Maria Quattrone's Blog & Real Estate News

 

Aug. 2, 2017

Blatstein officially buys Broad and Washington lot for big development

 

Last week, Bart Blatstein officially became the new owner of the northeast corner of South Broad Street and Washington Avenue, nearly giving him the go ahead to proceed with a big mixed-use development at 1001 S. Broad Street.

Philadelphia Business Journal first reported that the developer settled a lawsuit with the owner, NH Philadelphia Properties, which had sued Blatstein in 2016 over his legal claim to the property. Although Blatstein did not own the northeast corner at the time, he had started the design, development, and zoning processes with the city to build a 195,000-square-foot mixed-use project on the site.



A settlement was reached between the two parties, allowing Blatstein to close on the sale for an estimated $20 million. Two neighbors have filed an appeal regarding the developer’s zoning win, but Blatstein’s lawyer says he’s “confident we’ll overcome that.”

Last year, prior to the lawsuit, the plans called for 944 apartments in a 32-story tower, plus a retail “village” located above a parking garage. According to the report, the plan now is to build 1,000 apartments and 160,000-square-feet of retail.

There’s no construction timeline on the project as of yet. When it does break ground, it will be neighbors to another mixed-use, mid-rise development called Lincoln Square across the street. Lincoln Square has been on the rise since early 2017.

 

A lawsuit has been settled with the last owner

Posted in Uncategorized
July 6, 2017

1523 Webster St | Rare Graduate Hospital New Construction

 

1523 Webster Street, Philadephia, PA 19146

 

This brand new construction, located on a quiet street, is a rare 1 bedroom, 1 bathroom townhouse with LARGE GARAGE! Enter this home through your garage or front door and be greeted by an open floor plan complete with hardwood floors, ceiling fan, and natural sunlight. The wall to wall kitchen has plenty of cabinet space, stainless steel appliances, built-in microwave, subway tile back splash and granite counter tops. The living area features large windows, recessed lighting and has added character with built-in bookshelf and under steps storage. Upstairs, is a large landing with closet, great for a home office set up or small reading area. The bathroom has been finished with half-wall subway tile, large vanity sink and tub. Through the 10-lite french doors, is a spacious bedroom with large windows, and closet. In the heated/cool garage of the home you will find the utility sink, washer and dryer. Also featured is a video surveillance system. In the Graduate Hospital neighborhood of the city, you're within walking distance to great restaurants, coffee shops, bars, and parks. With a 5 minute walk to South Street, you will have access to Govinda's Restaurant, Entree BYOB, Jet Wine Bar, Rex 1516, and Founding Fathers, just to name a few. Two blocks away from Marian Anderson Park and five blocks away from Chew Playground and new Chick's Restaurant. Walk score of 97, bike score of 86 and transit score of 79. Sellers are including a 1-year builders warranty with the sale!

 

Posted in Uncategorized
July 3, 2017

Renting? Here's what $1,500-$1,600 gets you in Philly's gentrifying neighborhoods

Neon lights flash purple, green, red, and an array of other colors most nights at Broad and Chestnut Streets. They illuminate the 18-story building once regarded as one of the city’s premier office locations, the former home of the Art Institute of Philadelphia and other enterprises that enjoyed its proximity to bustling Broad Street.

These days, it’s one of Philadelphia’s newest upscale apartment buildings: the Griffin, at 1338 Chestnut St. And if the exterior is any indication, the interiors are extravagant and impressive.

Like many of the city’s luxury addresses, the Griffin offers a list of high-end features so long and robust that it rivals those at posh resorts and hotels. There’s a half-indoor, half-outdoor rooftop deck equipped with fire pits, outdoor kitchens, views of City Hall, and billiards and shuffleboard tables. There’s a sprawling gym. A golf simulator. A conference room. And a 24-hour doorman stationed in a sleek lobby.

It’s an expansive package for those craving that “live here, work here, play here” energy that luxury developers are banking on their prospective tenants desiring. But for those looking to rent at a price that won’t break the bank, the ultra-amenity lifestyle can sometimes result in ultra-tiny personal space.

At the Griffin, a typical 438-square-foot studio apartment rents for at least $1,500 a month. Upgrade to one of the largest two-bedroom/den units? That can cost as much as $4,000 a month.

Higher rents are part of a larger trend across the Philadelphia market, as an influx of millennials and the nationwide dip in home ownership have dramatically increased tenant numbers. According to a January study released by the Federal Reserve Bank of Philadelphia, the number of apartments citywide renting for more than $2,000 a month nearly doubled, to almost 11,000 units, from 2000 to 2014. At the same time, the study found, Philadelphia lost nearly 20 percent of its low-cost rental units (those available at less than $750 a month), dropping from 117,000 in 2000 to 93,000 in 2014.

The median rent per month, the study found, was $936 citywide (half rented for more, half for less).

