The Resilience of American Finance

My good friend Jeremy Siegel wrote this opinion piece that appeared in the Wall Street Journal. I think it is insightful and a good reminder to the American people about our ability to recover from trying financial times like these.

RENTAL Listing of the Week

The Carlyle
2031 Locust Street
2 bedrooms ~ 2 bathrooms
$2,200/mo.

Listing of the Week: The Lippincott

The Lippincott
227 S. 6th Street

Square Feet: 1,936 sq. ft.
Price: $1,250,000
Condo Fees: $1,053
Taxes: $347

Two bedroom dramatic showplace in boutique Washington Square condo building. Custom finishes, features, and appointments throughout.

Road Map of Market Recovery

I am a member of an organization called STAR POWER, which is a real estate education company. One of the other members, Denny Grimes, used this graph for a presentation and I thought it was right on. This is what he said about it: I believe this graph explains the behavior of any bubble market, sub-market and even an individual decision process before they make purchase. The length and the angle of your market's path may vary, but all markets will fall below "rational value" before they begin seeing price recovery. Price recovery or even an individual sale will not take place until confidence enters the market or the mind of the buyer. When a buyer feels confident that the property they are looking at is a good value for them, they act. When this happens in mass, the market will shift upward and begin driving prices back to rational value.

What does it all mean for the multifamily sector?

With the weekend's news that the Federal Housing Finance Agency is assuming the power of the Board and management of Fannie Mae and Freddie Mac, Global stock markets soared. But in the long run, is this really a good thing for the country's housing market? And more specifically, what does it mean for the multifamily market?

Along with some other real estate professionals, I gave my two sense to GlobeSt.com today about the news. In my opinion, we should see more competitive rates in multifamily as a result. Spreads in the multifamily sector have widened significantly over the past year. Spreads for conduit loans have gone as high as the mid 6% to 7% range. Now, I think they will start to compress. Mark Zandi, chief economist and co-founder of Moody's Economy.com, seemed to agree with this thinking. Check out what others had to say here.

And we're back...

So after too long a break, I am back and committed to regular posting. I thought I would dedicate my first post back to letting you know where I think the market in Center City Philadelphia stands today. Overall, there are pockets of price drops, but the core areas are holding well. From what I can tell, the market around Rittenhouse and Washington Squares, Society Hill and Avenue of the Arts is holding relatively steady in terms of home prices. The outskirts or fringe areas are suffering the most. These areas are seeing 5 to 20 percent price drops. In economic times like today people seek out the safest areas. Whether it's beachfront or bayfront real estate or properties on Rittenhouse Square, people flock to the safe investment areas for their home purchases.

I'll be back later this week with more. If you have any comments or if there is anything in particular that you are interested in seeing posts on, let me know!