The most recent home sales data indicate a solidifying of the local housing market’s condition after several years of both declining sales and prices.

 
After two years of falling prices, prices held steady for the third consecutive quarter in 2009 Q4. The typical Philadelphia home rose in value by 0.5% on a quality- and seasonally- adjusted basis this past fall, according to the latest analysis by Econsult economist Kevin Gillen [pdf]. From the housing market’s peak in 2006 to the recent trough of last winter, the average Philadelphia home had fallen in value by a total of 10.5%. But with the market’s apparent stabilization in the latter part of 2009, the average Philadelphia home has recovered 3.5% of its lost value, thereby reducing its total loss to only 7% since the bursting of the national housing bubble several years ago.

Download the report and Kevin’s commentary.

Price changes across the city’s neighborhoods were essentially flat, with slight increases in some neighborhoods being offset by slight decreases in others.

Center City / Fairmount +1.6%
West Philadelphia +1.5%
Lower Northeast Philadelphia +1.2%
Upper Northeast Philadelphia  +0.8%
Northwest +0.1%

 University City -13.1%
South Philadelphia -0.6%
Kensington/Frankford  -0.4%
Northwest Philadelphia -0.1%

Philadelphia’s housing market continues to significantly outperform other major U.S. cities during the current economic downturn. 

According to Case-Shiller MacroMarkets’ composite house price index, house prices have fallen by an average of 30% in the ten largest U.S. cities since the bursting of the housing bubble, compared to only 7% in Philadelphia. Of the twenty largest cities in the U.S., all but one (Dallas) have experienced more severe house price declines than Philadelphia.

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Technorati: housing market, philly housing, buyers market, appreciation by neighborhood

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In Philadelphia now is a good time to make the jump to homeownership.

The U.S. government has pushed hard to make homeowners out of one-third of Americans who still rent their homes. It introduced and later extended a tax credit for first-time home buyers, and has kept federal interest rates at their lowest levels since the 1940s.

Market conditions are such that now is a particularly good time for some renters to take the hint.

Whether to rent or buy is a complex decision, but timing is important. In Philadelphia, the premium to buy–the difference between what you’d pay monthly to own a home, rather than rent–has dropped dramatically. In Philly the step up from renting to buying is a much smaller one than usual. Buying isn’t necessarily cheaper than renting and in fact, it often remains a more expensive proposition. But if you are determined to own a home in Philly that investment is a better one now than it normally is.

The next thing to consider is whether your home will appreciate. With strong industries in Philadelphia (healthcare / pharmaceuticals) and a relatively healthy labor market that will keep generating new jobs the demand for homes will increase and therefore home prices will go back up.

So upgrading will cost much less than usual and home buyers are likely to get a good return on their investment.

Philadelphia Statistics:

Premium to Buy, 15-year Average: 28.4%
Premium to Buy, Q3 2009: 18.7%
Five-year Home Price Index Forecast: 13.85%
Median Rent: $957
Median Home Price: $227,500
Blended Mortgage Rate: 5.33%

Potentially Related Post: Here’s That Damn Question Again: Should you Rent or Buy in Philly Right Now?

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posted by janice       SEARCH the Philadelphia MLS. No Registration Required!

Mixed news on sales, prices.

The most recent home sales figures suggest a slowing in the momentum of the housing market’s attempt to recover from its current slump.

Following the first quarterly increase in citywide house prices after two years of falling prices, the typical Philadelphia home rose in value by a scant 0.2% on a quality—and seasonally—adjusted basis this past summer, according to the latest analysis by Econsult economist Kevin Gillen{pdf}. Following on the heels of a robust increase of 6.8% this past spring, Philadelphia house values seem to still be struggling to regain the value they lost over the past two years. With these losses in value netted against these two recent increases, the typical Philadelphia home has lost 8% of its value since the bursting of the national housing bubble over two years ago.

Download the report and Kevin’s commentary.

Price changes across the city’s neighborhoods were mixed, with increases in some neighborhoods being offset by decreases in others:

South Philadelphia +7.0%
West Philadelphia +6.4%
 University City +2.6%
Center City/Fairmount +0.7%
Lower Northeast Philadelphia +0.2%

 Northwest Philadelphia -4.4%
Kensington/Frankford -2.1%
Upper Northeast Philadelphia -0.7%
North Philadelphia -0.4%

Philadelphia remains in far better shape than most other major U.S. cities. According to Case-Shiller MacroMarkets’ composite house price index, house prices have fallen by an average of 32% in the ten largest U.S. cities since the bursting of the housing bubble, compared to only 8% in Philadelphia. Of the twenty largest cities in the U.S., all but one (Dallas) have experienced more severe house price declines than Philadelphia. And, according to the research firm IHS Global Insight, the typical Philadelphia home is now considered to be under-priced by 2%.