Rapid increases in rents have been concentrated in Center City, where both local developers and some from the New York-Washington corridor have been rushing to build. This year and next, about 4,100 new apartments are expected to be delivered  — and that’s in addition to the nearly 6,000 units that have opened up since 2013.

But today, developers also are searching far beyond Center City’s expanding borders, venturing into historically lower-income neighborhoods. The result has been gentrification, a term the Fed defines as both an increase in home values or rents and an increase in the number of college-educated students in an area where household incomes were once below the citywide median.

To establish which areas of the city have experienced gentrification, the Inquirer relied on reports from the Fed and other experts, as well as conversations with developers, Realtors, and residents. The goal was to see how rentals in these gentrifying areas have been transformed as the neighborhoods around them have been altered.

Using home-listing websites, the Inquirer searched to find what kind of apartments were available to renters with a budget of $1,500 to $1,600 a month in five of Philadelphia’s most rapidly gentrifying neighborhoods. That cost represents almost half the city’s median monthly pretax income of about $3,190 (annual is about $38,000), but the rental range was chosen with the assumption that many of these listings include multiple bedrooms that would house multiple tenants. The median income listed for each zip code is yearly.

Here are some of the units that were available between June 19 and 24.

Brewerytown: Philadelphia 19121

The Fairmount @ Brewerytown, 1363 N. 31st St.

Fairmount @ Brewerytown, developed by McSpain Properties, opened its doors in March 2016. Brewerytown has become one of Philadelphia’s fastest-growing neighborhoods, as developers capitalize on the spike in younger and wealthier people moving into the area. (McSpain Properties)
A one-bedroom at the Fairmount @ Brewerytown measures 750 to 950 square feet.
The property includes a rooftop pool, a 3,500-square-foot gym, a business center, and a billiards room. Flying Fish Crafthouse is on the ground floor of the building.

Monthly rent: $1,500-$1,550  Type of unit: Largest one-bedroom/one-bathroom                 Size: 900-950 square feet  On-site parking: Yes, indoors, for a $175 monthly fee

Amenities: Rooftop pool; 3,500-square-foot gym; billiards room; business center; in-unit washer/dryer; on-site retail and dining  Median income for zip code in 2015: $17,969

The Fairmount @ Brewerytown complex opened in March 2016 as a redevelopment of the old Acme warehouse near 31st and Master Streets. The $50 million project yielded 161 lofts, ranging from 550-square-foot studios that start at $1,200 a month to 1,500-square-foot two-bedrooms priced at $2,400. Occupancy is at 93 percent, said Sean McGovern, a partner at McSpain Properties, the project’s developer.

Brewerytown has seen rapid change. New developments both large and small have sprouted, with many projects, such as McSpain’s, rising in old factory buildings. Located about two miles from Center City, near major highways and SEPTA bus routes, Brewerytown is an ideal candidate for gentrification, situated just beyond Fairmount, now one of the city’s most expensive neighborhoods. And Brewerytown has started to see the spillover of investors and others hungry for cheaper properties.

“Quite frankly, you look at the prices people are spending in Center City, and it is egregious,” McGovern said. “People are spending $3 to $4 per square foot for rent, and the demographics don’t support it. When you’re paying $1.75 to $2, that is affordable, in my mind. I want to do developments where people can actually afford their rent.”

Fishtown: Philadelphia 19125

Old World Warehouse, 1100 Shackamaxon St., Apt. 2C

Jackie Dabrowski purchased her condo in Old World Warehouse, once the old Morse Elevator Works factory, 10 years ago, when the neighborhood had hardly gentrified. She is now renting the unit. (Jackie Dabrowski)
The condo is a one-bedroom/one-bathroom loft measuring 800 square feet.
Ceilings in the loft are 13 feet high, and the unit includes original pine floors from the old Morse Elevator Works factory.

Monthly rent: $1,595 Type of unit: One bedroom/one-bathroom loft  Size: 800 square feet  On-site parking: No

Amenities: In-unit washer/dryer  Median income for zip code in 2015: $45,720

When Jackie Dabrowski purchased her condo in Fishtown nearly 10 years ago, the neighborhood was almost entirely different. Back then, she said, much of it was filled with working-class residents, and home prices were affordable. When she heard about the conversion of the old Morse Elevator Works factory into lofts, she jumped at the chance to own one, attracted by the space’s large, nearly 9-foot-tall windows and 13-foot ceilings, its original pine floors, and a working freight elevator restored from the old factory.

Now, however, Fishtown is changed: There are trendy coffee shops and bars, salons, and more affluent residents. “A lot of the reason that I bought this was that it was this really cool, old factory that you couldn’t find anywhere else,” Dabrowski said. “Fast-forward to where we are now, and Fishtown is its own neighborhood … you don’t have to go to Center City. You could move to Fishtown just because it’s Fishtown now.”

