2007 Q1 Market Report

The Center City real estate market is really a tale of two cities:

Center City East is booming.  Real estate is up 5% for the quarter and 13% over Q1 of last year.
Center City West is in a slowdown with prices down 9% for the quarter and down 14% over Q1 of last year.

Overall the combined market has remained fairly flat.  Learn all of the details by taking a look at our just completed the Q1 Center City Real Estate Market Report!

If you want even more market stats including the growth of individual Center City neighborhoods check out the 2006 Year End report available at http://www.phillyliving.com/reports/

Anyone who has been in Old City in the last few years knows about the National. As is typical in new construction, while the sales center is wrapping up the last 20% of sales, people who bought early are starting to sell. This is often the best time to get a deal.

Unit 3e3 in the 10-story building on Bread Street has just hit the market. It’s an 1,106 sq.ft. 2-bedroom, 2-bath corner unit with a balcony overlooking Bread and a full-size parking spot in the underground garage. More importantly, because it was purchased at pre-construction prices, the owner is able to sell it for substantially less than what similarly sized units are being sold for by the developer. This unit is listed for $519,000 and is fully upgraded while the same size units in the same building without upgrades are being sold by the developer for $560,000+.

What’s the bottom line? In this market, it’s hard to find homes where you can feel confident that you’ve bought with equity built in. Not only do you get equity here, but you get a beautiful new home in one of the most secure developments in the city.

Though Inga Saffron may have been skeptical a year ago when the project was announced, the recent unveiling of The Residences at Two Liberty Place did a fine job at showing that good design can overcome the difficulties of converting an office building into spectacular residences.

With residences starting at the 42nd floor, the lowest of these condominiums is higher up than any other penthouse in the city. Simply put, the views will take your breath away.

The interior of the units are just as spectacular. The kitchens feature Snaidero cabinets and Miele and Sub-Zero appliances. Spacious living spaces are ornamented with beautiful finishes.

The 37th floor of the building features a private owner’s club with lounge, theatre, fitness center, yoga room, pool, and a private owner’s dining room in the new signature restaurant. Residents will have access to white glove concierge and porter services included river-to-river chauffeured town car service.

With introductory prices from $650-$750/sq.ft. and settlement occurring withing 4-6 months, this is truly an opportunity to acquire one of the most sophisticated living spaces in Philly without the wait and uncertainty of new construction.

Unless you are Larry Page or Sergey Brin, chances are you can stop reading right now. These are the 10 most expensive homes currently for sale in America. At prices from $52M and going up to over $100M, these residences are beyond extraordinary in every sense. View the original listings for more pictures– hell, they are so big you can clearly view them from the Google Maps satellite.

For your convenience, I have calculated your monthly mortgage payment (30yrs at 6%). Without further adieu: The 10 Most Expensive Homes…

10) $52,000,000 in Pasadena , CA

Listing says: This exquisite estate is situated on a nearly 5 acres of magnificent grounds.The breathtaking European-style gardens feature an expansive lawn,topiary sculptures,stained glass domed pavillions,romantic resting areas,secluded pond w/bridge&a serene waterfall,enchanting walkways through bamboo&covered arbors,koi pond,meditation point,fountains,statuaries,water gardens,practice court& an elaborate Grecian-style pool w/cascading spa.

Quick stats:
Location: 1288 South Oakland Ave
Bedrooms: 15
Baths: 19
Size: 31,415 sqft
Monthly Payment: $280,600

More information at Coldwell Banker (MLS)

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9) $57,000,000 in Newport Coast , CA

Listing says: The main house encompasses more than 22,000 square feet with approximately 17,000 square feet of interior living space featuring 2 wings:a family wing with outdoor kitchen areas, an office/game wing, each with views of the beautiful lake, garden, ocean, canyon and city lights.

Quick stats
Location: 1 N Pelican Hill Rd
Bedrooms: 7
Baths: 9
Size: 17,000 sqft
Monthly Payment: $307,600

More information at Coldwell Banker (MLS)

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$59,000,000 in New York, NY

Listing says: This handsome forty-eight foot wide mansion was built in 1920 by Jeremiah Milbank in order to create the 20,000sq ft necessary to accommodate a grand ballroom, indoor swimming pool, gymnasium and terraced gardens. This six story mansion still contains those original features as well the original Carrara marble staircase. There is a Georgian Library of knotty pine paneling circa 1770 which was imported from England. On the third floor is a 4000 sqft Master Suite which has a fireplace, private garden reminiscent of an Italian Piazza, ladies dressing area and bathroom with gold mosaic bathing tub, a gentlemen’s dressing area on the opposite side of the room, sitting room, and separate studio overlooking the garden. There are seven additional bedrooms and staff quarters in this magnificent twenty-six room home

