Are we in a housing bubble?
Is that bubble about to burst?
How can you take advantage of the opportunity (whatever the opportunity is)?
What are the best neighborhoods to invest in Philadelphia in the current economic climate… and considering what changes could occur in a few months from now?
For short-term fix-and-flip investors, they may be in and out before the bubble bursts. As long as you buy below market value and renovate in a short term, you may be able to get a great return on your investment.
But what if you’re looking to buy, renovate, and rent it out for the long-term? Or, what if you just want to buy a ready-to-rent house? What then? How do you navigate the complexities of the economy? What are the best neighborhoods to invest in Philadelphia to make sure you’re making a good investment especially if the housing bubble bursts?
While no investment could be guaranteed to be 100% market-proof, we do have some neighborhoods where house values have increased significantly in the last three to five years and they are forecast to continue to increase. These increasing house values are not so much tied to market forces as they are to the gentrification of their respective neighborhoods. Think about Graduate Hospital where house prices have steadily gone up over about the last decade. That increase significantly outpaced the market because it was more due to overall improvement of the neighborhood.
What neighborhoods are currently going through an overall improvement which will help to ensure that house values continue to climb, even if the market cools (and even if there is a short-term drop)? We could probably name many Philly neighborhoods and you should definitely research before investing, but here are three sample neighborhoods where house values have been outpacing the market and are likely to continue doing so because of overall improvement.
(And we’ll make a similar disclaimer now as in the past: we’re drawing from sources we can link to for information but you should always do your own due diligence and you may prefer to source multiple points of data before making a decision.)
Brewerytown
Zillow median home value: $248,000 (Feb 2019, click on link for current value)
Trulia median rent: $1,800 (Feb 2019, click on link for current value)
How long has it been since you’ve had a good drive through Brewerytown? If it’s been a few years, drive through it now and you’ll be surprised at how much better it’s looking now than you remember. So much housing renovation has happened here.
Grays Ferry
Zillow median home value: $123,900
Trulia median rent: $1,200
There’s lots of house renovations going on in Grays Ferry and still more good deals available. This is one of Philadelphia’s most affordable neighborhoods. The median home value in Grays Ferry is $123,900, and that’s up 36% over last year.
Chestnut Hill
Zillow median home value: $571,500
Trulia median rent: $2,500
In survey after survey, Chestnut Hill ranks as one of Philadelphia’s very best neighborhoods. Homes and properties are generally in very good shape. Houses are certainly more expensive here than Brewerytown or Grays Ferry, but like those neighborhoods, most houses here have experienced significant appreciation over the last few years.
Summary
The best neighborhoods to invest in Philadelphia are those where house appreciation has outpaced the market average, where gentrification is well underway. While these factors are always changing, and could change again when the housing bubble bursts, they are areas we are paying close attention to at the moment for opportunities for the right investor.