With all this talk of the best places to invest in real estate in 2019, one US housing market is being overlooked and not rightfully so. That’s the Philadelphia real estate market. In fact, there are a few good reasons why you should become a Philadelphia real estate investor in 2019.
And once you’re sold on this promising investment location, we can show you the best neighborhoods to invest in Philadelphia for next year.
Philadelphia Housing Market Forecast 2019
The US housing market predictions reveal a national slowdown in 2019. However, Philadelphia real estate market trends are showing that it’s one of the few cities that won’t experience the same downward slope. Here’s why:
Investment Property Value Will Continue to Rise in 2019
The fall in investment property value is one of the major concerns for the national housing market 2019. Real estate investors are worried about taking a major hit in loss of equity. However, current and future Philadelphia investors won’t have this concern. That’s because (according to Zillow), the value of property is forecast to rise 14.8% by this time in 2019. That’s impressive considering real estate values have already risen 11.8% in the Philadelphia real estate market over the last year.
Historically, real estate appreciation in Philly has been positive. From Q1 2000 to Q1 2018, Philadelphia investment property has appreciated a total of 137% with an annual average of 4.72%.
Related: How to Calculate Real Estate Appreciation
So while the Philadelphia housing market 2019 is not really considered one of the best cities to flip houses, it is looking positive for a buy and hold real estate investment property. It’s strongly recommended to consider this investment strategy for a Philadelphia investment property.
Affordable Real Estate Can Still Be Found in the Philadelphia Real Estate Market
Another major concern of real estate investors in the coming year is the occurrence of housing bubbles and consequent bursts. The Philadelphia real estate market 2019 is far from a crash thanks in part to the fact that prices have not yet peaked and are still relatively affordable. Looking at Mashvisor’s housing market data, the median property price for Philadelphia is $306,175. While high, there are plenty of neighborhoods with high-performing rental properties with a much lower median property price, as you can see from Mashvisor’s data below. (See “Best Neighborhoods in Philadelphia to Invest in Real Estate”)
Not only is the Philadelphia real estate market affordable, but it offers an advantageous entry point to the market. That’s because it’s one of the few most populous cities that has an affordable investment property price. Not only is the population high, but about half are still residing in rental properties. This is surprising due to the affordability of Philadelphia homes for sale. Despite this, it means high demand for rental property and a good investment for you.
Related: 2 New Ways to Find Cheap Investment Property for Sale in 2019
Philly’s Economy Is in Good Shape
As a real estate investor, the fate of your investment properties is tied to the economy. Luckily, the steady economy in the city props up a Philadelphia real estate investment. Job growth in the Philadelphia-Camden-Wilmington metropolitan area has shown positive signs with a rate of 1.4% year over year. The highly educated workforce can be found in the top industries of Healthcare and Information Technology.
Other Philadelphia Real Estate Market Trends for 2019
The Philadelphia housing market forecast 2019 is showing a seller’s market. However, it’s not a very strong one. While the housing inventory is low and decreasing while real estate prices rise, there is still room to find discounted property and negotiate. In fact, according to Zillow, about 17% of listings on the platform had a price cut from the listing price. While seemingly insignificant, it’s more than most seller’s markets can account for. Mashvisor’s data shows that the average days on market is 97 which is also relatively high for the average seller’s market.
Philadelphia Real Estate Market Stats
Let’s take a look at the kind of return on investment Philadelphia homes for sale bring in. The data below is taken from Mashvisor’s Investment Property Calculator.
- Median Property Price: $306,175
- Traditional Rental Income: $1,406
- Traditional Cash on Cash Return: 2%
- Price to Rent Ratio: 18%
The average monthly rental income that a traditional long term rental can bring in is relatively high. While a cash on cash return of 2% might not be the highlight of the Philadelphia real estate market data, remember it is just an average for the city. Typically, city averages are low as they take into account all kinds of investment properties.
If you want to find Philadelphia homes for sale with a higher CoC return, Click Here to use Mashvisor’s Property Finder. With this tool, you can find traditional Philadelphia investment properties like these:
The price to rent ratio of 18 represents a market with high rental demand. This is clear in the fact mentioned previously about the high population of renters.
What Type of Philadelphia Real Estate Investment Should You Go for in 2019?
