Developers plan to add 2,000 new rental apartments to the Philadelphia market as they seek to meet rising demand. Economic growth has benefited Philadelphia, increasing demand for housing as 2013 is expected to add jobs to Philly’s economy and draw the workers necessary to fill those jobs.

While some call the economic recovery in Philadelphia “modest” so far, increasingly positive statistics about our economy continue to be released. Many hope these indicators are signs of a real estate recovery in the winds for 2013 and 2014, and if apartment inventory and rental trends are any indicator, this appears to be the case.

Market Indicators Suggesting Philadelphia Housing Recovery

Philadelphia property developers plan to add nearly twice as many apartment rental units to the housing market 2013 as they added in 2012. Rittenhouse Square and Point Breeze areas continues to be a neighborhood of increasing luxury apartment development and inventory.  Meanwhile, regional vacancy rates are expected to decline 4.8 percent, nearly half a percentage point lower than they declined in 2012, causing the average effective rents rate to rise 2.1 percent this year.

Philly’s economy continues to grow, even if at a “modest” pace, adding an expected 36,800 jobs this year, and those workers will need somewhere to live. This influx of demand has many developers rushing to provide the supply of housing necessary to meet the demands of Philly’s recovery.

Apartment Demand Possible Indicator of Property Values Rise

These same market indicators have many wondering if now might be a good time to invest in Philadelphia real estate. Certainly developers are rushing to acquire properties capable of being developed to meet increased housing demand in the city, but those interested in buying a house in Philadelphia are watching the “modest” market recovery with some trepidation.

If the market indicators are a sign of the times, then Philadelphia’s economy is on the gradual upslope that could make now an ideal time to buy property in Philadelphia. Many potential buyers are watching and waiting to see if these signs mark a trend in the hopes of buying at just the right time. However, wait too long and that dream house in Philadelphia may well cost much more as property values rise with increasing demand.

The Philadelphia real estate market and Philadelphians themselves are feeling something in the air. A revival of Philly’s Downtown is having rippling effects throughout the city. Businesses are thriving, serving a new population of city-dwellers that have been immigrating into the city from the suburbs and exurbs year after year. This wave of new Philadelphians is partly due to investments that the city has made in the past and partly due to the rising cost of gas making many question their commutes. Whatever reason brings them to the City, this population is reviving neighborhoods, starting new local businesses, and supporting the businesses that make Philly great.

Demographic Shift Fueling Philadelphia’s Downtown Revival

A Pew Poll from 2011 (PDF) shows that the demographics of the city are shifting toward young adults and families with those aged 20-44 representing 37% of the city population. Further, it shows that only 69% of Philadelphia’s population was born in the city, meaning that 31% of that year’s population had moved into Philly at some point in their lives.

This demographic is great for Philadelphia, as it is generally composed of young professionals and their families. They are predominantly moving to Fishtown and University City neighborhoods to enjoy these areas’ thriving restaurant and cafe culture. This group’s spending is supporting Philadelphia businesses, leading to a further revival of Philadelphia’s Downtown businesses.

Philadelphia Downtown Revival: “If You Build It…”

Philadelphia businesses have been the key to Philadelphia’s Downtown revival. Their successes, some say, are a result of investments that the city of Philadelphia made in the 1990s. By passing the 10-year real estate tax abatement, Philadelphia courted business. One of the results was a New Convention Center and the many hotels that sprung up around it. Another was an increase in commercial shopping space, the same space that has made it possible for many Philadelphia small businesses to appear in the decades since.

Philadelphia is now feeling the effects of its long-term investment. More businesses means more jobs, so courting business has provided the jobs needed for the population influx of the last decade. The abatement of real estate taxes accomplished its goal of promoting business development in Philadelphia, but it also resulted in tax shortages that Philadelphians have felt through funding cuts to schools, fire departments, and police departments throughout the city.

Course Correction a Part of Philadelphia’s Downtown Revival

The Downtown Revival will need to be funded. Those young families need schools for their children and safe neighborhoods. The businesses need well-maintained roads for shipping and receiving of goods. The successful abatement left Philadelphian public servants clamoring for funding, but the City’s Actual Value Initiative (AVI) promises to be just the course correction that the city needs.

