I’ll start out with full disclosure: I was born and grew up in Philadelphia. I also went to high school and attended Haverford College as well as Pennsylvania University here in the city. This is also where I got married, at City Hall, and lived with my husband Dror, then a student at Temple University, also in Philadelphia, before I made aliyah to Israel and raised two children there. So I wouldn’t wonder if you think I’m just a bit biased about this city.
But actually, that’s not really true. It took me a long time before I started working in real estate investments in the U.S. before I discovered all over again what Philly has to over, and believe me—it has a lot. It’s the sixth-largest city in the United States, as well as the first capital of the country. And right now, there’s a window of opportunity in the city and the surrounding area for investments and opportunities.
Fast Facts About Philly:
The real estate market in Philadelphia is boiling hot right now and enjoying phenomenal growth. Prices are going up by about 10% per year on average and that average includes neighborhoods which haven’t seen an increase. When we’re talking about Philadelphia, it’s important to realize that it’s a city with dozens of different neighborhoods. Each neighborhood is a microcosm unto itself, with independent economic and demographic conditions. That’s why it’s hard to talk about “Philadelphia” as a unified entity, but nevertheless, when you look at it from a bird’s-eye view, 40,000 feet up in the air, it’s possible to talk about
After years of neglect and economic depression in many city centers up and down the East Coast of the U.S., Philadalphia, like its neighbors New York and Washington, has experienced a burst of economic growth. Philadelphia has lots of room for growth to fill in the gaps.
There are a few different drivers of Philadelphia’s economic growth, including:
Philadelphia is well known as a huge center for higher education. Leading universities like Temple, Pennsylvania University, Drexel, and Villanova have been joined by dozens of universities and colleges located in throughout the area, bringing new blood into the city each and every year. Micro-economies have sprung up around the universities based on young people voting with their legs and staying in the area for years after they complete their studies—some of whom choose to move to the city permanently.
Medical Centers, Companies, and Tourism
In Philadelphia, there’s a high concentration of huge medical centers, among the top in the world. University hospitals, Einstein Hospital, medical treatment and research centers draw medical insurance companies in their footsteps, along with other companies in the field of pharmaceuticals and medical devices. Communications companies like Comcast along with traditional heavy industry like the U.S. Naval Shipyards continue to operate out of the city. Philadelphia, as the first capital of the United States, in which the new nation declared its independence, is full of historic sites and important parks, which are a huge draw for tourists from all over the world. Therefore, the employment figures for the city are excellent even in comparison to other leading cities.
Location and Transportation
Following an increase in prices in New York and neighboring northern New Jersey, many residents and businesses have chosen to relocate to the southeastern corner of Pennsylvania and enjoy friendlier tax rates and more reasonable real estate prices, along with nature, atmosphere, and culture that the city offers its residents. Philadelphia is also an important transportation hub. The city is located on a main East-Coast transportation artery—I95, which runs between New York and Washington. Philadelphia has its own international airport, the Delaware River is a major aquatic transportation artery for shipping goods along with both the external train system as well as the internal train, bus, trolley, and Metro trains offer wonderful transportation options to travelers.
The second-largest city, by size, on the East Coast.
Following the growth the city found itself experiencing a serious shortage of residential housing units in certain neighborhoods which then experienced dizzying price increases. However, this growth is only starting to seep from the belt that circles the center of the city to neighborhoods nearby. Additionally, many investors have discovered what Philadelphia has to offer over the last decade, and huge funding sources have been channeled into the city, mainly from companies and private entrepreneurs for demolition, building, and improvement projects. The change has spurred on social change, gentrification, and social enterprises in various neighborhoods. The millennial generation which enters the city from the universities tends to be more volatile, and demand for rent is going up in particular neighborhoods.
The State of Pennsylvania, and Philadelphia itself, have sought to encourage real estate investment through relatively friendly tax laws for most neighborhoods, including a ten-year abatement on taxes for physical improvements.
All these facts should serve as clear indicators of the window of opportunity that the city and its surrounding area currently offer for real estate investors. It’s hard to predict how long the window of opportunity will stay as open as it is at present, which is why we recommend acting as soon as possible.
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