Looking forward to 2009

I have to say that I am happy that 2008 has come to a close. This has been a year of extreme market volatility with the country in a recession due to the Wall Street turmoil and the residential housing sector. Residential housing led us into this recession a few years ago and residential housing will lead us out. The reduction of interest rates is a first step in getting the housing ladder back on track. I am hopeful that lower interest rates and available credit will generate a recovery in the market. We still need financing from banks to be available and they must get back in the game and start lending to creditworthy borrowers instead of staying on the sidelines or punishing the good borrowers with dramatic increases in rates and terms.

So 2009 should start out a bit rocky but I believe we will see the resurgence of the first time buyer. Many are renting right now but with the lower rates they can do the math and lock in a low mortgage rate and a great sale price. A few of the bargain hunters have already started sifting through the inventory to see what they can buy. These are early signs of a market recovery. Current inventory at depressed levels is purchased and cleaned out and new inventory eventually becomes available.

Towards the second half of the year, barring any major financial or world events, we should start to see the $500,000 to $1 million market pick up. These buyers will be the sellers of the homes sold for $200,000 to $500,000.

The healthiest real estate recovery occurs with stimulating the first time home buyer market, which through lower interest rates, is happening today. So overall, I am optimistic for 2009.

Happy New Year to all!

Listing of the Week: Hopkinson House

Hopkinson House
$359,900
Condo Fees: $631/mo.
Taxes: $192/mo.
1,003 sf
One bedroom, one bath home available on a high floor with sweeping views of the east, south and west. The residence has a balcony, parquet floors, updated kitchen, washer/dryer and excellent closet space. Hopkinson House is located along Washington Square Park.

Forbes Names Philadelphia a Top Ten Real Estate Bet

Forbes Magazine ranked Philadelphia amongst America's Best Long-Term Real Estate Bets, saying these 10 markets, which include cities such as New York, Seattle, and Philadelphia, are the least likely to overheat and bust and the most likely to have vibrant economies moving forward. Sounds good to me! Watch the slide show.

Inquirer's Housing Prediction for 2009

In an article in today's Philadelphia Inquirer, reporter Harold Brubaker makes some predictions about housing in 2009:

Next year finally will bring the end of a three-year slump in housing prices in the Philadelphia region and across the country, economists say.
The decline from the peak in the second quarter of 2007 to the trough at the end of next year is projected to be 15 percent in Philadelphia and its Pennsylvania suburbs, according to Celia Chen, an economist at Moody's Economy. com in West Chester.
Citing the Fiserv Case-Schiller Home Price Index, Chen said conditions in South Jersey were worse, with average prices - in line with the national trend - likely to bottom out late next year at 30 percent below their peak in 2006.
The persistent slide has Toll Bros. Inc., of Horsham, biding time, luxuriating in a cash stockpile and cutting its developments to 255 from its peak of 325 in early 2007.
Residential real estate has been at the center of the nation's economic maelstrom, but its commercial cousin could start wreaking more havoc for banks as the recession victimizes more tenants of office buildings and shopping centers.

A lot of what Harold is predicting is what I have been saying for awhile now. I believe the drops in mortgage rates are creating the beginning of the bottom of the market. I think we will look back in 4 months and and see that we are past the bottom. In today's market, many homes that have been on the market for awhile are selling at lower prices, which is the first sign of recovery. Once all of the old inventory gets wiped out, new product will come on the market and prices will eventually beging to rise again.

Listing of the Week: 1900 Rittenhouse Square

1900 Rittenhouse Square

$575,000

1,085 sf

One bedroom, one bath, high ceilings throughout, south and west views, neutral paint colors, upgraded galley kitchen with granite countertops, stainless steel appliances, tile backsplash and tile floors, large dining room with hardwood floors, large window, spacious living room with hardwood floors, crown molding and Juliet balcony, bathroom has marble vanity, upgraded fixtures, tile floors and dual access doors that allow entrance from the bedroom and the dining room, bedroom has original hardwood floors, large window, washer/dryer in unit

Electri-City

While on the topic of the Center City District, next Wednesday night (12/17), the CCD is having a lighting ceremony on Broad St. The following buildings are being lit up in bursts of color:

TERRA BUILDING • NORTH AMERICAN BUILDING • 215 S. BROAD • THE BELLEVUE GARAGE • THE BELLEVUE • THE UNION LEAGUE OF PHILADELPHIA • LAND TITLE & TRUST BUILDING • 1401 WALNUT STREET • CHAMBERS-WILEY MEMORIAL PRESBYTERIAN CHURCH • 337 S. BROAD STREET • KIMMEL CENTER FOR THE PERFORMING ARTS • 123 SOUTH BROAD

The lighting kick-off ceremony will be held at 6:15pm at The Bellevue. Food and entertainment will be ongoing from 5:30pm to 7:30pm. Should be worth seeing!!

