Friday, October 25, 2013

Philadelphia's progress is alive and well in "Four Square Blocks"

Snyderman-Works Galleries | Old City, Philadelphia

For someone who was born just outside the city's limits, but has now lived in Philadelphia for 15 years, I have seen various impressions of our great city.

From both locals and transplants alike.

I have personally found that those who were born in the city during its decline, and moved out when the suburbs were growing, tend to have a love/hate relationship with the city. Honestly, I don't blame them as they witnessed neighborhoods go from thriving, job-heavy, and low-crime to the complete opposite; a good number of those neighborhoods are still stuck in that same routine.

That's what change is, and it happens everyday.

I have also personally found that those who have never been to Philadelphia before, or visited for their first time within the last 10 years, have a completely different perspective of our great city. Honestly, I don't blame them either as they describe Philadelphia as having character, urbanity, and great energy.

That's what change has produced, and it's still happening everyday.

Now that I have been in the city long enough to visit most neighborhoods, and experience a lot of what Philadelphia has to offer, I personally see progress. What do I mean by progress? I mean that Philadelphia as a whole is really starting to realize its true potential. That potential was always there, especially when our city was considered one of the most important and influential in the nation; but when the jobs left during/after deindustrialization, so did its momentum and promise.

Fast forward ahead about 50+ years, and most will tell you that momentum is back in Philadelphia's corner. Do we have unemployment and poverty issues? Yes. Are our politics/systems outdated and antiquated? Yes. Do some people, who have lived here their entire lives, still have absolutely no hope that this city will ever turn around? Yes.

"So then what the h*ll are you talking about, Tim?"

I'm talking about the importance of cities as the preferred spot to live among younger generations.

I'm talking about how the rise of "Eds & Meds" is propelling cities into global status.

I'm talking about large, urban, and highly-rated universities where students are now staying, working, creating more jobs, and planning their futures.

I'm talking about technology and entrepreneurship, and their importance in reshaping the overall economy.

I'm talking about walkability, bikeability, sustainable living, parks, small businesses, established community groups, and ... location, location, location.

These are things that drive growth in cities today, and Philadelphia is jam packed with them (on top of that, our location is hard to beat). It's articles like this one that help me realize how significant Philadelphia is to the American landscape, and its continued promise that lies just ahead.

Friday, October 18, 2013

Philadelphia Marketwatch Report - September 2013

Click to Enlarge

The MWR from Trend (or the MLS, as most people call it), focuses specifically on Greater Philadelphia. There are reports available for the entire 5 county area in Southeastern PA (and also in Berks County, so let's call it 6), as well as in Southern NJ and Northern DE.

The report for Q3 2013 is still moving in a positive direction, as was the Q2 2013 report I posted in July. The key metrics show that Philadelphia's average sales prices are up, closed sales are up, homes for sale (aka supply) are down, and the average property marketing period (aka marketing time) is down.*

*Please note that these stats are based on year-over-year changes, to help compare the real estate market in Q3 2013 as compared to Q3 2012. I wanted to reiterate this just so people don't assume these statistics are month-over-month, which is almost always a hard comparison to make (due to weather changes, school calendars, etc).

So, let's break these down 1-by-1:

1. Average Sales Price: $209,001, up 4.8% from Q2 2012. Why do real estate prices go up? Simply put, supply and demand. If supply is low, demand is high; and vice-versa. That is what's happening here.

2. Closed Sales: 3,279, up 15.5% from Q2 2012. That's a decent jump, especially in a still-tight lending environment. It means that homes are selling in larger quantities than the previous year, which makes it easier to sell; which can also be translated into a "seller's market." The pool of buyers is more qualified because lending guidelines haven't really changed yet (for the better), and people can still afford to buy; also good news for the housing market.

3. Homes for Sale & Months Supply: Down 14.9% and 27.6% from Q2 2012. Again, if supply is low, demand is high. If demand is high, prices go up. If prices go up, there is more competition. If there is more competition, there are more bids for each property. And so on, and so forth.

4. Average Property Marketing Period: 84 days, down 19.4% from Q2 2012. This means that it's taking the average seller less time to accept an offer on his/her home. When sellers have to wait a long time to sell, what typically happens? They lower their listing price to attract more buyers and buyer agents. When sellers don't have to wait as long to sell, what typically happens? Prices remain stable, and start moving up.