While it is likely to raise taxes on many commercial properties and increase the share of the tax burden shouldered by Philadelphia businesses, the funds that it will draw into city coffers will have a direct impact on the lives of Philadelphians. With shifting demographics moving toward those populations that economies are built upon, the Downtown Revival is likely to continue, and that can only be good for anyone who wants to buy a home in Philadelphia.

The forecast looks good today – it’s a great day for a street fair, and there’s a doozy of one on Walnut Street. Photo from Greater Philadelphia Tourism Marketing Corporation.

As sure as the flowers bloom, the crowds will flock to Walnut Street from Broad to Rittenhouse Square today for another May perennial: the Rittenhouse Row Spring Festival.

This annual event brings the city’s premier shopping district outdoors for one fun-filled, flavorful afternoon.

“Flavorful” because the district’s restaurants are the stars of the show. More than 40 Rittenhouse Row restaurants set up shop at the festival, offering inexpensive samplings of their featured fare. If you’re looking for a.bar or a.kitchen to patronize, don’t fret – both of these establishments will have tents at the event. So will the city’s two most prominent restaurateurs. If this year is like last, the Rittenhouse Square block of Walnut will be a Stephen Starr showcase, with demonstrations and booths from his Rittenhouse-area restaurants – Alma de Cuba, Barclay Prime, Butcher and Singer, Continental Mid-town, The Dandelion, El Rey and Parc. Jose Garces will be represented by his Village Whiskey, and you will have one last chance to experience Le Bec-Fin fare on the cheap – the restaurant will close for good in June, but it will have a booth at today’s festival.

There will also be shopping, with merchandise from area retailers, and live entertainment on several stages.

Rittenhouse Row Spring Festival, noon to 5 p.m. today on Walnut Street from Broad to 19th. Free.

Philly needs teachers. This statement has been repeated so many times since the 90’s that it is beginning to feel like a mantra. Drawing teachers to Philadelphia and then keeping them there seems to be an unending battle with Philadelphia students suffering the majority of the repercussions. One developer in Philadelphia thinks he has an idea that might help. D3 Real Estate plans to offer teachers in Philadelphia discounted rent when they rent from their Oxford Mills development in Fishtown.

Greg Hill of D3 Real Estate described the program:

“Although we are not educators and we’re not necessarily experts in that field, we do believe that if we can create a good working environment and a good living environment that’s affordable, it helps those very dedicated professionals do what they do best.”

This program offers a nice incentive for teachers who want work and live in Philadelphia. D3 Real Estate is able to accomplish this benefit thanks to “financing subsidies and historic tax credits.” Teachers may be the ones receiving the discount, but the real value is what this program may do for Philadelphia’s students.

Teach For America to Move Its Headquarters to Fishtown

As if having Philadelphia business’s do their part to encourage the success of Philadelphia schools weren’t enough, D3 Real Estate’s Oxford Mills development was announced as the soon-to-be headquarters of Teach For America’s Greater Philadelphia branch. Locating their offices near to discounted housing for Teach For America’s teachers was an opportunity on which they simply could not pass.

Teach For America – Greater Philadelphia works with Philadelphia schools and communities to promote an improvement in Philadelphia schools with lower funding and struggling student populations. Since 2003, Teach For America has sent more than 250 teachers to Philadelphia and Camden, NJ schools. Many of their alumni have gone on to become leaders in the Philadelphia public and Charter Schools development. Everyday Teach For America corps members make a difference in Philadelphia students’ lives.

Philadelphia Teacher Retention Programs Initiated

Rent incentives and Teach For America programs bring teachers into Philadelphia. The City now has the challenge of retaining those teachers. A recent study of Philadelphia schools (PDF) conducted by the by The New Teacher Project (TNTP) found that a shocking number of Philadelphia educators felt overworked and underappreciated.

Philadelphia is certain to continue its efforts to encourage talented educators to spend their careers in Philly. What the Oxford Mills apartments project shows us is that Philadelphia business-owners are community members that are glad to participate when city government offers incentives.

