Everything You Know About Philly Real Estate Is Wrong

According to the Prudential Fox & Roach HomExpert Market Report, even though average prices in Rittenhouse have dropped almost 10 percent since 2006, folks selling there in 2007 still got the highest median sale price in Center City (at $440,000, more than twice that of a decade ago), followed by Old City ($407,500), Washington Square ($360,000), Broad and Arch ($335,000) and Northern Liberties/Fishtown ($326,000). On the Main Line, Villanova led the pack at a $920,000 median selling price — even after an eight percent drop — ­followed by Gladwyne ($900,000), Merion Station ($537,000), Bryn Mawr ($532,000) and Bala Cynwyd ($471,500). No big surprise.

What it may mean to you: The Bryn Mawr 4BR/3BA colonial today: $600,000. Knowing it will hold its value 12 years from now: Priceless.


PERCEPTION 4.
Best hang onto your houses, Philly. You won’t sell ’em now.

The Philly reality: On average, Gillen says, houses for sale now are on the market about 67 days, nearly double what they would be in a balanced market. Thus, inventories in metropolitan Philly are very high, he says, and the number of homes actually selling is low.

“At this rate of turnover,” he says, “it would take approximately 10 to 12 months to burn off all the homes available for sale, and that’s if no homes are added to the current inventory, which they almost certainly will be once the spring selling season arrives. To call this a ‘buyer’s market’ would be an understatement.”

Nevertheless, the same market has created a sort of perfect storm — a pervasive fear of mortgages and interest rates after the sub-prime mess; stricter standards from lenders; people who have to wait longer to sell before they can then buy — that has buyers staying home, and houses withering on the vine.

A solution will work itself out, Gillen says, as sellers adjust to the idea that they can’t sell their homes for what they could in, say, 2005. “Sellers are beginning to give up a little,” he says, “and it’s slowly trending downwards, with asking prices dropping about $20,000 on average.” They will drop still lower, he says. (Depending on which economist you talk to, prices will go down between two to 12 percent more before we hit bottom.) Which hurts if you’re the seller — but for the market, it’s a good thing. “It helps us return to a balance, where houses sell more quickly,” Gillen says.

What it may mean to you: There are a few exceptions (we’ll get to those in a bit), but potential sellers should seriously consider not adding to the glut of houses for sale right now. Have to sell? Remember, as Domb says, that the market’s needs, not yours, dictate the value of your house. And polish, polish, polish, advises Smerconish: “I’ve staged more houses this year than I’ve done in a lifetime — packing furniture away, replacing Corian countertops with granite. It’s not that you don’t need that type of attention in strong markets, but now it’s essential.”