Why it's cheaper to buy a home than rent in Philadelphia

PHILADELPHIA (WPVI) -- People looking to buy in Philadelphia are in luck, according to a local realtor who said you can get more for your money if you buy rather than rent in the city.

"For the same amount of money that you'd be paying in rent, instead of renting a one-bedroom condo for $2,500, you're able to buy a three-bedroom house," said Jonathan Barach, of The Barach Group at Compass.

Barach said there are a few reasons for that.

"Philadelphia has always had a high demand for rentals which had led to an increase in pricing for rentals for the last 12 years," said Barach.

He also said Philadelphia is transient.

"A lot of residents, when they come in for med school you know they have three years to be here and they choose to rent. You also have a lot of schools and universities so the young professionals that graduate college choose to rent when they're first starting their life. So, the rental prices have increased over the last 12 to 15 years," said Barach.

Philadelphia has some incentives for home buyers.

"There are tax abatements for buying a house that's new construction or renovated. There are opportunities to purchase a house where you're not paying the full amount of taxes for up to 10 years," said Barach.

Folks we spoke with said shocked at the cost of buying versus renting in Philadelphia.

"I'm actually pretty surprised because I used to live in Manhattan so it's always like cheaper there kind of to rent, at least in the short term," said Binita Gupta.

Barach said it's more cost-efficient to buy in Philadelphia compared to some cities nearby.

"Center City has a lot lower taxes than a lot of other cities like Boston, New York and D.C. So, when you factor that into your monthly mortgage payment usually tends to be less than what those other cities are," said Barach.

As for the Philadelphia suburbs, Barach said, "The market is still a little bit out of control in the suburbs. I think in Philadelphia it's a little more manageable to purchase. The suburbs houses are still going for a significant amount over the asking price, in a matter of days, or hours."