Philadelphia home values increased more than most cities - here's why people are moving to Philly

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Zillow just released a report outlining changes in home values since February 2022. It's no shock that Miami is number one with a 10.49% increase in home values since last year. Miami real estate has been booming for years now.

What's more surprising are some of the other locations in the top 10. No, Manhattan, Los Angeles, and Chicago didn't make the list. Cities that did? Oklahoma City, OK, Kansas City, MO, and Hartford, CT.

Coming in at number 10 with a 5.66% increase in home value since last year: Philadelphia, PA.

This is notable given that the real estate market, which saw dizzying heights during the pandemic, has slowed considerably in recent months. Many of the most popular sunbelt cities, like San Diego and Phoenix, have experienced negative growth in home values since this time last year.

What's going on?

Recently Redfin issued a report chronicling America's great migration. A record number of people (25%) who search for housing on the site are now looking outside of the city where they currently live.

People who live in metropolises are now considering mid-sized cities while people in mid-sized cities are looking at smaller towns and rural settings.

There are two big factors playing into this change

The pandemic enabled a record number of people to work remotely. So today, many knowledge workers have a freedom they've never known before - to work from anywhere. If you never (or rarely) have to go into work, you can work from wherever you can get the Internet.

Because of this, many are choosing their destinations based more on lifestyle than on where they can get the most gainful employment. Suddenly people are able to choose where they live based on quality of life factors like urban density, access to nature, weather, etc.

Inflation and mortgage rates also play into this. With life getting more and more expensive, people are looking for a lower cost of living. This is all relative, of course. While some would consider Philadelphia expensive, large city dwellers may see it as a place where their dollar goes further. They can get more house for less money, a significant financial advantage.

So, why Philadelphia?

There's a reason the New York-Philadelphia pipeline is firmly in Philly's favor, with twice as many New Yorkers moving to PA than the other way around.

Philadelphia is more affordable, and in many ways, more convenient. It boasts a walkable downtown, public transit, culture, and history, all in a less crowded and hectic atmosphere.

Philadelphia is a highly livable city. And with Americans becoming freer to choose where they want to live, the Philadelphia real estate market isn't likely to slow down anytime soon.