The answer is a resounding yes.
Philadelphia has broad appeal to various groups of people, including young professionals, investors, retirees, families, athletes, and students. The city has experienced steady population growth for over a decade, driven primarily by millennials and immigrants. This growth has elevated the real estate market value, transforming previously overlooked neighborhoods into desirable places to live.
According to Kathryn Blessington, Realtor/Developer and founder of PhillyProper Philadelphia offers incredible value compared to cities like New York. For $2 million, one can purchase a 3,000+ square-foot ultra-luxury residence with a 10-year real estate tax abatement and garage parking in the most sought after neighborhoods in Center City. Philadelphia continues to attract residential buyers, multi-family home buyers, commercial real estate buyers, and luxury real estate buyers at a stable price point.
Investors can find a growing and stable rental market with single family homes or a larger multifamily property, and CAP rates for newer buildings range from 5-7, well above the nearby cities. Higher returns and tax incentives mean investors have been flocking to Philadelphia since the last recession.
There are several reasons why Philadelphia real estate is a smart investment:
Neighborhood Value: Property values in neighborhoods like Rittenhouse Square and Washington Square have remained stable. These areas offer quiet blocks with well-kept pedestrian sidewalks and green spaces. Investors can expect positive rental income in these neighborhoods due to limited new development and the growing population. Similar trends can be observed in other popular neighborhoods, including Fairmount and Bella Vista/Queen Village.
Continued Growth: Philadelphia has experienced a 5% population growth over the past 10 years, with a 1.17% year-over-year employment growth rate. The city boasts a diverse economy with significant sectors such as financial services, healthcare, biotechnology, IT, food processing, and oil refining. Its strategic location between New York City and Washington, DC, along with its transportation infrastructure, further enhance its appeal.
Affordability and Rental Market: Philadelphia offers affordable home prices compared to many other cities in the United States. The percentage of renters in Philadelphia is increasing, making it an ideal market for investment rental properties. With a cost of living 3% below the national average, the city provides a range of activities, dining options, nightlife, and historical destinations.
Philadelphia is a wise real estate investment decision. Its population growth, stable property values, diverse economy, and affordability make it an attractive destination for investors seeking long-term opportunities.
If you’re interested in investing in the Philadelphia area, reach out to Kathryn Blessington at Kathryn@phillyproper.com today.
Meet Kathryn Blessington
Locally known as a trend setter in marketing for real estate and design, Kathryn, a Main Line PA native, is ranked as a top luxury real estate agent in Philadelphia and the Main Line. She’s distinguished as the Most Viewed Agent Online nationally in 2021 and 2022 and her deals have been featured in Philly Mag, Philadelphia Style, Main Line Today, Curbed, The Inquire, and notably Architectural Digest.
