Real Estate Wisdom Update-12-21-17

Real Estate Wisdom Update-12-21-17

Wealth. Legacy. Lifestyle.

Whether you are a reluctant landlord or emerging investor, this newsletter is for you. You can count on the Real Estate Wisdom newsletter to provide the inside scoop from talking to buyers & sellers, studying the market trends, and following what is going on at local city halls. 

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Action Inspiration

“I have been impressed with the urgency of doing. Knowing is not enough; we must apply. Being willing is not enough; we must do.”– Leonardo da Vinci

Here are my latest 5 Points of Interest about the Philadelphia metro area and final November market statistics.

5 Points of Interest

1)The Philadelphia metro area needs more permanent housing solutions for veterans and their families.

The region’s handful of affordable housing earmarked for veterans, such as Buchman Meadows in Chester and the newly opened Spring Garden School project in Philadelphia, do not address the shortage.

On a smaller scale, owners can participate in the HUD-Veterans Affairs Supporting Housing program (HUD-VASH) that combines the traditional rent voucher with case management and clinical services provided by the VA.  Like the regular HUD voucher program, your property must pass an inspection. Once your unit is deemed eligible, you can promote your property to potential tenants through the VA and other affordable housing tenant networks.

Note, both the Delaware County Housing Authority and the Philadelphia Housing Authority administer this program, click here for the Veterans program Landlord fact sheet.

2)We are positive about Buy and Hold opportunities in 2018.

The demand for safe, affordable rentals is strong for working-class residents in the metro area for units at the $800-$1,200 price points. Within the older housing stock, there are great single-family and small multi-family rentals. Finding good tenants at that price point is just a matter of screening takers.

You don’t necessarily need to add high-end amenities to satisfy this group. Most importantly, the math may not work for you.  Many of the new construction units on the market go for more than the average Philly area renter to afford (or an average November rent for a 2 Bedroom Philadelphia apartment of $1,745, according to Rent Jungle).

The bottom line is that there is still money to be made serving the working-class market.

3)West Philadelphia is hot.

The recent multi-billion investment in University City (i.e., Schuylkill Yards near 30th Street Station, U-City Square near 36th & Market, and the 40th Street Trolley Portal project near Baltimore Avenue) will continue to drive home values up further and further west.

Take a look at the trend in sold prices between 2013 and 2017 YTD (source Trend MLS). We compared the low and high sales price from 46th Street through 56th Street between Chestnut and Spruce Streets.

Low High Average
2013 $20,500 $278,125 $142,908
2017 $58,005 $370,000 $198,784

4)We are keeping an eye on regulatory changes for short-term rentals (Airbnb).

Safety concerns, security, and lost tax revenue have been other reasons cities have been tempted to impose more boundaries around short-term rentals. Even though the last changes in the Philadelphia code was in 2015, it is important to track pending changes in other cities.

Recently, Seattle passed an ordinance that restricted the number of homes owners can operate as short-term rentals to two: their primary residence and one other. Seattle justified this change to protect the supply of affordable housing units for families who want to make the city their permanent home.

The Airbnb business model may remain an attractive revenue stream in the Philadelphia metro area in the short term until municipalities pass new restrictions.

5)You may be paying too much in property taxes in Delaware County.

In some of the suburban communities, the owners are not only underwater with their mortgage, but they are also over-assessed in taxes. Some owners feel the pain worse than others.

In Delaware County, about one-third of owners are over-assessed, with the highest rates in Darby (taxes based on 216% of market value), Marcus Hook (tax taxes based on 203%), and Upland (taxes based on 226% of market value), according to the Philadelphia Inquirer.

Earlier in the year, the Delaware County courts voted to complete a reassessment across the entire county by 2021, the first since 2000. To make your case, you need to get an appraisal to prove your current market value.

November Key Market Statistics

(Statistics shown are for rolling 12 months)

(19143) West Philadelphia-Cobbs Creek/Cedar Park

 NOV 16NOV 17% CHG
Total Sales4204200%
Lowest Sales$10K$11K13%
Highest Sales$1,545K$949K -39%
Average Sales$141K$137K-3%
Days On Market354220%

(19104) West Philadelphia-University City/Mantua

 NOV 16NOV 17% CHG
Total Sales14016719%
Lowest Sales$13K$14K8%
Highest Sales$2,400K$1,250K-48%
Average Sales$268K$239K-11%
Days On Market5038-24%

(19139) West Philadelphia-Walnut Hill/Haddington/Mill Creek

 NOV 16NOV 17% CHG
Total Sales19325231%
Lowest Sales$7K$5K-29%
Highest Sales$775K$607K-22%
Average Sales$82K$91K11%
Days On Market6349-22%

Upper Darby

 NOV 16NOV 17% CHG
Total Sales913100610%
Lowest Sales$14K$17K21%
Highest Sales$425K$435K 2%
Average Sales$122K$130K7%
Days On Market8261-26%


 NOV 16NOV 17% CHG
Total Sales11917043%
Lowest Sales$6K$5K-9%
Highest Sales$165K$255K55%
Average Sales$45K$52K14%
Days On Market7455-26%


From the desk of Veronica Woods, Daniel Woods Real Estate

About Veronica
Veronica comes from a family of real estate investors. She is passionate about helping individuals make smarter decisions about how to manage real estate and create opportunities to create legacy wealth. Veronica is a licensed realtor in PA and NJ. She earned her MBA at The Wharton School and has a BA in Economics from Northwestern University.