Hot time for city houses Prices have risen in most of Phila.'s neighborhoods.

Posted: June 14, 2004

The real estate boom has not left Philadelphia behind.

From Center City to Chestnut Hill, Fairmount/Spring Garden to West Mount Airy, the city is seeing a boomlet of its own.

Home-sale prices went up in 47 of the city's 56 neighborhoods between 1998 and 2003, an Inquirer analysis showed. For the city as a whole, based on 20,976 sales, the 2003 median price was $77,500, up 26 percent since 1998.

The increase was the third highest in the eight-county metropolitan area (which considers Philadelphia a county and excludes the Jersey Shore), according to The Inquirer's analysis of roughly 175,000 home sales in 1998 and 2003. But the city's 2003 median price still falls well below the lowest of the seven suburban counties in New Jersey and Pennsylvania.

After Philadelphia prices peaked in 1986, it took 13 years for them to begin moving upward again, said Allan Domb, president of Allan Domb Real Estate in Center City.

"Sale prices by 1991 had dropped by 30 percent," Domb said. "By 1998, we finally equaled 1986 prices."

The neighborhoods that experienced the greatest percentage increase in prices, according to The Inquirer's analysis, were just south and north of Center City, luring downtown residents looking for more space at not-yet-so-premium prices.

In those neighborhoods, condos are selling for more than much-larger houses elsewhere, said Bari Shor, an agent with Prudential Fox & Roach.

Among buyers on the move were musicians Elizabeth and David DePeters, who sold a Rittenhouse Square condo and bought a house in Northern Liberties.

The DePeterses had purchased their 1,100-square-foot condo in 1999. They weren't looking to move from Center City and had been splitting their time between Philadelphia and a place they owned in Baltimore.

"We go to a lot of open houses, not to buy but to look," said David DePeters, who until recently was with the Baltimore Symphony.

Then Elizabeth DePeters saw a 10,000-square-foot place listed in Northern Liberties, borrowed a car to take a look, braved the crowds of other people looking, and called David.

They made an offer, the owner accepted it, and he and David shook hands. Although the owner received several higher offers over the weekend, the handshake agreement held up.

Northern Liberties/Fishtown experienced the largest median price increase - 163 percent.

And the increasing cost and shortage of housing in Center City "brought buyers who wanted to live on Spruce Street kicking and screaming" to Fairmount/Spring Garden, said Christopher J. Ryan of Prudential Fox & Roach's Art Museum office.

The result: a 113 percent increase in median prices in five years and expansion of the neighborhood to Girard Avenue west of Broad Street, Ryan said.

Within the neighborhood, every bit of vacant land is disappearing, replaced by townhouses and condos.

At 19th and Green Streets, for example, eight of 12 condos sold within two weeks of completion - each for about $360,000, Ryan said.

Developers are engaged in or planning major projects, among them Tivoli Townhouse Condominiums, a low-rise and high-rise complex at 1900 Hamilton St., and 300 houses at 30th and Oxford Streets planned by Westrum Development that, if built, could sell for $250,000 to $300,000.

David B. Glancey, who chairs the Board of Revision of Taxes, describes the demand in Fairmount/Spring Garden as a "second flourishing" of an area that started to gentrify in the 1970s.

Downtown prices have pushed still other buyers into neighborhoods south of Center City, including the area around Graduate Hospital.

"The city is clearly expanding," said Mike McCann of Prudential Fox & Roach, who added that there are four or five rehabs on every block in the neighborhood - and some new construction.

The dramatic upturn in fortunes there began at the end of 2001, McCann said.

"In 1998 [around] Graduate Hospital, we had 53 units on the market with an average of 118 days on the market and a median price of $80,000," he said.

"Last year, it was 184 units, 52 days, and a median of $183,000."

In Mayfair and other neighborhoods in the Northeast, New York investors are pushing prices up and shutting first-time buyers out of the market.

Lured there by comparatively low prices and the demand for rental housing by immigrants, Realtor Christopher J. Artur said, investors are coming in with "20 percent down payments and offering $20,000 over asking prices."

"First-time buyers in the neighborhood, who usually need seller help with their purchases and depend on FHA and VA mortgages, just can't compete," said Artur, who estimates that 50 percent of his sales are to such investors.

The end may be near because interest rates are expected to begin heading toward 7 percent this year.

"We've seen a lot of sellers moving to put their houses on the market recently," said Marilou Buffum of Eichler & Moffly Real Estate in Chestnut Hill.

But for now, everything remains rosy.

Ryan related a conversation with a colleague about the $490,000 price of a house at 18th Street and Fairmount Avenue.

"I told him that I couldn't believe there were two offers over asking price," Ryan said.

The colleague's reply: "Well, if you only have $500,000, where else can you live?"

Contact real estate writer Alan J. Heavens at 215-854-2472 or aheavens@phillynews.com. Read his recent work at http://go.philly.com/alheavens.

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