Real Estate 2005: Where to Buy Now
As the frenzy abates (a bit) and the interest rates stay low (for now), buyers are facing friendly conditions indeed. But while the end of the runaway market means fewer bidding wars and a little less competition, it also means it’s time to hunt for an investment with staying power. Here’s where to get in while you still can, whether you’re looking for your first home, expanding with kids, retiring, or ready to finally splurge on the weekend getaway.
THE STARTER HOME
It’s not Manayunk — at least, not yet. But in the past two years, East Falls has been getting all the riverfront buzz, from new restaurants (Verge) to a new, upscale fitness center (East Falls Fitness) to houses that are being swept up by new homeowners at a Center City-rapid clip. Right off Kelly Drive, the neighborhood is ideally central: 15 minutes from Center City, two minutes from Manayunk, a few miles to the Schuylkill. Of course, the main drag, Midvale Avenue, isn’t quite as happening as its gentrified neighbor, or even Northern Liberties. But that’s a good thing, if you’re looking to buy: Three-bedroom starter homes here sold for under $200,000 a year ago; now they’ve gone up to a still affordable $225,000, with some screaming deals mixed in — if you’re willing to do some work. One recent transplant paid $190,000 last year for her 1,800-square-foot fixer-upper off Midvale Avenue — and got four bedrooms, a porch and a backyard. Having renovated it, she’s putting it up for sale for $299,000 — and buying something else down the block.
Drexel Park Gardens
Realtor Maureen Ingelsby describes the Drexel Hill subdivision in Delaware County as "the best bang for the buck" for new homeowners. And she should know: Three of her own children bought their first homes in this 70-year-old community, in the shadow of Drexel Park’s mini-manses. Connected city-style, the two-story rowhomes (now known as "townhouses") are either 16 feet or 18 feet wide, and average $125,000 to $145,000 (though you can find some needing work for as low as $95,000). The winding subdivision has more than 2,500 homes, most with small yards and garages, some of which have been converted into family-room extensions. A few minutes’ drive from City Avenue, the friendly community of young families and old-timers offers an easy 20-minute commute to Center City and the western suburbs. The county provides some of the region’s best assistance for first-time homebuyers, and while property taxes have remained reasonable, Ingelsby says, the houses have consistently risen in value: "A lot of people use these as stepping stones."
Graduate Hospital South
After months of searching all over the city, Monica Wyatt and John Hinchman knew they’d found their perfect first home the moment they walked into a Madison Square rowhouse last fall. Between 22nd and 23rd just below Catharine, it had three bedrooms and a lovely garden where their one-year-old daughter could play. It was west of Broad, but north of Christian — their self-imposed geographic limits. It was within walking distance to Center City, and their jobs. And it was a fixer–upper, so they paid only $200,000. "Our favorite hobby is fixing up our house," says Wyatt. "And we were on a budget. So this was ideal." Though still sketchy in parts, the neighborhood south of Graduate Hospital has become a certifiable hot spot for young urban homebuyers who want easy access to Rittenhouse Square and the Schuylkill Expressway and can’t afford exorbitant condo fees. The houses vary — some -century-old three-story rowhomes, some smaller new townhomes — and can still be had for under $250,000, -often with tax abatements included, says Jill Rizen, of Coldwell Banker Preferred, who’s been selling in the area for three years. And with the rate of gentrification, Rizen predicts, home prices have nowhere to go but up: "All these people will make money in three to five years, when they’re ready to move on."
Buyer Tip: A double-loan trick
With low interest rates comes an influx of first-time buyers with nowhere near the 20 percent down payment that circumvents lender requirements for private mortgage insurance (PMI). While many buyers pay a penalty for that — in the form of monthly PMI payments — mortgage brokers are increasingly offering a way around the extra cost: an "80/10/10" split. Instead of one loan on which you pay PMI, your broker arranges two separate home loans. If you bought a $100,000 home with 10 percent down, one loan would be for $80,000 (80 percent) and another for $10,000 (10 percent). Because of how the loans are structured, PMI doesn’t come into play. The second loan does have a higher interest rate, but monthly payments of the two loans combined should still be less than you’d pay with PMI on top of one larger loan.