According to information from the Federal Reserve Bank of Philadelphia, the average median home value in the “river wards,” defined as Fishtown and Port Richmond, increased 155 percent, from $56,048 in 2000 to $143,398 in 2013. Rental prices and median household income saw sizable increases, too.

“The growth here is not done yet,” Dabrowski said. “It’s been a nice transition from what it was to what it’s becoming. And I think it’s been very peaceful.”

West Philadelphia: Philadelphia 19139

West Lofts, 220 S. 47th St.

 

A public space at West Lofts. A one-bedroom is priced from $1,125 to $1,659.
The West Lofts, which were redeveloped inside the former West Philadelphia High School, are to open in July. The project was completed by Brooklyn-based developer Andrew Bank, of Strong Place Partners. (Strong Place Partners)
There are four floors of lofts in the former girls’ wing, built in 1911. Elsewhere in the building, to preserve some of the school’s history, the developer restored the track in the original gym.

Monthly rent: $1,560  Type of unit: Two bedroom/one-bathroom loft  Size: 735 square feet  On-site parking: No, street parking, for now. Construction continues.

Amenities: Restored 1911 high school gym with running track; 24-hour concierge; landscaped gardens with bocce  Median income for zip code in 2015: $24,606

Andrew Bank, based in New York with Strong Place Partners, was looking to develop a site in the city when the School District of Philadelphia was trying to sell off some of its public school buildings to raise cash to fill a budget deficit.

One school, in particular, caught his eye: West Philadelphia High School, which his grandmother had attended.

He purchased the property for $5.1 million, with the hope of turning it into housing. Opening in July will be 139 apartments. In receiving federal tax credits, Bank said, he made every effort to preserve the school’s facade and other key features, while turning the building into what he hopes are highly sought-after lofts.

For years, West Philadelphia has been changing, largely because of Drexel University and the University of Pennsylvania. But developers have begun to take interest beyond the universities’ perimeters.

“We’ve had a very positive response,” Bank said. “We’ve seen a lot of people from the neighborhood who are just attracted to the type of apartment that we have available.”

Grays Ferry/Point Breeze: Philadelphia 19146

2632 Federal St.

Located at 2632 Federal St., this three-bedroom home that was listed in June is just beyond the border of Point Breeze in Grays Ferry. (Joe Alfano Photography)
The nearly 1,100-square-foot house has three bedrooms and one bathroom, and a private backyard. It is listed at $1,500 a month.
While not nearly as gentrified as Point Breeze, Grays Ferry has increasingly seen investors and developers taking interest in the area, Realtors say.

Monthly rent: $1,500  Type of unit: 3-bedroom/1-bathroom rowhouse  Size: 1,070 square feet  On-site parking: No

Amenities: In-unit washer/dryer; fenced back patio  Median income for zip code in 2015: $48,015

The way many observers see it, Grays Ferry is simply next in line. The redevelopment of the Graduate Hospital area fueled the redevelopment of Point Breeze, they say. And when Point Breeze redevelopment is near completion, more investors will turn their eyes to Grays Ferry.

That’s certainly what RE/MAX Realtor Maria Quattrone is thinking. Last month, she listed this three-bedroom rowhouse on 26th Street, just one block away from Point Breeze — and saw plenty of interest, most of it from young professionals and students.

The house has been completely restored from what Quattrone described as “a shell.”

“You are seeing a lot of new [residential] construction popping up in Grays Ferry,” Quattrone said. “So soon, there will be commercial businesses popping up here, as well.”

Cecil B. Moore/Lower North: Philadelphia 19121

1908 Ingersoll St., Unit B

This unit is priced at $1,500 for two bedrooms and two bathrooms. (Raza Properties)
As this area near Temple University has become increasingly gentrified, there have been efforts to try to slow the pace of change. Earlier this year, City Council unanimously passed legislation aimed at decreasing the density of certain areas in an effort to preserve more single-family housing here.
This apartment is on the second floor of a newly constructed building.The unit measures about 900 square feet.

Monthly rent: $1,500  Type of unit: 2-bedroom/2-bathroom  Size: 900 square feet             On-site parking: No, street parking

Amenities: In-unit washer/dryer, back patio  Median income for zip code in 2015:$17,969

Raza Properties finished construction along the 1900 block of Ingersoll Street earlier this year, delivering nine units that it hopes will target typical working-class renters.

The $1,500-a-month rent “gives us the ability to develop properties at a reasonable price, attracting middle-income clientele,” said Rahil Raza, CEO of the development group. “We’ve been successful in doing that so far. … Some of these units will be rented out to young professionals who just graduated.”

Located south of Temple University, the Cecil B. Moore/Lower North neighborhood has experienced growing pains in the past, as developers increasingly have constructed new, pricier units to house students and young professionals off-campus. Earlier this year, City Council passed a measure that would decrease the density in some areas, with a goal of preserving more single-family housing.