Quick stats
Location: 16 East 67th Street
Bedrooms: 7
Size: 20,000 sqft
Monthly Payment: $318,400

More information at Corcoran

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7) $60,000,000 in Lloyd Neck, NY

Listing says: Waterfront compound includes: 47.2 acres, 22,000 square foot main house, six bedroom, six bath guest house, 11 bedroom, seven bath staff house, pool/cabanas, three greenhouses, eight-car garages, protected cove with dock, two helipads, tennis, extensive gardens. Quick commute to New York City.

Quick stats
Location: Not exactly sure
Bedrooms: 8
Baths: 8 full / 4 half
Size: 22,000 sqft
Monthly Payment: $323,800

More information at Sotheby’s

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6) $62,500,000 in Southampton, Hamptons, NY

Listing says: Sprawling oceanfront estate boasting 8.9 acres and 450-ft. of beachfront. The master suite consists of bedroom with fireplace, sitting room with fireplace, and marble bath. Also includes music room with fireplace, detached office with fireplace and marble bath, staff apartment with kitchen, and security room. Har-Tru tennis court, 20′ x 50′ heated gunite pool, professional putting green, barbecue area and world class rose garden complete this very special offering.

Quick stats
Location: See map
Bedrooms: 8
Baths: 12
Size: 8500 sqft
Monthly Payment: $337,200

More information at Douglas Elliman

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5) $65,000,000 in San Francisco, CA

Listing says: Clad in French limestone, an exquisite Neoclassical style villa with stunning Golden Gate and Bay views, garden and a guest house with 19th Century Italian tile roof comprise this unique compound spanning two lots from Broadway to Pacific

Quick stats
Location: 2845 Broadway
Size: 20,608 sqft
Monthly Payment: $350,700

More information at Pac Union

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4) $70,000,000 in New York, NY

Listing says: The penthouse located at The Pierre Hotel encompasses the top three floors. Spectacular 360-degree views of Manhattan are found in this incomparable property. This French château is located within one of the world’s greatest five star hotels. The Pierre Hotel offers every conceivable service twenty-four hours a day. It encompasses 16 grand rooms – including five master bedrooms, 7 full baths and three half-baths, five working fireplaces, oak flooring with mahogany borders throughout, separate guest suites plus staff accommodations. The living room is considered the most magnificent privately owned room in the world. This incredible space was the original ballroom at The Pierre Hotel, with 23 foot high curved ceiling and 20 foot French doors overlooking the park and the city. Four adjoining terraces add to its phenomenal dimensions. This is without question the most important and spectacular penthouse in the world. Maintenance/CC: $38,720 a month

Quick stats
Location: 2 East 61st Street
Bedrooms: 5
Baths: 7
Monthly Payment: $377,700 (+ $38,720 in maintenance)

More information at Brown Harris Stevens

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tie for 2nd) $75,000,000 in Bridgehampton, NY

Listing says: Situated on over 60 acres of rolling farmland, this remarkable waterfront compound has been designed and built with a commitment to excellence. A magnificent collaboration between three brilliant architects, each a master of his field. The architect of record, Allan Greenberg, L.L.D., is regarded as one of the prime interpreters of classicism who has worked on The White House, Princeton University, and Rockefeller Center. The Golf Course (U.S.G.A. rated 18 hole) was designed by renowned golf-course architect Rees Jones, designer of many of the highly-rated courses including Atlantic Golf Club and The Bridge. Landscape architect Edmund D. Hollander, P.C., is among the foremost designers in his field.

Quick stats
Location: See map
Bedrooms: 8
Baths: 12
Size: sqft
Monthly Payment: $404,700

More information at Corcoran

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tie for 2nd) $75,000,000 in Corona Del Mar, CA

Listing says: Gracing three oceanfront lots in Cameo Shores, this soft contemporary masterwork is both defined by its stunning seaside site—and redefines the luxury lifestyle ideal. Most every room provides a breathtaking panorama of the majestic Pacific Ocean, serene beach coves and the spectacular coastline from Dana Point to Palos Verdes.