The City is taking it one step further by making efforts to honor Philly’s best educators. Philadelphia will honor 59 excellent educators from Philadelphia public high schools by awarding them the Distinguished Teaching Award. This award recognizes teachers who truly strive to elevate Philadelphia school systems with their dedication, talent, and years of service. The award comes with a $3,500 prize from the Lindback Foundation and is awarded just in time for summer vacation. How great is that?

These efforts on the part of the City and the community are steps in the right direction, and many living in Philadelphia have high hopes that the coming decade will be a period of renewal and accomplishment for Philadelphia schools.

Philadelphia, the City of Brotherly Love, it was once the heart of the American Revolution, even serving as the nation’s capital for a period. It’s also a great place to live. Philadelphia has a thriving arts scene, including a musical culture that has repeatedly influenced American popular music. Restaurants aplenty offer food drawn from multi-cultural populations that share one thing in common: a love of good food. History and culture come together, making Philadelphia a great place to live.

The many things that make living in Philadelphia a great experience are often recognized with awards. Below, we’ve captured a few categories which we think illustrate why living in Philadelphia is living in one of America’s best cities.

Eat – Philadelphia Has Best Italian Restaurants and More

Philadelphia has a reputation for good food. Nothing illustrates this better than the Philly cheese steak sandwich, a classic often copied but very rarely done as well as the grill masters of Philly do it. Philadelphia also has a fantastic food scene that covers the full spectrum of gastronomical delights from street vendors to award winning restaurants. Just recently, Philadelphia’s Chef Marc Vetri’s restaurant Vetri was recognized by Travel + Leisure’s list of the 30 “Best Italian Restaurants in the U.S.” For great food, Philadelphians have it all, whether you’re looking for excellent pizza, true to The Boot Italian food, or authentic hand-pulled noodles in Chinatown, you can find what you are looking for in Philadelphia.

Drink – Philly Beer Scene Ranks Amongst Nation’s Best

When people talk about craft beers and microbreweries, you hear a lot about Vermont, Oregon, and Colorado, but GQ Magazine recently ranked Philadelphia as one of the America’s best beer culture cities. Philly’s annual Beer Week and dozen craft breweries were amongst the reasons for recognition. Above all, though, Philly was recognized for being “Home to the Perfect Pub Crawl” thanks to such locations as the “Memphis Taproom, Monk’s Café, Alla Spina, Tria, Yards Tasting Room, Standard Tap and Silk City.” Grab a Philly pretzel and get yourself a pint because living in Philly gives you access to a top notch beer town.

Be Merry – Philadelphia Amongst Best Cities for Holidays

Real estate site Zillow recognized Philadelphia as one of the best cities for Trick or Treating with Chestnut Hill, Manayunk, Mount Airy, South Philly and Fox Chase being the best neighborhoods for treats. Holiday traditions are a big deal in Philadelphia. Look no further than the annual New Year fireworks off Penn’s Landing and the Mummers Parade the next day, a fun, harmless tradition that has been passed through families in the region for generations. For more than 25 years, the Pennsylvania Ballet has been entertaining generations of Philadelphians with their annual production of The Nutcracker, a true holiday tradition. Living in Philadelphia comes with holiday traditions that go back generations, making holidays memorable for innumerable Philadelphians.

Go Natural – Philly Parks Recognized For Excellence

If you’re looking to get back to nature and think that’s not something that Philadelphia has to offer, you are in for a surprise. April was National Garden Month, and during that month, two Philadelphia region gardens were ranked amongst the nation’s 10 best gardens in the country. Both Longwood Gardens in Kennett Square and Chanticleer in Wayne, PA made the list. Further, Philadelphia’s Parks and Recreations Department ensures that living in Philadelphia gives you access to many public parks, ice rinks, swimming pools, adult centers, computer labs, golf courses, and even horse stables.

While most know Philadelphia for its pretzels, cheese steaks, and role in American history, living in Philly comes with an extensive amount of benefits. Add all of these together and you can easily see why living in Philadelphia is living in one of best cities in America.

2013 will be remembered as the year of the Actual Value Initiative (AVI) to many owners of properties in Philadelphia, residential and commercial alike. 2014 will be the year that everyone experiences the effects of the AVI, and while many are leery of the likely increase in property taxes, officials at The Office of Property Assessment (OPA) assure residents and business owners that the assessment of property value is also going to raise many properties recognized value as well.

