Wanna Sell? List NOW - Don't Wait!!

"There is considerable evidence, both anecdotal and statistical, that fewer people in the region are listing their homes for sale. " This is what Alan Heavens reported on Sunday and a phenomenon that I also have observed myself in the past few months. Bottom line in what this means to you... if you want to sell your property - list it now - don't wait - there are buyers out there now and not enough new inventory... in the springtime - there is likely to be a glut. Read the entire article here.

Philly Real Estate Prices Holding Better than Most Cities in the Nation

Alan J. Heavens reported in the Philadelphia Inquirer yesterday that Philadelphia is on a lis of seven (7) cities prime for a residential real estate rebound, along with Denver; Seattle; Raleigh, N.C.; Salt Lake City; Des Moines, Iowa; and Birmingham, Ala. The full article is here
Zillow.com's chief economist, Stan Humphries, said Nov. 13 that "it seems that Philadelphia may escape the worst of the housing-market woes affecting much of the rest of the country."
Foreclosure rates here remain well below those of other regions. Though I won't minimize the misery of people facing the loss of their homes in this area, it could be a lot worse - instead of one filing for every 2,500 houses in Chester County, it could be one in every 62, as it is in Vegas.
Let me emphasize that most mortgage loans today are not in default; it's just that the focus is on those that are.

Philadelphia Broker Announces $1,000 cash buyer incentive!!

In an unprecedented move, Philadelphia area Realtor, Prudential Fox and Roach announces an incentive program for buyers. It will be unveiled Sunday, November 9th at their multi-county OPEN HOUSE EXTRAVAGANZA. On that Sunday, a very large number of property listings by the firm will be OPEN HOUSE to the public. Potential buyers will sign in to register on special forms. If a buyer purchases any of these listings (or any Prudential Fox and Roach listing), obtains their mortgage through Trident Mortgage (this is the in-house mortgage company owned by Prudential Fox and Roach), and settles before the end of March in 2009, they will receive a $1,000 cash credit at time of settlement to be applied to their total closing costs and down payment!!
This program is expected to increase exposure for all sellers who have their properties listed with this firm (the largest in the Delaware Valley and 4th largest in the United States). The program is being offered at no additional expense to the property owners.
There is plenty of financing available for qualified buyers and over 100 different mortgage products including FHA, VA, as well as conventional and non-conforming loans.
For more information or details, contact Marlene Goldberg at 215-517-6362. If a potential home seller is ready to list their property - it is not too late to get involved in this excellent program.

Philadelphia Area at Lower Risk of Housing Price Drops

An article in the Phildelphia Inquirer last week by Alan Heavens, cites several statistical sources indicating that the eight county Phildelphia region is likely to fare better than many other metropolitan regions over the next two years with regards to falling home prices. It cites direct intervention by the city of Phildelphia. (The city has a pilot program for mortgage foreclosure diversions). Our region also is fortunate in that we have several major medical centers and also many colleges and universities that are large employers. These types of institutions are generally somewhat recession proof.

FHA LOAN LIMITS GO UP!!!

The new FHA and Fannie Mae- Freddie Mac conforming loan limits have been released by the U.S. Department of Housing and Urban Development.


This is particularly dramatic in the Philadelphia Area:
Just Announced Today……
FHA Loan Limit Increases Are Official:
BUCKS CO./MONT. CO./PHILADELPHIA CO./DELEWARE CO./CHESTER CO. ----- NEW- $420,000

This is up from the previous limit of lower $200,000's. In the past 24 years of being a Realtor, FHA loans were primarily of use only for lower to lower-middle income buyers. They are great loans because they only require 3% down, rates are great, and they are insured by HUD. This means that many more properties will be eligible for FHA financing and more buyers will be able to afford them. Qualifying standards are sometimes easier for FHA vs conventional loans as well. By the way, conventional loans are those that are not either VA or FHA. The latter two having connections to the Federal Government. FHA loans are insured (for the benefit of the lenders that grant these loans) and VA loans are guaranteed by the Veteran's Administration. Different words, and slightly different meanings. Conventional loans have neither and with low down payments, usually require "private mortgage insurance". If his all sounds confusing to you, please send me an email. marlene@marlenegoldberg.com. Thanks!!



