Airbnb RentalsTraditional Rentals How’s the Philadelphia Real Estate Market Doing Today? by Eman Hamed July 23, 2018August 31, 2018 by Eman Hamed July 23, 2018August 31, 2018 It’s mostly sunny in the Philadelphia real estate market 2018! Over the past few years, Philly has remained a fairly consistent housing market and, today, the city continues to be a good choice for anyone thinking of buying a rental property. If you’re a real estate investor, keep reading as we provide you with insights regarding the strengths and weaknesses of the Philadelphia real estate market. We further propose 6 top neighborhoods in Philly for buying an investment property at the moment. But, first, here’s a short summary of statistics regarding the Philadelphia real estate market. These figures are computed using Mashvisor’s investment property calculator – a tool that provides readily calculated projections regarding investment properties in almost every city in the United States. If you wish to analyze other cities in the U.S housing market and find the best investment properties in terms of the above metrics, click here! Related: Why an Investment Property Calculator Is Better Than Spreadsheets The Philadelphia Real Estate Market: What You Need to Know #1 The City’s Economy To begin with, Philadelphia’s economy is growing (slowly, but steadily). The city is one of the largest metropolitan areas with a substantial growth in the economy driven by the growing job market. This slow but steady growth makes it particularly attractive to a real estate investor, as it presents fewer risks than a more dynamic market. According to a number of reports, Philly saw one of the greatest year-to-year job growth rates, with focus on Information Technology, services, and higher education. On top of that, Philadelphia real estate has witnessed a major housing inventory and construction boom! By the end of this quarter of 2018, real estate developers are expected to deliver over 8.7 million square feet of construction. Housing inventory is especially increasing in multi-family homes and residential apartments. Fortunately for a Philadelphia real estate investor, home values and rents have been rising but only steadily, which is keeping occupancy rates high. So, if you’re looking to buy a multi-family investment property, Philadelphia real estate seems to be a stable buyer’s market that offers great investment opportunities of all types. When it comes to single-family investment properties, on the other hand, it’s a seller’s market as the housing inventory for this type of real estate is not keeping up with demand. Related: Is the 2018 US Housing Market a Seller’s Market or a Buyer’s Market? #2 The Job Market We’ve already mentioned that the city’s economic growth is mainly driven by the job growth in sectors like IT and services. Last year, the job growth rate in Philly was, in fact, faster than that of the national average. For property investors, a growing job market is a good sign to buy investment properties, which is another reason to invest in Philadelphia real estate. The addition of jobs indicates rising demand, especially for commercial investment properties. It should be mentioned that despite the growing job market, Philadelphia still has a high unemployment rate of 5.8% (higher than the national average of 3.8%). However, this is lower than the unemployment rate of 6.3% the city faced at the beginning of the year. Therefore, we can say that things are definitely improving in Philly. In addition, due to the fact that Philadelphia real estate investments are affordable compared to other large metropolitan cities, it’s likely to see some real estate appreciation in the medium and long term as the city keeps improving! Click here to start looking for and analyzing the best Philadelphia real estate investment properties. #3 The City’s Population Let’s remind everyone that Philly is the fifth most populous city in the US. With the stable economy and job growth, it’s no surprise that the city has also witnessed a strong population growth. Consequently, this has caused more demand for housing, further making the Philadelphia real estate market one of the best places to invest in! If you’re planning on buying a rental property, one of the things you should take into account is your target tenants. In Philadelphia, property investors should aim for millennials as this is the group that’s moving to the city and increasing its population! As a matter of fact, Philadelphia ranked 6th among the best cities for millennials in 2017. The growing job market, home affordability, improved amenities, and vibrate downtown scene all contribute to why millennials choose to move to Philly. Moreover, the majority of millennials continue to rent (rather than buy) their homes. For a Philadelphia real estate investor, this is another strong factor to consider multi-family investment properties. This is also good news if you’re a millennial