Home prices rise in Philadelphia's suburbs

Posted: August 18, 2012

Home prices in Philadelphia's suburbs rose 5.7 percent in 2012's second quarter from the first, according to an analysis of sales data by Econsult Corp. vice president Kevin C. Gillen.

Although it was the largest quarterly increase in the suburbs since the housing-market downturn began here at the end of third quarter 2007, the gain was less than the city's 7.6 percent, which Gillen reported in mid-July.

The analysis, compiled by Gillen for Prudential Fox & Roach Realtors, includes the four suburban Philadelphia counties in Pennsylvania, as well as Burlington, Camden, Gloucester, Mercer and Salem Counties in New Jersey and New Castle County in Delaware.

From the 2007 peak, prices in the city fell an average 18 percent, while they dropped 22 percent on average in the suburbs, he said.

"Consequently, not only did homes in Philadelphia County retain more of their value than suburban homes during the downturn, but they also appear to be recovering lost value at a faster pace than most suburban markets," Gillen said.

Though the difference may not seem large, he said it was notable compared with other recent downturns, in which suburban homes generally held their value better than their city counterparts.

During the last significant recession, from 1990 to 1994, homes in Philadelphia depreciated in value by 19 percent on average, while suburban homes lost an average 3.7 percent in value.

In this year's second quarter, Delaware County's average prices rose 7.2 percent, and Montgomery County's were up 5.1 percent. Prices rose 4.2 percent in Chester County, 1.9 percent in Bucks, 4.1 percent in Burlington, and 1.8 percent in Camden County. Gloucester County's prices dropped 1.2 percent in the second quarter from the first.

Gillen noted that the region's price declines continued to be lower than those in other parts in the country, and that the S&P/Case-Shiller Index of the 10 largest U.S. cities shows a drop of 33 percent since the downturn began while the Philadelphia region has lost only 19 percent.

Sales volume continues to run below "normal" averages, he said. The expanded area analyzed by Gillen saw 14,921 houses sold in the second quarter, compared with just over 16,000 in normal-market periods.

Among other good signs for the local market, Gillen said, was a decline in the number of condos for sale - 32 percent, from a 2008-09 peak of 4,000 to slightly more than 2,700. The sales rate of listed houses also rose quarter-to-quarter, 10.7 percent for single-family homes and 12.3 percent for condos.

Average days on market declined to 91 for houses and 108 for condos, still well above the 40 to 60 days in a "healthy market environment," Gillen said. For-sale inventory fell to a three-year low in the quarter - to 8.4 months' worth from 15.8 months in 2010 for single-family homes, and to eight months for condos from 21.5 months two years ago.

Contact Alan J. Heavens at 215-854-2472, aheavens@phillynews.com or @alheavens at Twitter.

comments powered by Disqus