Why Do New Construction Homes Look the Same in Philadelphia?
Over the last decade, Philadelphia has become a top destination for foodies, historians, and travelers. National Geographic even featured Philly in its list of the Best Trips of 2020! The city is booming for the better and it’s been a long time coming.
But it’s not just tourists flocking to the city. The real estate market has taken off in recent years. Property investors and we buy houses in Philadelphia companies are constantly investing in the area. New commercial properties, smaller apartment complexes, and single-family townhomes are popping up in the city’s core and all four corners of Philadelphia County.
With all the new real estate in Philadelphia, there’s a trend that keeps emerging. In these new construction homes in Philly, most of them are cookie cutter houses that look the same. This is especially the case for single-family properties.
If you’re wondering why new construction homes in Philly look the same, we have the answer. In this article, we’ll explain why new build homes in Philly look the same, the main steps in the construction process, and how much it costs to build new homes in Philly.
Why Do Houses in Philadelphia Look The Same?
Most new builds in Philadelphia are built in what’s called a “cookie cutter” fashion. This essentially means all houses in a row look the same, inside and out. In short, most houses in Philadelphia look the same because it’s cheaper and the style attracts the current homebuying market.
Years ago, Philadelphia row homes used to be built in Colonial or Victorian styles, mostly with porches, brick fronts, and meticulous cornices. However, today, new build homes are built with metal or vinyl “bumped out” fronts, with white-grey interiors, open floor plans, and roof decks. One of the main reasons why new houses look the same in Philadelphia is because the style looks nice and attracts the modern homebuyer.
2. Availability of Building Materials
The second reason why houses in Philadelphia look the same is cost-related. As explained below, building a Philadelphia property is a costly process. Most developers want to maximize returns by building new homes as affordably as possible.
Much of Philadelphia’s housing stock, excluding the farther northeast, was built in the late 1800s and early 1900s. During this time, brick was the superior building material. It was inexpensive compared to stone and easy to transport. Therefore, most houses built in this period look the same in Philly, built with brick facades.
In 2020 however, brick was one of the most expensive materials to build with. According to RemodelingCalculator.org, brick facades cost 40 to 60% more on average compared to vinyl siding or aluminum.
Because of this, builders try to minimize the use of bricks and use cheaper alternatives, such as metal or vinyl for the facade. That’s why most modern new builds in Philly look the same, with metal or vinyl facades instead of brick.
3. Economies of Scale
Additionally, it’s cheaper to build properties using the power of economies of scale. Economies of scale are defined as: “proportionate savings in costs gained by an increased level of production”. Basically, more production can lower the costs of materials and labor.
V2 Properties, a real estate developer in Philadelphia, demonstrates the best example of this. They finished 2019 with 226 homes under construction and/or sold. The majority of these properties look the same, with similar interior and exterior finishings.
By choosing the same designs and finishings for all their 226 homes, they were able to save time and buy materials in bulk. This keeps construction costs lower than if individual finishings and designs were purchased for each property.
Here’s an example of how economies of scale can lead to cheaper construction.
A typical sheet of drywall is 32 square feet. If a new construction house is 2,500 square feet, an estimated 80 sheets of drywall are needed. According to HomeDepot, a sheet of drywall is $11.98 for one ½ inch x 4 ft. by 8 ft. a piece.
However, if you buy more than 34 pieces, the price drops to $10.18/each. That’s about $144 in savings! Imagine the savings over ALL materials, including concrete, wood, windows, piping, wire, paint, doors, kitchen cabinets, tiles, etc., etc.
Builders can also achieve economies of scale with the costs of labor. For example, if a developer builds five houses in a few-block radius, they will likely use the same crew for all five houses. This is because laborers on larger or multiple jobs with the same developer give discounts, since they have work lined up for the next few months. Combine this with following the same layout for every property, the building is even easier, lowering labor prices further.
4. Plot Size
Finally, the last reason why new houses look the same in Philly is because of the typical plot size in Philadelphia. Many of the neighborhoods that are seeing the most development, such as Brewerytown, Francisville, Sharswood, Point Breeze, Grays Ferry, Pennsport, Kensington, Ole Kensington, and Fishtown, have a typical lot width of 14-15 feet.
With lot sizes as skinny as this, it’s hard to achieve many variations with the layout of the house. In addition to this, building codes have tightened since the early 1900s. For example, staircases back then could be skinnier and steeper than today’s standards. This further impacts how properties can be styled and sized.
Fun fact: These small lots were not Philadelphia founder William Penn’s original idea for cityscape and layout. He envisioned every lot being a 1-acre parcel in Center City!
How Do Developers Buy Land in Philadelphia?
Many developers buy the land they build on just like you’d buy your house to live in – off the MLS (Multiple Listing Service) or Zillow through a real estate agent. Others source their own land through various marketing strategies, other investors, or simply through online off-market marketplaces like LandCashin.
Many of the ‘We Buy Houses’ signs seen around the city are investors trying to source more houses and land for their projects. Most investors buy land for cash and give sellers a quick and flexible closing. Other investors buy a dilapidated house for cash, demolish it, and build a new property or several homes on the plot.
Land prices range anywhere from a few thousand dollars to hundreds of thousands of dollars. The cost depends on the size, zoning, and location, location, location!
Developers are mostly focused on investing in neighborhoods abundant with opportunities for cash buying and where the returns are best. In Philadelphia, the areas with the most redevelopment over the last few years include:
- Point Breeze
- Grays Ferry
- Ole Kensington
An area like Old Kensington has exploded over the last few years due to this area being heavily zoned as RM-1, according to the Philadelphia Zoning Code. RM-1 zoning allows developers to build multifamily properties. The lot size determines how many units can be built. Developers, cash buyers, and investors must understand the Philadelphia Zoning Code inside and out before developing plans.
Some developers build across the city, while others focus on just certain zip codes or neighborhoods. These developers buy multiple vacant lots in Philadelphia for cash on the same block and combine parcels to build small subdivisions or condos.
How Much Does It Cost to Build Houses in Philadelphia?
After developers buy a vacant lot, they need to have an architect draw plans. Once drawn, these are submitted to the city’s Licenses and Inspections Department for review and approval. Sometimes, there are zoning variances needed for a builder to construct their project, which is a timely and costly process.
Once the plans are approved, the developer needs to hire a contractor to get the property built. The average price to construct a typical Philadelphia house is $100 to $155 per square foot, according to HomeGuide.com. On a 2,500-square-foot house, that means the cost of building a Philadelphia home is anywhere between $250,000 to $387,500!
When the house is built, the property needs to be sold. Developers rarely sell houses without an agent. So, closing costs and commissions run the developer anywhere from 7% to 9% on the sale price. Ouch! That doesn’t include holding costs and financing costs. Even though many investors and developers buy land for cash, the construction costs are financed, which adds to the bottom line.
These reasons why new construction homes in Philadelphia look the same may not be ‘groundbreaking’, – ah, see what I did there? – but it is thought-provoking nonetheless.
If you are more of a fan of the older architectural style, there are plenty of rehabbers, like Brotherly Love Real Estate, that rehab old Philadelphia row homes and bring them back to life with modern touches but still preserve original detail. Learn more about how we buy houses in Philadelphia.
If you’d like to learn more about Philadelphia architecture, check out the Philadelphia Historical Commission.