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June 2, 2014
When enthusiasm drips from a buyers mouth-
Every “Ohh” is worth $5,000
and every “Ahh” is worth $10,000
Location is always going to be a determining factor in price as well as long term value retention. But there are mitigating factors in the Center City condo market that are going to dilute the power of a strong location in driving prices over the long haul. That major factor would be interior condition and the visual impact of any given Center City condo. Here are a few factors that may help the power of a condo’s condition to play a huge role in determining value:
Disbursement Of Wealth- Twenty years ago, if you had $1,000,000 you bought on Rittenhouse Square-period. Today, we will find that every neighborhood has broken the $1M barrier. And it is getting much easier for buyers to find high end condo product in some locations that might have been unfathomable even five years ago.
First Time Buyers and Empty Nesters- Clearly the dominate driving forces in the Center City condo buying segment. AND what do they both have in common? They both want a strong interior condition as neither seem to favor the condos that need work. Trying to get either to buy a fixer upper is an uphill battle (generally speaking).
Everything is out the window when buyers fall in love- You would pretty much have to be new to this planet to not know that concept. I have found that most buyers buy with their eyes. More often than not, buyers will forego the strength of the location in order to buy the condos that really strike a visual chord.
In no way should this argument be a vote for a weaker location than perhaps what you have in mind. However over the long haul, you might be surprised to find just how important condition is to the overall value retention of your condominium here in Center City. Ugly is an 800 pound albatross that can and will drive down your value like no other condominium attribute- And it may not matter if you are sitting in the perfect location. To underestimate the value of strong interior and visual appeal would be to underestimate the overall value of any given
Center City condominium.
Tags: Center City condo, condos in Philadelphia, Philadelphia condos
May 5, 2014
I get asked a lot of questions about Center City condos. Tons actually.
I have no problem with questions. In fact I love questions-gives me the opportunity to be a big brain know-it-all. When I was a kid, my father called me a ham. I don’t think he was too far off. Whatever….here are some commonly asked questions asked by buyers and sellers and the most direct answers I can come up with- My answers are in RED –
1) What will my future taxes be?
I dunno’ – I can’t see into the future.
2) Should I get a Lawyer?
Sure- IF you get a real estate lawyer 🙂
3) Should I have an inspection?
Yes- Please please do.
4) What will this condo be worth in 10 years?
Crystal ball broken- check back later.
5) Do I have to attend settlement?
Usually not. But a buyer who is getting a mortgage may have to attend.
6) Can I move in (either myself or my stuff) prior to settlement?
Uh, no.
7) What are condo docs?
See the answer to question # 2 above.
9) Do I have to pay condo fees?
Yes. All condos have fees. All.
Tags: Center City condo, condos in Philadelphia, philly realtor
April 21, 2014
Let’s Look Closely At The Current
Rittenhouse Condo Market
# Condos For Sale in 19103 Under $300,000 = 13
# Condos For Sale in 19103 From $300k-$500k = 21
# Condos For Sale in 19103 From $600k + = 62
# Condos For Sale in 19103 That Include Parking (all price ranges) = 31
# Condos For Sale in 19103 Having 3 bedrooms = 13
# Condos For Sale in 19103 Currently Pending = 48
# Settled Condos in 19103 since 1/1/14 = 51
# Condos For Sale in 19103 That Are ON The Square = 25
*Information per TrendMLS as of 3/25/14
Tags: Center City condo, Philadelphia condo, rittenhouse sq condos
April 14, 2014
It can make you a big winner or a big loser…
When big money is flying around here and there, the door opens for many folks to get bitten by the A-Hole bug. Which make sense…emotions are running high, deadlines need to be met, etc. etc., and I have seen some folks get seriously burned by playing their cards at the wrong time in the wrong place.
I think you need to look seriously at a few circumstances that may surround your transaction to know the power or leverage you have to throw your weight around. To begin with, the first thing you should look at is
“substitute-ability” of the Philadelphia condo. If you are fishing in a big pond of buyers or sellers, then of course you can bounce from one to the other without much risk to your goal of buying or selling a condo. Want to buy a condo at Locust Point in the spring? Watch your P’s and Q’s and zip your lip. Ditto for say a two bedroom at the Hopkinson House. If you are buying, you need to put your best foot forward and tie it up with a pretty red ribbon because demand almost always outweighs supply in those instances. Playing hardball as a buyer in these circumstances probably isn’t going to play in your favor. Owner’s can feel free to play any cards they pretty much like under those circumstances.
Two Quick Examples:
I sold a Center City condo in early 2010 to a buyer who had a real F You attitude to me, the seller, and the man on the moon for that matter. I have a lot respect for this buyer, and I like him. But I knew early on that if he didn’t get his way, he was going to walk. He may have been trying to save a dime for the sake of a dollar, as this was an exceptional deal, but his hardball play worked for him. I represented the buyer in this case, so I gave him all the ammo I could find. With a little homework, I could easily deduce that a lowball offer was warranted (thank you google) then was accepted by the seller. Winning.
On the other hand, back in the early 1990’s, I had a seller who was a real pr*ck, and his hardball tactics seriously misfired. He got his price, but wanted to keep his prized
Westinghouse Washer and Dryer…that were like 12 years old. Buyers told him to keep his used basement appliances, and walked. Seller sold the property six months later, for $40,000 less. The proverbial $40k washer/dryer, if you will.
