House hunters in Philadelphia today might want to channel their inner Rocky. It will take a good fight to find the right property at the right price. Inventory in the city proper was down 10 percent in September from a year ago, while the median price, $158,000, was up nearly the same, according to the Berkshire Hathaway HomeServices Fox & Roach HomExpert Market Report.
The closer in to the city center, the higher that median price rises.
"I have sold more homes this year within the first day or two or three that it goes on the market because there is such a shortage. If something shows nicely and is priced right, there will be multiple bids, and it will sell right away," said Mike McCann, a real estate agent with Fox & Roach.
Closed sales are up just 2.4 percent from a year ago, and signed contracts are down 13 percent. Homes are also selling nearly 5 percent faster than a year ago. Demand is coming from what McCann calls "meds and eds" — growing demand from the city's many hospitals and universities.
After falling in the last decade, Philadelphia's population has rebounded since 2010, putting ever more pressure on housing. Comcast, owner of NBCUniversal, parent company of CNBC and CNBC.com, is building a second tower in the city, which is creating spinoff jobs in the downtown, especially for young millennials. Downsizing baby boomers are also adding to Philadelphia's new residents.
"They want to be in town. This is the first time we've had growth in the city. The downtown marketplace has been expanding dramatically. There are a lot of renovations of old neighborhoods that are being fixed up and new construction. The market has expanded because of the shortage of inventory," added McCann.
Helping the growth is a 10-year tax abatement for new construction. That is adding new product to parts of South Philadelphia and Kensington. The center core is spreading farther, and retail and restaurants are following suit.