A Quantitative Guide to Buying a Home in Greater Philadelphia
Planning a move to Greater Philadelphia? Our home buying guide gives you unparalleled data on the area, so you can make an informed decision.
May 2, 2023 / 20 minute read
Average House Prices in Greater Philadelphia
Home budget is probably the most important factor in deciding where to live in any area. The average median price for a city in the Philadelphia area is $319.04k, compared to a national median sale price of $428.7k. This actually makes this area less expensive than average, but most families in the Philadelphia area will still want to the price of the city they live in into consideration.
Before deciding where to live, it will be helpful to have a range in mind for your home budget, and to look for a city whose median home price is close to that range. Our Buying Power calculator (based on a 30-year fixed-rate mortgage) can help you decide what your budget should be.
The median household income in the Philadelphia area is $60,664 so we've set up our calculator to start out showing the budget caculation for a hypothetical family with this income.
Your buying power is
Median price by city
Let's compare this budget as shown by the dotted line to the median prices in each major neighborhood and county in the Philadelphia area:
Median price by county
This maps shows zipcodes where there's been a “seller's market” in real estate over the last few months according to ZeroDown data. That means homes have been selling quickly, getting a lot of offers, and selling for above list price. The redder the area on the map, the hotter the market has been for sellers.
This can give you some idea of the level of competition you'll face as a buyer. It's often frusterating to be a buyer in a seller's market, since you may get outbid. On the other hand, it can be some indication that you are buying into an area that will be desirable going forward and therefore a good investment.
Homes sold in hot markets
Looking at volume in homes sold per 100k population gives an another view of the market conditions near Philly. While high sales volume is often a indicator of a seller's market, it's not a strict relationship, since sales numbers are an indication both of supply and of demand. In the last few months, we don't see this relationship in any significant way in the Philadelphia area.
Are homes in Greater Philadelphia a good investment?
Price Growth in the Last Year
Price Growth vs Distance to Philadelphia
Prices have grown by 3.7% in the average city in the Philadelphia area over the last year, which is a smaller increase than the national average of about 20%. Things were fairly even in the last year between inner and outer suburbs, without a clear relationship between driving time to Philadelphia and price growth.
Price Growth in Expensive Cities
This chart gives shows where prices are high near Philly, and where they are increasing (or falling) the most. Often, less expensive areas get more expensive when a city is growing, whereas more expensive areas get more expensive in a hot national housing market. This year, prices grew or fell at about the same rate in more expensive cities as in less expensive ones, leaving the relative price between cities relatively flat.
Rent and Home Price
Average median rent in the Philadelphia area is $1.17k. As you would expect, rents and sale prices have a strong correlation in the Philadelphia area. The ratio between the value of a home and the amount that can be made by renting it is a strong indicator of how good an investment the home is as a rental property. Thus, cities above the dotted line in this plot may be more attractive for this purpose than those below.
Percent of Renters
On average, 35.2% percent of people in Philadelphia cities rent. In the plot above, we see the both where rents are high and where more people tend to rent near Philly. This is actually (perhaps surprisingly) a negative relationship not only here but in almost all metro areas, because people are more likely to rent in poorer areas, and in areas with younger people without families, who tend to rent smaller and cheaper homes.
This map visualizes commute time by car to Philadelphia, with areas that have shorter commutes shown in green and longer commutes shown in orange.
Driving Time to Philadelphia
Near Philly, homes in the further suburbs are considered more desireable than those which are more centrally located. On average, a home 10 minutes closer to Philadelphia by car will cost about $11 less per square foot.
Time to Philadelphia on Public Transit
Public transit in the Philadelphia area is fairly good when compared to most metro areas nationaly, since most cities in the region do have some way to get to Philadelphia by public transit, and since transit commute times average only 224% of driving commute times, which makes it a viable option.
What part of Greater Philadelphia has the best schools?
School Quality vs Price
People generally want to send their children to the best school they can, so school quality is a major driver of home prices across the United States. It's no different in the Philadelphia area, with homes in a given city being $43.85k more expensive on average for every one step up in grade (e.g. from a B to a B+), or $131.54k for a whole letter grade.
School Quality vs Distance to Philadelphia
Near Philly, the schools tend to be significantly better as you get further from Philadelphia, which is a common pattern seen in many metro areas. For most of your choices at least, this means there is a trade-off between school quality and commuting time. Overall, the average letter grade for schools in the Philadelphia area is a B .This is in line with the national average for metro areas which is between a B and a B-.
Demographics in Greater Philadelphia
This map gives an idea of where most of the people near Philly live. Darker areas correpond to higher population densities. Population density one of the most important factors for showing the type of place a city or neighborhood is, since it relates both to the home size and lot size of the typical home in a the area, and the availability and density of homes, businesses, schools, roads, transit, and almost everything else.
Age vs Income
Since most people tend to earn more money as they progress in their careers, in most areas of the country, there's a strong relationship between the average age of a given city and its average income, and the Philadelphia is no exception. Being above the dotted line in this graph can be taken as a sign of prosperity relative to this region as a whole.
Many people with kids will naturally want to live in cities where other families are living. We can get a sense of which cities near Philly these are by looking both at the number of people younger than 14, and the average houshold size. Cities towards the top right of this graph are the ones where many of your neighbors will be raising families, whereas towards the lower left are the cities with the most single people and couples without kids.
Most walkable places to live in Greater Philadelphia
This map shows the walkable zip codes in the Philadelphia, with the more walkable neighborhoods shown in darker colors of green.
Walk Score vs Density
Denser cities tend to have a significant advantage in walkability just because things tend to be closer together. But, there are many other factors like the presence of mixed-use neighborhoods rather than purely residential neighborhoods and the existence of sidewalks that contribute to walkability.
People Without Cars
Another way to look at walkability is to ask how many people in a given city actually manage to get by without a car. The plot above shows two different ways of measuring this, showing the percent of households near Philly with a vehicle on the X axis, and the percent of commuters who drive to work alone on the Y axis. The cities towards the lower left of this plot can be considered most walkable by these measures.
Greater Philadelphia Political Map
This map shows the precint-level voting results in the Philadelphia area for the 2020 presidential election, with darker redder areas voting more for Trump, and darker blue ares voting more for Biden. You can see above your potential neighbors voted at a very granual level by zooming in.
Trump Vote vs Distance to Philadelphia
The general pattern in American metro areas is that the city center is blue, and the suburbs get redder and redder as you go out away from it. This relationship doesn't hold however in the Philadelphia area, perhaps reflecting that Philadelphia isn't quite a typical urban center. In any case, if you care about the political alignment of the community you're thinking of moving to, you may want to find it on the graph above.