Expanding With Kids
It’s almost in Collingswood, except it’s in Haddon Township, which means two things: better schools, and liquor stores. Otherwise, this up-and-coming Camden County town has pretty much all the comforts of its cute and more expensive neighbors (Haddonfield is also minutes away): tree-lined streets, 80- and 90-year-old houses, and a PATCO station that renders Center City less than 20 minutes away. Realtor Mark Weller, of Main Street Realty in Collingswood, is himself a Westmont resident, and says he’s seeing more afoot in the town these days: A yoga studio just opened on Haddon Avenue, and so did the chic new restaurant Cork. "Right now, the foot traffic seems to end around Cuthbert," Weller says. "But that’s changing fast." Don’t move to Westmont for hip amenities, though: Do so for Thomas Edison Elementary, where French lessons start in first grade.
When Kathy Donaher gave birth to her third child in four years, she looked all over the Main Line and Drexel Hill for a new house. But though she and her husband considered Rosemont, they decided they didn’t want their kids to be "the only ones in hand-me-downs." In down-to-earthier Havertown, the test scores are better than in many tonier suburbs (Chatham Park Elementary is one of Delco’s best), but "people don’t make ‘play dates,’ they don’t care what kind of stroller you’re walking, and the kids don’t get Hummers on their 16th birthdays," Donaher says. If family values are important in Havertown, people also love the fact that the place allows couples to be couples. Not only can the Donahers walk to Brookline Boulevard’s budding restaurant row (you’ve heard of Carmine’s Creole Cafe, but the Boulevard Bar and Grill and Sampan Inn also get raves); they can walk to the speed line that connects to the -Market-Frankford El. Like the Donahers’ nearly 100-year-old Dutch Colonial, much of the housing stock here is venerable — and some is still available in the low 200s, says realtor and Havertown lifer Graham Wagner. "People really want the 75- and 80-year-old houses these days," he says. "There aren’t a lot of deals, but it’s still affordable."
East Mount Airy
Realtor Marilou Buffum, a 35-year resident of East Mount Airy, sees a new stroller every time she looks out her window — quite a change, she says, from just a couple of years ago, when people were "more interested in West Mount Airy, because it’s closer to the park and there are bigger houses." While East Mount Airy is now on the move, it’s not too pricey — yet. Buffum is still finding townhomes near the main Germantown Avenue commercial corridor in the low ones. Commercially, the Avenue in Mount Airy isn’t quite Chestnut Hill-ified yet, but the past five years have seen the opening of half a dozen new restaurants, an arts-and-crafts shop, and a $3 million gym with an indoor pool — all the work of locals who’ve lived in Mount Airy for years. While the area’s public schools aren’t perfect, there’s hope: Test scores at most of the neighborhood’s public elementary schools have risen significantly over the past few years, a trend that could very well continue — especially if more of Buffum’s clients commit to going public. "Some of them are very involved," she says. "But most have traditionally chosen either parochial or private."
The Second Home
If you’re looking for a taste of country living, the townships of Solebury, -Nockamixon and Tinicum should be on your radar; properties there are enjoying the echo-boom of way-hot Lambertville and New Hope. "There are so many quaint towns," says Mark Caola, of Keller Williams Preferred Real Estate. "You’re close to New York, the Delaware River area, restaurants, shopping. It’s not remote."
In Solebury, some houses have sold with as many as 50 acres of land, and there are prime properties to be found in nearby Ottsville, where a completely renovated 100-year-old Victorian farmhouse on 10 acres was recently listed at just below $900,000. Crossing the Delaware could also be worthwhile for Garden Staters, who’ll find Pennsylvania’s property taxes anywhere from 15 to 20 percent lower than those in their home state.
Bargains get bigger the farther you’re willing to drive. "People are moving north from New Hope to get more land for their money," says Robert Hunt, of Kurfiss Real Estate. Up near Easton, in the Williams Township area, the equivalent of a $1.8 million buy in Solebury will set you back only half that, and you can find listings under $500,000 (like a three-bedroom farmhouse on a secluded, semi-wooded acre for less than $200,000). Some towns there, such as Riegelsville, are low on convenience (no malls, and no Starbucks every five feet, which could be a good thing) but great for acreage. Just don’t build new — taxes aren’t reassessed when old homes change hands, so while the guy next door is facing a $12,000 annual tax hit to build his faux 18th-century farmhouse, your fixer–upper will run you less than a quarter of that.
"Off-Island" at the Shore
To give you an idea of just how jaw-droppingly insane Shore real estate has become, consider one of Wildwood’s newest arrivals — a high-rise condo with units starting at $449,000, not with an ocean view or a bayside dock, but overlooking the Wawa at the foot of the Rio Grande bridge. Ten years ago, that would have been a laughable location to develop, but today, what’s hot is what’s left over, and anything south of Exit 38 on the Parkway is solid gold.
