Penn.|
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Philadelphia House Price Appreciation Rates by Neighborhood
Period
Center City/ Fairmount
Lower NE Phila.
Kensington /Frankford
33-year
155.8%
145.8%
10-year
27.6%
48.1%
42.8%
1-Year
4.5%
7.3%
-1.3%
1.5%
2.1%
9.7%
17.5%
0.5%
9.2%
1-Quarter
-2.2%
0.2%
1.4%
0.1%
-2.0%
3.6%
16.5%
3.5%
-1.0%
North Phila.
NW Phila.
South Phila.
Univ. City
Upper NE Phila.
123.6% 147.1% 167.6% 186.1% 180.7% 161.4% 156.6% 47.8% 38.1% 76.9% 52.4% 43.1% 57.5%
This table gives the total % change in house prices by neighborhood, through 2013Q1, from different starting points in time.
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West Phila.
Philadelphia Submarket Boundaries
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Median Philadelphia House Price v. Indexed Philadelphia House Price 1980-2013 $140,000
$120,000
Median Price
$100,000
Indexed Price*
$80,000
$60,000
$40,000
$20,000
* Empirically estimated by Kevin C. Gillen, PhD © 2013 Fels Institute at U. Penn.|
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2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
$0
1980
Q1
Average House Price Minus Median House Price: 1980-2013 $45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
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2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
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1994
1993
1992
1991
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1986
1985
1984
1983
1982
1981
1980
$0
Number of Philadelphia House Sales* per Quarter: 1995-2013 8,000
Q1 7,000
Q2 Q3
6,000
Q4
5,000 Qtly. Average
4,000
3,000
2,000
1,000
0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 *Only arms-length transactions between private sector entities were included in this analysis. © 2013 Fels Institute at U. Penn.|
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Number of Philadelphia Home Sales* per Quarter with Price>=$1 Million: 1997-2013 30
Q1 25
Q2 Q3
20
Q4 15
10
Qtly. Average
5
0 1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
*Only arms-length transactions between private sector entities were included in this analysis. © 2013 Fels Institute at U. Penn.|
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2007
2008
2009
2010
2011
2012
2013
Philadelphia House Sales in 2013 Q1
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Center City House Sales in 2013 Q1
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South Philadelphia House Sales in 2013 Q1
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Kensington/Frankford House Sales in 2013 Q1
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West Philadelphia House Sales in 2013 Q1
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North Philadelphia House Sales in 2013 Q1
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Northwest Philadelphia House Sales in 2013 Q1
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Northeast Philadelphia House Sales in 2013 Q1
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2013 Q1 House Price Rate of Change by Neighborhood Upper NE Phila: +3.5% North Phila: +0.1% NW Phila: -2.0%
Univ. City: +16.5%
Lower NE Phila: +1.4% Kensington/Frankford: +0.2%
West Phila: -1.0%
Center City/Fairmount: -2.2%
South Phila: +3.6%
Note: Each neighborhood is extruded by its average change in house values during 2013 Q1 in order to reflect its growth (or depreciation) rate relative to other neighborhoods. © 2013 Fels Institute at U. Penn.|
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+$1 Million Dollar House Sales in 2013 Q1
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Philadelphia House Price Diffusion Index 500.0
450.0
200%
Philadelphia HPI Diffusion Index
150%
400.0 100%
HPI: 1980Q1=100
350.0 50% 300.0
250.0
0%
200.0 -50% 150.0 -100% 100.0
50.0
The diffusion index measures how varied the direction of house price changes are across Philadelphia neighborhoods. It is computed as the percent difference between the number of neighborhoods in which prices rose in a given quarter, and the number of neighborhoods in which prices fell. A value of -100% indicates that prices fell in all neighborhoods in a given quarter, while a value of +100% indicates that prices rose in all neighborhoods. A value of 0% indicates that house price changes were evenly split between increases and decreases, across neighborhoods. Diffusion indexes are commonly used in financial economics as a leading indicator of turning points in a market's direction.
-200%
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
0.0
-150%
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Philadelphia House Prices: Declines v. House Price Index 500.0
450.0
400.0
300.0
Pct. Declining Philadelphia HPI This chart compares the Philadelphia House Price Index (in red) to the percent of Philadelphia neighborhoods that experienced house price declines (in blue) , in each quarter from 1980-2013.