Also See: Philadelphia Housing Considered Under-Value 1st Time Since 2003

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Technorati: housing market, philly housing, buyers market, appreciation by neighborhood

posted by janice       SEARCH the Philadelphia MLS. No Registration Required!

Confidence and Continued Demand for Center City Real Estate.

In a survey conducted by the Center City District (pdf) in July 2009 81% of Center City residents remain confident about the future of downtown Philadelphia.

** Despite the recession, Philadelphia has experienced a much lower decline in employment than either the region or the nation. Philadelphia has been buffered by the fact that 36% of the workforce is employed in educational and health care institutions.

** While Philadelphia is still losing population, Center City has been growing for over 40 years. Even as households have
gotten smaller, population density has been increasing. Since 2000, growth accelerated as seven out of eight downtown ZIP codes experienced an increase in population. Driven by the 10-year tax abatement that was approved in 1997, Center City has added 12,121 new units of housing.

** In the neighborhoods surrounding the central business district demand remains strong since none of these communities
are confronting a challenge of over-supply. Townhouses priced below $400,000, are selling well, as first time homebuyers,
prompted by the $8,000 federal tax credit, are connecting with willing sellers who have adjusted their prices downward.

**Center City Philadelphia has succeeded in attracting well educated, knowledge-workers — young professionals and empty-nesters — a key objective of development professionals in every American city. Twenty-eight percent of all respondents are ages 25 to 34, while 39% are over 55. Older, more affluent households are concentrated in the higher-priced housing in the core of downtown, with the largest proportion of individuals over 65 found in ZIP codes 19102, 19103 and 19107.

Like the national market, Center City housing production peaked in 2006 with almost 2,000 new units delivered to the market that year and then slowed in 2007 and 2008. The financial crisis of September 2008 caused production to plummet as financing for major for-sale projects almost completely dried up. Still, from Northern Liberties and Fairmount to the neighborhoods south of South Street, the construction of townhouses, rental units and high-rise buildings continue, albeit at a lower volume than in previous years.

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Technorati: center city real estate, philadelphia real estate, philadelphia housing market, home buyers, home sellers

posted by janice       SEARCH the Philadelphia MLS. No Registration Required!

Great news for Philadelphia home owners and anyone looking to buy Philadelphia Real Estate. A new report published by U.S. News and World picks Philadelphia as one of the “10 Cities primed for a Real Estate Recovery”. A sizable government sector has helped keep unemployment below the national average. Healthcare and education jobs also have helped offset cutbacks in finance, construction, and manufacturing. Those same sectors will help the economy recovery, possibly faster than the nation overall.

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Technorati: Philly real estate, Philly market conditions, Philly real estate recovery, buy real estate in Philly

posted by janice       SEARCH the Philadelphia MLS. No Registration Required!

The most recent home sales figures indicate some indicators of stabilization in Philadelphia’s slumping housing market acording to the latest analysis by Wharton economist Kevin Gillen.Dr.

 Kevin Gillen is an economist at the Real Estate Department of the Wharton School and Fellow of the University of Pennsylvania. He analyzes the Philadelphia real estate market using the city’s real estate database through Enconsult, an economics consulting firm based in Philadelphia. The results are published in a research paper called Philadelphia House Price Indices(PDF) each quarter as a public service to the Philadelphia real estate community.

After seven consecutive quarters of declining house prices, the typical Philadelphia home actually rose in value by an average of 6.8% on a quality- and seasonally- adjusted basis this past spring. This is a reversal from nearly two years of price declines. And, when added to previous price declines,Philadelphia house values are down cumulatively by 12% from the local market’s peak of two years ago.

Price changes across the city’s neighborhoods were almost all positive. From lowest to highest, the price changes by neighborhood are:

Center City/Fairmount (+0.9%)

Lower Northeast Philadelphia (+3.1%)

Upper Northeast Philadelphia (+3.8%)

Northwest Philadelphia (+5.8%)

South Philadelphia (6.9%)

North Philadelphia(+13.1%)

Kensington/Frankford (+14.0%)

University City (+17.1%)

West Philadelphia was the only neighborhood to experience a price decline (-1.1%).

With this price increase, Philadelphia has diverged sharply from the average house price decline for large U.S. cities. House prices have fallen by an average of 33% in the ten largest U.S. cities since the bursting ofthe housing bubble, compared to only 12% in Philadelphia. With the most recent price declines to date, Philadelphia’s housing is now actually considered to be under-valued. The typical Philadelphia home is under-valued by 3.2%. This is down from its peak of two years ago, when it was estimated to be over-valued by 16%, and the first time it has been considered under-valued since 2003.

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Technorati: Philadelphia real estate, market conditions, homes for sale

posted by janice       SEARCH the Philadelphia MLS. No Registration Required!