Posted in Uncategorized
June 29, 2017

The Most Expensive Listings in the Philadelphia Metro Area

These homes range all the way from $9,950,000 up to $25,000,000, for an impressive range of architectural and design styles, from Society Hill to the Main Line.

1. 7111 Sheaff Lane, Fort Washington, PA, 19034


$25,000,000

Listing courtesy of Long & Foster Devon

2. A1 Ashbourne Road, Elkins Park, PA 19027


$17,500,000

Listing courtesy of Berkshire Hathaway HomeServices Fox & Roach

3. 770 Godfrey Road, Villanova, PA 19085


$16,900,000

Listing courtesy of Kurfiss Sotheby’s International Realty Bryn Mawr

4. 232-36 Walnut Street, Philadelphia, PA 19106


$16,795,000

Listing courtesy of Keller Williams Real Estate Tri-County

5. 1543 Monk Road, Gladwyne, PA 19035


$16,500,000

Listing courtesy of Kurfiss Sotheby’s International Realty Bryn Mawr

6. 733 North Spring Mill Road, Villanova, PA 19085


$15,900,000

Listing courtesy of Kurfiss Sotheby’s International Realty Bryn Mawr

7. 50 South 16th Street #4604, Philadelphia, PA 19102


$14,500,000

Listing courtesy of Kurfiss Sotheby’s International Realty Philadelphia

8. 1530 Monk Road, Gladwyne, PA 19035


$13,999,000

Listing courtesy of Berkshire Hathaway HomeServices Fox & Roach

9. 912 Providence Road, Newtown Square, PA 19073


$10,995,000

Listing courtesy of Berkshire Hathaway HomeServices Fox & Roach

10. 111 East Skippack Pike, Fort Washington, PA 19034


$9,950,000

Listing courtesy of Long & Foster Devon


Did you see our lists of the most expensive listings in the Washington, D.C. and Baltimore metro areas? Check them out!

Please note: The list provided includes active home listings, excluding new construction, as of 6/15/17. It excludes sales without seller permission to advertise or promote. Information should be independently verified.

 

 

Want to find out what your home is worth?

Visit www.SoldByMQ.com today to find out using our state of the art seller valuation tool!

Posted in Uncategorized
June 19, 2017

Spring Ahead to Summer Fun with a Professional's Quick Tips

Spring Ahead To Summer Fun With A Professional’s Quick Tips

Spring is a time of new beginnings and renewal, and a time when the extended day shines a spot light on those home and garden improvement projects that have hibernated all winter.

           

By Walter Morgynski

 

 

The ground has thawed and the leaves are budding. Spring is a time of new beginnings and renewal. It is also a time when the extended day shines a spot light on those home and garden improvement projects that have hibernated all winter. The list extends from cleaning up the leaves and limbs outside to paint touch up and ceiling fan installations inside. If you are “lucky” enough to have a pending event — Prom pictures, Holy Communion, Bar Mitzvah, or Graduation — the stop watch is running. Enclosed are a few helpful hints that could make your list melt away like last month’s snow.

Outdoor Projects

When it comes to your exterior work, there is no such thing as fashionably late. You want to have those projects complete before the weather gets too hot. The bulk of the work may involve simple clean-up, however, the winter’s howling winds and flying limbs may have caused some undetected damage. For the security of your home and family insure that the exterior lighting is working properly or if bulbs need to be changed. Flickering lights could be a sign of underlying damage. We often think dimming or flickering lights are caused by a power surge, however, flickering lights can be a symptom of a wiring red flag. Many home inspection professionals and electrical contractors offer basic security inspections for a small fee or included with another service appointment. These small preventative corrections can save hundreds of dollars for wide-scale repairs or insurance deductibles.

 

Indoor Projects

Air conditioning or cooling may seem like a simple comfort but you need to maintain your equipment. The Alliance to Save Energy (ASE) says that a well-maintained cooling system will run more effectively, use less energy, and lower your energy bills. With that in mind, contact a professional heating and cooling contractor to inspect your system. This could be the perfect time to consider an advanced, energy efficient zoned system that can cool just one room or be strategically zoned for a large home. This is a great time of year to get a free estimate or take advantage of pre-season savings for installation. If your needs are not that sophisticated, it’s a great time to install those ceiling fans to keep the air moving.  Don’t wait for those 100 degree days to think about cooling your home.

 

This may also be a season when you consider tackling a home renovation or addition. It’s great to organize or create new space.  Don’t forget to consider lighting or wiring needs for the space.  If you are adding square footage to your home, you may need to upgrade your electrical panel to accommodate the new space.  This is also a great time to consider recessed lighting, dimmer switches, USB charging ports and security surveillance features.  To ensure that these home automation and comfort features are installed properly and safely, consult a local professional.