I'm sure that most of these are self-explanatory to the average reader, but I personally find that it helps to break down each key metric individually and explain what it means to the market as a whole.

If anyone would like the most recent MWR report (for your specific area), please don't hesitate to reach out via phone/email/text. I will email you a customized report, via PDF.

Friday, October 11, 2013

Common myths about "Buying" vs "Renting"

As you all know by now, I'm a huge fan of IMHO, it offers the best real estate tools, allows you to dive deep when researching real estate agents, and is more user-friendly than most other sites that advertise the same features.

Again, totally my own opinion and nothing more.

If you would like to try out one of Trulia's new tools, here is their awesome "Rent vs Buy Calculator"; this tool is unbelievably helpful, and simple too. Talk about user-friendly, the RVB tool not only breaks down your current cost to rent vs your current cost to own, but it even accounts for your tax bracket; which helps paint a better picture of one vs the other.

I have written a few posts in the past about Buying vs Renting (feel free to check out Example 1 and Example 2). And no matter how many things you read online or hear on TV, it will always be a case-by-case decision for you as an individual. There is no correct answer, but if you break it down based on your own needs as a single person or family, you will find yourself with a better plan to make that decision.

Aside from a side-by-side cost comparison, and reviewing the most common myths in this article, the most important, general question I ask all of my clients upfront is, "How long are you planning to stay?" Not only is this a hard question to answer for anyone, but it's something that can change with each passing day.

What if I change jobs?

What if my family grows?

What if I don't get that raise?

What if we have to relocate?

What if there is a tragic personal event?

What if ... What if ... and so on, and so forth.

These are all very good questions, and normal concerns at that. The more answers you have, the better off you will be. But the truth is that most people don't have those answers, which is why buying real estate is considered a risky endeavor. But so is investing in gold, picking stocks, buying antiques, and even putting money into your 401K.

They are all "Risk vs Reward" propositions, where typically the brave and well-prepared perform the best. You have probably heard the expression, "If it was easy, everyone would do it." It's true, which is why there is risk. If everyone did it, the risk would be low as well as the return.

If you want to be in the best position possible to decide whether you should buy or rent, run your numbers and learn what works best for you and your current short/long-term goals.

As always, I'm here to help if you have questions about it.

Friday, October 4, 2013

University City's growth labeled as a "real estate explosion"

Aerial View | University City, Philadelphia

I agree.

How else can you describe a small, dense, city-within-a-city that has seen local jobs climb from 50,000 to 72,000 in just over 10 years? That's an overall increase of 44% (since 2001), and half the time was also during one of the worst recessions the US has ever seen.

Pretty impressive.

Here is a great quote from Matt Bergheiser, Executive Director of the UCD:

     "It’s the land of opportunity here. Our general theme is onward and upward. It seems like every year we build on the amazing things that happened the year before. We broke some barriers and some of it is measured by data. We broke the 72,000 jobs barrier, we broke 43,000 student mark and we have more 6.5 million square feet in development either planned in a real way or under construction and a wave of residential development coming.

     "Almost 2,000 new housing units are coming. That’s about 4,000 to 5,000 additional people or about a 10 percent increase in population by 2015. We continue to be a place where the concentration of economic activity is unmatched in all but a handful of places around the country. It’s important and critical for the city and region. When you get a lot brain power in a concentrated space, good things happen."

Multiple posts have been written during my blogging career about how impressed I am with UCity's growth, as well as their planning, decision making, and organization.

Here are some past articles for further info consumption (in case you are either new to this blog, or just want a refresher), starting with the most recent:

- University City ... meet "Drexification"
- More residential growth for University City
- What recession?
- More rental high-rises for University City
- University City is still thriving
- An "oasis" at Penn

Talk about a UCity overload, but I always find that it's helpful to take one current, worthwhile article, and link it to past blog posts that I've done to bring the point home. It just makes for easier reading.

If you have not been to University City recently, since college, or since the 90s, now is as good a time as ever to drive down, walk around, and have a nice dinner while you're there.