Quick stats
Location: 4627 Brighton Rd
Bedrooms: 8
Baths: 10 full / 5 half
Size: sqft
Monthly Payment: $404,700

More information at Coldwell Banker (MLS)

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And the most expensive home for sale in America: #1– $125,000,000 in Palm Beach, FL

Listing says: Donald Trump’s ultra exclusive 6.5 acre palatial oceanfront residence featuring approx. 574′ of direct ocean frontage.

Quick stats
Location: 515 N. County Road
Bedrooms: 17
Baths: 15 full / 8 half
Size: 67000 sqft
Monthly Payment: $674,500

More information at Sotheby’s

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(These listings have been collected these listings from various MLS’s and brokerages accross the country and exclude raw land and multi-untis.)

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The just-released 2006 Center City Philadelphia Real Estate Market Report reveals that the average sale price for a Center City home is $372,633 up 3% over last year. Despite this record high, the Center City Philadelphia market has shown some signs of cooling off. Compared to the previous quarter the average price is down 3% and the time to sell a property has increased by 7 days.

The full report is available at http://www.philadelphiacityrealty.com/report and is based on an analysis of over 20,000 sold properties.

“With an average appreciation of 64% over the last 5 years it is reasonable that the market needs a breather,” says David Friedman, a Center City Philadelphia real estate agent who commissioned the report. “The recent softening of the market suggests a slowdown rather than a major change in direction.”

Highlights from the 2006 Center City Philadelphia Real Estate Market Report include:

* The average sale price for Q4 was $354,186 compared to Q3 of $370,097, a 3% drop. The number of sales dropped 24% for the quarter from 700 to 528; sales for the year remained flat at about 2,600.

* Price growth continues to remain strong in Center City East at 9% for the quarter versus Center City West where price is down 13% for the quarter.

* In 2002, the average Center City Philadelphia sale price was just $200,000. In 2005, it passed $300,000.

* New Construction properties average price was up 23% for the quarter and 10% for the year with virtually no discounting from asking price. “While the long term appreciation is lower than average, the demand for this market segment is expected to continue”, says David.

* Northern Liberties and Society Hill/Penn’s Landing neighborhoods experienced over 30% growth in sale price compared to 2005. Old City and Avenue of the Arts neighborhoods were the only neighborhoods with a price drop.

ABOUT CENTER CITY PHILADELPHIA MARKET REPORT

The Center City Philadelphia Market Report provides summary and neighborhood market information on Center City real estate. The report is based on sale information from the Philadelphia metropolitan region’s multi-list system, TReND, for the period from 2001 to 2006. The report is published by Philadelphia City Realty at http://www.philadelphiacityrealty.com/report and will be updated on a quarterly basis.

Remember, real estate is a local business. Market to market and even neighborhood to neighborhood can be different. What is happening is that sellers are not able to simply tack on a healthy percentage increase on what a comparable home sold for the previous year as was the case the last few years here in Philadelphia. Instead, they are taking a good look at the marketplace with their sales associate and determining what the proper price of their home should be. I can’t emphasize enough how critical proper pricing is in this market.

Additionally, remember Econ101 – supply and demand. If there is a healthy supply available, the consumer has the opportunity to shop around and choose the right home. A healthy negotiation between buyer and seller then ensues.

While the media is focusing on dropping prices, it is important to remember that there is still appreciation going on. And, in the historical context of how long you may have owned your home, appreciation has been substantial. According to the Office of Federal Housing Enterprise Oversight over the last five years through June 30, 2006 existing homes in the U.S. have appreciated more than 56%.

Finally, we also need to be aware that not all of America had the white hot real estate market of the past few years. For a lot of Americans, slow and steady appreciation was the norm. These folks read about high appreciation, booming and falling markets, and scratch their heads because they’ve never had that in their market.

We are still hearing about the real estate bubble and no one seems to be able to answer the question of whether it has burst or not. Here are a few things to consider:

1. First-time homebuyers (in particular) are naturally hoping that prices will come down. They hear about this bubble and get a false sense of security that prices will automatically come down, so they remain on the sidelines. I think that this type of “timing the market” is very bad.
2. There has never been a national real estate bubble since the National Association of Realtors began recording median home prices in 1968. Freddie Mac has never shown a decline in national median prices since their record keeping began in the mid-50s.
3. In my terms, the definition of a real estate bubble is a massive oversupply of homes coupled with massive job losses. We are just not seeing that. In fact, the Brookings institute reported that the U.S. will need 40 million new residential housing units by 2030.
4. The Office of Federal Housing Enterprise Oversight studied 362 metro markets between 1978-2003 and found only 21 real estate busts which they described as a 15% decline in home prices over a 5-year period. That means that only 2/10th of 1% of the markets studied over 25 years were busts and only 9 occurred after a real estate boom, which is described as 30% home price appreciation over a 3-year period. Clearly, the idea that home prices go way up and then come crashing down is simply not true.
5. Except for catastrophic injury or illness, sustained loss of a job or other personal crisis, we will not sell our home at a loss. A home is what we live in; it is not a stock or bond and cannot be bought or sold quickly. A home purchase is a complex and emotional decision that is certainly not a routine event.

