Affordability, construction, community in 2023 | Real Estate Newsletter

“That was this year?!” is something I find myself thinking at the end of every year. So much happens over the course of 12 months that it’s easy to forget things.

And a lot has happened in real estate this year, which means many stories from my colleagues and me. Now that it’s the last week of 2023, it’s time for a year-end wrap-up.

I asked my fellow real estate writers Jake Blumgart and Kevin Riordan to look back on their stories and share what stood out to them. I did the same.

And keep scrolling to see the most-read stories that I mentioned in the newsletter and highlights from a year of taking home tours together.

📮 What would you like to see in the newsletter in 2024? Share questions you’d like answered and suggestions of what we should write about by emailing me.

— Michaelle Bond

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A huge story this year (and every year really) was the affordability of homes. Prices kept rising, and mortgage interest rates were up. That combination priced potential buyers out of the market.

Home prices are relatively more affordable in Philadelphia than in other large cities. Earlier this year, the Philly region was one of only four metros where buying a home was cheaper than renting.

But this spring, the Philly area was short thousands of homes for sale that low- and middle-income buyers could afford. Buyers in our region needed to make thousands of dollars more than last year to afford a starter home. And more couples are creating home funds on their wedding registries to get help with down payments.

A survey released in March found that three in five Philadelphians think housing affordability and homelessness should be top priorities for the city.

Housing advocates often say “the most affordable home is the one in which you already live.” But a lot of homes in Philly are old and need repairs. The Federal Reserve Bank of Philadelphia found that tackling all the home repairs needed across the Philly region would cost at least $3.7 billion.

On the rental side of the market, Philly tenants who were facing eviction at the start of the year owed more in back rent than they did before the pandemic. This year, City Council discussed how to hold onto subsidized apartments that are at risk of being sold. And Philly started offering loans to landlords to repair properties and maintain the city’s affordable housing.

Of course, not everyone is struggling. Some Philly homeowners are spending what it would cost for a new home to add a third story to their rowhouse.

🎤 I’m passing the mic to my teammate Jake Blumgart, who covers commercial real estate:

While our real estate market would never be mistaken for Miami or Manhattan, neighborhoods like Northern Liberties, Roxborough, Kensington, and University City have seen dramatic levels of new construction in recent years. Even as the city’s persistent struggles with poverty and segregation continue, Philadelphia finally began competing with its suburban counterparts for population and tax base (especially those that resolutely refused to build new housing).

But after years of negotiating a pandemic, a spike in gun violence, and a variety of other historic challenges, Philadelphia’s real estate industry met its match this year in a more esoteric foe: rapidly rising interest rates.

Projects like the Durst Organization’s 360-unit apartment building on the Delaware River or the second part of the Post Brothers’ Northern Liberties development were put on ice. Others were outright canceled, like Alterra Property Group’s proposed 352-unit building on 42nd and Market Streets. Then there are those like the Goldenberg Group’s 468-unit tower on South Broad Street, revealed in the summer of 2022, that sit on ground that remains conspicuously unbroken.

While cranes still dot the skyline from the recent construction boom, next year is expected to be an excruciatingly slow one. Anyone who hadn’t previously secured construction loans will struggle to get them now.

The situation may change, of course, especially if the Federal Reserve begins cutting interest rates. And as we’ve learned over the past seven years, unforeseen events are likely to throw everyone’s calculations off.

But for now, 2023 — and perhaps 2024 — has seen Philadelphia’s real estate industry go into a deep freeze.

🎤 Now I’m passing the mic to my teammate Kevin Riordan, who covers real estate in New Jersey and the Philly suburbs:

In 2023, my real estate beat took me all over the region, including Philly itself. I spent time in many of the inner-ring, postwar, and emerging suburbs in Pennsylvania and New Jersey, as well as in stretches of the suburban frontier in both states.

Despite their abundant differences, these places, and the stories I wrote about them, had a lot in common. Whether focused on a proposal for warehouses in Oldmans Township, Salem County, or an upscale condominium proposal for downtown Swarthmore, Delaware County; or a request to tear down a local landmark in the Germantown section of Northwest Philadelphia, or to construct affordable apartments in Upper Gwynedd, Montgomery County; the issues boiled down to disagreements over what sort of place these places sought to be — or become.

People generally don’t like change. And they don’t like other people — particularly, politicians, developers, urbanists, or journalists — telling them what’s good for them and especially, what’s good for where they live.

But I often find that while some people are motivated by fear (or worse), people on “both sides” of real estate and development-related issues are motivated by a protective love for their communities.

Sometimes, but not always, recognizing what they share with one another can enable people to compromise, which is a powerful thing. They may even find they have the power to convince politicians, architects, and developers to find a way to compromise, too.

Of the many, many stories I featured in this newsletter throughout the year, these were the five most read on our website:

One of the most fun parts of this newsletter is peeking into other people’s homes. One of my editors, Katie Krzaczek, is responsible for laying out the beautiful presentations you see each week for The Inquirer’s Haven series. Below is her look back at 2023. How many of these homes do you remember?

I’ve had a first look into home renovations, custom builds, farms, verdant backyards — what makes all of your houses homes.

One thing stood out to me: our homeowners’ personalities were on full display, whether in their art collections, sports memorabilia, or the heirloom pieces that shaped the design of a room.

With these readers opening their homes to give us an intimate peek into their lives, it’s hard to pick a favorite. I’ve loved reading about what makes their homes Haven-worthy. But a few have stuck with me this year, including this South Philly rowhouse that has maintained the charm of decades past, a truly one-of-a-kind Victorian filled with taxidermy and ornate antiques, a home in Burlington that has a dual purpose as a wedding venue, and this cross-generational garden shared between neighbors young and old.

Thank you for letting us look into your lives each week. And we’re always looking for future Havens! Nominate your home (and send some digital photographs) by emailing properties@inquirer.com.

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In 2024, I’m looking forward to continuing to share real estate market insights and context; pieces that shed light on the problems of inequity that our communities face; and personal stories of locals who are buying, selling, renting, and going about their lives in their homes. Enjoy the rest of your year.

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