Phila housing market slows and foreclosures increase.

by Nancy Woodward

Housing prices in Philadelphia feel slightly. An analysis by a Wharton economist shows home values in Philadelphia falling last quarter for the first time since the first quarter of 2003.

During this time, the foreclosure activity surged. This will create a $223 billion drop in property values overall. The decline in the area has a direct correlation to the fact that Phila was late reaching the boom and is, consequently, late to bust.

The Center for Responsible Lending estimates that roughly one in three households will see their equity value declining while mortages taken in 2005 and 2006 reset (arms) at much higher interest rates. This will, of course, increase the number of foreclosures in the future.

In the future, it will be very difficult for homeowners who are in this sector to purchase homes again. While the housing market in the nation declines, Phila is one of the cities with a lesser decline.

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