Philadelphia Reveals Surprising Home Equity Values

By Joe Taylor Jr.
Local Lender Columnist
Feb 2, 2007
Among the nation's metropolitan housing markets, Philadelphia is known for remaining stable during the real estate boom of the early 2000s. While real estate values have appreciated 11 percent in Philadelphia since 2003, they're just 3 percent above the national average. This means steadily rising mortgage rates should not put a damper on this robust housing market.

While many metropolitan real estate markets were over-speculated, Philadelphia's housing prices remained true to the market indicators of low mortgage rates and increasing demand. Philadelphia is attracting people willing to trade a longer commute to New York for lower housing prices, and buyers willing to pay luxury home prices are converting home equity from their Philadelphia homes into new mortgages on suburban properties.

Economic forecasters also predict a strengthening economy, which means that housing prices should remain stable in a market like Philadelphia's. Long-term homeowners will enjoy the best results, using their mortgage payments to build home equity. The average house price in Philadelphia is $186,400, making it one of the most affordable metropolitan markets in the U.S. (and a fantastic place to invest in real estate).

Philly's Home Buyers Look for Long Term Gains

One of the downsides of the real estate boom has been a stream of buyers strapped with adjustable-rate mortgages for which they can no longer make increasing payments. Reasonable real estate prices in Philadelphia coupled with the city's efforts to secure affordable housing makes buying a house more manageable. Even prospective buyers with bad credit can start building home equity.

Many financial advisors recommend investing in a mortgage that you can afford, such as a 30-year fixed rate mortgage. In Philadelphia, your property value should continue to increasing, adding home equity to your investment.

Sources
CNN Money
Greater Philadelphia
New York Times
Philadelphia Daily News
Philadelphia Daily News

About the Author
Joe Taylor Jr. has covered business and finance news for Financial Times Television and CNBC. He coaches beginning mortgage brokers to provide better customer service and to understand creative financing opportunities.