Philadelphia may be known for Ben Franklin, Rocky, and cheesesteaks, but it’s listed far below Pittsburgh in a new ranking of real estate markets. Why?
Too many underwater mortgages and not enough jobs, according to an analysis by WalletHub.
Analysts compared 17 “key indicators of housing market attractiveness and economic strength” to come up with their ranking. The data comes from median home-price appreciation and how affordable housing is, along with job growth.
At the top of their list: Two Texas communities, McKinney and Frisco, followed by Cary, N.C., Nashville, Tenn. and Durham, N.C.
Pittsburgh perched at 196 for the best place to buy a house, while Philadelphia is down at 294 among the 300 largest U.S. cities.
“I would take umbrage if I knew what ‘umbrage’ meant,” joked Bill Lublin, incoming president of the Pennsylvania Association of Realtors. He told DVJournal he was surprised Philadelphia and Pittsburgh were so far apart in the rankings, given that the cities are so similar, and that he was used to seeing them near the top of various charts.
A lifelong Philadelphian, Lublin noted both cities are great places for first-time homebuyers with rowhouses that are economical because of their shared walls, which help with heating costs. Both cities have excellent hospitals, universities, cultural amenities, restaurants, cuisine, and outstanding sports teams.
“The cost of living is lower compared to other mid-Atlantic states,” so people move here for that reason,” he said, although higher interest rates are currently hampering sales a bit. Comparatively low real estate taxes are also a boon, he said.
WalletHub analyst and writer Chip Lupo explained, “Philadelphia ranks 100 spots lower than Pittsburgh in WalletHub’s Real Estate Market study, mainly because of the city’s share of seriously underwater mortgages and people delinquent on their mortgage debt. It also has a higher foreclosure rate than Pittsburgh, ranking 250th.
Another reason why Philadelphia ranks lower than Pittsburgh is the unemployment rate, which is one percent higher than Pittsburgh. This suggests that people in Philadelphia might not be able to afford housing in today’s market.”
Philadelphia also has the unfortunate label of “America’s poorest big city,” with poverty at 22.8 percent, according to Pew Charitable Trusts.
“Additionally, Pittsburgh residents have a higher median credit score than those in Philadelphia, which indicates a better chance at getting accepted for a home loan,” said Lupo. “Overall, Philadelphia’s real estate market is not performing well, mostly because of its residents’ financial state.”
WalletHub experts used only city-level data, not information from surrounding suburbs.
“Current home prices are extremely important, but there’s much more that you need to look at when determining the health of a city’s real estate market,” said Cassandra Happe, a WalletHub analyst. “Factors like the cost of living, the potential for the value of homes to increase, the availability of recently built homes and the quality of the city’s job market are all important to consider in conjunction with asking prices and interest rates. The best cities may not always be the cheapest, but they offer excellent housing options and long-term stability.”
Pittsburgh was also named the fifth most popular housing market in the U.S. by realtor.com.
Lublin shrugged off the numbers. Both Philadelphia and Pittsburgh are “really great places to live, raise a family, or buy investment real estate,” he said.
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