Philadelphia Real Estate 2009 Year End Analysis

Philadelphia Real Estate 2009 Year End Analysis

As 2009 has come to a close, it is time to take a look at where our Philadelphia real estate market stands currently and what has been accomplished in 2009.

2009 was a very difficult year for the United States and Global real estate markets. However, Philadelphia stood strong compared to many other major cities in the U.S. In Philadelphia there are still positive signs of construction all around us. These signs are not as obvious as several years back when every construction company appeared to have plenty of work for them and their workers. Now it is more segmented.

Certain companies appear to be recession proof and still have work for their employees but in moderate dosages while many others are living day by day. It appears to be more about who you know and what company or union you are working for in order to land more consistent work. If you are a small time contractor and are working for a company that is not as aggressive in their marketing campaign, then you may have seen little employment. This also applies to the larger contractors as well. When the recession hits hard you need to be on the right team to weather the storm. If your union or contracting firm does not have a good recession plan then they may have a hard time surviving, which will affect the livelihood of their employees or members.

The Philadelphia real estate market has had a push from the new Obama administration in 2009 with various legislation passed in favor of economic stimulation. These laws include first time home buyers laws and various lending laws in support of the consumer. Despite all of this new legislation, many people are still scratching their head as to whether this “support” from the federal government has done anything really worthy of praise. The unemployment rate is still at an all time high; the federal funds rate can barely go any lower than it is now, the health insurance industry is still massacring civilians with its premiums; and the promised rebuilding of our nation’s infrastructure has yet to make the majority of Americans sleep safe at night knowing that tomorrow’s commute won’t end with a collapse of the bridge that he or she will be driving on.

What about war? War is still everywhere in the Middle East with more soldiers deployed daily. With all of this money to spend on war…how about allocating a little bit to help the many homeless people that we now have in America?

What about the Green Revolution? This could be a very positive thing for the world. Building homes that are more environmentally friendly only makes sense. However, Governor Jesse Ventura does have a point that many rich people may be planning to capitalize on this new trend. Regardless of whether being green is a conspiracy, builders building with the planet’s best interest in mind should always be the focus. In Philadelphian, the Green Revolution is already here and strong. For example, many contractors are already putting green roofs on to conserve energy. Are people going to profit from being green in ways that would make the average American shiver? Yes, but at least there is a positive result that may occur from this new business.

In 2009, many smart builders have found a way to use the recession as a means of survival by switching their focus to green. Some green strategies for builders include: adding green roofs, recommending more energy efficient lighting, paint, and plumbing. This is resulting in a more eco friendly Philadelphia and this trend will continue increasingly over the next 10 years. If Philadelphia keeps up the momentum then they may position themselves as one of the leaders in the Green revolution along with San Francisco. This can lead to more money to be brought into the Philadelphia real estate market, which will have a positive impact on all of its community members.

Despite the many complications and obstacles that the Philadelphia real estate market has faced in 2009, there still appears to be signs of smoke clearing in 2010. Building is still taking place. Although construction is at a much smaller rate, the fact that there is still construction occurring automatically positions Philadelphia as a recession resistant city compared to many other major U.S. cities (particularly on the West Coast where cities were built over night, i.e., Phoenix, AZ). From an optimistic standpoint, any construction is better than no construction. Building equals growth of a city even at minimal levels. From sky rises to residential housing, Philadelphia was building (and thus growing) in 2009. The question is will Philadelphia be able to increase that construction to more productive numbers in 2010 to balance out all of their financial troubles?

Philadelphia will be able to be a leader in 2010 if the city can get a better grip on its financial game plan. This includes working hard to lobby federal money for the improvement of Philly’s infrastructure. There are countless bridges that need to be repaired in Philly. This can creates plenty of jobs and thus will revive the whole economic cycle in Philly. If workers have steady paying jobs then they will spend. If workers spend then the cash flow process is circulating. This is how you revive an economy. Also, if the Philadelphia government can incorporate the green revolution into its financial plans then we can be recognized as a leader in this industry. This can lead to positive financial growth for our city.

Although the Philadelphia real estate market did not rebound as quickly as many analysts said it would in 2007 when the global financial meltdown began, Philly is superior to many of its counterparts as we have a very strong, time tested economy. When things get rough in the real estate market, smart investors always put their money back into more secure markets. What is more secure then the oldest real estate market in America? For several centuries, Philadelphia has been building strong and will continue to do so.

I am speculating that the end of the real estate recession will be occurring in the later part of 2010. Due to the severity of this recession, the comeback may be a longer path than normal. In the end, Philadelphia will remain one of the healthiest real estate markets in the country and again will prove to the world how resilient we are to any economic situation that we encounter.

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