Center City District's Restaurant Week

I think that one of the best things that the Center City District does each year is host Restaurant Week. And the next one is coming up fast: Sunday, January 25th through Friday, January 30th. It's an awesome opportunity to try new restaurants that you normally wouldn't go to.

You get 3 courses for $35.

Here are two restaurants that are worth making reservations at: Alma de Cuba and El Vez. For a full list of restaurants visit http://www.centercityphila.org/life/RestaurantWeek.php.

El Vez

Alma de Cuba

Top 12 Reasons to Buy a Home During the Holidays

Wow! You'd think, from anecdotal evidence, that no one sells or buys a home during the holidays. Obviously, that's not the case; the housing market statistics show that homes do close during the months of December and January. Here are my top 12 reasons to buy a home this holiday season:

1. Uncertainty regarding loan programs and limits that may not be available in 2009 or after we have a new President in the White House.
2. Because there are less buyers shopping for a home at this time, you may be in a stronger negotiating position.
3. With fewer buyers on the market during the holidays, there may be less multiple offer situations, especially regarding REO properties and Short Sales.
4. The transaction load is lighter for lenders at this time, so your file may be handled quicker, more efficiently, and more accurately. This is true also for Title and Escrow.
5. It's nice to get a feel for a home when it's decorated for the holidays.
6. You may have more vacation or free time instead of having to ask off work to look at homes or complete paperwork, signings, etc.
7. You can show your visiting friends and family your prospective new home.
8. With fewer buyers on the market at this time, it may be easier to schedule inspections, etc., allowing you to shorten a contingency period in exchange for a more favorable price or lock in an interest rate on your loan.
9. You'll be enjoying your new home in the spring as opposed to waiting to move in.
10. January is typically the best time of the year to buy decorating items or home improvement items as the retail industry doesn't want a huge slump after the boom in holiday shopping.
11. If you have kids, they can transfer to their new school at the start of the new semester and avoid "getting behind".
12. What could be a better gift for the family than a NEW HOME FOR THE HOLIDAYS!

First Time Homebuyers Tax Credit

Over the summer a First Time Homebuyers Tax Credit was written into the Housing and Economic Recovery Act of 2008, but I don't think enough attention was paid to it. Now, with mortgage rates low and potentially going down another point, there has never been a better time to buy a first home. Here are the details:

What is it?
$7,500 tax credit for first time home buyers that works like an interest-free loan and must be repaid over a 15-year period

How does it work?
If you buy a primary home between 4/9/08 and 6/30/09, you may be eligible for a tax credit up to $7,500. If you were going to originally receive a $1,000 refund when you file your taxes in 2009, it will now be increased up to $8,500 as a qualified first time homebuyer. Starting the second tax year after your purchase, you have up to 15 years to repay the loan.

Who is eligible?
1. You must close between 4/9/08 and 6/30/09.
2. You must be a first time homebuyer or not have owned a home in the last three years.
3. You must be buying a primary residence; no investment of second homes allowed.
4. Your modified adjusted gross income must be below $150,000 or $75,000 for buyers that file taxes single.

U.S. Fed policy-makers' recent comments (from CNBC)

CNBC reports some interesting comments by Federal Reserve policy-makers. Click on the logo to read the story:

Philadelphia Fed President Charles Plosser confirms: The Fed will enter the bond market and buy up Fannie and Freddie bonds to lower interest rates.

Plosser also said the risk of deflation was 'overblown' and that the housing market should finally hit bottom in 2009 when unemployment reaches a peak above 7%.

Listing of the Week: Pier 5

Pier 5
$409,900
2,229 sf

Three bedroom, four bathroom tri-level home. The first floor has updated eat in kitchen with oak cabinetry, tiled center island, separate dining area, spacious living room with fireplace, built in shelving and storage cabinets, updated powder room. The second floor has a master bedroom with large walk in closet, updated master bath has white cabinetry, two sinks, whirlpool tub, second bedroom, updated full bath. The third floor has a third bedroom with large walk in closet, updated bath, roof deck. One car parking is included.