Housing Costs in our region (Philadelphia, Chester: for sale, real estate, apartment)

[Norm Barnes]

If you are now looking for a home, there is no doubt your Realtor had to get the paddles out to get the heart moving. It's a concerning state of affairs. I believe we will be hard pressed to find an economic solution.

You roll back time and compare the home prices Maybe 3 years ago to now and you think of outstanding appreciation. You are right but what's the consequences. There is no need to point all them out because one stands evidently clear. Shocking and a new reality. Sticker Shock. This coupled with rising rates creates a very scarey landscape for a buyer. I guess you may have just said: "Tell me about it". Well I will.

The government has chosen control over the housing market. The belief I'm assuming is that by increasing interest rates you control inflation. You think they may have some data or evidence that people who drive prices on houses up by bidding or who have such an insatiable appetite will now temper their mindset. I think very little. It almost becomes an unpleasant game that if you win you set back and say what have I done. I've mortgaged my future. I worked hard yesterday now I really got to get moving. Well Molly can get a job. I can work part time on the weekends and soon Johnny can cut lawns. Nah not really that bad but there will be some adjustment to living style to assure the cash flow is there to provide for this new heightened responsibility.

Ok that's the problem genius what's the solution. Well if your thought is. has or will be that "It's only Money" then go read another post. This is exactly the fact you have to ponder "it's your Monies". You have to spend it wisely. It's like smoking half a cigarette and saving half for later. When you save money you feel brilliant when you are stung you feel somewhat broken. scattered and very pissed off. The fed may increase rates but what we really have to do is increase and improve awareness. If everyone spends foolishly then everyone suffers. You have that change in your pocket spend it wisely that's where it starts.

[Oh2Me]

I have no idea what you’re saying, I’m sorry.

We bought our first home in Philadelphia 4-5 years ago and refinanced when rates were good. We added a baby to our family and decided to buy a larger condo in Francisville. It was a higher mortgage and interest rate but our future isn’t doomed by releasing a sub 3% rate.

Our community has a ton of other young working professionals and old and new residents alike. There are still great opportunities in this city for homeownership and continued development.

[Norm Barnes]

Well we all have an idea of reality. Your Francisville community looks to be about 40 households with 1- 2 Bedrooms and sales prices 3 years ago as high as 695K. No idea of their present value since no homes in Francisville has sold in 2023 that I can see. Let me present a situation in today's world.

There is a community in Delco called Briarcliffe a typical Warner West Like community of 3 Bedroom/1 -2 Bath row homes. A FAMILY community which sports fairly reasonable Real Estate Taxes. It has small parks and Athletic Associations and neighborhood schools.
It's a nice first time Buyer community. Many homeowners long time occupants. The kind that kids move near their parents. Surprise it does happen. Lol. It includes zips in Darby Township amd Glenolden.

A home in 2018 in Briarcliffe community could be purchased from about 110 - 130K. Interest Rates 2018 - 2023 ranged from about 2.875 to 4.625%. The current rate about 6.625%. Today prices range on average from 215K - 225K. Since today's buyers like to pay more than asking let's say a house sells/closes at $227,500 @ 6.875% and a payment of $2124.36 including in this payment is area average taxes. Let me focus a 3 Bedroom Row home in Darby Township a payment of $2124.36. Now let's go time machine to 12/1/2018 and a house selling at 125K and a rate of 2.875% would have had a payment of $1137.20. A payment in 2023 almost $1000 higher in just over 4 years.

Not my point. Here is my point. Typical conventional mortgages have a front end ratio including the entire Mortgage payment and a secondary ratio including all other credit payment lasting more than a certain number of months. Dealing strictly with front end ratio acceptable of about 33% in most cases. Let us round the 2023 payment above to $2100. For ratio to be acceptable income would have to be $6300 monthly or about $76k per year in 2018 acceptable income would have been about $43,200. Add a car payment averaging about $320 per month. Income based on Front end requires a 33K improvement of income to maintain a status quo maintained in 2018. Picture who has been priced out of the "American Dream". Boy am I happy it didn't affect you however you have to understand my concern about the other millions impacted.

Boy I hope you try to understand as we enjoy Brandy in our Library.

[cpomp]

Okay... so housing prices and interest rates are extremely high and unattainable for the middle class?
The reality is unfortunate, but that isn't news to anyone, nor is this phenomenon limited to "our region"...

