Young people in cities across America — Philadelphia included — just aren’t buyings homes. With student loan debt higher than ever and a shaky job market, a down payment on a home can be daunting.
But if you think you’re going to be living in one place for three or more years, now might be the best time to buy.
RE/MAX @ Home CEO Maria Quattrone said it’s hard to say how many millennials in the city are living at home or sharing a space with friends, but the benefits of buying now could outweigh the drawbacks, whether that’s through a 10-year tax abatement on new construction or the chance to build equity as student loans are paid off.
But Quattrone said the big thing homebuyers should take advantage of now is low interest rates — across the country, the Fed says interest rates will increase by October. While it’s not expected to be dramatic, Quattrone said the buying power one could have now is greater than it will be by late fall of this year.
The key is to buy in a neighborhood where the buying power will be maximized. And from where Quattrone is sitting, three neighborhoods in Philadelphia stand out. And while they are considered “developing,” it’s worth noting that some see that as a nicer word for “gentrifying.” As young professionals and families push outside the limits of Center City, tax rates and rent prices are going up in neighborhoods that were once on the outskirts.
Either way, developers are taking advantage and pushing apartments, condos and new construction in neighborhoods they hadn’t before. These are three of the neighborhoods where that’s happening, and where you might get the best bang for your buck if you think you’re ready to buy:
Fishtown
This is probably a no-brainer. Over the last five to 10 years, Fishtown has exploded with bars, restaurants, amenities and new construction to accommodate and increasingly younger, artistic base of residents pushing out of Northern Liberties and other neighborhoods in the area.
Quattrone said Fishtown still has room to grow — a lot of the construction is either rehabbing single-family homes and condos, or ripping down old warehouses that aren’t in use and building apartments on top. She said what sets Fishtown apart is that it’s been an occupied neighborhood (read: fewer vacancies) “for forever,” so infrastructure is already in place for amenities drawing in new residents.
So could Fishtown become the next Northern Liberties? The neighborhood just north of Old City has been developing for the last few decades, and has since become a progressive, established neighborhood with economic and cultural influence. Not to mention that after the major construction boom, its rent prices have been set right up there with Rittenhouse, Old City and Washington Square West.
For Fishtown to become that, it could take time.
“In 10 years? That’s hard to say,” Quattrone said. “It took Northern Liberties 20 years to get where they are at now.”
Boundaries
The boundaries of Fishtown are in some ways up for debate, but they’re usually seen as between Frankford Avenue, the Delaware River and York Street. (Of note: Quattrone also said East Kensington, in the same area as Fishtown, is one of the hottest neighborhoods for real estate as well. It has lots of vacant land that’s ready to be developed, but is missing some of the amenities other neighborhoods already have.)
Population information
According to the latest U.S. Census filings, 12,505 people live in Fishtown, 4,374 (35 percent) of those being between the ages of 20 and 34. It’s safe to say that both of those numbers have likely swelled in the last year as more (young) people have moved into the neighborhood.
How much it would cost to buy there
In Fishtown, about a third of the homes in the neighborhood are occupied by renters while the other two-thirds are occupied by homeowners. Fishtown’s median home value currently sits at $259,700, representing a nearly 10 percent increase over the last year, according to Zillow. Over the next year? The real estate company predicts the median home value will rise another 5 percent. The median rent price in Fishtown is $1,800, about $500 more than the the Philadelphia-wide median.
Major development projects
- A developer who had his 200-unit apartment complex rejected by the Fishtown Neighborhood Association is trying again to develop in the neighborhood, this time with a large Live Nation music venue that’ll go in where a factory used to sit along the Delaware River.
- Plans are moving forward for a high-end hotel to be constructed on Frankford Avenue, not far north of Girard Avenue. The hotel, which would likely become Fishtown’s first, is expected to come along with boutiques, a restaurant and a bunch of new parking spaces.
- Speaking of hotels! No Libs super developer Bart Blatstein (who named a bowling alley in Atlantic City after himself) recently gobbled up an old Peco electric plant in Fishtown and says he has plans to turn it into… you guessed it: Hotels.
- Housing projects: A five-unit modern housing complex called “Awesometown.” Modern rowhomes at “Moyer Street Court.” A four-unit structure on Frankford Avenue. Other homes on the market here.
Francisville
This area that was once seen as just the northern part of Fairmount has broken off and solidified itself as one of the hottest neighborhoods right now for real estate, but it’s different from Fishtown — Quattrone says it’s been gentrifying over the last four years, mainly because of new construction that’s for sale or rent.
It has less amenities than Fishtown, but that’s quickly changing as a 24-hour gym, a brewery and a slew of brand-new apartments are being put in this year. But what’s really attractive about Francisville is its proximity to Center City and its accessibility via the Broad Street Line.
Quattrone says this still-developing neighborhood will be valued for how close it is, and could easily become “the next Graduate Hospital” — a southwest Center City neighborhood that’s become a huge haven for ambitious developers and young professionals moving in. Its growth rate for young people is one of the highest in the city.
Boundaries
Francisville is bounded by Corinthian Avenue to the west, Broad Street to the east, Fairmount Avenue to the south and Girard Avenue to the north.
Population information
Census data from 2010 shows that 9,613 people live in Francisville, which is seen by some as a section of Fairmount. Because census tract boundaries don’t line up with neighborhood boundaries in the area, it’s difficult to discern how many young people live in just the Francisville section of the city. However, Quattrone says it’s safe to say new development projects in the area will bring in more young people in coming years.
How much it would cost to buy there
The median sale price in Francisville is currently $309,000, with a median sale of $225 per square foot, according to Redfin. Median monthly rent in Francisville in 2011 was $818, according to City Data.
Major development projects
- A mixed-use building with three ground-floor commercial spaces was approved to be constructed on Ridge Avenue.
- Other recent housing projects: Condos with three large master suites. New homes that look like this. A partially converted garage. A 31-unit structure at Folsom Powerhouse. Condos at Poplar Square Condominiums. A home with a pet salon.
Point Breeze
You’ve heard this one before: Point Breeze is changing. Extremely quickly. Neighbors have battled gentrification for years in this neighborhood, but young professionals who at one time would have liked to live in Graduate Hospital are now pushing south into Point Breeze.
To accommodate that, the neighborhood is seeing a great deal of new homes, construction and rehab — making it one of the hottest ‘hoods for real estate in the city.
Boundaries
Point Breeze is bounded by 25th Street to the west, Broad Street to the east, Washington Avenue to the north, and Mifflin Street to the south. It’s worth noting that the area closest to Broad Street is developing as another neighborhood that some locals call “Newbold.”
Population information
According to recent Census data, 16,391 people live in Point Breeze, a number that’s grown since 2011. The number of people in the neighborhood aged 20 to 34 increased by 29.4 percent in the last four years, going from 3,619 to 4,683.
How much it would cost to buy there
Point Breeze’s median sale price for homes for the second quarter of 2015 was $165,000, representing an increase of 10 percent compared to the prior year, according to Trulia. The real estate company reports sale prices have appreciated a whopping 71.9 percent over the last five years in Point Breeze. The average rent price in Point Breeze is $1,308, according to Realtor.com.
Major development projects
- An apartment complex was approved by the Planning Commission to go in at 16th and Washington.
- At 20th and Wharton, developer Ori Feibush has gotten the green light to replace an old warehouse with 22 new rowhomes. But like many projects, its fate is uncertain.
- 48 more townhomes are planned for Point Breeze at on a lot bounded by Wharton, Capitol, Woodstock, and Reed streets.
- A complex called “reNewbold” which will have 16 rowhomes and two condos at 16th and Moore streets.