The AVI was designed to rein in wildly disparate property values within Philadelphia neighborhoods by replacing outdated valuation methodologies with uniform property valuation criteria. This AVI criteria set is clearly stated and entirely available to the public, ensuring that properties of the same value within the city are taxed as such through an entirely open process.

Criteria for AVI Assessments of Philadelphia Property Values

OPA has established standardized metrics by which commercial and residential properties in Philadelphia will be assessed for current real estate market value. This is in order to ensure a more uniform system of measurement and thus a fair treatment of value across all neighborhoods in Philadelphia.

Properties will be assessed by size and age of property, as well as the property’s location and condition. The use of the property as a home or business will also affect property value. Residential properties in Philadelphia will be analyzed against recent sales data, using the previously mentioned statistics to adjust property value appropriately. Commercial and large, multi-family properties will be weighed by an income approach, market approach, and cost approach, taking into account property type and use. Commercial properties will also have cost of construction and land taken into account.

These Philadelphia property value metrics will be determined by the characteristics of each individual property as determined by field inspections, aerial photography, city permits and deeds, and such commercial data as property listings and sales.

What The AVI Means For Owners of Philadelphia Properties

Owners of commercial or residential properties in Philadelphia may be wondering what the AVI means for them. The answer is a bit of bad news and a bit of good news. Philadelphia property taxes are likely to increase for some property owners when the data from the AVI goes into effect in the 2014 tax year. That’s the bad news. According to recent Pew Research (seen in the chart to the right), Philadelphians have had it easy when compared to other major cities.

Philadelphia’s property taxes have been unusually low because the assessed value of some properties in Philadelphia had drifted far from actual market value, an issue most likely to be seen in commercial properties. From an operational government standpoint, this meant a stream of revenue via property taxes that failed to keep up with something that never fails to keep up with the times: contemporary costs.

The good news is that Philadelphia will be able to modernize itself to the standards of other American cities by further funding its schools, infrastructure, and public safety departments. The AVI may be even better news for current owners of residential property in Philadelphia who are looking to sell. The newly assessed property values are likely to give sellers a government-approved property value assessment with which they can value their property. Further, the investment of this revenue in Philadelphia enables the city to enact programs to keep Philadelphia a competitive city in the 21^st Century.

Buyers looking to buy commercial or residential property in Philadelphia may want to seize the opportunity provided by the time it takes OPA to complete the AVI during 2013. Undervalued properties in Philadelphia are a great opportunity right now, assuming the AVI results in a higher valuation of the property in 2014.

Looks inviting, doesn’t it? A professional home stager can help you achieve this look when you sell your home.

Let’s face it – not all of us are design geniuses. We may keep our homes spic and span, with everything in its place, but that place still might not show off its qualities to greatest advantage when it comes time for you to sell it.

We may know all the little things we need to do to make the inside of our homes more appealing to buyers, like getting rid of clutter and removing peculiarly personal mementoes or odd knicknacks, but we may still not have our home in ready-for-its-closeup condition.

In such cases, it makes sense to engage the services of a professional home stager. Home stagers are interior design specialists who focus on turning sellers’ homes into show pieces. They know the little tricks that turn a room from ho-hum to dazzling, where and how to place furniture to maximize the appearance of spaciousness, and the steps to take to downplay a home’s defects.

And in just about all cases, they can do it with the objects you already own.

What’s more, hiring a home stager can be an excellent investment. A survey conducted by the HomeGain website found that professional staging produced a $1,780 average boost in a home’s selling price, or a 586 percent return on investment.

Which means that if you can afford it, hiring a professional stager can result not only in a faster sale of your home, but also a more profitable one. The Philadelphia area has many talented, knowledgeable home stagers to choose from.

Tomorrow – Saturday, May 4 – “the hippest street in town” will become even more of a playground from noon to 8 p.m.

During those hours, South Street from 2nd to 8th streets and 2nd from South to Lombard will be closed to traffic for the first-ever South Street Headhouse District Spring Festival, an afternoon-long celebration featuring food, music, crafts, shopping, fun for the kids, and more.

