Housing prices are bouncing back all over Philadelphia, except in West Philly, according to a recent report.

Second quarter home prices fell 7.8 percent in University City compared to the first quarter and an average of 5.9 percent in other parts of West Philly, the Fels Institute of Government analysis shows.

Photo by Katrine Lvovskaya.

Prices around the city bottomed out about 18 months ago and prices in many neighborhoods have begun to bounce back (as much as 8 percent in parts of North Philly), while prices in this side of the Schuylkill have lagged. Not to worry, said Kevin Gillen, a senior research consultant at Fels and the report author. He believes the down tick in house value is just a short-term phenomenon and can be regarded as more of a “correction” in pricing, particularly for University City, which saw double-digit home price rises for the last 10 to 15 years.

“The prices are still way above where they were 10 years ago. It’s like 100 steps forward and 15 steps back. Think of it as a mean reversion,” said Gillen, who believes the long-term trend for the area is still optimistic. “It’s positive going forward but a more modest positive than you had in the past.”

Average home prices across the city have increased 3.1 percent compared to the second quarter last year.

This over-inflation during the decade’s housing boom, said Gillen, can be attributed to University of Pennsylvania renewed, three-fold investment in the neighborhood: the creation of the University City Business District, which led to better public services; a mortgage program aimed at UPenn faculty and staff to encourage them to invest in the neighborhood; and the opening of the Penn Alexander School at 43^rd and Locust Streets 10 years ago.
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