Interesting trends are happening in the Luxury market where the number, median, and average price are all up significantly. This mini-boom in luxury properties is a good leading indicator for the market as a whole. It says great things about Philadelphia when the rich are buying property at levels we haven’t seen for some time.

Interest Rates are making homes more affordable

Interest rates are at 30 year lows and this allows you to buy more home for lower payments. While other parts of the country have been in a real estate slump, Philadelphia has remained a good value. This and the historically low rates make it the perfect time to buy a new home.

Advice for buyers: If you are thinking about purchasing, do it now.  Interest rates haven’t been lower for 30 years. Move quickly and keep an eye on new listings as good homes sell in days. One good way to keep track of what’s new is to sign up for our daily email from our website.

Advice for sellers: The market is strong for those who price right.  If your house doesn’t sell in the first 60 days on the market, consider lowering your price. Good values drive buyer interest and for the first time in awhile we’ve been seeing bidding wars for houses priced right. Contact Philly Living today to learn how we can help sell your home.

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2008 Q3 - Another Solid Quarter for Home Prices

Greenspan wrote that the recent slowing in the rate of decline in U.S. home prices is the first positive note in the year-long trauma and that eventually, frozen credit markets will thaw “as frightened investors take tentative steps toward reengagement with risk.”

“More conclusive signs of pending home price stability are likely to become visible in the first half of 2009,” he wrote.

Once the housing market finds it footing, markets will be able to tackle the core issues of the credit crisis.

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Greenspan says housing market to recover in early 2009

In the “Great Neighborhoods” category, Society Hill was a winner, and South Broad Street’s Avenue of the Arts took a “Great Streets” award. Both were among 10 national recipients in each category, but Philadelphia was the only city to garner more than one prize, Jastrzab said.

The 325-year-old Society Hill neighborhood, named in honor of the Free Society of Traders, chartered in 1682 by William Penn, “provides a stimulating confluence of varying architectural styles, mixed uses, and social diversity in a downtown urban setting.”

The eight blocks of South Broad Street from City Hall to South Street, transformed during the past decade into the Avenue of the Arts, made the APA’s “Great Streets” honor roll for “its historical character, focus on the arts, social vibrancy, and public and private redevelopment efforts.” First developed in 1681, South Broad is one of the oldest planned streets in the country.

The nine other APA 2008 Great Neighborhoods are: Echo Park (Los Angeles); Greater Park Hill (Denver) ; North End (Boise, Idaho) ; Old Town Wichita (Wichita, Kan.); Downtown Salem (Salem, Mass.); Charles Village (Baltimore); Greater University Hill (Syracuse, N.Y.); Village of Mariemont (Mariemont, Ohio); and  Downtown Sheridan (Sheridan, Wyo.).

The nine other APA 2008 Great Streets are: Mill Avenue in Tempe, Ariz.; Seventh Avenue in Tampa, Fla.; West Main Street in Louisville, Ky.; Commercial Street in Portland, Maine; Washington Street in Boston; Main Street in Annapolis, Md.; Summit Avenue in St. Paul, Minn.; South El Paso in El Paso, Texas; and Clarendon & Wilson Boulevards in Arlington, Va.

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Philly wins two “Great Places” awards

High Noon Entertainment is producing “My First Place” for HGTV, and is based out of Denver, Colorado. Our show captures the drama of finding and financing one’s first place, and ends with the couple’s/person’s/family’s taking possession of their first home. In each episode, we give the new homeowners a surprise housewarming gift to thank them for their participation.  We will be shooting several episodes in Philadelphia this fall, and are actively looking for some fun, high-energy first-time homebuyers and their realtors who are interested in being featured on the show.

The person(s) should be very motivated to buy and not mind having a camera crew standing by to shoot all of the exciting (and not-so-exciting) processes and experiences of finding and financing their first home.  Therefore, we need them as early in the process as possible.  Applicants should be ready to start looking soon, with a reasonable expectation of closing within about 90 days.

Let us know if you or someone you know would be interested in this unique opportunity!

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Buy a house and be on TV

At the same time, we all know that interest rates have risen (about 1% in the last quarter) and most economic forecasts assume that they will continue to rise.  So what is a buyer to do?

