Just how sick is the housing market? - Page 5 - PhillyBlog

sonnetboom · #41 (**permalink**) 03-25-2007, 04:36 PM

Quote:

Originally Posted by BigH

2 BD unit in 19107 near 10th and spruce in a building with about 15 units. Seller bought in 2001 at 130k. Now asking $330k. There has been about 20k in upgrades.

While I don't begrudge them their profit, I wonder if they didn't get the memo.

Who do you think would buy at the price? It's a serious question. Who has the $$--yuppies, retirees? I've heard that this metro area has a considerable concentration of millionaires. Are they the ones?

JillyS · #42 (**permalink**) 03-25-2007, 05:54 PM

Quote:

Originally Posted by sonnetboom

I would've guessed higher-income working class and middle class folks were leaving, for the suburbs and better schools, safer neighborhoods, etc. Philadelphia seems to be affordable for the poor, actually. Why would the poor be leaving? Where would they be going?

I wonder about this too. From what I understand, Center City and its surrounding neighborhoods are gaining people each year--my guess is that they are mostly upper-middle or upper class people. It seems that we, like many cities/areas across the country, are losing our middle class. I wouldn't guess that Philly is losing its poor population, although I remember reading recently that overall more low-income people now live in the suburbs than in cities.

Gekko · #43 (**permalink**) 03-25-2007, 06:52 PM

Quote:

Originally Posted by BigH

You can read as many articles as you like, but until you are actually out there you will not know what's happening in a market. As some of you might know, I'm probably one of the few people on this thread that has actually been in the market looking for a place. I started my search very early in Jan although my lease ends in late Jun. I've looking at over 10 properties in condo buildings with at least 20 units for 2 Bedroom units in the low 300ks in 19106, 19107, and 19103. Here are my observances:

1. There are alot of units that did not sell last summer that are currently being relisted.
2. Most units that I've seen have been on the market for over 90 days. These are not run down places. Renovated with nice kitchen and baths.
3. Sellers are still not moving much on price hoping that buyers will come out in spring 2007.
4. Some sellers are still listing at agressive prices (probably getting bad advice from a realtor who just got their license number). Example:

2 BD unit in 19107 near 10th and spruce in a building with about 15 units. Seller bought in 2001 at 130k. Now asking $330k. There has been about 20k in upgrades.

so what are your eyes and your gut telling you?

BigH · #44 (**permalink**) 03-25-2007, 07:14 PM

Quote:

Originally Posted by gekko

so what are your eyes and your gut telling you?

My eyes and gut tell me that on the scale of 1 to 10 (10 being a boom market, 5 maintaining value, 1 losing value of over 5% annually), the real estate market in 19106 and 19107 is at about 4. However, april-june (peak season) will tell us if we're moving to a 3 or 5.

I guess I'm one of those yuppies looking to buy a place. I can afford a 2BR at 400k with a 2k/month mortgage, but I believe that it is way overpriced to pay in philly. I've been looking for a good value in the city (2BR, 950-1000 sq ft) in the low 300k without much luck. If I don't find it in april, I'm renewing my lease. I'd rather pay rent at $800 month in a building and apartment I love than make a bad 300k investment.

Gekko · #45 (**permalink**) 03-25-2007, 07:47 PM

Quote:

Originally Posted by BigH

My eyes and gut tell me that on the scale of 1 to 10 (10 being a boom market, 5 maintaining value, 1 losing value of over 5% annually), the real estate market in 19106 and 19107 is at about 4. However, april-june (peak season) will tell us if we're moving to a 3 or 5.

I guess I'm one of those yuppies looking to buy a place. I can afford a 2BR at 400k with a 2k/month mortgage, but I believe that it is way overpriced to pay in philly. I've been looking for a good value in the city (2BR, 950-1000 sq ft) in the low 300k without much luck. If I don't find it in april, I'm renewing my lease. I'd rather pay rent at $800 month in a building and apartment I love than make a bad 300k investment.

smart man. don't get emotional and don't rush it. this is a business transaction. $800 is cheap rent. IMO, bank the difference over the next 12 months and then reevaluate. the trend is clear. good luck.

sonnetboom · #46 (**permalink**) 03-25-2007, 07:51 PM

Quote:

Originally Posted by BigH

I can afford a 2BR at 400k with a 2k/month mortgage, but I believe that it is way overpriced to pay in philly.

A friend once said to me that anybody who pays over 400k for anything in Philly was a fool.

Apart from the posh spots like Rittenhouse, is that generally true? What do you guys think is the highest fair valuation for, say, a two-bedroom home with amenities? This can be a range, if that makes it easier to quantify.

Gekko · #47 (**permalink**) 03-25-2007, 08:00 PM

Quote:

Originally Posted by sonnetboom

A friend once said to me that anybody who pays over 400k for anything in Philly was a fool.

Apart from the posh spots like Rittenhouse, is that generally true? What do you guys think is the highest fair valuation for, say, a two-bedroom home with amenities? This can be a range, if that makes it easier to quantify.

1997 Prices + 3.5% Annual Appreciation.

BigH · #48 (**permalink**) 03-25-2007, 08:06 PM

If I was talking fair value, I'd say that a 1000 sq ft. good condition (10 year old kitchen and bath) 2BR, should be priced around 310k-320k in 19106 or 19107 in a multi-unit condo building. Of course, you can't find anything at this price. Thus is my problem. Most developers and owner are expecting philly to sustain price per sq ft of 400 now and in the future in 19106 and 19107. I'm not buying that.

BigH · #49 (**permalink**) 03-25-2007, 08:07 PM

Quote:

Originally Posted by gekko

1997 Prices + 3.5% Annual Appreciation.

Gekko,
you make a lot of good points, but there is no way prices will reach the level of 1997 +3.5% annual.

Gekko · #50 (**permalink**) 03-25-2007, 08:38 PM

Quote:

Originally Posted by BigH

Gekko,
you make a lot of good points, but there is no way prices will reach the level of 1997 +3.5% annual.

Never say never. I remember in 1999 how everyone said the NASDAQ would never fall below a certain level. Google "Regression to the mean". History always repeats itself.

http://www.1stmillionat33.com/posts/.../house_his.gif

http://www.nyse.tv/nasdaq-composite-history-chart.htm

The end result you are trying to say is there are no more real estate and/or economic cycles. This you will find out for sure is a very incorrect assertion as all those dot com "newbies" before you that espoused "eyeballs" and the like found out. I could even conjecture that the cycles will be deeper than in the past.