As the oceanfront lots overflow and the old standbys get more and more crowded, towns like Cape May Courthouse and Mayville are no longer the hinterlands; they’re an option — especially if you’re willing to live in a suburban environment that’s like more like -Deptford-by-the-Sea than Sea Isle. "It’s even getting hard to find property off-island for under $200,000," says Audrey Porter, of Century 21 Alliance in Stone Harbor. And just because you’re removed from the crowds and the beach doesn’t mean you’re downscale — one five–bedroom manse in Egg Harbor Township is listed at just shy of $5 million. Louis and Helen Rosato of Overbrook spent summers in Avalon and Stone Harbor as kids, but bought a house in -Mayville three years ago. "Back then, you might as well be in Vineland if you’re not on the island," Helen says. "In Mayville, you’re not on top of each other, there isn’t the summertime hustle and bustle, but we can go to it when we want to. We’re five minutes from Stone Harbor and North Wildwood. We couldn’t be happier."
If you need to breathe that salt air, look to less popular beaches like Brigantine, where you can find an oceanfront four-bedroom for $3.5 million. Then there’s the bay, long overshadowed by the glamour of the ocean but now considered prime real estate. Take the Villas, a sleepy year-round bayside burg where horseshoe crabs once outnumbered residents. Given its tranquility and proximity to Wildwood and Cape May, waterfront cottages are being leveled and replaced with compounds straight out of Avalon, and some properties on the water are approaching $1 million.
Forget the jokes, and images of heart-shaped whirlpools: Buyers are high on the mountains. "I’m seeing a huge rush in the Poconos," says John Menno, of Prudential Fox & Roach. Pocono housing developments carry price tags that can rival those of Main Line spreads, and they feel more like neighborhoods in the ‘burbs than ski lodges. At Lake Naomi, in Monroe County, half a million dollars can put you on a lake, with three bedrooms; you’ll pay a $3,000 initiation fee, and yearly dues to cover use of the pools, tennis courts, and a nine-hole course at nearby Timber Trails. (For summertime visits, there are seven beaches — with sand!) Buyers with a renovation jones should comb through Mount Pocono, where prices range from five figures to $300,000 and many of the homes are ripe for renovation or replacement.
Or perhaps your fantasy mountain villa lies farther north, in Pike County — specifically, the Lake Wallenpaupack region, a two-and-a-half-hour drive from Philly and perfect for year-round use, with both winter slopes and summertime water sports. If you’re looking to build the log cabin of your dreams, lakefront lots in under-development Nemanie Village are available and can run up to $1 million. Now is the time to buy here, as taxes are stable and growth hasn’t exploded. (With a third of Pike County covered by state forest, overcrowding won’t be a problem.) "But values are starting to increase," says John Menno. "Word is getting out."
Buyer Tip: Inside the Schools
If you’re looking for more insight into schools than standard test scores give — and want to find out which direction a school seems to be heading — visit Greatschools.net, which has school reviews posted by parents. Particularly in trendier areas, test scores can leap very quickly; at Arthur Chester Elementary in Philadelphia’s Graduate Hospital area, for instance, 57 percent of students tested in 2004 met or exceeded math proficiency tests, up from 24 percent in ’03. In Pennsylvania, you can also find demographic information and attendance rates at paprofiles.org.
The Retirement Home
Centennial Mill, Voorhees
Although retirees have been flocking to Black Horse Pike towns like Barrington, Bellmawr, Lawnside and Mount Ephraim for their inexpensive, sturdy housing stock, South Jersey has had few communities built expressly for older residents. That changed two years back, when Del Webb, a national developer of retirement communities, opened Centennial Mill near the Ritz 16 in Voorhees. Del Webb is best known for Sun City, in Arizona, and although Centennial Mill’s "active adult" residents tend to come from neighboring towns, they’re living a life inspired by the snowbird paradise. The builder imported a number of Arizona house types, featuring large windows and open floor plans, in addition to some new colonial-style designs more sensitive to the neighborhood. They range in price from $245,000 for townhomes to $600,000 for fully loaded 3,000-square-foot houses. The gated community for the 55-and-over crowd has outdoor and indoor pools, two clubhouses, and an activities coordinator who oversees a wide-ranging leisure menu. There’s a French club, a bake club, trips to Atlantic City, and, in Centennial Mill’s park, a summer "Rockin’ Oldies Show" that includes Sinatra and Elvis impersonators.