We’ve put together some simple numbers looking at what we believe could be reality - a 5% drop in home prices coupled with a 1% increase in interest rates.  Most indicators show that 5% is probably a bit extreme, but erring on the side of caution seems prudent.  So what does this all mean?

It turns out, from a financial standpoint, most buyer will save themselves money by hedging their bets against increasing interest rates rather than hoping that the market will dip. After all, most people who were hoping for a dip were not so happy to find out that Center City prices are up 1% year over year….

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Buy now or later? By the numbers….

Right now, Philadelphia has an inventory accumulation of 9.  What is interesting about this is if you look at the breakdown by price range:

From $200,000 to $300,000 the accumulation is 9.
From $300,000 to $400,000 the accumulation is 10.
From $400,000 to $500,000 the accumulation is 11.

Notice a pattern?  Now here is where it gets interesting:

From $500,000 to $600,000 the accumulation is 18!

I wish I could say that it improves after that, but it keeps climing to an inventory accumulation of 56 when you get to $2,000,000.

So what does this mean?  Simply put, the city-wide numbers that are being reported are heavily skewed because of the luxury properties that just are not selling.  However, for the “average” Philadelphia buyer and seller under $500,000, the market is strong and moving along.  For a more detailed look at the market on a nieghborhood level, see our exclusive market report.

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A Look at the Philadelphia Inventory and Price Ranges

In a recent article by Forbes, Philadelphia was named the 4th best city in which to buy real estate.  Their decision included factors such as increasing values, shrinking vacancy rates, and the relative cost of owning versus renting.  Simply put, “Philly is a great place to buy a new home.”  It’s relieving to see the media finally recognizing that though the nation may be still recovering from the housing slump, there are a number of cities where purchasing still makes financial sense.

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Forbes Names Philadelphia a Best Buy

“Center City real estate has appreciated an average of 15 percent a year since 1985, greater than the inflation rate,” says Center City District executive director Paul Levy. “Condos aren’t something that you own for just 15 minutes. They are long-term investments with a proven record of appreciation.”

That’s consistent with the trend nationally, says Mark Zandi, chief economist for Moody’s Economy.com. “Downtown condo markets across the country have held up better than I would have expected,” he says, “given . . . demand and despite the glut of space.”

In the first quarter of 2008, data from the City Recorder of Deeds Office show, condo sales throughout Philadelphia stayed about even with the same quarter last year, at more than 500 units.

Thirty-two condos in Center City sold for $1 million or more in the first quarter, the data show. The most expensive went for $4.7 million at the Ayer on West Washington Square. For all of 2007, 115 condos sold for $1 million or more; in 2006, 49 sold. (More $1 million-plus condos are being built now, thus sales numbers for them are increasing.)

Currently, there are about 10,000 condo units in Center City, more than twice the 1990 number, because of new construction and conversion of nonresidential buildings encouraged by tax-abatement programs enacted by City Council in the late 1990s.

Hundreds of units are still in the pipeline. And despite slower sales regionally and in the city’s single-family-home market, most developers - especially those with high-rise and higher-end projects - appear to be hanging in.

Among such projects are 1706 Rittenhouse Street, 10 Rittenhouse Square, the Murano, and Residences at the Ritz-Carlton. Developer Carl Dranoff plans to break ground June 19 for 777 South Broad, a 146-unit, five-story condo building.

Not surprisingly, given the overall real estate market, some condo plans have not come to fruition. More than a dozen projects have been canceled, delayed or postponed over the last 18 months.

Newly built or not, Center City’s condos continue to draw a mix of buyers.

“You hear everyone saying this is an ideal market for first-time buyers, and it is,” says Matthew Young, 24, an engineer who has just closed on a $410,000 condo at Seventh and Bainbridge Streets.

“I was fortunate that, thanks to my savings and my family, I was able to put 60 percent down,” says Young, who searched for a month before finding what he wanted.

With 73 percent of Center City residents working downtown, Levy says, gas prices may prove as big a boost to real estate there as nightlife and cultural opportunities. “It soon may be cheaper to fly home to the edge of the suburbs,” he says.

“I didn’t want a car,” says consultant Gail S. Bowers, 46, who with her partner, Temple professor Barry Vacker, 51, has a contract on a 1,000-square-foot studio at 1352 Lofts on South Street near Broad. Prices there range from $349,000 to $1.4 million, says Kathy Conway of Prudential Fox & Roach.

