The Philly Pretzel

Tips on making a low-ball offer a homeowner might just accept.

BUYERS the BEST situation to submit a low-ball offer:

1. Seller has reduced the price for the 2^nd time

2. Seller has reduced price within 4 weeks

3. Property has been on the market 4 months or longer

4. Seller bought 5+ years ago

5. Property needs cosmetics but not total rehab

6. Property is vacant and seller has moved on

One word of caution: It isn’t worth anyone’s time to submit a ridiculously low offer, often it just enrages the seller who then refuses to negotiate. If the property is priced close to market value then an offer of 8-10 % below asking is low-ball. Properties that are priced using the “I would like to see how much I can get” or “I need to make this much” method are better just left alone.

The WORST time to submit a low-ball offer:

1. Seller has not reduced asking price

2. Property is less than 4 weeks on the market

3. Open House is crowded

4. Property is priced slightly below market value already

5. You have been looking for awhile and the house is “the one”

Some examples would be:

1913 Green St #1 - Reduced from $725k to $575k; Reduced 5 times. On market since 6/21/2006 (I think they are finally close to market value now).

36 Strawberry St #26 - Reduced from $290 to $247k; Reduced 3 times. On market since 9/17/2007 (they have moved on and are motivated).

850 S. 5th Street - Reduced from $415k to $315k 299k; Reduced 9 10 times (now we’re talking). On market since 5/19/06.

Potentially Related Articles:
NY Times: Lowball Offers on the Rise

Technorati: Philadelphia real estate, Center City Philadelphia real estate, market conditions, low ball offers

posted by janice

Make no mistake we still are in a buyers market in Philadelphia and probably will be for some time. The housing market took a much needed correction after a number of years of unwise purchasing but unlike what the media would have us believe, a correction in the housing market doesn’t equate to a crash. Unfortunately, the ongoing negative news about the troubled areas in the U.S. has caused a ripple effect, with home buyers and sellers on a national level exercising caution before making a decision. This has caused an overall slowdown in the marketplace.

The National Association of Realtors says the US housing market showed signs of stability in February and existing home sales rose 2.8% nationally and up 11.3% in the Northeast, up for the first time in 7 months.

True, the numbers of homes sold in 2007 have dropped from the year before, but 2007 is still among the highest years on record, with numbers of sales for 2008 projected to be even higher than the levels seen in 2002. Inventory in the Philadelphia region still remains high but is moving in the right direction. This equates to good news for buyers who have more homes at more price ranges from which to choose.

Philly Median Home Prices:

        • The median sold price for 2006 was $180,503
        • The median sold price for 2007 was $185,204
        • This represents a 2.5 % increase in price (nationally there was a decrease of
           8.2%)

Philly Sales Volume of Houses Sold:

        • There were 17,667 homes sold in 2006 for a sold volume of $3,188,950,036
        • There were 15,735 homes sold in 2007 for a sold volume of $2,914,195,066
        • There were 1,932 fewer homes sold which equates to a decrease in sold volume
          of 8.6% (nationally 23.8%)

Summary:

        • Philly has faired much better than the national average both in median sold home
           prices and in volume of homes sold
        • Housing demand in the Philadelphia region is down from 2006 but still relatively
           strong
        • There is a smaller percentage of supply in Philly than there is in the majority of
           the country

Houses that are priced consistent with market guidelines are attractive to buyers 

        • Attractive listings increase Buyer demand
        • Increased demand reduces supply
        • Fact-based pricing creates a healthy real estate market

Potentially related website:
Search All Philadelphia Homes For Sale

Technorati: Philadelphia real estate, Philadelphia median home price, Philadelphia home sellers, Philadelphia home buyers

posted by janice

What are absorption rates… and why are they the best indicators of Market Performance?

Absorption rate is the average number of homes sold per month over a particular period of time and how long it will take the homes that are on the market to sell. Absorption rates are a great means of tracking market performance and predicting trends. Although they are usually used to indicate overall market performance they can be just as powerful when tracking sales by price range or by neighborhood.

Buyers market, sellers market or neutral market?

