THE STATE OF REAL ESTATE. You hear a lot about it these days — most of it bad. Sub-prime disasters. Spiraling prices. Stagnant sales. But take heart, Philly. Because there’s one thing you may not have heard, yet: that real estate, like politics, is local. And our industry insiders actually have good news for you about buying, selling, owning, borrowing, wheeling and dealing, in Philadelphia … and beyond. On the following pages, we address the most common perceptions out there about the region’s housing market, and present you with the truth about real estate, right here, right now — including the inside scoop on best-bet neighborhoods, a detailed look at local home prices, and (free!) real estate advice from the pros.
Plus: What your million bucks buys these days, how to sell your place faster than your neighbors sell theirs, and why you should ignore everything Katie Couric says about the housing market.
PERCEPTION 1.
The real estate market is just crappy right now — everywhere.
The Philly reality: It’s Bernanke-affirmed: The downturn in the American housing market has been huge. Home prices have dropped, sales of new homes have fallen, and there are more homes for sale than there are buyers — all classic indicators of a down market. And even, some economists think, of a recession.
But you, Philly, get a pass — at least in part. Metropolitan Philadelphia, historically a stable market, continues to fare far better than the rest of the country.
“Over the holidays, I traveled to Arizona and California,” says Allan Domb, president of Allan Domb Real Estate and king of the Center City condo scene. “In those local newspapers, I saw ads from realtors who showed 12 listings, eight of which were bank repos, foreclosures. And we’re not talking inexpensive prices; one was $977,000, in a beautiful area. You don’t open the paper here and see 66 percent of houses for sale as foreclosures. You just don’t.” Of course, realtors have a vested interest in painting a pretty market picture. But that doesn’t mean Domb’s insight isn’t on target.
Here’s why: First to feel the pinch in a down market tend to be the secondary and tertiary housing markets — a.k.a. vacation homes. (When interest rates shoot up, these are the first on the chopping block.) Greater Philly is a region of primary residences, with owners who live where they work and contribute to the local economy. That economy is based on industries that go beyond new construction and tourism (and into manufacturing, government, health, education, financial services). These are key factors in a stable market. So while “we’re definitely going to come away from this cycle bruised,” economist Ryan Sweet, of Moody’s Economy.com, notes, “we’re not going to have the black eye other markets have.”
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