If you are looking for professional help, there are a few things to consider. Contractors tend to specialize; some concentrate on new construction, some just in commercial work, and some go only on service calls to fix dead outlets or faulty fixtures.  Those who specialize in remodeling have mastered techniques for wiring existing homes and additions, such as snaking wires through finished walls, assessing the capacity of existing circuits and evaluating whether to install an additional service panel (where the circuit breakers are) to handle increased power demands. If you would like to discuss your project and what you may potentialy need, feel free to call your friendly, home specialists at GEN3 Electric.


Read more at http://www.phillymag.com/sponsor-content-promo/#w6vMDp2tUB8WJkQx.99

June 17, 2017

Philly Ranked 5th Most Walkable City in the US This Year

Philly Ranked Fifth Most Walkable City in U.S. This Year

Miami moved up in the annual Walk Score rankings, dislodging the city from fourth place.

 

All of Center City’s neighborhoods, from the Avenue of the Arts on down, are “Walker’s Paradises,” contributing to the city’s continued ranking among the five most walkable cities in the U.S. | Photo by Jeff Fusco

A mere two-tenths of a point dropped Philadelphia from its perch as the nation’s fourth-most-walkable city in this year’s Walk Score rankings of American cities.

Miami traded places with Philadelphia to become the No. 4 most walkable city in the U.S. on this year’s list. But no one should lament this development, for what it means is merely that cities all across America continue to up their walkability game.

A news release from Walk Score parent Redfin noted that once again, all of the 10 most walkable cities had higher Walk Scores than they did last year, and of the top 50, only Omaha saw its Walk Score fall (by a mere 0.3 point). Philadelphia’s Walk Score of 79 was 0.7 points above its showing last year, but Miami posted an even stronger gain of one full point to 79.2, putting it in fourth place and Philly in fifth.

Local Redfin agent Blakely Minton attributed the city’s continued walkability gains to people recognizing the role neighbohood amenities play in enhancing house values. She gave Northern Liberties as a prime example.

“At first [agents] had a hard time getting people to move there,” she said. “That wasn’t because it was on the outskirts of anything, but because it had no grocery store. Once they started adding grocery stores and other neighborhood businesses, values took off.

“When you’re in a city where parking is at a premium, you have to have places where people don’t have to get into a car to go everywhere. You need banks, you need grocery stores, you need dry cleaners, you need day care.”

Minton acknowledged that this lifestyle appeals to only a segment of the overall residential real estate market, but it’s a segment that has grown over the years. “Walkability has become a national term that people are recognizing now. They realize it matters to the value of their homes and the desirability of their communities.”

Plus, she said, “City people love to walk.  They don’t want to have to rely on a car to do everything. They may not even want a car at all.”

As it has been since Walk Score began issuing these rankings, New York remains the king of the hill, with its Walk Score continuing to inch upward towards “Walker’s Paradise” territory (90 points or better). Its Walk Score of 89.2 this year is its highest ever and 0.3 points above last year’s score. Rounding out the top five most walkable cities are No. 2 San Francisco (Walk Score: 86.0) and No. 3 Boston (80.9).

Walk Score’s annual rankings cover all U.S. cities with 300,000 or more inhabitants. They are derived from Walk Score’s methodology, which assigns points to individual addresses based on distance from amenities, density of population, block length and intersection density.

Every one of the 10 most walkable cities has neighborhoods that rate as “Walker’s Paradises,” where daily errands do not require a car. All of Philadelphia’s 10 most walkable neighborhoods, which appear below, fall into this category.

Eight of the city’s nine large divisions as defined by Walk Score and 54 of its 68 neighborhoods were rated at least “Very Walkable,” with scores of 70 or better that indicate that most daily tasks can be accomplished on foot. All of the neighborhoods that fell short of this standard save one — East Parkside in West Philadelphia — were in either Northwest Philadelphia (in descending order: East Falls, Chestnut Hill, Roxborough) or Northeast Philadelphia (all the others). But even Northeast Philadelphia, the least walkable of the city’s large divisions, contains several Very Walkable neighborhoods: Tacony-Wissinoming, Frankford, Oxford Circle-Castor Gardens, Lawncrest and Mayfair all fall into that category (again, in descending order).


Read more at http://www.phillymag.com/property/2017/06/06/philly-ranked-fifth-most-walkable-city-in-u-s-this-year/#uuEx1LSWbbId3sEU.99

June 16, 2017

Just Listed: A Standout Home in East Kensington for $585k

Just Listed: A Standout Home in East Kensington for $585K

 

Looking for an antidote to the bland, boxy and boring? Red Oak Development built this place with you in mind.

2401 Emerald St., Philadelphia, Pa. 19125 | Photos: Sandy Smith

Red Oak Development, the people who built the Parish House not far from this place in East Kensington, pride themselves on being a notch or two — or several — above the run-of-the-mill builders throwing up new homes around the city.

