A new study by Penn economist Kevin Gillen finds that homes in the City of Philadelphia have retained more of their value compared to those in the region’s sprawling suburbs. “Walkability” is a key reason why, Gillen says.

Philadelphia is one of the most walkable cities in America. Sections of Center City are sometimes referred to as a walker's paradise because they are so close to shopping, restaurants, entertainment, and public transportation, says Gillen.

In the new report, “The Correlates of Housing Price Changes with Geography, Density, Design and Use: Evidence from Philadelphia,” Gillen, a senior research consultant at the Fels Institute of Government, analyzed the stability of Philadelphia-area home prices from 2007-2012, comparing home prices in the city to those of the suburbs.

The study, commissioned by the Congress for the New Urbanism, analyzed 340 different zip codes, examining how housing density, neighborhood walkability, transit accessibility, and land use mixes effected changes in housing prices during the 2007-2012 post-bubble period.

Gillen’s research shows that housing prices in the more densely populated areas of Philadelphia fell less than housing prices in the area’s more spacious suburbs, a reversal of previous down market trends.

According to the report, all zip codes in the study saw housing prices decline from 2007 to early 2012. But those in Center City declined 20 percent on average, compared to 33 percent on average in the suburbs.

“The study needs to be understood in the context of the recent housing bubble,” Gillen says. “We haven’t had house prices fall this much since the Great Depression. During past downturns, the exact opposite occurred.”

Gillen, who received his Ph.D. in applied economics in 2005 from the Wharton School, says that in the previous housing downturn of 1989-1995, house prices declined the most—about 34 percent on average—in Center City. They declined close to 18 percent on average in other areas of the city, and 14 percent in suburban counties.

“Twenty years ago, Center City was different,” he says. “The city rolled up its sidewalks at 5 o’clock. Since the Center City District was created, there’s been a renaissance. And Philadelphia added more housing stock in the last 10 years than in the 1950s. We should be proud of reversing decades of negative trends.”