Differences Between Phoenix and Philadelphia’s Housing Markets
Moving to a new place can be an exciting time, but it can also come with plenty of fears. Are you making the right decision for your family? Will the home you move into be enough space for everyone and meet the family’s needs? Are there enough professional opportunities in the location you are moving to? You probably face a lot of questions as you are considering a place to move.
Two options that you have if you are looking to move to a big city in the United States are Phoenix, Arizona and Philadelphia, Pennsylvania. While neither of these cities has the population or the reputation of larger metropolitans like New York City, Chicago, or Los Angeles, they can be great alternatives if you still want that big city experience.
How will you choose between these two unique and vastly different cities? Let’s talk about the differences between their housing markets to help you make a decision.
The most important factor for many buyers looking for homes is price. Very few buyers can afford to pay for an entire home with cash upfront, especially with prices rising in the last few years. That means they will have to take out a loan and pay it back over 15, 20, or even 30 years.
Home prices in each city are going to vary widely, but it is important that you understand median prices. In Phoenix, the median price of a home is $440,000. Meanwhile, in Philadelphia, it is only $245,000. As you can see, homes in Phoenix are significantly more expensive on average. However, you can find plenty of homes for sale in Main Line, PA, and other upscale neighborhoods that are just as expensive. Also, a median price is not indicative of the housing supply. In each city, you can find homes for as little as $100,000 or less, though you will be getting what you pay for.
Competition With Buyers
Competition is another factor that plays a huge role in buying a house. The more competitive the market is for buyers, the more likely you will have to pay more to acquire the home you want. Competition leads to bidding wars and paying above the asking price, which makes things more challenging. Phoenix, AZ, is a somewhat competitive market, with homes averaging about 35 days on the market before being sold. It is also one of the best cities to raise children in the country, so many families find it an appealing place to move to.
Philadelphia is also somewhat competitive but is not on the same level as Phoenix. Many homes sell for a few percentage points less than the listing price, whereas in Phoenix, they tend to sell just 1% below the listing price. What does this all mean for potential buyers? There is a little less competition for homes in Philadelphia. However, it should be noted that competition can vary from neighborhood to neighborhood in cities this large.
Cost of Living
Cost of living should also be a factor in your decision between these two areas. For example, if you are going to end up paying toward the higher end of your budget for a home, you do not want the cost of living to also be very high or you may have trouble paying your mortgage along with other bills.
In this category, Philadelphia has the advantage. Out of the major cities in the United States, it has a very affordable cost of living. Additionally, the public transportation system is top-notch. Phoenix can be a little more expensive to live in than the average market across the country, although it still is growing at a positive rate among families and retirees.
Which City is Better to Buy a Home in?
Unfortunately, there is no perfect answer to this question because it depends on your individual needs. Are you hoping to find a place to raise your young family in a consistently sunny climate? Then Phoenix would be a great fit, though the trade-off is paying more for a home and a slightly higher cost of living. Would you rather move to a city with great professional opportunities on the East Coast and great walkability for your daily commute? Then Philadelphia could be perfect for you.
The housing market in Phoenix, AZ is a little more competitive and expensive because it is a highly sought-after location. Philadelphia, PA has cheaper housing with less competition but is not growing as much overall as a city. Both options can work if you find the right house in the right location.