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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. 

If you think this info is useful, remember to share.

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%

Chester

 NOV 16NOV 17% CHG
Total Sales11917043%
Lowest Sales$6K$5K-9%
Highest Sales$165K$255K55%
Average Sales$45K$52K14%
Days On Market7455-26%
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Real Estate Wisdom Newsletter – Market Update 10-3-17

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. 

If you think this info is useful, remember to share.

Action Inspiration

If your dreams do not scare you, they are not big enough. Ellen Johnson Sirleaf, President of Liberia

The number #1 question that I get from investors is “how is the market?” Here are 5 Points of Interest about the Philadelphia metro area and final August market statistics.

5 Points of Interest

  1. Baby Boomers are driving some of the low inventory. Many empty nesters (55 and older) who may have previously wanted to sell because they had “too much house” now are opting to stay put in greater numbers. This trend makes them more likely to hold out for a price that would allow them to buy a new house that meets their needs. Since home ownership among baby boomers is at 78%, this is a trend that we are watching. [Source: Realtor.com]
  2. The battle to woo Amazon to Philly has benefits for real estate investors. Dozens of cities across the country are courting the new Amazon headquarters including Philadelphia. The insiders say that the most viable sites locally are two sites in University City and one at the Navy Yard. What does this mean for local real estate investors? If Philly gets the bid, the metro area will have an influx of new residents who are going to need homes to buy or rent. If the city doesn’t, it will still have garnered new national attention which may support market appreciation.
  3. The demand for single-family rentals is still high. While there is speculation about relaxing some mortgage requirements, many consumers may still fall short. Also, 40% of families with children living at home are renters, which often means a three bedroom/one bath home. In the Philly metro, 14.9% of single-family home inventory are rentals (vs.19.2% nationally). It will continue to be a good time to be a landlord. [Source: Zillow]
  4. First-time home buyers are driving health of the market. Often investors overlook making their properties owner-occupant ready when it’s time to sell. According to a report by Genworth Mortgage Insurance, first-time home buyers account for 36% of the total home buyers (up two percentage points from the previous year). First-timers are often willing to put in a little sweat equity into a property in exchange for a reasonable sales price. These buyers will not float in low-ball offers as another investor would. The best way to reach these folks is with professional marketing using a realtor and syndicating the information about your property via the MLS.
  5. Chester Charter School of the Arts now has a new home. In 2015, the Chester Housing Authority sold the 11-acre site off of Rte 95 and Highland Avenue (previously the McCaffery Village housing development) for $2.5 million to The Chester Fund for Education and the Arts, which founded the K-12 school in 2012. The group used New Market Tax Credits from the state to partially fund the $25 million effort. Officials cut the ribbon on the new school on August 25. This project signals the feasibility of additional development opportunities through public-private partnerships for other developers in Chester.

August Key Market Statistics

(Statistics shown are for rolling 12 months)

(19143) West Philadelphia-Cobbs Creek/Cedar Park

 AUG 16AUG 17% CHG
Total Sales4024112%
Lowest Sales$10K$11K13%
Highest Sales$840K$1545K 84%
Average Sales$139K$139K0%
Days On Market5245-13%

(19104) West Philadelphia-University City/Mantua

 AUG 16AUG 17% CHG
Total Sales13614624%
Lowest Sales$14K$13K-7%
Highest Sales$1,325K$2,400K81%
Average Sales$245K$250K2%
Days On Market5141-20%

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

 AUG 16AUG 17% CHG
Total Sales18522924%
Lowest Sales$7K$5K-29%
Highest Sales$775K$607K-22%
Average Sales$82K$93K13%
Days On Market6950-28%

Upper Darby

 AUG 16AUG 17% CHG
Total Sales9059576%
Lowest Sales$14K$17K21%
Highest Sales$425K$415K -2%
Average Sales$120K$129K7%
Days On Market8069-14%

Chester

 AUG 16AUG 17% CHG
Total Sales116146100%
Lowest Sales$4K$5K43%
Highest Sales$165K$165K0%
Average Sales$45K$50K13%
Days On Market7060-14%
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Real Estate Wisdom Newsletter – Market Update 8-16-17

Wealth. Legacy. Lifestyle.

Whether you became an investor reluctantly or with the intention to grow a mighty portfolio, I would like to be a resource for youYou 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. 

If you think this info is useful, remember to share.

Action Inspiration

Action expresses priorities. Mahatma Gandhi

The number #1 question that I get from investors is “how is the market?” Here are 5 Points of Interest about the Philadelphia metro area and final June market statistics.

5 Points of Interest

  1. It’s still a seller’s market, which is helping to drive average sales prices up. Owners who bought or refinanced in 2006 and 2007 are still under water. Houses for sale in both Delaware County and Philadelphia is lower as seller’s gamble on whether the hot market will continue to have steam into 2018.
  2. 40% of all Q2 Home Sales were all cash in the Philadelphia metro area (up 13% from 2016). This suggests that investors, local and from NYC and DC, are still successfully finding deals   It is also reflects the current mortgage lending environment as challenging for first-time home buyers. [Source: RealtyTrac]
  3. August rental data shows that one Bedroom rentals (+4.3%) showed more price appreciation than two bedroom ones (+0.2%) year over year. Also, if you are considering purchasing multi-family with mostly 1 bedrooms, it still could be a winner. The cash flow upside may be more favorable than you originally thought. [Source: Abodo]
  4. New hotel in Chester, PA. The groundbreaking for the $6M project for an extended stay hotel near 4th Street occurred in June. Construction is planned to begin in August. We will need to wait to see whether this will bring new restaurants to support the residential market in the downtown area.
  5. At the end of June, Brandywine Realty Trust pledged $5.6M to promote neighborhood development in West Philadelphia. The developer committed to support real estate development in the neighborhoods surrounding its large Schuylkill Yards project. This means new opportunity for Mantua, with nearly 30% vacant parcels.

June Key Market Statistics

(19143) West Philadelphia-Cobbs Creek/Cedar Park

 JUN 16JUN 17% CHG
Total Sales475619%
Lowest Sales$18K$17K-6%
Highest Sales$820K$949K 16%
Average Sales$160K$156K-3%
Days On Market4039-3%

(19104) West Philadelphia-University City/Mantua

 JUN 16JUN 17% CHG
Total Sales111318%
Lowest Sales$38K$56K48%
Highest Sales$520K$685K32%
Average Sales$324K$379K17%
Days On Market6221-66%

Upper Darby

 JUN 16JUN 17% CHG
Total Sales9039485%
Lowest Sales$24K$32K33%
Highest Sales$372K$375K 1%
Average Sales$136K$140K2%
Days On Market7256-22%

Chester

 JUN 16JUN 17% CHG
Total Sales10514033%
Lowest Sales$7K$8K11%
Highest Sales$100K$107K7%
Average Sales$32K$43K35%
Days On Market7144-38%