We expect the impact of these loan limit increases on the housing market to be significant because of the infusion of capital into the mortgage market, which should result in lower interest rates across the board. In addition, there will be a direct impact on high-cost areas that previously required borrowers to take out costlier jumbo mortgages. As NAR (Natl Assoc of Realtors) research points out, increasing FHA loan limits will help an additional 138,000 Americans achieve the dream of home ownership and will allow nearly 200,000 homeowners to refinance and potentially keep their home. In addition, NAR believes that increasing the loan limits for Fannie Mae and Freddie Mac will bolster the housing finance market, which continues to be severely stressed, by providing an immediate infusion of much needed liquidity to the nation’s mortgage market. An economic impact study conducted by NAR in January 2008 estimated that increasing the GSEs’ conforming loan limits would result in as many as 500,000 refinanced loans and could help reduce foreclosures by as much as 210,000. In addition, over 300,000 additional home sales could be generated, housing inventory would be reduced and home prices would be strengthened by two to three percentage points.

Philadelphia Area Foreclosures Far Less than Other Regions.

Foreclosures in the Philadelphia area dropped by 32 percent last year, according to RealtyTrac.
The California company, which tracks foreclosures, released its Year-End 2007 Metropolitan Foreclosure Report, ranking the nation's 100 largest metro areas by percentage of total households entering some stage of foreclosure.
Philadelphia was 79th, with a foreclosure rate of 0.492 percent of households. The area recorded 16,246 foreclosure filing in 2007. Camden, N.J., where foreclosures were up 42 percent, was 37th on the list with a foreclosure rate of 1.23 percent and 5,237 filings.
Read the entire article here:
http://www.bizjournals.com/philadelphia/stories/2008/02/11/daily26.html
This jives with my personal impression of the Philadelphia area market in early 2008. Buyers are out there and properties that show well and are priced correctly are moving. Days on market appears to be shortening.

Why do mortgage rates go up when the Fed lowers rates?

The Fed cut rates 50bp on Wednesday which takes the Fed Funds Rate down to 3.0%. This is a big help for business loans, consumer loans, Home Equity Lines of Credit and Adjustable Rate Mortgages. But how will this affect mortgage rates? As we have said for years, Fed Rate cuts do not have a direct impact on fixed mortgage rates. In fact, they often serve to push them in the opposite direction, by fanning fears of inflation when they cut - or by fighting inflation when they hike. Fixed mortgage rates are directly affected by inflation, because a fixed rate mortgage provides the investor with a fixed rate of return for a long period of time. As inflation increases, the buying power of that fixed return is eroded, because it costs more dollars to buy the same amount of goods and services. So if inflation is on the rise - investors will demand a higher fixed rate of return to compensate them for the more rapid erosion of buying power on their return. The last time the Fed had a long cutting cycle was back in 2001. The Fed cut eleven times in eleven months, and eight of those cuts were by 50bp, for a total of a 4.75% drop in the Fed Funds Rate. But mortgage rates were actually higher throughout this drastic cutting cycle, because inflation ticked higher. Let's look at more recent history, and as we have pointed to previously: the Fed cut by 50bp on September 18, 2007, and after prices enjoyed a move higher that afternoon, Mortgage Bonds lost 94bp over the next two days. On October 31st, the Fed lowered by 25bp...and over the next five trading days, Mortgage Bonds lost 78bp. On December 11th, the Fed lowered by another 25bp, and over the next two days, Mortgage Bonds lost 64bp. Most recently - the surprise 75bp cut by the Fed cost us about 150bp on our rate sheets over the next two days.

Reprinted from an original posting by Michael Lee of Trident Mortgage Bankers (owned by Pudential Fox and Roach Realtors)

New Loan Program Eliminates PMI!!

This is great news!! For the uniformed, PMI (private mortgage insurance) is insurance YOU would have to pay as a home buyer for the benefit of the lender/mortgage company in the event you are putting less than 20% down. The fees for this can be pretty hefty.

Now, some lenders are actually offering borrowers with good credit the opportunity to borrow up to 85% of the sale price (15% down), with NO PMI and the exact same interest rate they would get with 20% down. For these same high credit score borrowers (generally this means over 700) they can put even 5 or 10 % down and not pay ANY PMI, but at these lower down payments they can expect a small rate bump - on the order of 1/4 point.

Buyers with less than stellar credit are also eligible for slightly higher rate bumps, but NO PMI means the savings are still huge! This is a great deal!

I see the Real Estate Market Picking Up NOW!

The third week in January, it is bitter cold here in Philly, yesterday was the NFL playoffs - to many folks - way more exciting than the Super Bowl. Combine that with all the doom and gloom you hear about how much the real estate market is in the toilet. Everyone from the WSJ to Suze Orman has led us to believe that no one is buying homes and Realtors might as well just give it up - go become hairdressers, or whatever.... Are they right?