The amount of inventory determines which way the market swings. A neutral market is 6 months of inventory and anything less than that is a sellers market. Conversely, an inventory of more than 6 months is a buyers market.

What do absorption rates mean to a buyer?

Absorption rates can help a buyer to understand market supply and demand and this can be helpful when crafting his/her offering strategy. The longer a home has been on the market and the more competition that it has in its price range, suggests a lower offering strategy and a greater possibility of increased reduction off asking price.

What do absorption rates mean to a seller?

Absorption rates help a seller understand how long it might take a home to sell. They can also assist the seller in determining their pricing strategy. The most desirable home in a price range always sells first. If a seller wants to sell quicker, they want to have the most desirable home in a price range… even if that is one price range lower.

Disclaimer:

Absorption rates are a great tool that can be used by either a buyer or seller to understand the real estate market and to be in a better position for success. But they tend to fluctuate dramatically by neighborhood and by price range. Absorption rates are more accurate if calculated in smaller segments. A good example is the rate for Fishtown is 6.23 weeks and the rate in Queen Village-Pennsport is 4.33 weeks but the above rate for all of Philadelphia is 11 months! If you would like to know the absorption rate for your neighborhood, send me an email and I will publish the rate.

Potentially Related Posts:
The State of Philadelphia Real Estate
Philadelphia Forclosure Rate

Technorati: Philadelphia real estate, absorption rate, Philadelphia real estate trends, market conditions

posted by janice

The tallest building in the Western Hemisphere and the second-tallest building in the world is planned for the parking lot at 18th and Arch Streets in Center City. Walnut Street Capital, a Philadelphia development company headed by Garrett Miller and a pension fund from Washington State are joining forces to develop the project. This type of funding enables the project to skit around the current credit crunch that is starting to put a damper on commercial projects. With the funding in place the obstacles ahead include the need for zoning adjustments and attracting prospective tenants to occupy the office part of the building.

This development would fill a hole in a critical block of Center City and help expand the Central Business District  filling the emptiness between Logan Square and Market Street. The design of the building will have a mix of uses and design elements that try to create vibrant public spaces to be used at all hours.

The American Commerce Center would be constructed to meet the U.S. Green Building Council’s LEED gold certification and the developer anticipates, if approvals are in place, breaking ground next summer and finishing it by 2012.

FAST FACTS:

     Website: American Commerce Center

     Location: 1800 Arch St.

     Height: Office Tower-1500 feet (525 feet higher than the Comcast Center)

     Usage: retail, hotel and office space (even a movie theater)

     Cost: $800 million, 2.2 million square feet

     Architect: Kohn Pedersen Fox

     Developer: Walnut Street Capital

     Groundbreaking: Summer 09′?

     Features:

        •  1500′ Spire
        •  26 Story Hotel / 5 Star (300 rooms)
        •  2 Roof Gardens (473′ and 6th Floor accessible to hotel guests)
        •  3-6 Stories of Ground Floor Retail along Arch St with a public garden
        •  Underground Parking (383 spots with dedicated bicycle parking)
        •  LEED Gold Certified

Impressive news. This is a great day for Philadelphia. Check out the official renderings and more information on philly skyline.

Technorati: Philadelphia skyscraper, Center City, American Commerce Center, tallest buildings, Philadelphia real estate

posted by janice

Here’s another reason to love Philadelphia: according to the City Planning Commission, daily off-street parking is both “ample” and “cheap.”
Occupancy rates are only about 80%, and availability should continue to cheerily rise with demand so not to worry, friends; when you need parking space for your 2010 Cadillac hybrid, it will be there.

Why doesn’t this cheer me right up?

Because as a Realtor, I’m always trolling for a short-term space, which the Commission admits is “disproportionately expensive” compared to other cities. Typically, an hour’s parking costs more than half as much as a full day.
Plus, it takes me a few precious milliseconds to drive into a parking lot.
What I want, dear reader, is a nice cheap parking space right smack at the curb.
But sometimes, even in my favorite city, you can’t always get what you want.

PS. You can pay your parking tickets online, it’s almost painless.

Technorati: Philadelphia, Center City, Philadelphia parking, parking problems

posted by carolyn