The "G-ho" (lords how I hate that phrase) area is in a bad way right now. I looked at a home at 20th & Kater, extremely tiny (a mere 140 square metres), no parking, interior was in bad shape, and they were still asking $359K.

I'm not expecting prices to drop by $100K across the board, but something is tremendously wrong when I could easily rent a flat of the same size in that area for a rate far lower than what I would pay in a mortgage. I believe mortgages in Philly are still out of step with rental rates & salaries, and until that adjusts properly, I won't be touching this market.

And you're absolutely right, this influx of condos makes no sense, especially considering the city's population has been on a steady decline for the past, what, 11 years?

I feel like many sellers are still making major distinctions between the northern and southern blocks of G-Ho (price-wise) while buyers are not. This is based on my own observations from my block and other blocks in the neighborhood. Houses and condos that are priced appropriately south of Fitzwater seem to be moving (although slower than they were 2 years ago). Newly converted condos on my block priced around 300K seem to be snapped up quickly. I also live on the east end of the neighborhood, which seems to have more room for growth--it's a little cheaper over here because its less "established". Construction, at least on my block, has not seemed to slow very much over the past few years...

Also, it's important to point out that 20th & Kater is a few blocks from Fitler and Rittenhouse, two of the best neighborhoods in the city and half a block from the ammenities on South St. In many other cities 359K for a location like that would be a complete steal.

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Courage doesn't always roar. Sometimes courage is the quiet voice at the end of the day that says, "I will try again tomorrow."

---Mary Anne Radmacher

I'm going to respectfully disagree with you on the basis that mortgages in the area are still drastically outpacing rentals. A good friend of mine lives at 21st & Kater, renting a house. He moved in last year, and pays $1400 per month to rent the house, plus utilities.

Two houses down the lane were both up for sale at the time he moved in, asking $375 and $400K, respectively. Both of them were the same size as the place he rented.

Even with a firm 20% down on a mortgage and a flat 6% rate for the life of the mortgage, your remaining payment would be several hundred larger than his rent. At a more realistic percentage (7%+), your rate would be even higher. And if you're such an unlucky sod that you get an 8% rate, your mortgage is now over $2200 per month. Meanwhile, the renter gets to enjoy the same amenities, park on the same block, and put that extra $200 to $600 per month into bonds, savings, etc.

My logical conclusion is that either every rental in the area is being generously subsidised for the renter, or that home prices are inflated. I'm going to go with the latter.

Call me naive, but I assume people able to buy in CC and it's surrounding neighborhoods presently are making at least that much...or have made a significant amount of money from the sale of a previous property during the "boom".

I guess my perspective is different. We moved here from Central Jersey and would have had a hard time finding a decent home with 2500 sq. ft. for much less than 450K in that area...not including $6000+/year in property taxes. As far as I'm concerned, Philly is still a bargain in many respects. I just don't see how buying a home here is a "huge" risk if you want to live here, haven't sunk everything you have into its purchase and are realistic that you won't double your money back after just a few years and a few upgrades.

Spare me the lectures about the market and such please...I'm just sharing my perspective...

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Courage doesn't always roar. Sometimes courage is the quiet voice at the end of the day that says, "I will try again tomorrow."

---Mary Anne Radmacher

I see what you're saying, but how long do you continue to rent and wait?

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Courage doesn't always roar. Sometimes courage is the quiet voice at the end of the day that says, "I will try again tomorrow."

---Mary Anne Radmacher

I can't vouch for the sources that this site uses, but the data they provide might be very interesting to you.

http://www.housingtracker.net/afford...a/philadelphia

Also, they provide some data for comparing the relative affordability of various cities:

http://www.housingtracker.net/affordability/

At this point, the condo boom has probably been overstretched, but I'm not sure it "makes no sense". Yes, the city's population has been declining for the past five decades; but in the past few years the decline has leveled off. Moreover, keep in mind that the areas in which the most condos seem to be rising (i.e., CC and surrounding gentrifying areas) have been, if I'm not mistaken, experiencing significant influxes of fairly affluent individuals and families. Thus, while there are perhaps too many condos being built, I think there has been at least some justification for the construction.

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"Everything that guy just said is bull$h!t! Thank you."

-- Vincent LaGuardia Gambini

Honestly, I wish I could give you a proper answer to that question, but I simply don't know. I'm sure the answer varies depending on which individual you ask.

For me, and me only, I will continue to do so until I feel that the prices are a bit more acceptable given my level of income, my job situation, and my desired location in the city. I just hope that doesn't mean I'll keep renting until I die.

That makes perfect sense.

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Courage doesn't always roar. Sometimes courage is the quiet voice at the end of the day that says, "I will try again tomorrow."

---Mary Anne Radmacher

Unfortunately your mortgage payment has nothing to do with what you could rent the place for....that was way back in the 80's or early 90's. Rent money you will never see again but theoretically any money invested in a house will be recouped when you sell (you hope). You can afford to rent in CC but not buy. Many, many other people are in the same boat.

The city population continues to drop but that has nothing to do with demand in the center city area. Location, location, location as they say.

Yep--I sell houses to people generally that can afford more than they purchase but I'd argue I primarily work in one of the most affordable neighborhoods where rehabs are taking place so maybe that's skewing my perspective. A couple each earning $40K is lower middle class in a major city so it's not inconceivable even a 25 year old couple is earning that.

Contingencies based upon the sale of a house still aren't being accepted out there...have tried 3 or 4 recently with zero success. It's a great way to not have an offer countered. Most of these buyers coming with equity do so via home equity loans or swing loans. On one hand, these buyers completely realize that their contingency will never be accepted and if they want the house before someone else buys it, they need to buy it without the contingency. Yet, they are skittish about how quickly their house will sell because they hear these horror stories about how houses aren't selling and they see these listings that are sitting on the market.

I've had two such situations in the past few months and managed to sell their houses in under 2 weeks. I priced the house right, made them do certain things to make the house more marketable to the buyers in the vicinity, took appropriate pictures and described it accurately and voila. It still isn't rocket science.

A market that is still doing amazingly well is Roxborough/Wissahickon/Manayunk. I've had a couple buyers in this market in the past few months and it's just numbing how I feel 4 years after I looked there things are still selling so quickly. I think the reason is that most of these houses are being listed by agents who are very familiar with the market, price things right with pictures (it still astonishes me how many agents just cheap out on this or are too lazy--everyone has a digital camera these days and there's no excuse) and present very uncluttered, freshly painted little masterpieces. Every once in a while you see a house that sits...and your questions of why are answered the moment you open the front door. That market did hit a bit of a slowdown in early 2006 based upon my experience but agents wised up.

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