Um, imho - they are all wrong. Our office had amazing open houses yeseterday with LOTS of buyers showing up at properties that did not even have any directional signs on them. Buyers came just from ads, e.g. no curious and nosy neighbors!! Our phones are busy. Properties are getting offers - some multiple bids taking place. Mortgage rates are fab right now - only 5.75 %. This is exciting. I think the media is always six-nine months behind in reporting what I observe day to day. It took them a really long time to realize that the market was tanking - I saw it about nine months before it was widely reported. Now, I see real signs of life in the market and the media is way behind again.

Smart buyers will jump in now while inventory is still up and rates are great - I say you have about a sixty day window of opportunity here. Rates may climb a bit in the spring. Just my intuition and gut feeling based on some empirical observations - combined with 24 years of watching the real estate market here in the Philadelphia area. What's your take?

Private Mortgage Insurance Deduction is Back!!

Congress Makes Mortgage Insurance payments tax deductible for 2007.


At a time when some homeowners need relief most, Congress has extended legislation allowing homeowners to deduct private mortgage insurance payments. When obtaining a home mortgage, borrowers who put less than 20% down are required by the lenders to take out this type of insurance. This insurance is for the benefit of the lender, not the homeowner and is paid monthly until there is 20 % equity in the property at which time the premiums may be dropped. That can, however, take quite a long time, especially when values are not appreciating or even falling.

The tax legislation, originally approved in December2006, pertained only to lands closed in the 2007 calendar year. With this renewal,there are three important points to note:

The tax deductibility extension is for three more years (through 2010). After that, it will have to be renewed again for existing homeowners to continue to deduct premiums and for new borrowers to take the deduction.

There are specific guidelines concerning annual income in order to determine who is eligible and at what level for this tax break. Consult your tax professional for more details. I also have additional details on the specifics of this legislation that I can provide to you. Please contact me if you want more information.

HIWAY THEATRE IN JENKINTOWN

Last night, I had the pleasure of attending the Grand Re-Opening of the Hiway Theatre in Jenkintown.
The Hiway Theatre has been an important community, cultural and economic institution since 1913 and is one of few non-chain and free-standing independent theatres that remain in the Delaware Valley. Having various names and owners over the years, its mission has always been in bringing people together to enjoy high quality films. But time, neglect and heavy use had left the theatre in desperate need of a carefully orchestrated renovation. In 2003, a group of local residents, who recognized the Hiway's importance to the community formed a non-profit 501(c)(3) corporation to purchase, operate and rehabilitate the theatre. Donors were invited to this evening's special Grand Reopening Event.

What I found remarkable is that this was an example of all levels of government working together with private citizens to bring about something important for the community. In order to pull this off, county commissioners, Abington, Cheltenham and Jenkintown elected officials and private donors got together. On hand this evening were Congressman Joe Hoeffel and U.S. Congresswoman Allyson Schwartz. Montgomery County commissioners Thomas Ellis and Ruth Damsker were also present and had helped to raise funds. Congresswoman Schwartz was instrumental in getting PA Governor Ed Rendell to approve the largest piece of funding from the state right before she left her position in PA state government to become a member of Congress. We also got to meet some of the architects and designers. The theatre looks wonderful and is very comfortable.

Before the presentation, we were treated to a wonderful catered affair in the lobby with delightful hors douvres , cocktails and chamber music provided by some very talented local student musicians. Then, we saw a special screening of the movie "The Philadelphia Story" with Katherine Hepburn, Cary Grant, and Jimmy Stewart. The film was selected because it was made in 1940 – the same year the Hiway theatre got its current name.

You may wonder what this has to do with real estate – actually, it has a lot to do with it. Anything that strengthens a community, enhances its culture and brings concerned citizens together with government, is an asset to the community and has a "trickle-down" effect that benefits local property owners. Conversely, the alternative of having a decayed and neglected theatre and a blighted appearance would have had a negative impact on Jenkintown and the surrounding townships and their real property values.

Why Your Home Isn't the Investment You Think It Is - WSJ.com

Why Your Home Isn't the Investment You Think It Is - WSJ.com


Hi Marlene,

Here was an interesting article in the WSJ that frankly scared me a little. I suppose the message is that a home isn't really an investment in the sense of stocks/bonds/etc, but I was interested in your take on it as well.

Kenny (name changed)

A young client of mine who is actually the son of former clients (boy – I must really be old!) is buying his first home and forwarded an email to me and this article (link above) from the Wall Street Journal. It worried him. The article is by David Crook, Sunday editor of the WSJ. It appeared a couple of weeks ago. I am providing you with a link to the entire article which is quite lengthy and a bit tedious. I felt that Mr. Crook's piece had significant inaccuracies and used isolated incomplete examples and “fear tactics” in order to make a point and help the author sell his books. I wrote a response to my young client and forwarded same to the author. In coming days read my response, Mr. Crook’s response, and my client’s final response.
Your feedback and comments are welcome!

