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Will Spring Thaw the Frozen Philadelphia Real Estate Market?

April 6, 2011 at 4:55 pm · Filed under For Home Buyers, For Home Sellers, Philadelphia Market Conditions

Get the real story about the Philly real estate market.

The spring home selling season is usually under way by Super Bowl Sunday, but it got a late start this year between the weather and the economy. This wait and the fear of rising interest rates seem to have released the pent-up demand among buyers who have been out in droves lately. We should start to see the back-log of inventory decline for well- priced house that are updated to today’s standards. Buyers’ expectations are also greater. Buyers in today’s market are a lot less willing to commit to homes that need work.

SELLERS: Pricing your Philadelphia home correctly from the beginning is vital. However the spring market may present a new opportunity to aggressive re-price and move a floundering property.

(click on graph for larger view)

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Potentially Related Posts:

Philadelphia House Prices Currently Back to 2003 Levels
Philadelphia Real Estate: Strong Buyers’ Market Persists
How’s the Philadelphia Real Estate Market?

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Philadelphia Real Estate Taxes in the News

April 1, 2011 at 1:34 pm · Filed under For Home Buyers, For Home Sellers, YO Philly

courtesy of Fix Philly Taxes

In 1981 the Mayor and City Council of Philadelphia entered into a political “deal” that was supposed to correct the systemic problems by equalizing property values over six years. Over 25 years have passed since the court-ordered deadline in their agreement…and still the system has not been fixed.

I think we all agree that the real estate tax system in Philadelphia is broken. Attempts at fixing the inequities have been by and large dismal failures. With the recent “temporary” tax increase and the Actual Value Initiative on the horizon there has been lots of discussion this week in the news.

Daily News Editorial: Property taxes: Getting past crazy

Philadelphia must justify property-tax projections

Nutter, Council pull off tax-hike switcheroo

Inquirer Editorial: Smells like a tax hike

This Is A Temporary Tax Hike, Right?

Philadelphia eyes a boost in real estate tax revenue

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What is the 90 Day Mortagage Flip Rule?

March 31, 2011 at 2:08 pm · Filed under For Home Buyers, For Home Sellers, Mortgage

With the Philadelphia spring housing market upon us I thought it would be a good time to review the guidelines for getting a mortgage on a flipped property. Essentially a flip is when an investor buys a property and then sells it at a profit within a short time frame. Flips tend to make lenders cautious because these types of transactions historically have had higher rates of default – more fraud involved, inflated property values, etc. These transactions can be difficult to close but if you know the rules it gets easier.
Conventional mortgage flip rules are relatively straightforward – a resale on a property when the seller is owner of record 90 days or less the loan is a decline. A resale of a property when the seller is owner of record 90-180 days is acceptable with 2 full appraisals and will typically be very closely reviewed, especially if the loan requires mortgage insurance.

FHA loans also have a prohibition on buying properties that were bought by the seller in the past 90 days. But there is a waiver in effect through December 31st 2011 that will allow flips to close. There are some conditions – the transaction has to be arms length (meaning not between friends or family) and if the seller is making more than 20 percent of their original purchase price, there are more complicated conditions that need to be met. Read the entire notice: Temporary Exemption from Compliance with FHA’s Regulation of Property Flipping (pdf)

While FHA has waived the rule for one year not all lenders will also waive their flip rules which are often applied to all mortgages. One more reason to use an experienced Realtor who knows the ins-and-outs and who has a good working relationship experienced mortgage brokers. It could mean the difference between buying the home you want or being denied a mortgage.

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Philadelphia House Prices Currently Back to 2003 Levels

March 9, 2011 at 2:58 pm · Filed under For Home Buyers, For Home Sellers, Philadelphia Market Conditions

The Philadelphia housing market continued its downward trend this past quarter, as both home sales and prices hit new lows.

This makes it a good time to buy a home in Philly.

Not such a great time to sell unless you are selling and buying another home – you’ll sell low but also buy low.

The Philadelphia housing market continued its downward trend this past quarter, as both home sales and prices hit new lows. The typical Philadelphia home fell in value by an average of 4.2% on a quality and seasonally adjusted basis this past fall, according to the latest data from the City’s Recorder of Deeds.

With this most recent decrease, the average Philadelphia home has now fallen in value by a cumulative total of 15% since the bursting of the national housing bubble several years ago.

The decrease in house prices was citywide, with no area of the City being spared. From largest to smallest, the average decline in house prices by neighborhood were:

West Philadelphia -10.1%
North Philadelphia -9.8%
Kensington/Frankford -8.5%
South Philadelphia -7.3%
Center City / Fairmount -5.4%
University City -3.5%
Upper Northeast Philadelphia -2.7%
Northwest Philadelphia -0.8%

Sales activity news was equally negative:

2,817 homes changed hands in Q4 - 15% decrease from Q3.
33% decrease from the same time last year.

However, even with the latest downbeat numbers, Philadelphia continues to weather the current housing downturn much better than most other major U.S. cities. According to Case-Shiller Macro Markets’ composite house price index, house prices have fallen by an average of 31% in the largest U.S. cities since the bursting of the housing bubble, compared to only 15% in Philadelphia. Currently, only two cities—Dallas and Denver— have experienced smaller total declines in average house values than Philadelphia.

Even with this quarter’s significant price drop, Philadelphia remains in third place of the twenty largest cities in the U.S. for the least house price declines.

Download the report (pdf) and Kevin Gillen’s (urban economist, Enconsult Corporation) commentary (pdf).

Potentially Related Posts:

Philadelphia Real Estate: Strong Buyers’ Market Persists

Philadelphia Real Estate: #2 Best Performing City of the Decade

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Who Were 2010′s Home Buyers and Sellers?

February 25, 2011 at 9:57 am · Filed under For Home Buyers, For Home Sellers

Every year, the National Association of REALTORS® (NAR) conducts a survey to find out who today’s home buyers and sellers are. This year’s survey asked: Did home buyers use the tax credit? Are they trading up or going with a more modest home? How did buyers search for their home?

NAR surveyed people who participated in a real estate transaction between July 2009 and June 2010. The questions ranged from simple demographics, such as age and marital status, to more in depth questions like discovering the primary reason for purchasing a home and how long buyers expected to be in the home they just purchased.

Interesting Facts from the Report:

In 2010, it took buyers an average of 12 weeks to find a home, which remained the same as in 2009.

57% of people used an agent that was either referred to them or one they had previously worked with.

87% of people would refer their agent or work with them again.

In terms of the tax credit, 93% of first-time buyers and 48% of repeat buyers took advantage of it.

Typically, sellers received 96% of their asking price. Of those that sold, more than half bought a house more expensive than their previous home.

43% of sellers did not reduce their asking price.

36% of all buyers polled looked online for properties for sale.

45% of all buyers walked through a home which they had previously viewed online.

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