Philadelphia Market

Taylor,

You said a mouth full. Chris and I talk about this 24/7. We live in Northern Liberties right now, I rented in the Art Museum for years, and we moved from Old City where we still own one of our old condos. So, when I speak with our "opinion", I am doing so having much of our own personal retirement invested in these areas of the city. Not to mention we have experience as modestly smart and successful Realtors.

The condo market in Center City Philadelphia and the "fringe neighborhoods" such as Northern Liberties, the Art Museum, even Old City, that have an abundance of new construction condos and rehabs meant for flips, are handcuffed by the mortgage industry. It looks like the only developer doing well is Bart Blatstein. He is a genius because he builds posh apartment housing and then builds a village around them that will provide for their every need. Brilliant business model and a generous city planner.

Developers and rehabbers can't go any lower on their prices without being upside down on their loans. Developers are defaulting on their loans because the buyer pool for their 1-2 bedroom condo is nonexistent. Well, maybe not completely, but for the most part, the buyer pool is more like an evaporating puddle.

Who are the buyers for most of these beautiful condos? They are you. They are typically young, first time buyers, with good credit, and a great job making decent pay but they typically do not have a lot of cash saved up. Their savings are perhaps 10-15% shy of qualifying for a mortgage for a new condo.

The buyers that are out there right now do not qualify for condos. Many can only qualify for an FHA loan which rules out most of the condos out there in the city. That is why neighborhoods like Fishtown and the Art Museum, as well as Pennsport and Graduate Hospital have been where many sales transactions are occurring. The condo buyers default to the closest neighborhood Center City and buy row homes. As long as there is a demand the prices will not go down dramatically for those areas.

If the loan products do not become more user friendly, then sellers will have to either lower their price and suck up the loss, rent their home until the market ripens, choose a short sale if they have proof of hardship, or throw the towel in and let the bank foreclose on the property. We are seeing all of the above.

As for condo pricing, it has come down, but perhaps not as much as it has in New Jersey,  and certainly not as much as it has in other states. The Developers are holding on and renting as an option. The Marine Club is an example of a fabulous, large, Luxury condo conversion that has amped up on rentals rentals because it is unattainable for first time buyers that can only qualify for an FHA loan.

That is our opinion. At least that is one of them : )

if inventory is high compared to sales, prices are high compared to rent, prices will surely plummet.

EVERY single city, where people/agents have argued elsewise on here so far has eventually fallen. They said the same in Phoenix 1.5 years ago, since then we dropped 40% and counting...

Hi
I really think that you can buy more than a 500 sq ft condo with what you are making. It looks like you can afford a little over $300,000 and I could send you many condos in Center City at that price. It does seems like the prices didn't come down but you do have some bargains out there and in this market sellers know that they will get less that their asking price. For example there is a 700 sq ft condo for sale in Abbot Square for $230,000 It is a short sale Who know how much you can get it for ??
So it is a matter of trying to get the best price you can I do write multiple offers for clients until they get the best deal possible.
When it comes too the Marine Club I could inquire about it for you, But what do you want to know about it?