A few years ago when the 2006 Census data was released, Philadelphia received a major ego-blow as Phoenix, AZ passed us to become the nation's fifth-largest city by population. Well, after this article in today's NYTimes, Philadelphians can take solace in the fact that some of Phoenix's growth over the past decades came at the expense of massively inflating prices in that region's housing market. According to the most recent release of the Case Shiller Home Price Index, Phoenix home prices are down 50.8% since that market's peak in June 2006. While the Case Shiller index does not track Philadelphia home prices, it's safe to say that our region has fared much better over the course of the past few years - according to MLS data the average price in March 2009 was down only 16.7% from June 2006.
A couple reasons reasons we can point to for Philadelphia's relative stability, even in the face of continued population decline, are:
1. A diversified economy with concentrations of recession resistent industries such as education, healthcare, and pharmaceuticals.
2. A comprehensive public-transit system and walkable neighborhoods that cushioned the blow of last year's high gas prices - assuming high gas prices return, car-dependent cities like Phoenix will become less attractive as commuting becomes more expensive.
3. A 'slow-but-steady' approach to development that prevented us from building too much new housing during the boom times. While there are instances of overbuilding in Philadelphia, most of them can be attributed to developers who didn't understand the local market. Those who built quality product for middle-income Philadelphians are still doing just fine.
Now, if the Phillies can win another World Series title I think Philadelphia will be fully relieved of any Phoenix envy...
Comments(0)