They seek to give each home they build personality through the use of local craftsmen, reclaimed materials and original design.

This brand-new townhouse that went on the market today oozes personality out of every pore of its being.

Especially on the outside. “We had neighbors asking when we were going to clean up the outside,” said Red Oak principal Anthony Giacobbe.

That outside is as clean as it will ever be: it’s made of Cor-Ten steel, the kind that forms its own protective coating of rust.

Inside, it has a bunch of other original elements. Like that staircase from the second to the third floors. It’s actually cantilevered over the sidewalk, allowing for more interior room within the traditional building envelope. A steel column running through the building stairwell, fabricated in-house by Red Oak along with the rest of the staircase’s structural and decorative steel, provides the support needed for the cantilever to work.

A joint effort between Toner Architects and Bright Common, this home is also filled with the quality fixtures and fittings that go into Red Oak homes, including the handmade Eurostyle cabinetry, zinc-topped island table and concrete countertop with natural shell imprint in the kitchen, all products of local craftspeople. (Quality doesn’t have to be expensive, by the way: the kitchen drawer organizers were obtained through Ikea.) KitchenAid appliances round out the quality parade.

Custom lighting by Red Oak adds an element of industrial chic to some of this home’s spaces, most notably the main stairwell. Green tile in the master bathroom adds a splash of color, and the double-sided roof deck offers a great view. The master bedroom has its own deck as well.

The porthole window in that stairwell gave the stager the inspiration to decorate this home with a nautical theme, as the pictures below show. We think you’ll be impressed with the statement this home makes as well as the features it offers.

THE FINE PRINT

BEDS: 3

BATHS: 3

SQUARE FEET: 2,500

SALE PRICE: $585,000


Read more at http://www.phillymag.com/property/2017/05/31/just-listed-a-standout-home-in-east-kensington-for-585k/#gKM6VuBbucTsjT7Z.99

June 15, 2017

What Happens to the Real Estate Market if Mortgage Rates go

  • Low rates have spurred demand for property, led to price increases in stable markets and stopped the landslide of prices from the 2008 crisis.
  • While we don't know how every facet of the market will behave if loan rates begin to increase, we can predict that investors will lose their buying capacity and deposits will begin to yield again, though minimally

The mortgage rates in Europe and the U.S. have been declining in recent years and finally fell to a record low in 2017, while property prices have been quickly increasing.

In 2015, the Federal Reserve System (Fed) began gradually increasing the refinancing rate. Many assume that the mortgage burden will also increase, putting pressure on property prices as investors anticipate higher return on investment.

Is the price adjustment really a matter to worry about?

How mortgage rates have affected property prices

Europe and the U.S. have been pursuing the easy money policy in order to activate their economies since 2009.

As a result, an unprecedented event — the cost of money falling to zero and negative values in some countries — has been taking place in the global economy over the last five years.

Mortgage loans have become almost free: According to Statista.com, the mortgage rates in Germany decreased from 5.2 percent to 1.5 percent between 2007 and 2016.

In 2017, German resident investors can buy flats with an 80 percent loan-to-value (LTV) mortgage at 1 percent per annum, rent them out and get yields of 3 to 4 percent per annum. Property owners can pay the mortgage with their rental income and enjoy the annual property appreciation by 2 to 5 percent, depending on the location. The cost of financing is significantly lower than the rental rates.

Bank deposits have stopped yielding and even become disadvantageous, as most European banks charge their clients for keeping money. People have to find alternative investment vehicles and increasingly opt for real estate, which is a comprehensible and reliable way of investing with relatively high yields.

All of the above has led to a situation where the real estate asset owners do not want to sell their properties at reasonable prices. If the investors “go into cash,” they will need to reinvest the money in something, and there are very few offers. Having deposited money with banks, they will have to pay negative rates.

This narrows the number of offers in the market even further.

 

 

Low rates have spurred demand for property, led to price increases in stable markets and stopped the landslide of prices in countries that suffered from the 2008 crisis.

According to Eurostat, the residential property in Austria and Germany became 20 percent more expensive between 2013 and 2016, while certain markets (e.g., Berlin and Munich) grew even more rapidly.

During that same period, the prices in Spain and Portugal hit bottom and then started going up, while the markets of Australia, Hungary, Ireland, Canada, Poland and the U.S. were growing actively.

The European real estate market of today can be explained using the following metaphor: Germany is a bathtub, and water is the capital. The bathtub is full, so the water overflows to the secondary markets: Hungary, Ireland, Spain, Portugal and the Czech Republic.

Low rates have also augmented the supply as more capital became available for construction. Thanks to cheap mortgage loans, the global market has seen much development over the last six years. The developers would not have carried out many of their projects, and the clients would never have purchased the constructed properties without this capital.

