Bubble in Point Breeze Philadelphia

[David Park]

Not all parts of Philadelphia are in a bubble. In fact even when the market comes down it will do alright and cash flow. The infrastructure and basic pipelines are there so that it will be alright, not great but good enough to be able to hold, if bought right. There are good income earners living there and buying properties there because of commute time, public transportation, restaurants, coffee shops, it’s safe and fun.

However Point Breeze will not do alright, who ever is doing new construction or flipping there will get hurt badly.

Here’s my logic why Point Breeze over anywhere else is a bubble.

First, It’s not as safe as the other places. I didn’t feel too safe walking around those neighborhood. Random kids sitting on there porch smoking weed, and neighbors calling us out “Look at these guys looking like they gonna move here”, did not sit well with the vibe that I got.

The Red Circle is where most of the development is happening in Point Breeze area.

Second, why would I move here? If I have a job in Center City and I need to commute, I would not choose Point Breeze. There’s nothing there. If I want to get coffee, there isn’t even a good coffee spot I can go to. No coffee, restaurants, and shops. Other houses around the same price range has all of that and more. Also, the fact that I’ll be surrounded with working people with similar wants seems more appealing than to wait for the shops to come and become established, vs having stores that are already established with more looking to move in.

Where’s my coffee? I have to walk to where? And in this neighborhood.. (From Yelp, most reviews, coffee)

VS

VS

Third, there is no safety net. I understand that it’s cheaper and seems like a good play. But if you really looked at it with an unbiased eye, you would see that other areas provide more cushion even if means paying more. If you been there you know what I’ll be talking about. Down one street of 40 houses about 15-20 were in different phases of new construction. There were wide eye new developers and flippers looking at properties talking to wholesalers. I didn’t see anyone around that area that looked like they could afford the 400k+ houses. So what happened?

Guys started running out of houses to buy in other locations and didn’t want to pay up for the project. So, they started to go to point breeze after seeing couple people do successful flips there. ” Oh that guy bought it for 210k put 70k and sold it for 400k?” “I can do that”

If you compare all the houses sold especially good condition house vs a brand new flip. Then you can see the difference being the biggest in Point Breeze. Also the comparison of people in pre foreclosure vs new construction ratio is the biggest in Point Breeze.

Point Breeze Sold house discrepancy

Fishtown

Brewery Town

Hopefully if you are already invested in there you can get out fast or hedge your bet somehow. If you figured out how to bet, please let me know how I can put this trade on.

These are my opinions only, do your own Due Diligence

Check out more of my analysis at

http://m31fund.com/