A year ago, when Daniel Palko bought a new home, he saw it as a great value in an area that was supposedly undergoing revitalization and painting itself as a destination for families.
New neighbors have been few and far between in the new Mantua houses, however, as realtors look to balance the right price point with buyers’ wait-and-see attitude. The 51-home development is one of several across the city and the region that have gotten off to a slow start.
Few neighborhoods haven’t taken hits since 2007. Higher-end homes that were originally $600,000 are selling for half that price and dozens of million-dollar condos have been auctioned off.
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“They’re moving. It’s slow, but they are moving,” Palko said of the Mantua homes in the Union Hill development. “They’re really a great value, but compared to this area they’re expensive.”
Despite sluggish sales, there are reasons for developers to be optimistic. A report from real estate firm Prudential Fox & Roach showed sales in Philadelphia up 3 percent in the first half of the year compared to the first six months of 2012. The median sale price also rose almost 5 percent.
Experts credit low interest rates and the drop in prices over the last few years.
“Our observation is it’s clear that the sales are beginning to improve now,” said Long & Foster senior regional vice president Bob Albanese. “It’s safe to say the upper price range, specifically say, $700,000 up to a couple million, we have seen a definite uptick in contracts and purchases in that price range plus in the last three months.”
Another sign that things are picking up, Albanese said, is that consumers are buying at a good pace during the hot summer months. “The strength in the summer indicates a stronger-than-anticipated fall market,” he said.
“Following several years of recession-induced price declines in which house values fell by an average of 22 percent from their peak, Philadelphia’s housing market surged to life this past spring with the single largest quarterly gain in house prices since the housing bubble burst in mid-2007,” Kevin Gillen, of Econsult Corp., wrote in his quarterly House Price Index statement