Actually, our house had been sitting on the market for a while, and we had ignored it at first thinking it was damaged somehow. It turns out that somebody had swiped all the copper pipes out of the basement, and I think that scared off a lot of potential buyers. We kept trying to figure out what was wrong with the house, but that was the only negative thing we (and the inspector) could find. When pressured a little, the sellers agreed to replace the pipes prior to sale. We were planning to low-ball them, but of course, the day we put in our offer another party did the same so we ended up going higher. I don't regret it at all.

The house nextdoor sold in fall 2006 for $50k more than we paid, and another house on the block just listed for $90k more than we paid. It's in better shape than ours, but not by much. Now, whether they get that amount of money remains to be seen, but I will be interested to find out how long it's on the market and how much it goes for.

This is all on the edge of UC near the infamous Croydon building, in Walnut Hill. I'm still optimistic that values will go up...

We had the same experience with buying a home in the city this summer. The nice ones in our price range didn't last long on the market. I think if you are looking in the relatively lower price range (250-375), nice houses are still moving at a brisk rate in Philly.

Our price range was much lower than that. It seems the $100-200k entry-level market is very competitive right now.

Thanks for the info. It's good to see some specific stories instead on relying on the generalities in the newspapers.

The brisk pace of the $250-$375K range intrigues me. Traditionally, buyers in that range spend no more than 3X their annual income on a home purchase. Are there really that many buyers earning $80K-$125K annually in Philly? Obviously, couples can afford way more than a single person, but not all of these home are being purchased by couples.

Or, are some buyers using non-traditional financing to "afford" these homes?

Can any agents with experience in this price range let us know how the buyers are affording these homes?

$375K for a row home is considered the lower price range now?
I looked at several homes in Manayunk and UCity/West Philly that were in the $200-$400K range. Many of them were utter rubbish, just total dumps.

One home at 48th street would have needed a complete overhaul inside the house, new kitchen, new flooring, new bathrooms, etc., and they were still asking $270K for it. Needless to say, it's been on the market for over 200 days. They have lowered the price 2 times down to $220K, and still it sits.

This is just one man's opinion, but the only homes that seem to sell briskly are the ones that are truly in excellent shape, and I suspect then it's only a matter of people who are so sick of seeing the terrible ones that they'll go ahead and buy out of fear of never finding quite another like it.

There are plenty of homes in Philly sitting on the market, and not moving. Despite what some real estate agents on here may say, the market is not all up and up.

That's the Philly market in a nutshell. It's not dropping per se, but it's just leveling out and will continue to plateau for another year or two while we have our slight correction. We never really had a boom, so we don't need a bust.

Another thing driving the high inventories in PHL is a seller's mentality of.... Joe Schmoe got x amount for his house in 2005 so I want 15% more for my comparable property. You end up with only the nicest properties getting sold. People don't like to hear that they're selling at the wrong time and will deny it until they have to sell(next July).

As clarification just of my own recent home-buying experience, there ARE a number of rundown rowhomes under 300K in the more desirable neighborhoods in the city. But we saw some average homes in those same neighborhoods in the 300-350K range and from what I see those houses are selling. We jumped on the one in this price range that we bought because it was new on the market, is in better than average condition, and we knew it would not last long. It definitely taught us that we should try to take care of our new house to make sure it is in good shape when the time to sell comes! We are a couple with two incomes and we have a traditional mortgage. I really don't know how a single middle income person could ever afford a decent house in the city these days.

Re-read what you wrote. You say that we're having a correction. A correction, by definition, is a drop in prices (slight or not). But you also say that prices are not dropping and are levelling out. Can't have it both ways.

I'm not trying to pick on you personally. I hear these types of contradictiory statements alot these days. I think it's hard for people to admit that prices have dropped from their peak -- although there is plenty of evidence (in many Philly areas) that prices have indeed dropped. Now if you bought at that peak, your home is most likely worth less. If you bought 10 years ago, your home is still worth plenty more.

BTW, Philly's had a boom for sure. Not a Miami-like boom. But a boom nonetheless. Homes in my area (Fitler Square) tripled in value since the late 90's. To be precise, prices tripled as of early 2006. But prices have backed off 5-10% since. There has been no leveling off in my area. Will they continue to drop or do they level off for the the next few years (or even rise)? That's the big question.

I hope they do rise. I own a home (since the late 90's; whew!). But I see no rational reason for prices to rise for the next several years. Too much inventory is entering the market. Mortgage lenders are tightening their standards. And mortgage interest rates could rise as investors (those who buy the mortgages in the secondary market) demand higher returns to offset the increasing risk of owning mortgage-backed securities.

Something else to consider: Before this most recent boom, RE values in Philly last peaked around 1990, then dropped at least 20% by 1994. That seems like a lot, but it was a slow burn. Prices dropped about 4-5%/year -- barely noticebale -- until you tried to sell, in 1994, your home that your bought in 1989. That's when you realized for sure that you're getting 20% less than you paid.

I often hear that Philly is a very different place than it was in 1994 and that the city is vibrant now. So true. Philly has made a remarkable turnaround. But so has Miami and Las Vegas. And few people believe that those cities' RE values are going to just level out.

Fortunately for us, the level of speculation in Philly is far less than that in Miami and Vegas. (I recently was in Miami and counted 32 condo towers under construction simultaneously. Plus, there are many recently completed condo towers that are almost completely dark in the evening.)

But I do see a whole lot of building going on in Philly these days, and that worries me. Even as prices has slipped, building continues at a furious pace throughout the city. Why? Builders do NOT communicate with each other and decide when they should all stop building. Each one is in it for themselves, competing with each other. One hears that another made money on a condo project last year, so the next builder jumps in. Then the next, and so on.

I think we're witnessing the saturation point, and it's probable that some of these projects will ultimately be abandoned mid-construction and result in blight, especially in the up-and-coming neighborhoods. I looked at a couple dozen condos south of Grad Hospital last week, and many of them are months behind their scheduled completion time -- and some had no sign of work being done at all. That's a very bad sign.

I think what concenrs me MOST is, well, who doesn't know someone who is involved in RE these days? Just like we all knew someone who was involved in a dot.com company in the late 90's! It's all looking very familiar to me.

Its like a kinder, gentler, Felix_PHL or whatever his name was...

I went to a few open houses in QV this weekend, all condos/delapidated houses in the 300-350 range. blech. I will continue to sit on the sidelines and sock money away.