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Friday, March 24, 2006

Call Me a Prophet

I've been saying this for years: via

10 bubble blowers -- appreciation should continue to grow

Phladelphia. Major northeastern cities may be the least expected on a list like this, so we were somewhat surprised to see Philadelphia show up in a favorable position on several reports. The NAR quarterly report showed a 12 percent increase in appreciation between 2004 and 2005, high enough to encourage people to buy homes, but not at such a dizzying rate as to spark panic purchases. The housing-cost-to-income ratio, at 31 percent, is quite favorable compared to other large northeastern cities (53 percent in Washington, D.C., and Newark, N.J., and 72 percent in New York City) and while job growth is small, it's moving in the right direction.

UPDATE: from a January 30th Daily News article:

"PMI Group, a Walnut Creek, Calif.-based research firm and mortgage insurer, gives the Philadelphia market a risk factor of 98 on its quarterly U.S. Market Risk Index. That means there is a 9.8 percent chance of a local drop in real estate prices in 2006.

Compare that with San Diego's risk factor of 588, Boston's 579, and New York City at 477. The index, which uses 1995 as a base year, ranges from one to 1,000. The smaller the number, the lower the risk.

"Philadelphia's numbers have been low for a while and even though appreciation has slowed, it's still pretty good," said PMI spokeswoman Beth Haiken.

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