Marlene the Real Estate Queen

Real Estate Trends

According to the current issue of Philadelphia Magazine (March '07), people are attempting to "reconnect with their inner Mayberry. There is a desire to be in more urban settings again in the sense of being able to walk to a stores, movies, shops and mini-downtowns. Suburban home ownership appears to have lost some of its luster. The center city condo boom is not only attracting empty nesters, but also families with young children. Back yards are being replaced by city parks. Communities that already have a mini-downtown and main street, such as Ambler, Glenside, Hatboro, etc, are likely to have somewhat of a rebirth over the next decade. How do you tell if an old town is on its way back? According to the article, if there is a parking problem, that is a sure sign!

Great time to Jump In to the Market

For all of you who may have delayed on buying a home for the past five to six years - now could be your opportunity. It is true that sellers have reigned in our area. Inventory has been slim and prices were escalating daily. Frequently, buyers were in multiple bid wars - with as many as five or six offers on the same property. The lowest offer was usually full price! Well, now things have reverted to a more normal and balanced market. There is more selection of properties, interest rates are still attractively very low, and prices in the Philadelphia area have stabilized. So, call your favorite Realtor, and get out there and start looking!

Philadelphia Inquirer | 01/28/2007 | Condo cooldown not severe in Phila.

Philadelphia Inquirer | 01/28/2007 | Condo cooldown not severe in Phila.

The Philadelphia condo market has not suffered as much as those in other major cities. This article explores the reasons and explains that the runup in values was not as dramatic as in other cities in the U.S. What the article does not say, but what I have observed, is that there is still an increasing popularity of center city living among various demographic groups. Younger singles and marrieds in their twenties and thirties, even those with children, appear to be favoring the "downtown" lifestyle and culture as opposed to living in the burbs, which their predecessors have done. also, older empty nesters are in many cases, selling their larger suburban homes and moving to center city residences.

Road Congestion in Bucks County

I have been a Realtor for 23 years. During that time, I have noticed many new residential housing developments go up in Holland, Langhorne and Richboro, for example. The main roads in and out of that area are typically Buck Road (route 532), Bridgetown Pike(Route 213), Bustleton Pike, and 2nd Street Pike (route 232). During that time those roads have remained primarily two lane roads. The population and traffic have increased exponentially, yet the roads have not been expanded. For this reason, I rarely elect to show homes to people during rush hour in these areas.

It is just too difficult to get from property to property without a lot of hassle. It is also difficult for people to get anywhere in those areas starting from after school hours around 3:30 until almost 7PM. This pattern is repeated, I am sure, in many suburban areas throughout the region. It is one reason why people fear development and protest it. Usually, however, protests do not seem to occur around residential development, but more around civic and commercial projects. All develpment projects, in my opinion, need to take into account the traffic and congestion that will be created.

Termite Bait Stations May Not Work

Traditionally, subterranean termites (the kind we have in the Phildelphia area) have always been treated with chemicals injected into the ground around the entire perimeter of a home. The exterminators drill every 12-18 inches both inside and outside to create a chemical barrier. This method, usually is immediately effective at killing termites and stopping them in their tracks. Occasionally, there are gaps in the barrier and re-infestations need to be retreated, but this is not terribly common.
Then, someone came up with the idea of "bait stations" and they are being heavily marketed by the large franchise termite companies. The theory is that small bait stations with wood in them are placed in various locations outside the property. The companies come back at quarterly intervals to "monitor" them. If they find termites in one of the stations, they then replace the piece of wood with some chemically impregnated wood. This is supposed to be taken back to the termite home under ground and then kill them.
I may be oversimplifying, but here is what I have observed in several properties I have sold that have these bait stations. While the termites are eating the wood in the bait stations, nothing is stopping them from eating the wood in your house! They just don't work and the termites continue to dine on your home leaving extensive wood damage if they go unchecked. Moreover, these bait stations are almost three times the initial cost as a traditional treatment and the annual contract to maintain them is about $400 per year as compared with about $100 per year for the traditional, and, in my opinion, more effective method.
They are promoted by companies for one reason - they are cash cows and great profit centers. So, if you find out you have termites in your home (usually you will see a swarm of insects in either the spring or fall that looks like flying ants)make sure to get all the facts before you decide on treatment and don't fall for the glossy sales pitch. Obtain several opinions from both small and large companies.
There are some situtaions where the bait stations are the only alternative, for example, in homes with well water as opposed to public water. As always, get informed to make the best decision.