The street will also be a stage, with featured bands performing hourly on the main stage at 5th and South streets, a kids’ stage at 2nd and South featuring the School of Rock House Band and the Tune Up Philly youth orchestra, and other musicians and performers doing pop-up sets at satellite stages along the street.

Local restaurants and bars will turn out their best fare for the event – we’ll bet there will be specials – and hot dog emporium Hot Diggity will wheel out the mobile version of its South Street restaurant at the festival.

Discount parking is available at the lot on Columbus Boulevard at the foot of the South Street pedestrian bridge, and other area lots will also be open. Or save yourself the headache and take SEPTA to the event – or let Uber drive you there: the car service is offering users their first ride free with a special promo code for the event.

For more information about the festival, parking and the promo code, visit the South Street Spring Festival web page.

In our last post, we began our look at the top ten hottest neighborhoods in Philadelphia as forecasted by market trends seen in the first quarter of 2013. Today, we continue our journey through Philly’s fastest-growing neighborhoods and look at a few areas where properties barely hit the market before they are sold.

Demand in some of the neighborhoods below has many surprised and bodes well for the continued recovery and growth of the Philadelphia housing market.

The Big Five of Philly’s Top 10 Hottest Neighborhoods

Cedar Park – Cedar Park is home to historic architecture of the Queen Anne style. The westward expansion of University City has put this Philadelphia neighborhood on the map of many knowledgeable house-hunters. This Philly neighborhood sports a great variety of cafes and restaurants whose menus span the globe. The efforts of its neighborhood association are drawing investment in preserving its historic buildings.

Northern Liberties – Take a look at Northern Liberties and gaze at the future of Fishtown about a decade from now. The youthful hipsters of the Bush era took over Northern Liberties, revitalized it, and were slowly driven out by the rising prices. Now, young and established professionals alike are drawn to Northern Liberties, enjoying its thriving restaurant scene and almost small-town charm.

Avenue of the Arts – Property values are skyrocketing in this once fallow neighborhood thanks to the construction of new apartments, condos, and townhouses. Avenue of the Arts is drawing young professionals who enjoy its shopping, restaurants, bars, and nightlife. Proximity to public transit and a fashionable reputation ensure Avenue of the Arts will remain a hot neighborhood for some time.

Washington Square West – The locals call it the “Gayborhood,” and yes, there is a sizable gay and lesbian population in Washington Square West. This influx of single professionals and dual-income-no-kids (DINK) couples has likely been key to this neighborhood’s complete rebirth. With thriving businesses and rising property values, Washington Square West is drawing all manner of young professionals and young families who appreciate its amazing restaurant scene and bohemian feel.

Rittenhouse Square – In the middle of it all, Rittenhouse Square offers shopping, restaurants, parks, and access to all that Philly has to offer. This neighborhood is seeing an influx of investment from the more established, including empty nesters, professionals from the Hospital of the University of Pennsylvania, and those who can afford its higher property values. Price, it seems, will never be enough to keep Rittenhouse Square from being one of the most popular neighborhoods in Philadelphia.

If it weren’t for the outer boroughs, it would take even longer for owning to cost less than renting in New York City. Image by Nadavspi from Wikimedia Commons, used under a Creative Commons license.

At Philly Living, we’re all about promoting home ownership – it gives you not only a secure place to live but also a grubstake in both your own and your community’s future. And we are fortunate to live in a large city where homeownership remains within reach for most residents, which means that if you’re planning to stay here a while, buying beats renting in just about every case.

But there are some cities where that’s not the case. In New York, for instance, it would take you five years before the total cost of home ownership dropped below the total cost of renting. Bloomberg analysts recently crunched the numbers for renting vs. buying over a 30-year time frame and came up with a “breakeven horizon” – the point at which home ownership begins to pay off – for a number of large cities. It should come as no surprise that all six of the cities where renting makes sense for the longest time period are on the coasts. From No. 1 to No. 5 (two were tied for fourth), here they are, with their breakeven horizons:

1. New York, 5 years
2. Seattle, 4.3 years
3. Boston, 3.9 years
4. (tie) San Francisco, 3.7 years
4. (tie) Washington, D.C., 3.7 years
5. Portland, 3.6 years

The Best Cities for Renters (Bloomberg)