Zenobia Cofer and her husband started looking for a home in West Philadelphia almost a year ago. They've looked at more than 100 properties, but they are running into the same problem: the price.
“I can’t even afford the neighborhood where I grew up,” Cofer said.
Philadelphia has always been seen as the bargain between New York and Washington D.C. There's a new normal now, however.
The housing market is hot, which is great for sellers, but it’s difficult for the everyday family to compete with out-of-town real estate investors who can make an offer over the asking price.
The median price for homes sold in the first three months of this year are up 9.7 percent from last year, according to Bright MLS, a combination of nine Realtor organizations covering Greater Philadelphia. The median is up 25.9 percent from three years ago.
“If you have a $50,000 income, you’re going to be able to afford a $200,000 house no problem, but that $200,000 house you could get in 2000, is maybe $300,000 today," said Susan Wachter, a real estate and finance professor at Penn's The Wharton School.
Many would-be home buyers, especially Millennials, are being priced out of the market, and it’s having a ripple effect. Home ownership is at a 50-year low.
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“It’s new for us that Philadelphia should be a market where it’s so difficult for Millennials to become homeowners,” Wachter said.
"The main thing right now is that prices have increased steadily since 2006 at a rate that we have not seen before historically. The rate of price increase has exceeded wage increases exceeded income increases by far so we've got a crunch here."
In addition, housing supply is low. Homeowners are staying in their homes and renovating rather than moving out.
So, while Philadelphia is still very affordable compared to Washington, D.C. and New York, it is becoming less affordable over time.
The news came as a shock to Cofer who is fighting frustration in finding the right place to raise a family. Others are likely sharing the same angst.
