Tran and Griffin are the kind of couple that a decade or two ago would have moved to the suburbs. She works at the Navy Yard and he works in Manayunk, which would have made a home somewhere along the Main Line just as convenient a commute as Francisville. But they’ve made a commitment to Francisville, and so far that bet is paying off.

When they bought it, their home was the most expensive one on the block. Since then, the vacant lots across the street have been replaced with new condos and they no longer own the priciest parcel on the street. As Francisville fills, housing prices continue to rise.

Ruokai Chen made a similar bet along the border of Fishtown and East Kensington, purchasing a home for $415,000 last year. Based on neighborhood trends and comparables, the actuary expects the value of his home to continue to go up. In his late twenties, Chen managed to save for the large down payment thanks to the combination of a high-earning job and having graduated debt-free courtesy of a Curtis Institute education.

It’s the same story all across the neighborhoods surrounding Center City, fueling the highest housing prices the city has ever seen. “The level of house prices in philadelphia is at an all time high,” said Gillen. “It’s about 12 or 14 percent higher than its previous peak back in 2007, during the previous peak before the boom.”

Notably, Tran, Chen, and other buyers PlanPhilly spoke with for this article all mentioned—without prompting—the quality of their local neighborhood school, noting it in marked, favorable contrast to their lowly impressions of the School District of Philadelphia as a whole.

Ironically, part of what is fueling Philadelphia’s housing demand, and thus the spike in housing prices, is the city’s relative affordability compared to other metro areas, says Nela Richardson, an economist with the web-based real estate company, Redfin.

“I went to school in Philly 20 years ago,” said Richardson, who graduated from the Wharton School at the University of Pennsylvania, “The city already had it [back then], and people finally awakened to the to the fact that you can get the Philly urban experience for half the cost of DC and a quarter of the cost of New York.”

Redfin recently found that users of its website based in New York City and Washington most frequently searched for housing in Philadelphia when searching locations outside of their current cities. According to Richardson, Philadelphia “is just that kind of center of activity where you can finally have a great job and an affordable cost of living. You don’t have to make several hundred thousand dollars [just] to live in town.”

Driven by the intense demand, Philly’s high housing prices are fueling a construction boom. While lagging, supply may be starting to catch up, as thousands of new condos, rowhomes and apartments are springing up across the city .

That has some realtors and economists worried that the city may be in a small housing bubble, driven by demand, rather than an oversupply of credit as in 2007.

“I think we’re in a little bit of a bubble,” said Somers, who expects the market to cool as new apartments and condos come online in the near future.

“My crystal ball would say ‘sell’ in the next year and a half to two years, because I just don’t see this lasting,” said Somers. “I’m really concerned about the new construction — there’s a lot of that going on. I’m wondering when the demand for that will be not so interesting.”

Housing prices will continue to appreciate only if two things occur, said Gillen.

One, the city has to continue to grow in population. That seems to be happening, although it did slow down last year. An increasing population translates into demand for apartments and homes. While the two submarkets play off each other a bit—expensive home prices tend to lead more people to rent longer, which can lead to relatively high apartment prices—they both rely on the basic arithmetic that more people wanting to live here means higher prices.

Two, Philly needs more jobs. The city’s unemployment and poverty levels remain stubbornly high. While it recently increased at a healthy 2.8 percent clip, Philadelphia’s jobs growth has lagged behind peer cities for years.

If Philly stops growing in population, it will mean that Philadelphia really is in a housing bubble. Unlike the disastrous bubble a decade ago, this one would fizzle more than pop. Prices will slow, maybe dip down a bit. For recent buyers who suddenly need to move or developers looking to quickly flip properties, that will hurt. But for most residents, the impact will be minimal.

But, if the population continues to rise as people relocate from the suburbs and other cities, yet the city doesn’t see broad job growth, economists say Philly will have a different kind of problem on its hands.

“You move to a permanent plateau of unaffordability like New York or San Francisco, where homeownership is just out of reach for most people and the cost of housing — whether it’s owning or renting — consumes a much higher share of your income than it would in less pricey cities,” said Drexel’s Gillen. “We don’t want either of those situations.”

Moreover, job growth in the city will need to be broadly based. When Comcast finishes its second tower, the cable giant will relocate thousands of high-paying jobs from New York to Philadelphia. That sort of influx will put added pressures on the city’s higher end real estate market, leading to further increases in real estate values in the neighborhoods adjacent to Center City. But it’s unlikely to bring a comparable number of blue collar jobs , meaning few of the 26 percent of Philadelphians currently living in poverty will gain employment.