(Image: Kevin Gillen, Lindy Institute)

The Lindy Institute's new Q4 housing report from economist Kevin Gillen shows Philadelphia's housing market still deep in seller's market territory with record low inventory of homes for sale and prices continuing to rise, albeit more slowly this quarter. It's a situation that calls for local elected officials to shake off their complacency and start thinking harder about their role in ensuring there's available and affordable housing for everyone who wants to live here.

In his summary of the Q4 report, Gillen writes that the number of homes listed for sale is the lowest its ever been since these numbers began being reported in 2001. 

Housing inventories (the number of homes listed for sale) plunged to a new all-time low in Philadelphia. From October to December, housing inventories dropped by nearly 1,000 units, from 4,331 to 3,336. Although inventories typically show a seasonal decline as the region transitions from the warm to cold weather months, this is now the lowest number of houses available for sale in Philadelphia since these numbers began being reported in 2001.

(Image: Kevin Gillen, Lindy Institute)

The low inventory comes after a weak year for home building that once again failed to keep pace with population growth for another year in a row, according to Lindy. While a lot of housing observers have been talking about a possible future housing downturn, they're talking about a downturn in prices. A slowdown in construction has already been underway for a few years. It looks like we'll probably top the number of units built in 2013 when the November and December 2018 numbers come in, but still come in lower than any of the last four years. 

(Image: Kevin Gillen, Lindy Institute)

The result of the construction slowdown has been to keep the local housing market in seller's market territory for several years in a row, with prices steadily climbing and the Affordability Index moving in the wrong direction from the perspective of wanting to ensure there's a steady supply of affordable starter homes available. 

(Image: Kevin Gillen, Lindy Institute)

(Image: Kevin Gillen, Lindy Institute)

This is happening within a larger policy context where the City is creating a Housing Action Plan that has a slowdown in population growth baked in as one of its operating assumptions, giving policymakers an easier target to hit that allows them to avoid confronting any hard questions about problems with the status quo approach to zoning and neighborhood growth. As Jake Blumgart wrote recently, Philadelphia District Councilmembers have largely been going in the opposite direction on zoning changes recommended by most housing experts, creating unnecessary affordability problems in neighborhoods in the path of population growth. Low housing inventory is a political problem, not a fact of nature, and it's going to take some new political leadership on this issue to avoid bumbling our way into an affordability problem of our own making. 

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