Will the rate increase lead to a price reduction?

The situation in the lending market has begun to change over the last two years: the U.S. Federal Reserve System has increased the refinancing rate three times since 2015 and will probably do so two more times before the end of 2017 (in June and in December).

The Fed is raising the refinancing rate cautiously. Its goal is to find an effective balance between the risks of low rates and the desire to encourage economic growth.

When it comes to the refinancing rate, the mortgage rates depend. Notably, a rise in U.S. interest rates may be followed by an increase in the rates of the U.K. and continental Europe.

While we don’t know how every facet of the market will behave if loan rates begin to increase, we can predict that:

  • Investors will lose their buying capacity
  • Deposits will begin to yield again, though minimally
  • The volume of construction will reach its peak
  • Supply of real estate in the market will increase
  • Owners will want to lock in their profits or reject burdensome mortgages and properties that have lost their liquidity

All this may stop aggressive purchase growth and even cause a property price decline in peripheral locations.

For instance, a property in the U.S. was bringing its investor a yield of 5 percent per annum with a treasury yield of 1 percent. The spread (or the investor’s risk compensation) amounted to 4 percent per annum.

Later, the general rate level increased and the treasury yield grew to 3 percent. It is logical for the investors (the potential buyers of this property) to require the same risk compensation as before. This means that the yield of such a property has to increase up to 7 percent.

This can happen either with the increase of the rental flow or a reduction of the price per square meter. Long-term rental contracts are rarely reviewed, so price reduction is really the only viable option.

However, according to our estimates, when and if the regulators begin raising the rates, they will do it not rapidly but gradually, for which reason no quick price adjustment is to be expected. But it is true that the growth limit has already been reached in many developed countries. Many investors understand that the prices may go down. Such a risk is most probable in the locations where the population, income and the number of workplaces do not grow.

Our recommendations

The rate growth is a risk professional investors need to consider in advance. We recommend taking specific measures to indemnify your investments.

How to invest in order to not lose money

  • Buy quality assets in locations with healthy population and income growth. Prices fall less during the recession and grow more quickly during the market recovery in central districts.
  • Buy properties with long-term (10 to 20 year) fixed rental contracts. Such agreements allow getting through the period of price adjustment smoothly.
  • Do not refinance the projects, but fix the rate instead.

What to do in order to earn

  • Find micro-locations that are going to gain in price quicker than their neighbors due to reasons like infrastructure and logistics improvements or gentrification. Examples of such neighborhoods include, Poblenou, Barcelona, Lichtenberg, Berlin and Wynwood, Miami.
  • Invest in properties that will be popular for more than 10 years (e.g., micro-apartments, hotels, warehouses and retirement homes).
  • Invest in properties with growing rental revenues and capitalization rates.
  • Invest in value added development and redevelopment projects.

Experienced investors choose 10-year or longer planning horizons when investing their funds in rental properties. As every real estate market is subject to cyclicality, price adjustments are unavoidable in long-term investments.

However, in the mature markets, average yield rates and property price growth rates always outrun inflation, and future price adjustments are offset.

In 2017, we recommend investing in foreign property, relying on the following criteria:

  • Macro-location. A city whose labor market and population income are growing.
  • Micro-location. A gentrified neighborhood near the center where price growth will surpass the city average in the following decade.
  • Property type. Highly liquid properties that will be in high demand for the next 10 year or longer (e.g., micro-apartments).
  • Financing. Fifty to 60 percent LTV mortgage loan at a rate fixed for the longest term possible

These recommendations will help indemnify your investments against market correction risk if mortgage rates go up.

George Kachmazov is managing partner at Tranio.

June 14, 2017

The Nation's Rebirth Officially Begins Friday

 

A little more than a year ago, as it was being demolished, the old National Products Company Building on North Second Street in Old City got a thorough going-over from Bradley Maule at Hidden City, who noted that whatever else happened, the bright-orange-tile Midcentury Modern facade that made the building worth saving would be preserved and restored.

The only difference between Maule’s description of how that would happen then and what will happen starting Friday, June 9th, is that the people in charge of the reconstruction project have changed. Replacing Glenside-based Dale Corporation is the Buccini/Pollin Group (BPG), a Wilmington-based developer of multifamily housing, office buildings and mixed-use projects, including Talen Energy Stadium (nee PPL Park), the home of the Philadelphia Union soccer team on the Chester waterfront.

BPG will develop the property on behalf of its owner, an entity of the AFL-CIO Building Investment Trust, and manage it through its ResideBPG property management arm. The design remains the one Barton Partners unveiled last year: a six-story building clad in metal panels with orange accents that match the restored and newly manufactured tiles below. TN Ward Company will be the project’s general contractor.