Philadelphia Inquirer | 12/24/2006 | On the House | Prices, not the press, help move home sales

Philadelphia Inquirer | 12/24/2006 | On the House | Prices, not the press, help move home sales

A few posts back, I wrote about how I felt that the press influences home buyers. In fact, the CEO of the brokerage I work for has written letters to the Inquirer asserting this. Of course, pricing is paramount, but there is not question that in order to sell papers, emotional tag lines and "scary" sentiments can get to the psyche of readers/potential buyers!! In this article, the newspaper appears to be going on the defensive!! I have personally experienced this. Buyers come in and expect to be able to "steal" properties and make ridiculously low offers. They have been unsuccessful.
To give credit, however, the article goes on to say that the Philadelphia area housing has not been impacted as much as the rest of the nation. Our local economy is strong and growing. Stay tuned!!

Fox Chase Cancer Center

This post is a follow up to my previous post -

As previously explained, residents of most communities seem overly fearful and resistant to anything being built nearby. Sometimes, of course, their reasoning is valid, which I will explore in future posts. Sometimes, in my opinion, it is not.

Case in point - Consider the recent situation (2005) in Northeast Phildelphia concerning Fox Chase Cancer Center. By any standards, this is a highly rated medical institution geared to fighting cancer at both the clinical and research levels. They have a world class reputation and employ many people in the Phildelphia area.

However, the center is just squeezed too tightly in their current facility and the board of directors has wanted to expand onto SOME of the parkland in the adjacent Burholme Park. This met with fierce opposition from the community. The way the facility explained it, most of the park is going to be salvaged and there are other nearby park areas for residents to use. The park never appeared to be overly utilized in the first place.

The boon to the local economy and to the neighorhood, city and region is almost inestimable, to say nothing of the valuable medical resource. It boggles my mind that anyone could have had such fierce resistance. Apparently, however, the measure is passed and the Fox Chase Cancer center will be permitted to go ahead with its plans. Jobs will be maintained and new positions added. This will allow continued growth in that neighborhood - continuing to draw high caliber professionals to our area. This is always GOOD for real estate!! Stay tuned!

Read more about it from the Center's Newsletter:

Here is a link to a blog from people in the region who opposed it:

Marlene Goldberg Realtor, GRI, Jenkintown, PA

RISMedia » Are Consumers Sick of Development? Attitudes against Land-Use Development Grow Deeper, Survey Says

RISMedia » Are Consumers Sick of Development? Attitudes against Land-Use Development Grow Deeper, Survey Says

My take on this is as follows: Generally, any potential development from something like a cell tower, to a school, or hospital expansion, etc. is frequently met with community resistance. Two "policies" seem to govern this. They are "NIMBY" and "BANANA" - acronyms which stand for... "Nothing in My Back Yard" and "Build Absolutely Nothing Anywhere Near Anything"!! It is a wonder that anything ever gets built!!

TRI-STATE HOUSING OUTLOOK FOR 2007

While it is true that there is a housing "slowdown", what is indisputable is the fact that Real Estate continues to be the single greatest source of individual wealth. Local and and national trends continue to support a healthy economy that supports a normal real estate market.
DEMOGRAPHICS: Baby boomers are at their peak earning years and are buying bigger and more expensive homes and vacation homes. Generation X and Y are buying a first home or moving to larger ones. Immigration has created a growing market of home buyers. Singles, especially women, are the largest growing population segment of home buyers.
Our national and local economy continue to generate job and income growth. Interest rates remain at historic lows.
In the tri-state region, there exists a temporary decrease in the pool of buyers. Why? Extremely low interest rates and concern about rising prices caused many people to purchase a home BEFORE they might have in a more normal market. This has caused a temporary decrease in the number of current buyers in the market place.
Also, there are legitimate concerns about affordability. Prices in the tri-state area have risen 68% over the past five years, while income has risen onlly 25%.
Where are we now? The number of sales in Trend Multiple Listing Service decreased 19 to 23% in the third quarter, compared to the same period in 2005. Inventory has increased by 35.6%. There is now an 8 month supply of houses for sale compared with a 5 month supply in 2005 and 4 months in 2004. Average days on market has risen from 41 to 56.
How long will this last? Our best guesstimate is that it will last through all of 2007 and into the spring of 2008. Partly, this is due to the fact that sellers' and buyers' expectations are far apart. Many sellers still expect a double digit annual appreciation. Once they accept and understand the current market, asking prices will adjust, creating more buyer activity. Then a process of recovery will begin. Affordability will increase and buyer confidence will be enhanced.