[BPP1999]

Originally Posted by cpomp

Okay... so housing prices and interest rates are extremely high and unattainable for the middle class?
The reality is unfortunate, but that isn't news to anyone, nor is this phenomenon limited to "our region"...

Right. And imagine if our region were on the coast (like NY, Boston, LA, etc.). Then prices would be truly astronomical. We and Chicago are generally a damn good (non-coastal) bargain.

[Duderino]

Originally Posted by BPP1999

Right. And imagine if our region were on the coast (like NY, Boston, LA, etc.). Then prices would be truly astronomical. We and Chicago are generally a damn good (non-coastal) bargain.

I was just about to reply with this point exactly. Yes, home prices have been supercharged everywhere, but Philadelphia still manages to be tempered, even in the current frenzy (one exception seems to be the Main Line, where prices are up like 50% over the past few years, but it was clear to me that was only a matter of time, as it's now a prime target of affluent out-of-metro NYers or DC-ers looking for more house for their money bidding up prices).

Even so, Philadelphia absolutely maintains its "Steady Eddy" reputation on the East Coast, with one of the most enviable income-to-cost ratios in the US.

Even formerly "bargain" Sun Belt metros now have more expensive median housing costs--Atlanta, Houston, Dallas, Nashville. Let's not get started on Florida.

That's unbelievable to me and really shows that the Philly area is now more of a bargain than it ever was.

[cpomp]

Originally Posted by Duderino

I was just about to reply with this point exactly. Yes, home prices have been supercharged everywhere, but Philadelphia still manages to be tempered, even in the current frenzy (one exception seems to be the Main Line, where prices are up like 50% over the past few years, but it was clear to me that was only a matter of time, as it's now a prime target of affluent out-of-metro NYers or DC-ers looking for more house for their money bidding up prices).

Even so, Philadelphia absolutely maintains its "Steady Eddy" reputation on the East Coast, with one of the most enviable income-to-cost ratios in the US.

Even formerly "bargain" Sun Belt metros now have more expensive median housing costs--Atlanta, Houston, Dallas, Nashville. Let's not get started on Florida.

That's unbelievable to me and really shows that the Philly area is now more of a bargain than it ever was.

Chester County seems to be the largest exception in the Philadelphia area. Average sale prices are now well over $500k.

[Duderino]

Originally Posted by cpomp

Chester County seems to be the largest exception in the Philadelphia area. Average sale prices are now well over $500k.

True, and I don't think MontCo and Bucks are far behind.

I've praised the region for remaining a relative bargain, but there is definitely a caveat: it's probably the amongst the highest risk in the US for big jumps in prices moving forward, precisely because of out-of-region buyers seeking that bargain.

[Oh2Me]

Per a popular realtor site, there are 159 homes for sale in my zip code 19130. This isn’t filtered for pending/contingent. Median list price (not sales price) is 450k. There are other areas of Philadelphia that have lower prices, but as mentioned this isn’t a Philadelphia specific issue. In general, our city is very affordable considering other comparable communities.

My family is from the Seattle area. Real estate is absolutely a regional issue there. I realized as an adult those who purchased their homes ended up way better than my family which is why I jumped on buying whatever I could afford here. It wasn’t ideal but it gave us a way to get our current condo later on middle class salaries (I’m an RN, husband is an accountant and we both had student loans and prioritized having children).

For anyone interested, there is two new House Hunter episodes in Philadelphia. One is an attorney moving back to the area from Brooklyn and the other is a couple who made it work with a duplex and are finally getting their own space. The second noted they did not come from means and had a history of housing instability.

Looking for a home can be difficult, discouraging, and take planning, but if you want to own property, Philadelphia is still one of the most amazing and affordable places to do so.

[smt1111]

There are pockets of affordable housing in the suburbs (under $300,000) but you are not going to get the house of your dreams with all new, up-to-date everything for $250,000. For $250,000, you might find a small house that needs some updates, maybe has only one bathroom, small rooms, maybe flaws like occasional basement water issues, ugly walls and carpeting, old wiring and plumbing, a porch that has peeling paint, and a yard with overgrown bushes.

I looked online at houses for sale in one suburb near me that is popular due to the school district and the homes are running $700,000 to a million. These are gorgeous, updated, McMansions, which most two-career couples are looking for. They are not willing to live in a small, 3BR house with 1 bathroom and dingy carpeting and wallpaper. Suit yourself. You can lower your expectations and buy something as a starter home, build equity, then trade up, or you can stay in your apartment waiting to hit the lottery.