Philly Ranks 5th on Hot Real Estate Markets List for 2025

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Philadelphia is one of the most popular places to live on the east coast. It’s proximity to New York, New Jersey, and Delaware, on top of the many attractions and landmarks of the city, is a main contributor to the rise of the occupancy rate.

Kevin Gillen, senior research fellow at Drexel University’s Lindy Institute for Urban Innovation, admits while things are rocky momentarily, he envisions steady growth for Philadelphia over the coming years.

“It’s returning to a more balanced market,” Gillen says of the area’s real estate. “We’re not there yet, and I don’t think we’re going to hit it in 2025, but we’re definitely trending towards it, and that’s a good thing.”

“It’s because of the lock-in effect,” he says. What this means is that, because supply is lower while interest rates are higher, owners of existing homes are reluctant to trade their current digs for what will likely be a smaller house for a larger monthly mortgage payment: “If you already own the Bentley, why would you trade it in for a Honda that’s even more expensive?

“The economy was the third piece,” he continues. The post-COVID run-up in prices and interest rates kept many would-be first-time buyers on the sidelines. “Middle- and upper-income buyers were doing fine,” Gillen says. “But the housing markets are like a chain of dominoes. At one end you have the first-time buyers and at the other you have the empty-nester Boomer retirees. And if one of the dominoes doesn’t tip, it locks everyone up.”

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