Philadelphia real estate may be the most undervalued and underperforming asset on the East coast. The City’s location is arguably better than any other metropolitan area in the United States, including New York City and Los Angeles. It was only 240 years ago when Philadelphia was the most important centralized meeting place in the colonies. That might seem like an eternity but relative to the total timeline of human existence, it really isn’t. Humans have been populating North America for thousands of years and although the political and social influences change constantly, the pros and cons of a City’s geographic location remain constant.
If one was to disregard current political and social conditions of cities and just focus exclusively on geography, it would be tough to argue that Philadelphia not rank at the top. There is no other city in the country with more population in a 250 mile radius than Philadelphia. This radius includes 4 of the top 10 most populated cities in the United States – Washington D.C., Baltimore, New York, and Boston… half of the country’s total population within a half day’s drive.
Furthermore, population growth is trending southward into Virginia, the Carolinas, Georgia and Florida. These areas are less congested and have two important features that New York and Boston will never have – warmer climates and lower taxes. As population continues to decline in the northeast and move southward, Philadelphia will be the closest distribution hub for these areas.
Unfortunately for Philadelphia, geography is not the only factor that influences a city’s success. Political power tends to have more weight in the short term and many Philadelphians remember when it was illegal to build higher than William Penn’s hat on the top of City Hall. Although it seems comical today, this law seriously affected the City’s growth during the 19th and 20th centuries. Without the ability to build vertical, the City was forced to spread out, pushing population into the suburbs. New York City, on the other hand, built some of the world’s largest skyscrapers which allowed for higher density within the City, more businesses, and therefore more revenue.
The good news is that, in the long run, markets should eventually correct themselves. When they do, Philadelphia will benefit greatly by the current pricing disparities. One must only hope that local politicians do not stand in the way.
Joe Jesuele is the founder and president of Northern Liberties Real Estate in Philadelphia, PA. He is responsible for overseeing all aspects of business development, leasing, and project management for residential and commercial properties. He is currently working on the construction of a single family residence in the Northern Liberties section of Philadelphia. For news on this project and other Northern Liberties Real Estate projects, please follow the company’s News and Blog.