Rates as of August 3, 2009:

30 Yr Fixed – 5.125% (1 point) / 5.375%(0 points)

15 Yr Fixed – 4.5% (1 point) / 4.875% (0 points)

FHA – 5% (1 point) / 5.25% (0 points)

Investment – 5.625% (1 point) / 6% (0 points) – 25% down payment required

*Rates are based on 80% loan to value unless noted and 720+ credit score (with the exception of FHA) *Income and Asset verification required and must meet DTI guidelines *This is not a commitment to lend and other conditions may apply

“ENERGY AND PERSISTENCE CONQUER ALL THINGS.” Benjamin Franklin.

And indeed, Bonds and home loan rates definitely showed some serious energy and persistence this last week, despite some serious headwinds, including additional supply flooding the market from this week’s big Treasury auctions.

The Treasury unloaded an enormous supply of paper onto the markets this week…and remember, anytime there is more supply than demand, it means prices will naturally decline. And when Bonds are concerned, when prices decline, home loan rates go up. The heavy supply hitting the market caused some wild volatility for rates midweek, but overall home loan rates managed to find some improvement by the end of the week. However, it won’t be long before another enormous supply of Treasuries comes on the market.

 In just two weeks, we’ll be looking at a fresh round of auctions…and the size of those auctions will be announced on August 5th. This announcement date of August 5th, and the following week’s auction dates of the 11th, 12th and 13th will probably have high volatility and provide a headwind for Bonds. It used to be that the dates of economic news would be circled on the calendar as the ones to watch for greater movement in Bond prices…but right now, the supply issue has become so important that it now may be the most dominant current factor in Bond pricing and home loan rates.

In other news, Advanced Gross Domestic Product (GDP) for the 2nd Quarter came in better than expected, while the 1st Quarter GDP was revised lower. GDP measures the total market value of all final goods and services produced in a country in a given year. Overall, GDP has fallen four quarters in a row for the first time since government records started in 1947. The report also showed consumer spending is down, as consumer savings increased to the highest level since 1998.

Technorati: philly mortgage, mortgage market, carina marchese, center city mortgage company

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TREND is the Multiple Listing Service (MLS) for more than 32,000 real estate professionals in and around the Philadelphia metropolitan region. The report is a compilation of TREND data, government data and NAR (National Association of Realtors) analysis. The home sale statistics come from TREND, while the labor and industry data comes from government sources. All of the analysis is written by NAR economists. Complete 2008, 4th quarter report: Economic and Market Watch Report (pdf).

This information has been reprinted from the Economic and Market Watch Report with permission from TREND.

Potentially Related Posts:
Phila. Real Estate: Still a Strong Buyers Market
Phila. Real Estate: Market Data 2nd Q 2008
 

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posted by janice SEARCH the Philadelphia MLS. No Registration Required!

The median home price in the Philadelphia area fell 2.6 percent to $223,000 in 2008. Clearly housing prices took a hit from the economic crisis but not to the extent of the overall national market. Nationally, the median sale price dropped last year by 9.3 percent, according to the National Association of Realtors data, down to $198,600 $219,000 in 2007.

Philadelphia County was the only county in the region where the median price increased last year, rising by 0.9 percent to $141,237. Chester County registered the highest median sale price of $304,250, followed by Bucks County at $282,500. Montgomery County’s median sale price was $263,000.

Philadelphia Housing Sales Facts for 2008:

     **57,877 homes sold, a 23.9 percent decrease
               76,084 homes sold in 2007
              85,302 homes sold in 2006

      **Average days on market was 77
               65 days in 2007
               54 days in 2006

      **Monthly average inventory was 60,530
               60,166 in 2007
               54,009 in 2006

With historically low interest rates, some great buys and the imminent passage of the Economic Stimulus Bill eager sellers have been kicking up more sales at the start of the spring selling season, which unofficially launched after the Super Bowl.

How Much is My Philly Home Worth?

 Technorati: philadelphia market conditions, philadelphia real estate, philadelphia home prices

posted by janice       SEARCH the Philadelphia MLS. No Registration Required!

Not All Rates Are Cut From The Same Stone.

Please note that advertised mortgage rates are based on 720 credit scores and above with 20%down. The rates can very significantly depending on different factors:

Credit score

Down payment/equity percentage

Property type (owner‐occupied, 2nd or vacation home,  investment property)

Reason for mortgage (purchase, rate/term refinance, cash‐out refinance)

Loan type

When looking at loan pricing on various scenarios, it’s extremely important for your mortgage broker to have full information on each borrower to do a preapproval.

This has turned out to be a volatile week for mortgage rates. They shot up from the mid 4’s to over 5%; that’s a half-percentage point rise in eight days.  The mortgage bond market is skittish about our new President.  If Obama’s Economic Recovery Plan is passed by Congress inflation could gather steam rather quickly.  It relies on huge government borrowing and that is inflationary. A spike in inflation may make it harder for the Fed to drive mortgage rates much lower.

Rates appear to be on the rise but even the best of the best can’t predict what rates will be or when.

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posted by janice       SEARCH the Philadelphia MLS. No Registration Required!