A diversified real estate portfolio is often the key to being successful, and many real estate investors are now considering buying investment property in Philadelphia. If you’re thinking about real estate investing in the Philadelphia area, here’s what you need to know before jumping in.
An Overview of Philadelphia
Understanding the economics of an area is essential before buying into its real estate market. Philly is the seventh largest metropolitan area in the United States, and has a relatively young, urban population that’s less interested in the suburban experience than previous generations.
The local economy is strong and recent employment growth numbers are a bit higher in comparison to the rest of the country, while unemployment remains on-pace with the rest of the US. The strongest growth is in the technology and services areas, along with other skilled-labor sectors. Some of the fastest growing local employers include:
- Lamps.com – a digital retailer of lighting solutions and home furnishings.
- Environmental Construction Services – a designer and builder of energy-efficient facilities.
- Torchlight Technology Group – providing lead generation, data management, and media services for the financial and insurance industries.
- Streamline Solutions – a real estate development firm.
- The Comcast Technology Center – this 60-story building is currently under construction and will be a hub for technologists, engineers, and software engineers, and will house a media center and local broadcasting station.
The Philadelphia Real Estate Market
With the current state of the local economy and the expectations for growth into the future, the real estate market is also looking up for Philadelphia. One expert points to these factors driving growth:
- Growing GDP. Philadelphia’s GDP has increased by 2% since 2010 putting it in the top 10 of the nation’s largest metropolitan areas.
- Growing Population. Center City’s population has increased by 27% in the northern areas and 17% in the southern areas. Plus, 86% of Center City’s residents have at least a bachelor’s degree.
- Loyal Residents. Philadelphia residents are staying put: 87% of homebuyers in Philadelphia in 2017 were already residents of the city.
The housing market is growing, and the trend is expected to continue. Investors should consider that the focus is currently on multi-family housing and affordable single-family homes in urban areas. The influx in population has been young, well-educated professionals who prefer walkable, affordable neighborhoods with plenty to do including dining, parks, green spaces, and other activities.
In terms of commercial real estate, some experts are speculating that the city may have reached its peak, especially once the Comcast Technology Center and other major commercial centers are completed and open for business. Savvy investors are keeping a close watch on the continued influx of new residents and the growth in the jobs market, with an eye toward future commercial needs.
Why Invest in Philadelphia Real Estate?
Whenever young, fresh talent starts arriving in major cities, the potential for growth remains strong–and growth is where real estate investments become profitable. As the Millennial generation seeks steady employment in modern tech and service careers, they are also enjoying the history and charm that one of our nation’s oldest cities has to offer.
Philadelphia may have suffered along with the rest of the nation during the bust of the 2000s, but the city of brotherly love appears to be in the early stages of a rebirth. Early investors and speculators have already put themselves in the game in anticipation of Philly’s upcoming shift, and experts are predicting even more investors arriving before the year is up.
Is Philadelphia a good place to invest in real estate? In a word: Yes.
