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Action Inspiration
F-E-A-R has two meanings. ‘Forget Everything And Run’ or ‘Face Everything And Rise.’ The choice is yours Zig Ziglar
Here are my latest 5 Points of Interest about the Philadelphia metro area and the February market statistics.
5 Points of Interest
1) Philadelphia metro area continued to rank high for fix & flip deals in 2017.
The latest Attom data report shows that Philadelphia metro flippers earned the fourth highest return in the nation in 2017 behind Scranton, Pittsburgh and Baton Rouge. The lower inventory of distressed houses and competition has affected returns but has not stopped the deal flow for savvy investors in the area.
With roughly 40% of homes in the Philadelphia area built prior than 1940 (according to NeighborhoodScout.com), it creates more opportunities to complete the value-add projects that generate the most profit. Increasingly flippers are selling with a tenant in place (as a rental property) vs. the traditional flipping a vacant property to a new buyer.
2)Most buyers still need financing.
Overall, 80% of homebuyers in the third quarter of 2017 purchased their property using some form of financing, with 47% getting a 30-year mortgage, according to a report from the Pennsylvania Association of Realtors.
The likelihood of the financing choice does vary by age. For buyers under 50, 49% seek a 30-year mortgage while those over the age 50 prefer cash (33%). If the target profile of your likely home buyer is a first-time home buyer, it is even more likely that they will need a mortgage. More flippers sought to finance in 2017 (34.8%) with the overall loan volume increasing to a 10-year high.
As a seller, you need to think about how the lender’s appraiser will view your home. A “no repairs” stance may increase the time it takes to sell your home.
3)Gain more equity by investing in starter homes.
It may be tempting to focus on the luxury market with your rehab but starter homes are gaining equity faster in many markets, according to a recent Zillow report. This opens up opportunities for more modest rehabs and highlights the continued shortage of inventory for 1st time home buyers.
The most affordable segment of the market (avg price of $117,800) showed a 5.2% appreciation over the last year and 16.7% increase over the last five years while the high-end segment (avg price of $338,900) showed only a 3.0% appreciation over the last year and 16.1% increase over the last year.
| Metro Areas | Bottom Tier Avg Px | 1-Year Chg Bottom Tier | 5-Year Chg Bottom Tier |
Top Tier Avg Px | 1-Year Chg Top Tier | 5-Year Chg Top Tier |
|---|---|---|---|---|---|---|
| Philadelphia | $117,800 | 5.2% | 16.7% | $388,900 | 3.0% | 16.1% |
| Baltimore | $138,700 | 3.8% | 13.9% | $452,100 | -0.3% | 10.8% |
| Washington DC | $238,700 | 3.1% | 34.1% | $666,600 | -0.1% | 13.9% |
| New York | $260,200 | 8.5% | 24.1% | $790,600 | 5.7% | 29.2% |
4) New institutional investors are starting to buy cheaper single-family homes.
Once overlooked by the larger players, new start-up private equity firms have made notable investments in cities like Philadelphia targeting the affordable rental market of $800-$1,200, according to Bloomberg.
The outlook for more activity looks promising as Freddie Mac financed a portfolio of 200 single-family affordable rentals in the MidWest and South this January —in a first-of-its-kind loan. Of course, you need systems and a team of real estate professionals to replicate what the big boys are doing.
5)Are you renting to a hoarder?
As an owner, ignoring a tenant that shows signs of hoarding creates serious health and safety issues, including fire hazards, pest infestations, and even structural problems. Don’t wait until you are ready to sell to address the problem directly.
Since hoarding is now considered as a mental disability, you must manage the situation with care and attention to the Fair Housing laws. Consider having a hoarding policy upfront that addresses managing excessive clutter and storage privileges. If you suspect that your tenant is a hoarder, develop an individualized remedy plan that gives “reasonable accommodation.” An attorney can help. The plan can require clean-up over the course of months with immediate removal of any fire or safety hazards. If you think the tenant may need more support, you can provide a list of local agencies such as an area agency on aging, Hoarding Cleanup.com or the Philadelphia Task Force on Hoarding.
May Key Market Statistics
(Statistics shown are for rolling 12 months ending in July)
(19143) West Philadelphia-Cobbs Creek/Cedar Park
| May 17 | May 18 | % CHG |
|
|---|---|---|---|
| Total Sales | 390 | 489 | 25% |
| Lowest Sales | $11K | $14K | 24% |
| Highest Sales | $840K | $949K | 13% |
| Average Sales | $140K | $147K | 5% |
| Days On Market | 46 | 38 | -17% |
(19104) West Philadelphia-University City/Mantua
| May 17 | May 18 | % CHG | |
|---|---|---|---|
| Total Sales | 136 | 174 | 28% |
| Lowest Sales | $13K | $14K | 8% |
| Highest Sales | $1,325K | $1,250K | -6% |
| Average Sales | $250K | $252K | 1% |
| Days On Market | 48 | 38 | -21% |
(19139) West Philadelphia-Walnut Hill/Haddington/Mill Creek
| May 17 | May 18 | % CHG | |
|---|---|---|---|
| Total Sales | 205 | 264 | 29% |
| Lowest Sales | $5K | $5K | 0% |
| Highest Sales | $607K | $585K | -4% |
| Average Sales | $87K | $103K | 18% |
| Days On Market | 62 | 41 | -34% |
Upper Darby
| May 17 | May 18 | % CHG | |
|---|---|---|---|
| Total Sales | 930 | 1,012 | 9% |
| Lowest Sales | $14K | $21K | 50% |
| Highest Sales | $415K | $435K | 5% |
| Average Sales | $125K | $136K | 8% |
| Days On Market | 75 | 57 | -24% |
Chester
| May 17 | May 18 | % CHG | |
|---|---|---|---|
| Total Sales | 168 | 193 | 15% |
| Lowest Sales | $5k | $5k | 0% |
| Highest Sales | $165k | $255k | 55% |
| Average Sales | $51k | $55k | 8% |
| Days On Market | 58 | 57 | -2% |
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Veronica comes from a family of real estate investors. She is passionate about helping clients create wealth, build a legacy, and design a dream lifestyle through real estate.
What makes Veronica stand out from other realtors is her financial background. With an MBA in Finance from The Wharton School and a bachelor’s degree in Economics from Northwestern University, she does not run from the numbers. She spent over a decade running financial models to help her employers evaluate projects and products. This skill allows her to simplify the bottom line for a homeowner or forecast the return on investment for a developer.
Veronica is a licensed realtor in PA. Veronica helps her clients buy, sell, invest in real estate in the following neighborhoods in the Philadelphia metro area: Cedar Park, Chester, Cobbs Creek, Darby, Drexel Hill, Germantown, Kingsessing, Lansdowne, Marcus Hook, Overbrook, Overbrook Farms, Sharon Hill, University City, Yeadon, and Upper Darby. Her company also provides property management services for single-family homes and small apartment buildings in the area.