In a news release, BPG Co-President Robert E. Buccini said, “We are thrilled to finally begin construction on The National, our first of many planned apartment ventures in Philadelphia. We have steadily expanded our residential development and ResideBPG management platform in nearby Wilmington and have long sought such a signature location as an entry into the strong Philadelphia multifamily market.”

“This development has been in the works for decades and we are eager to see The National join the incredible array of residential and recreational amenities in Old City,” Boris Kaplan, BPG vice president, said in the same release. “We are treating this project with great care in recognition of the historic fabric of the surrounding community.  This location is tough to beat and we expect the diverse dining, cultural and commercial destinations in this thriving neighborhood to drive demand for these apartments.”  

When it was being demolished, the property owner agreed to a stipulation the city included with the demolition permit that the tile and metal facade be preserved, restored and rebuilt. New tiles are being produced to replace those that are in poor condition or have suffered damage.

When completed in the summer of 2018, the new National will contain 192 apartments, 2,000 square feet of street-level retail space, and resident garage parking for 60 cars. Building amenities will include a fitness center, a pet spa, a two-story clubhouse and a roof deck with gas fire pits and grills.

The project will also transform a glorified parking lot next door to the building into an actual park that will serve as a more attractive entrance to next-door Elfreth’s Alley, the nation’s oldest continuously occupied residential street.

BPG is currently building a similar mixed-use residential/commercial project in downtown Wilmington designed to speed the transformation of that city’s Market Street into a live-work-play thoroughfare with activity at almost all hours of the day. That’s already an accurate description of Old City today, which means BPG has less in the way of heavy lifting to do with this particular revitalization project.

A groundbreaking ceremony at 10 a.m. Friday will officially mark the start of construction.


Read more at http://www.phillymag.com/property/2017/06/07/the-nationals-rebirth-officially-begins-friday/#BbdORp6widGw0j2B.99

June 5, 2017

Low inventory and rising prices are forcing many home buyers to become less picky

In the Philadelphia real estate market we are still short on inventory, and rising home prices have made it difficult for first-time buyers to purchase. Interest rates are on an upward trend, which will make mortgages more expensive over the long term, and student loan debt continues to be a significant burden for many buyers. Despite all this, local real estate agents report they are still optimistic for a successful year because a number of other positive forces are in play.

 

 

Our annual survey of local real estate professionals asks for their honest opinion about both the positive and negative forces affecting our market, and this year a full 63 percent said they expect this year to be a busier — and more positive — market than last year.

The No. 1 reason for optimism cited by agents was the improved job market. A few years ago, many different industries had a tenuous hold on their profit margins and had to cut back on hiring, as well as raises or cost of living increases. All three of these factors have improved this year, compared with previous ones, which placed many potential buyers in a much safer financial position.

After improved job market, agents cited the increase of first-time buyers and more qualified buyers as the second and third reasons on the list. Both of these groups have finally saved up enough to make a larger down payment, and more of them have had a few extra years in the workforce, so they have higher than entry-level salaries. This not only gives them more cash on hand but also lowers their debt-to-income ratio, making them much more attractive to lenders.

This season, more than any in recent years, agents are also sharing that potential buyers have become more flexible in their housing wish lists. Buyers are more willing to purchase a home that is in need of upgrades or one that isn’t in their first choice for a location. This greater flexibility is a large part of the reason closed sales are up 8 percent, compared with this time last year, even though active listings are down 14 percent year-to-date. Buyers have gotten the message that they need to broaden their criteria when it comes to owning a home.

The return of equity has helped considerably. Fourteen percent of our respondents listed this as the biggest reason they expect this year to be better than last. The rise in median sales prices has made current homeowners much more willing to sell their home, and that willingness is one of the main drivers behind the inventory that does make it on to the market. While it hasn’t been enough to meet demand, it has made the situation much better, compared with even three or four years ago.

Of course, the price increases that are helpful to sellers can also create an obstacle for buyers, particularly the first-time or younger buyers in the region. But as I mentioned, these groups have several more years of saving under their belts that have made a larger percentage of them able to take on the greater costs. There are also many more mortgage products on the market that cater to these groups, either by requiring a lower percentage for the down payment or allowing greater flexibility when it comes to gifts from family members or student loan balances.

The final reason agents are optimistic about this year’s real estate market is the ongoing increase in rent prices around our region. That can often be the final push for buyers who don’t want to continue missing out on the possible equity they could gain from owning a home.

 

When looking at the market as a whole, we are definitely  in a seller’s market. However, this year has many more positive signs for buyers. The more stable job market and the improved financial position for so many people in our area are some of the biggest factors, but the increase in equity and broader array of mortgage options contribute, as well. Buyers have plenty of reasons to be optimistic this year, too.

 

Article taken from The Washington Post

Full Article here


David Charron, chief strategy officer of Rockville-based multiple-listing service Bright MLS, writes an occasional column about the Washington-area real estate market.

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