Vacker, an architecture buff, wanted something built in the 20th or 21st century, and Bowers wanted a low-rise. Both wanted “fabulous space with a lot of light, and we got it,” she says.

There was a time, from 1987 to 1997, when condos in the city lost value. But data compiled by Kevin Gillen, a research fellow at Wharton and vice president of Econsult, a Philadelphia economic-forecasting service, show prices rising consistently since.

Through the fourth quarter of last year, prices appeared to be holding, or at least not falling precipitously, Gillen says. And during the first quarter of this year, which he describes as one of the slowest winters in years, condos were moving.

Prices of comparable units in older buildings show substantial gains over the last decade, without factoring in inflation. For example, a one-bedroom in Wanamaker House sold for $92,500 in 1997, and a comparable unit sold for $365,000 in 2007, according to records kept by Center City condo developer/Realtor Allan Domb.

A Society Hill Towers two-bedroom that went for $122,000 in 1997 sold for $550,000 last year. A one-bedroom in Academy House that brought $72,500 in 1997 sold for $310,000 last year.

If the 1997 prices were adjusted for inflation and condo values had been flat over those 10 years, the one-bedroom at Wanamaker House would cost $119,500 today, and the two-bedroom at Society Hill Towers $157,605.

In the first quarter, with 47 units claimed, the Arts Condominium at 13th and Locust Streets was the city’s best seller, deed records show. Of its 372 units, 371 have settled, says property manager Mary Galgon. Remaining is a $319,000 one-bedroom penthouse.

John Featherman, an agent with Prudential Fox & Roach, owns several condos at the Arts, sold about a dozen, and leased about 25 for clients.

“Where can someone have bought a studio for around $100,000 to $135,000?” Featherman asks. “The units are small and they generally have mini-kitchens, but you’ll take these units over a dorm.”

The quarter’s second-best seller was Parc Rittenhouse at 17th and Locust Streets, with 36 condos sold. Of its 260 units, 153 have closed, and 42 are set to close over the next 120 days.

Former New Jersey Superior Court Judge Steven Fluharty and his wife, Joan, have lived in their two-bedroom, two-bath unit with den at the Western Union Building at 11th and Locust Streets for about a month and are “just loving it,” he says. “Everyone said Rittenhouse [Square], but we wanted something close to everything but quieter. This was it.”

So far, just under 70 of the building’s 99 units, which go for $400,000 to $1.5 million, have sold, and more than 40 have settled, says Bruce Lang of Coldwell Banker Realty Corp., who is handling sales.

For a growing number of buyers, the Center City condo is a second home. Like Curtin and Lisa King of Northeast, Md., who in March bought a one-bedroom unit at the Winne on Front Street for about $379,000.

Both are in their 40s and are in marketing.

“My husband calls [the condo] an 800-square-foot addition to our home,” she says. “I had sold some real estate and we wanted to find a place to put the money to good use.”

They chose Philadelphia, “because the housing market is strong and healthy,” she says. “We are planning to spend a lot of time here.”

Reprinted from philly.com

By Alan J. Heavens, Inquirer Real Estate Writer

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Center City condos thriving

There are three 11 homes being auctioned, split among three models. Minimum bids start between $125,000 and $250,000 with the original prices of the homes between $349,990 and $749,990. All homes have 2-3 bedrooms and 1-2 garages.

The auction will take place on Saturday, June 7^th, at 1:00 PM with public open houses before then. If you or anyone you know is interested in taking part of this exciting opportunity, let us know so that we can provide you with all of the necessary registration information.

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Real Estate Auctions Come to Philly

For months we’ve been telling you the Center City real estate market is stronger than you might think from listening to the news. We’ve blogged about why Philadelphia is different and told you about developers who are investing in the city. But our first quarter report provides the best proof to-date of the ongoing strength of Center City real estate.

The median price for a Center City home is $310,000 up around 13% from last quarter 13% from Q1 of last year. The average home is at a whopping $384,000 up almost 10% for the quarter. The upward trends show fundamental strength in the market and suggests market activity will increase. Buyers need to be prepared to act fast as homes will sell more quickly than 2007.

Sign up to read our full report and receive quarterly updates on the state of the market.

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Housing bubble? Not in Center City Philly!