The most prominent type of real estate property available in the Philadelphia real estate market seems to be townhomes for sale, according to NeighborhoodScout. While you may not have considered investing in townhomes, they can make for a good investment. For one, they tend to be cheaper compared to average single family homes for sale which can mean higher returns since the demand for this rental property is high in cities like Philly.
Another common type of real estate property in Philly is small multi family homes for sale. These can bring a good rental income and ROI according to Mashvisor’s housing market data below:
- Median Property Price: $367,853
- Traditional Rental Income: $1,387
- Traditional Cap Rate: 3%
Again, these are the averages for small multi family homes for sale in the Philadelphia real estate market. Take a look at a few of the multi family properties found by our Property Finder Tool:
Click Here to Use the Property Finder Tool to Find the Best Philadelphia Homes for Sale.
Related: Learn How to Invest in Multi Family Homes for Sale
Single family homes are also available, though not as widely as multi family homes and townhomes. Still, if you can find one, it is sure to bring a good ROI as the typical single family rental in the right real estate market can.
What About Airbnb Philadelphia? Is It Legal for Investors?
Is Airbnb legal in Philadelphia? Yes, it is and has been since 2015. However, if you plan to operate a vacation rental property that is not your primary residence, you will have to apply for a visitor accommodations variance. Besides that, there is a taxation system in place for Airbnb Philadelphia rentals as well. But it can all be worth it considering the good ROI an Airbnb investor can get, according to Mashvisor’s rental data below:
- Airbnb Rental Income: $2,336
- Airbnb Cash on Cash Return: 3.5%
- Airbnb Occupancy Rate: 51%
Here are a few Airbnb properties for sale in Philadelphia with high return on investment:
Click Here to View and Analyze These Airbnb Philadelphia Rentals and More.
The 10 Best Neighborhoods to Invest in Philadelphia Real Estate
If you have made up your mind about investing in Philadelphia real estate in 2019, then you need to know what the best neighborhoods are. Here are the top for traditional and Airbnb:
5 Best Neighborhoods in Philadelphia for Traditional Rentals
- Olney
- Median Property Price: $131,771
- Traditional Rental Income: $1,347
- Traditional Cash on Cash Return: 6%
- Cobbs Creek
- Median Property Price: $139,895
- Traditional Rental Income: $1,145
- Traditional Cash on Cash Return: 4%
- West Oak Lane
- Median Property Price: $146,101
- Traditional Rental Income: $1,071
- Traditional Cash on Cash Return: 3%
- Tacony
- Median Property Price: $152,401
- Traditional Rental Income: $1,102
- Traditional Cash on Cash Return: 3%
- West Passyunk
- Median Property Price: $237,672
- Traditional Rental Income: $1,252
- Traditional Cash on Cash Return: 3%
5 Best Neighborhoods in Philadelphia for Airbnb Rentals
Note: Even though Airbnb is legal in Philadelphia, be sure to check Airbnb laws and zoning ordinances for individual neighborhoods.
- Manayunk
- Median Property Price: $449,989
- Airbnb Rental Income: $3,543
- Airbnb Cash on Cash Return: 5%
- Airbnb Occupancy Rate: 60%
- Point Breeze
- Median Property Price: $336,553
- Airbnb Rental Income: $2,725
- Airbnb Cash on Cash Return: 5%
- Airbnb Occupancy Rate: 51%
- East Kensington
- Median Property Price: $313,044
- Airbnb Rental Income: $2,385
- Airbnb Cash on Cash Return: 4%
- Airbnb Occupancy Rate: 55%
- Mount Airy East
- Median Property Price: $271,086
- Airbnb Rental Income: $2,831
- Airbnb Cash on Cash Return: 4%
- Airbnb Occupancy Rate: 49%
- Fishtown
- Median Property Price: $390,688
- Airbnb Rental Income: $2,751
- Airbnb Cash on Cash Return: 4%
- Airbnb Occupancy Rate: 56%
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
Invest in the Philadelphia Real Estate Market 2019
You have plenty of good reasons to invest and now you even know where to invest in this Pennsylvanian city. If you want to know how to invest in Philadelphia real estate, the answer is with Mashvisor. That’s because buying an investment property in Philadelphia requires the right tools and Mashvisor has them.
Start Your 14-Day Free Trial Now to use our real estate investment tools to find the best Philadelphia investment properties on the market.