Philadelphia’s downtown boom may have been propelled by young singles, but it’s being maintained by older, kid-free couples. Empty nesters prizing walkability and mass transit plus easy access to cultural attractions are streaming into the condos that ring Rittenhouse Square, including new office-building conversions like 1920 Chestnut Street and Allan Domb’s Lanesborough (in the old Jewish Federation headquarters at 16th and Locust). And developers keep on announcing more on the condo front. The latest will rise from the ashes of social clubs past: 10 Rittenhouse, a Walnut Street tower designed by architect Robert A.M. Stern, will include the facade of the Rittenhouse Club; 17 apartments are planned for the Locust Club’s empty shell. Despite growing numbers of older residents, these buildings aren’t by any means retirement communities; the range of services varies widely. (10 Rittenhouse, with its hotel infrastructure and offerings of housekeeping and a car service, is perhaps the most extensive.) "People do not want to do senior activities, and they don’t want to be around all elderly people," Domb says of his retirement-age clients looking in the city. "Some of them tell me city life keeps them young."
The Corinthian, Bala Cynwyd
Developer J. Brian O’Neill’s Corinthian, off City Avenue in Bala Cynwyd, brags of being the first new-construction condominium on the Main Line in 18 years. The building, with 108 units, is a mass of brick with Second Empire details, on a secluded driveway that points the structure away from neighboring office plazas. The first apartments, from one-bedrooms selling for $484,900 to penthouses for $2 million, won’t be ready for move-in until January 2006, but about a fifth of them have already been sold. Agent Joey Sheehan has sold several to older clients who want to stay in the area where they raised their kids. "They’re still active and don’t want to go to retirement places, but they want to get something smaller than their Main Line mansions," she says. "They welcome the one-story living these condo flats afford." Designed with older residents in mind (but not exclusively for them), the Corinthian offers a list of concierge services that includes bill payment, a "delivery greeter" and, should mature minds skip a beat, a "reminder service."
Buyer Tip: Happy Returns
When it comes to senior-friendly houses — single-floor dwellings such as ranchers — the Philadelphia market, with its stock of multi-story family houses, is woefully underserved, say real estate agents. Suburban growth restrictions make it difficult for developers to keep up with an increasing demand: One recent study predicts Philadelphia will be among the top 10 markets for boomers buying retirement homes (along with such elderly meccas as Phoenix, West Palm Beach and Sarasota). That, however, doesn’t mean retirement-specific homes are necessarily safe bets if the housing bubble bursts. "The more standard the house, the less vulnerable to cycles," Wharton real estate prof Susan Wachter cautions, which means durable house types might weather a storm better. — Sasha Issenberg
Buyer Tip: Just Add Airfare-What’s prime a little further afield, and who you might see there (from here)
Palm Beach. Buff up those nails — or your crocodile loafers — and be prepared to bump into your Main Line neighbors. Polo and equestrian aficionados are heading west to Palm Beach’s Wellington area. If you’re not packing at least $4 million for a mini-estate, look in downtown Palm Beach proper, where $400,000 will score you a palm-tree-flanked stucco two-bedroom.
Realtor: Toni Lee of Mary Overall Real Estate; 561-301-6234.
In residence: Jones Apparel Group’s Sidney Kimmel; tree-trim honcho Christopher B. Asplundh; Ray (Belmont Industries chair) and Ruth Perelman; Carol and Jay (Park America prez) Weitzman; Rena Rowan Damone (former executive VP of Jones New York) and singer Vic Damone.
Aspen. Sales of $1.6 billion last year set an all-time high for this ski-centric community, but unlike in rival Vail, there’s practically no space for new construction. What’s selling are pre-existing homes, with newer models running $1,000 a square foot and up. Long-term land appreciation rates are high, so for the best deals, look for a tear-down you can rent out for a few years before building your dream home.
Realtor: Robert Ritchie of Coates, Reid & Waldron; 970-920-0565.
In residence: Businessman Dick Butera; SEI Investments chair Alfred P. West Jr.; Dollar Express’s Bernie and Joan Spain; attorney Mark Mendel; car king Robert and Lexie Potamkin.
Nantucket. If you’re thinking of renting on this 14-mile island, you’re probably too late for this summer. And with sales up 29 percent from 2003, every property here is a hot one. (The average home sold for $1.67 million last year.) Buyers face a two percent land-bank fee, which goes toward the purchase and maintenance of open land, so there’s little chance of this Cape Cod escape becoming Wildwood North.
Realtor: Mary-Beth Gibson of Congdon & Coleman Real Estate; 508-325-5000.
In residence: Businessman Sonny and Miriam Mandell; Crossing Vineyards’ Tom and Chris Carol; real estate bigwig Marc Rubenstein.
Contributors: Sasha Issenberg, Roxanne Patel, Richard Rys, Maureen Tkacik