8/14/2005
Through the roof
By Bob Fernandez and Alletta Emeno
Inquirer Staff Writers

A condo boom is adding thousands of high-priced homes in Center City. Sales of million-dollar properties are way up. And down at the Jersey Shore, prices of second homes are rising faster than Enron stock in the 1990s.

But the real estate boom is benefiting more than just the wealthy. Across the Philadelphia region, home prices are rising at double their historic rates, according to an Inquirer computer analysis of 96,000 sales of new and existing homes in 2004.

The gains are broad-based and remarkably even, with the median gain ranging from 13 percent in Bucks and Camden Counties to 17 percent in Philadelphia and Gloucester Counties. The region's median price rose to $177,500 in 2004 from $155,000 in 2003, a 14.5 percent increase. The median is the price at which half the homes are more expensive and half are less expensive.

At the Jersey Shore, median gains were even higher: 24 percent for Atlantic County and 26 percent for Cape May County last year.

Last year's performance represents an acceleration of the recent trend. In the last five years, the median gain for the region averaged 8.1 percent a year, above the national average of 7.2 percent a year for the same period.

The bull market for houses led to a 50 percent surge in sales of million-dollar homes in the eight-county Philadelphia area. There were 630 of them in the region last year, including the $3.9 million Moorestown abode purchased by Eagles receiver Terrell Owens. That was the highest-priced sale in South Jersey. In the Pennsylvania suburbs, the highest price in 2004 was $6.4 million for the Lower Merion home purchased by businessman David J. Adelman, who owns and manages thousands of apartments for college students.

"A lot of people were afraid to miss the boat," said Albert Perry, president of the 1,700-member Greater Philadelphia Association of Realtors, of the home-buying activity in the last year.

Buyers saw values moving up and didn't want to wait for the "perfect house on the perfect street at a perfect price," said Perry, a Century 21 agent who sells in both the city and the suburbs. "That fear of loss is a powerful motivator."

While the data reflect sales in 2004, real estate experts believe the trend has continued so far this year, pushed along by falling mortgage rates in the spring selling season.

With the boom comes a drumbeat of predictions that it can't continue much longer. Even the National Association of Realtors, typically an optimistic bunch, cautioned on Tuesday that the housing market is "close to a peak."

Freddie Mac, the second-biggest purchaser of U.S. mortgages, said Thursday that the average rate on a 30-year mortgage in the United States rose for the sixth straight week to the highest in more than four months, reaching 5.89 percent.

The problem with predictions that the so-called bubble is about to burst is that each market is different. Although places such as New York City and Boston look overheated by many measures, the Philadelphia region's housing-price run-up hasn't been nearly as fast and furious.
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