2017 was one of the hottest years for Philadelphia real estate and its real estate investors.
Are you a real estate investor wondering if you’ve missed the boat on Philadelphia real estate? Or do you already have a piece of Philadelphia real estate and are wondering if the 2018 housing market trends will be as auspicious for your rental properties? Well, then you need to know what the top Philadelphia real estate market trends are for this year!
Philadelphia Real Estate Market: A Seller’s Market or A Buyer’s Market?
Looking at real estate market trends, the end of 2017 might have been described as a seller’s market for the Philadelphia real estate market. Housing inventory hit a historical low for single family homes for sale, with only 3,329 single family homes for sale (condos for sale not included) available in the Philadelphia housing market. Low housing inventory coupled with high house prices points to a seller’s market.
However, things weren’t so black and white for Philadelphia real estate market trends at the end of 2017. With low housing inventory came lower house prices, somewhat of a contradiction to traditional real estate market trends. In fact, the median house price fell from $159,000 to $150,000. Of course, even with the median house price falling, some neighborhoods saw a rise in the price of Philadelphia real estate. Essentially, this gray area in real estate market trends makes for a somewhat neutral area between a buyer’s market and a seller’s market, at least for the end of 2017.
What does this mean for the 2018 Philadelphia real estate market?
We will continue to investigate whether Philadelphia will be a buyer’s market or a seller’s market by looking at the housing inventory for 2018 and the house prices. However, there is a key takeaway from this investigation of the end of 2017, and it’s this: Philadelphia real estate will be hot, if not hotter than in 2017.
Seems like a jump? Well, it’s not really. The end of 2016 saw an odd mix of real estate market trends, similar to the end of 2017. 2017 followed strong, and real estate experts are predicting the same thing for 2018.
Philadelphia Real Estate Housing Inventory
The housing inventory will get a boost in the Philadelphia real estate market this year. Real estate developers are predicted to complete over 8.7 million square feet of construction by the third quarter of 2018. Specifically, the housing inventory will see an increase in multifamily real estate property and residential apartments for sale in the real estate market.
What does this mean for multifamily real estate property owners?
Because the housing inventory will be seeing growth, it might be more difficult for an individual rental property owner to compete for occupancy. This just means rental property management professionals will have to up their game in terms of advertising and marketing rental properties in the Philadelphia real estate market.
Luxury apartments will offer a kind of support.
Luckily, the Philadelphia real estate market for luxury apartments will give multifamily real estate property owners a slight push in occupancy. This is because the luxury apartment rental market is a bit too expensive for average tenants in the Philadelphia real estate market. These tenants will be pushed toward the more affordable multifamily real estate. While this bodes well for multifamily real estate investors, those investing in luxury apartments will have to get a little bit more creative to drive occupancy rates.
Housing Inventory for Single Family Homes
Housing inventory is generally high for single family homes as well as townhomes for rent. Real estate investors who own property in this section of the Philadelphia real estate market, however, won’t face these same issues as those in multifamily real estate. This is simply due to the fact that lower rent prices will keep occupancy rates high. It seems then that single family homes will be the way to go for real estate investors in 2018.
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Philadelphia Real Estate Market House Prices
NeighborhoodX carried out research on the house prices in the Philadelphia real estate market for January of this year. What the study found was a large range of house prices across 18 neighborhoods in the city: $58-$1,620 per square foot. It’s safe to say that with the rise in housing inventory (single family homes and multifamily real estate property) and the range of house prices, this year will be a buyer’s market for real estate investors in Philadelphia.
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Philadelphia Condos for Sale
With single family homes looking promising, real estate investors might assume the same thing for Philadelphia condos for sale. Even though Philadelphia condos for sale displayed some of the most favorable real estate market trends in years, it still doesn’t come close to the success of single family homes. There are two reasons for this: appreciation of house prices and housing inventory.
The house prices of Philadelphia condos for sale increased by 2.8% last year, while the prices of single family homes increased by 10.6%. The housing inventory is also low compared to single family homes. For 2018, there doesn’t seem to be much of a promising change in this section of the Philadelphia real estate market. Real estate investors buying an investment property should stick to other types of single family homes, it seems.
Click here to find single family homes in Philadelphia.
Commercial Real Estate Trends
Commercial real estate investors in Philadelphia would be wise for buying an investment property that can be used as a coworking office space. Shared office spaces are growing in popularity in the city mostly because of their flexibility. In upcoming years, coworking offices will make up more than 30% of the commercial real estate market, as commercial real estate development will increase its focus on such office spaces.
With this sector of commercial real estate predicted to be on the rise, now is the time for buying an investment property of this type. It is in high demand now with a relatively lower inventory compared to the future.
Airbnb Philadelphia Real Estate
Airbnb Philadelphia is legal in the city, allowing real estate investors to enjoy this investment strategy. A case study done by Biggerpockets.com showed that real estate investors have the opportunity to make more money with Airbnb Philadelphia than with traditional, long-term rentals. Because single family homes are looking good for 2018, Airbnb Philadelphia is a great option for making money in real estate in this housing market.
Click here to find an investment property with Mashvisor for Airbnb Philadelphia.
In general, it seems Philadelphia real estate will be at the top of the best real estate investments for this year. Single family homes, multifamily real estate, commercial real estate, and Airbnb Philadelphia are all showing positive trends for the upcoming year, giving real estate investors options. The buyer’s market makes it the best time to enter this real estate market with confidence. Choose Philadelphia real estate for your next investment property.