REGARDING APPRECIATIONI think this conversation is getting a little too detailed on all the great fundamental kickers(desirability, employment, population, etc..) 

If this property still meets your fundamental goals don't drop it just to chase the new thing.

Long story short I have an opportunity to purchase a 2bd 1 bth non-listed home straight from the seller (financing already lined up) that is fundamentally sound.

It is a competitive market, so deals are hard to find no matter how you define them, but stay at it and be disciplined about it ... strong supply & demand fundamentals cut both ways; that which is hard to buy in the short term is generally easy to sell or rent and tends to appreciate in the long term.

The FED simply won't do it unless fundamentals in the economy dramatically turn around.

Am I missing some fundamental here?

Well, it's still got room to grow more for sure, major industry going on, but the fast and steep one is over.Philly has great market fundamentals, fantastic returns (assuming you are buying in the right areas), and good buying opportunities.

I know there are probably some fine tune details to get it cleared but fundamentally would someone be able to use collateral for new Multi-family construction?

I really need to get something fundamentally clear here.

I agree with Taz about this fundamental mis-assumption: rent = 10% of purchase price.