So what does this all mean? It means that though some segments of the Philadelphia marketplace may see a bit of adjustment (see new construction condos for a good example), it is highly unlikely that we will see any substantial bursting of the bubble.

Selling a fixer-upper is not impossible, but buyers are going to expect it to be priced far less than comparable homes in good shape. Your strategy for selling a fixer-upper will vary depending on factors including the location, strength of the market and how much work is needed to get your home in shape.

Be Prepared – know what’s wrong with it
Many experts advise getting your own inspection before selling any home, and this is an especially good idea for a fixer-upper. That way, you avoid being surprised by problems that could sabotage a sale when the buyer gets his own home inspection. You have to disclose the faults in your fixer-upper, especially things like lead paint or plumbing problems, but at least the buyer will be confident that you’re not trying to hide problems that will be expensive to fix. I always tell my clients to be wary of the disclosure statements that disclose nothing.

Spruce it up….maybe
Before you do anything, you need to decide whether you’re selling your fixer-upper as is, or if you’re willing to do some work that will more than pay for itself on the sale. Real estate experts say even cosmetic improvements like refinished hardwood floors or fresh, neutral paint can make a big difference when selling a fixer-upper.

You can get more people to look at your house — and thus increase your chances of selling your fixer-upper — with the minor remodeling of a key area, like the kitchen, or by replacing unsightly siding. According to a 2004 survey by Remodeling magazine, you would recoup an average of 93 percent of the remodeling costs, and even more in some markets.

So, why would you invest money if you’ll only recoup 93% of it? It’s all about salability. Remember that, from the buyer’s perspective, if they buy a completely remodeled house, they can buy the whole thing with mortgaged money. However, if they have to put $50,000 into making a fixer-upper shine like a new house, that’s $50,000 out of pocket. By appealing to the masses who can’t afford to outlay rehab money, you are widening the pool of perspective buyers and will significantly increase your odds of selling.

The Residences at Fairmount Quarters have my eye as the best new project for quite some time. With prices starting around $240/ft. and only going up to about $380/ft., on price alone this is a great deal for center city and Northern Liberties.

Situated between 4th and 5th on Fairmount, this small building contains 15 completely unique residences. Soaring ceilings (15+ feet) make the already large spaces feel even larger. Where else can you find an 897 sq.ft. studio? The builder has done an amazing job at keeping the original character of the building by saving old brick floors, amazing metalwork, and even the steer-head gargoyles on the front of the building. Neither floorplans or written descriptions can really explain what a great and unique space this is.

I expect that these units will sell out within a few weeks. With immediate equity because the prices are so low, these units are a great buy for either the homeowner or investor.

Every day you open the paper to the same information: The real estate boom is over; it’s a buyer’s market; inventories are at an all time high; nothing is selling. In a way, it’s all true. But, at the same time, we’re seeing numerous bidding wars, over-asking-price offers, and no-contingency offers constantly.

See, the key to selling property in this market (or for that matter, in every market) is creating value in the buyer’s eyes. Buyers determine value by comparison shopping. They look at the price of your home based on its features and benefits and compare it with the features and benefits of similar homes that have sold recently or are currently on the market.

A simple example: Let’s say a car dealership has the make and model that you want for $20,000. Now what if another dealership has the exact same make and model for $20,000, but throws in a CD player and sunroof? You’d buy the second one, right? But, what if the first dealership put the car without the extras on sale for $14,000? There’s a better value with the cheaper one.

So, if you want to increase value, you either:

1. Lower the price, or
2. Have more features and benefits for the same price

Since it’s generally a bad idea to do major upgrades (financially, it is unlikely that you will recoup your expenses), it is imperative that you price your house aggressively. With a 14-month supply of homes in center city, you need to make sure that you are offering unquestionable value to the buyer.

What about pricing it high and the lowering it later? Not a good strategy, but we’ll deal with that another day.

[tags]phillyfeaturedblog, philadelphia, real estate, realestate[/tags]