thinking of starting a real estate investing career in an environment surrounded by other millennials! Related: The Millennials’ Guide to Starting a Real Estate Investing Business #4 Airbnb Philadelphia If your optimal rental strategy is short-term rentals, then you’ll be happy to know that the Philadelphia real estate market 2018 is Airbnb-friendly. While other cities continue to force strict regulations on Airbnb hosts, the Philadelphia City Council legalized Airbnb rentals in 2015, making the Philadelphia real estate market even more attractive for property investors. Want to find the best Airbnb investment properties in Philly? Then use Mashvisor. Click here to use our Property Finder and find properties in a matter of minutes! Today, Airbnb Philadelphia is growing so fast. However, some restrictions still exist. For example, Airbnb is prohibited in residential neighborhoods, is limited to under 180 days per year, and a city license is required if hosts are renting out for more than 30 days. Nonetheless, these restrictions are still much fewer compared to other major metropolitan cities in the U.S housing market. Related: Cities With The Least Airbnb Legal Issues To get a better understanding of Airbnb Philadelphia and determine whether or not to invest in Airbnb rentals in the city, we recommend that you further look into the Airbnb laws and regulations in Philadelphia. The Philadelphia Real Estate Market: Top Neighborhoods We all know the importance of location in real estate investing. Thus, to invest in the most profitable investment properties in Philly, consider looking into these neighborhoods: Dickinson Narrows Median Property Price: $393,314 Traditional Rental Income: $1,922 Airbnb Rental Income: $2,638 Traditional Cash on Cash Return: 2.3% Airbnb Cash on Cash Return: 3.16% Traditional Cap Rate: 2.3% Airbnb Cap Rate: 3.16% Airbnb Occupancy Rate: 68.64% East Passyunk Median Property Price: $348,178 Traditional Rental Income: $1,632 Airbnb Rental Income: $2,442 Traditional Cash on Cash Return: 2.01% Airbnb Cash on Cash Return: 3.2% Traditional Cap Rate: 2.01% Airbnb Cap Rate: 3.2% Airbnb Occupancy Rate: 62.73% Powelton Median Property Price: $391,633 Traditional Rental Income: $1,918 Airbnb Rental Income: $2,598 Traditional Cash on Cash Return: 1.96% Airbnb Cash on Cash Return: 3.04% Traditional Cap Rate: 1.96% Airbnb Cap Rate: 3.04% Airbnb Occupancy Rate: 62.36% Graduate Hospital Median Property Price: $446,202 Traditional Rental Income: $1,779 Airbnb Rental Income: $2,281 Traditional Cash on Cash Return: 1.56% Airbnb Cash on Cash Return: 2.22% Traditional Cap Rate: 1.56% Airbnb Cap Rate: 2.22% Airbnb Occupancy Rate: 64.05% Hawthorne Median Property Price: $536,780 Traditional Rental Income: $2,000 Airbnb Rental Income: $2,498 Traditional Cash on Cash Return: 1.17% Airbnb Cash on Cash Return: 1.67% Traditional Cap Rate: 1.17% Airbnb Cap Rate: 1.67% Airbnb Occupancy Rate: 62.78% West Poplar Median Property Price: $427,633 Traditional Rental Income: $1,669 Airbnb Rental Income: $2,153 Traditional Cash on Cash Return: 1.22% Airbnb Cash on Cash Return: 1.61% Traditional Cap Rate: 1.22% Airbnb Cap Rate: 1.61% Airbnb Occupancy Rate: 58.24% With our investment property calculator, you can get this kind of data for any housing market right now. Click here to start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after. To sum up, the stable economy, growing job market, population growth, and increasing popularity of Airbnb contribute to making Philadelphia real estate one of the best in the U.S housing market. Investing in The City of Brotherly Love is an excellent investment decision for a real estate investor in 2018. To learn more about real estate investing in any other city in the U.S, sign up to Mashvisor and make use of our tools to start analyzing! Do you have questions about Mashvisor? Click here to read our FAQs and learn about our tools. Start Your Investment Property Search! START FREE TRIAL Start Your Investment Property Search! START FREE TRIAL LocationPhiladelphia PA 0 FacebookTwitterGoogle +PinterestLinkedin Eman Hamed Eman is a Content Writer at Mashvisor. With a focus on market reports, she enjoys researching the state of the real estate market in different cities across the US. Eman also writes about trends, forecasts, and tips for beginner investors to gain the confidence and knowledge they need to make wise decisions. Previous Post How to Buy Investment Property with a Bad Credit Score Next Post Florida- The Best Place to Buy Multi Family Properties in 2018 Related Posts All You Need to Know About Short-Term Rentals in the US Housing Market Airbnb security deposit: Should you charge it? Cities with Highest Airbnb Rental Income in 2018 Subleasing Airbnb: The Definitive Guide Looking for a Hot Real Estate Investment? How About Airbnb Las Vegas? Is Airbnb Worth It as a Real Estate Investment Strategy? 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