"People want to be in the downtown area near restaurants, shopping, museums, the theaters, waterfront—from the millennials to the 55-to-75-year-old empty nesters," said Mike McCann, a real estate agent at Berkshire Hathaway Fox & Roach.
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Home prices have struggled, down 0.3 percent for all sales in the last year. If you exclude sales of distressed properties by short sales or after foreclosure, prices were up 5.5 percent, according to CoreLogic. Fewer Philadelphians owe more on a mortgage that the home is worth. At the end of the fourth quarter, just 7 percent of homes were underwater, down from close to 10 percent the prior year.
The city is looking to millennials for the future. The Philadelphia region is home to more than 300,000 students and many colleges and universities, including University of Pennsylvania, Drexel and Temple. The city has made a concerted effort to keep graduates in town.
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According to a Campus Philly 2014 survey, 51 percent of out-of-towners chose to stay in Philadelphia after graduation, although the number is lower than the 59 percent who stayed in 2010. The survey's authors say the Great Recession may have dampened student mobility.
Still, Philly touts its growing foodie reputation, walkability and relatively low prices. "We're still an affordable city for a millennial, where they can buy something for $200,000 to $450,000 right in the downtown neighborhoods of the city," said McMann.