Philadelphia’s Fix and Flip Market is Ripe for Investors
The Philadelphia fix and flip market is red hot right now, and it’s the place to be if you’re a fix and flip investor.
When real estate investors look at the Philadelphia housing market, they see listings leaving the market in 10 days, median home sale prices rising by $40,000 year-over-year, and sales transactions hitting 10-year highs.
With stats like these, it’s easy to see why Philadelphia’s real estate market – especially the fix and flip market – is on fire. Data from Attom shows that Philadelphia is ranked the sixth best US market for house flipping, and Pennsylvania is the second-best state for flipping with four of the top 10 fix and flip markets in the country in 2020.
So, how was the Philadelphia market (which includes Camden, New Jersey, and Wilmington, Delaware) able to position itself as a giant in the fix and flip market? There are several reasons to consider:
- Homes are spending about 65 days on market (median).
- Single-family homes in Philadelphia are reaching the median sold price of $315,000.
- On average homes in Philadelphia are selling for the full asking price.
- Philadelphia is transitioning into a buyer’s market with the current supply of homes greater than the demand for homes.
- 40% of the rental units in Philadelphia rent for between $1,001 and $1,500 per month.
COVID-19 couldn’t even stop Philadelphia’s housing market boom in 2020. County and city offices shut down early in the pandemic, making it impossible to obtain permits for construction. During March and April, just four new construction permits were issued. The year before during that same time, 122 permits were issued. This made inventory even tighter in an already hot market.
But the slow-down was temporary. By August, permits were skyrocketing well past the level they were at before the pandemic. Philadelphia’s growth during the pandemic positioned the city as one of the best areas in the nation for fix and flip investors.
This is huge for investors. Of the 149 U.S. markets with at least one million people, Philadelphia ranked as one of the highest for flipping profitability. Cheaper purchase prices and booming technology have combined to attract several investors to the region.
Strong Rental Appetite Boosts Fix and Flip Market
No doubt that Philadelphia has turned into a real estate investor’s city, but it’s also turned into a renter’s city. The real estate boom is creating a place for renters to flocking to. About 45 percent of the total occupied housing units in the city are renter-occupied.
Of those renters moving into Philadelphia, most of them were younger people who previously lived in other cities, and 53 percent of Philadelphia’s new arrivals were urban dwellers. The average age of the group was 28.
Affordable rent is another huge reason attracting renters to Philadelphia. The average rent is $1,660, which is great for investors. Over the past three years, Philadelphia’s average rent has increased by 8.7 percent above the national average.
The net result is a market ripe for fix and flip investors who can rest assured that they’ll be able to sell a home quickly after completing the flip, or turn it into a profitable rental if they choose to hold the property.
When the housing market is that hot, you can’t waste time getting your fix and flip project going. You need a lending partner that will move fast and help you get the funding you need. That’s what Lima One Capital does best.
We offer a wide variety of FixNFlip rehab loans for the real estate investor looking to purchase and rehab an investment property. Our full offering of FixNFlip, Construction, Cash Out, and bridge lending programs provide investors the ability to capitalize on the fantastic real estate opportunities that exist across our entire lending area. Whether it’s your first flip or your 500th, Lima One is here to help you through the process.