90%
80%
70%
60%
50%
200.0
40%
150.0
30%
100.0
20%
50.0
10%
0.0
0%
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
250.0
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% Declining
HPI: 1980Q1=100
350.0
100%
Philadelphia Housing Affordability* Index: 1980-2013 3.50 3.25 3.00
2.75 2.50 2.25 2.00 1.75 1.50 1.25 *Affordability is measured as the ratio of the median Philadelphia house price to the median Philadelphia household income. High values of the index mean that housing has become less affordable to the average Philadelphian. Contact
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1.00 0.75
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2013
2012
2011
2010
2009
2008
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2006
2005
2004
2003
2002
2001
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1980
0.50
Average House Price-to-Rent Ratios*: 1980-2013 Philadelphia v. U.S. 15.0 14.0
13.0 U.S.
12.0
Philadelphia
11.0 10.0 9.0 8.0 7.0 6.0 5.0 4.0
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*Computed by taking the ratio of average house price to the average annual rent of a comparable housing unit. The P/R ratio is to real estate what the P/E ratio is to other assets. Contact
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Inflation-Adjusted* Philadelphia House Price Index 1980-2013 1980Q1=100 200.0
180.0
160.0
140.0
120.0
100.0
80.0
Linear Trendline 60.0
40.0
20.0
*The empirically estimated house price index is deflated by the rate of inflation over time, using the national Consumer Price Index as the proxy for the national rate of inflation. This procedure converts the house price index from "nominal" to "real" terms, and thus shows house price changes net of general inflation.
0.0
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Source: US Bureau of Labor Statistics
Philadelphia Houses Listed For Sale: Inventory v. Sales Rate 14,000
30%
# Houses Listed For Sale % Sold
25%
10,000 20%
8,000 15% 6,000
10% 4,000
5% 2,000
0
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0%
Source: Trend MLS
%Sold = (#Sales/#Listings)
# Homes Listed "For Sale"
12,000
Average Days-on-Market* for Philadelphia Homes 100
90
# of Days
80
70
60
50
*Days-on-Market (DOM) is the average number of days it takes for a listed house to sell.
40
30
Source: Trend MLS © 2013 Fels Institute at U. Penn.|
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Index of Homebuilder Sentiment: 1985-2013 (Seasonally Adjusted) 90
National
80
Northeast 70
60
50
40
30
The Index represents the current sentiment of U.S. homebuilders. The index is computed via a regular monthly survey of homebuilders. An index value above 50 indicates that more builder are optimistic than pessimistic, while an index value below 50 indicates that more builders are pessimistic than optimistic.
20
10
Source: National Assoc. of Homebuilders (NAHB)/Wells Fargo © 2013 Fels Institute at U. Penn.|
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2013
2012
2011
2010
2009
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2005
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2003
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2001
2000
1999
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0
Philadelphia Stock Exchange Housing Sector Index: 2002-2013 $300
$250
$200
$150
$100
$50
The PHLX Housing Sector Index is a modified capweighted index composed of 20 companies whose primary lines of business are directly associated with the U.S. housing construction market. The index composition Note: the index underwent a encompasses residential builders, suppliers of aggregate, significant rebalancing in lumber and other construction materials, manufactured January of 2006. housing and mortgage insurers.
2002 2002 2002 2003 2003 2003 2003 2003 2004 2004 2004 2004 2004 2005 2005 2005 2005 2005 2006 2006 2006 2006 2006 2007 2007 2007 2007 2007 2008 2008 2008 2008 2008 2009 2009 2009 2009 2009 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 2012 2012 2012 2012 2012 2013 2013
$0
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Source: finance.yahoo.com
Housing's Road to Recovery: %Lost v. %Recovered
10%
1%
0%
-9% -10%
-1% -5% -6% -5% -5%
-12%
-10% -9%
-6% -13%
-1%
-28% -19% -21% -20%
-30% -36% -38%
%Remaining -40%
-31%
-21% -20% -26% -28%
-30%
-18%
-22%
-12% -11% -16% -16% -24%
-20%
-11% -13%
-15% -16% -14% -14%
%Recovered
-17%
-25% -44%
-26% -50%
-60%
Now that the housing market's recovery appears to have arrived, this chart shows how much house prices need to rise in each city in order to erase the cumulative losses from the bust. The total rebound (to date) in house prices is shown by the blue bars, while the remaining losses are shown by the red bars. For example, Philadelphia county's average house prices fell by a cumulative 21% from peak to trough. To date, they have rebounded by 5%, which implies they need to rise another 16% in order to return to their pre-bust peak levels. Source: Kevin C. Gillen, PhD. All other cities courtesy Case-Shiller MacroMarkets LLC.
-70%
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Zillow Housing Forecast: 2013 Q1 - 2014 Q1 20.0%
15.0%
This chart shows the forecasted change in average house values from 2013Q1 to 2014Q1, as estimated by Zillow.com. Philadelphia is projected to experience house price appreciation of 0.2%, according to Zillow's model.
10.0%
5.0%
0.0%
-5.0%
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Courtesy: http://www.zillow.com/blog/research/
Courtesy: The New Yorker © 2013 Fels Institute at U. Penn.|
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