Are you going to be a big winner, or perhaps a big loser? I dunno. But if you are going to play the A*hole card, you better be willing to stick to your guns when the heat rises. I just hope I can give you solid, if not a hint conservative information so you can make your own decision. And if you are being a butt-head, be my guest.. Then we’ll see how the deal is going to go down 🙂
Tags: Center City condo, Center City Real Estate, Philadelphia condominiums
April 8, 2014
I hear a lot of talk about the up’s and down’s of today’s Center City condo market. And what most Realtors are witnessing is multiple offers, properties selling at or above asking price and a decreased “days on market” statistic.
For the majority of the Center City condo market, there are more buyers than available inventory and the shift in that relationship will give rise to actions that we see more of today than we would have even six months ago- such as multiple offer bidding. I just encountered three offers on the same condo in one day and that condo had sat idle for almost two months.
Also becoming common are full asking price offers or even over asking price offers. I think it makes sense (many buyers see the time as being right to snag a condo out of the clutches of others and are therefore willing to put their best foot forward). I am now telling my buyers that IF they see a condo they want- do not hesitate to go in quick and strong.
Because nothing is more painful than a bidding war. Good for sellers, not so much for buyers.
Lastly, Realtors I speak with also confirm that they are seeing a decrease in the “days on market” calculations. Many Center City condos are selling within days, even hours after being listed for sale. I know of one unit at the Philadelphian that was listed in the MLS in the AM, and under agreement about 4 hours later. Not common, but certainly not unheard of.
Tags: Center City condo, condos in Philadelphia, philadelphia
March 3, 2014
Think your condo board and management companies don’t play a role in your value retention?
Center City condominium buildings are like a business and should be run as such. From maintenance to condo association policy, seems many folks have a hand in the determination of your resale value. Value within any given building is a moving target, and if I were King of the World, I would suggest that any association would want to evaluate their policies considering:
1) Pets- A hot button item. Buildings are often overlooked by potential buyers based upon the buildings’ pet policies. Buyers often request a pet- friendly building, but never have I had a buyer express to me that a pet-free building is on their wish list. Associations may want to limit pets based upon breed, size and allow such freedoms to only the owner occupants and not tenants.
2) Common Area Presentation – The death knell for many buildings in town in terms of value retention. Often, buyers refuse to walk into a Philadelphia condo unit after being walked through the common building foyer and through the halls. Some hallways smell- and haven’t been painted or had any new lighting in 20 years. I would have to suggest you rid your association of anyone who could be responsible for such lack of attention. The cost is SO MINIMAL to improve common area elements that it really makes no sense not to keep your common areas in tip top shape. This is where the “Investment Multiplier” comes into effect- for every dollar you put in, you get two back. Simple math here folks.
3) Transparent and Open Communications – There is a reason why Society Hill Tower, Hopkinson House, and The Washington Square West Condos at 12xx South St. are known to be very well run. I would suggest it has to do with the accessibility and transparency of the condo associations and or management companies. From condo docs, to board minutes – THINGS BUYERS WANT TO KNOW- Are but a click away on but a handful of condo sites. The surreptitious and somewhat mysterious ways that associations fail to hold out the information to scrutiny can be a serious concern for many buyers. And making a buyer wait up to 4 weeks to get condo docs – REALLY? That is a great way to piss off a new buyer and possibly a new member of the condo association.
4) Rentals- It is fairly standard for a building to allow a certain percentage of the condominiums in the association to be rented out. But having NO policy which addresses rentals can be a real disaster. Fannie Mae has rules about owner-occupancy ratios. A lack of adherence to those rules can lead to the need for buyers to put more money down AND pay a higher interest rate.
Which of course can reduce demand for your building, raise inventory levels, and ultimately lower your values. Ain’t no rocket science involved in that equation….
Below is a fantastic site with some great information. If you are a board member of an association here in town, you might want to bookmark this website:
Tags: Center City Real Estate, Philadelphia condo, Philadelphia condos
February 24, 2014
The old adage “Buyers Are Liars” is repeated often in many Real Estate circles. I think the line is a crock of sh*t….The line should be “Realtors don’t spend the time to get to know their Buyers.”
And there you have it….
The key to selling condos in Philadelphia. Find out as soon as possible what trigger is going to make any given condo work for a given buyer. Oh, and make sure you know everything about almost every condo in town and be able to discuss that condo at length, at the drop of a hat.
Here is a list of things that I find buyers really key into when shopping for a condo here in town:
1) Walkability
2) A Side of parking
3) Proximity to a given Point Of Interest
4) Areas in which they already are familiar
5) Curb Appeal / Interior Condition
Which one of those blows the others out of the water?
That would be # 5…
I hear it all the time- “I want this area”, “I must have parking”, or I want to be able to walk around town”. But many of those MUST HAVES fly out the window the minute the majority of buyers walk into a Philadelphia condo and fall in love with what they are seeing…usually quite a different story than what originally comes out of their mouths. NOTHING wrong with knowing what you like….I too am very visual.
Gone is the need for a study, or a 2nd bedroom, that large kitchen buyers have always wanted. Visually stunning condos here in Center City Philly are always in demand- regardless of most market conditions. Believe you me….and NEVER underestimate the fact –
IF IT SHOWS WELL, IT WILL SELL WELL
Tags: Center City condo, Center City Real Estate, Philadelphia condos
February 10, 2014
…and floor height isn’t the only factor affecting values within the same buildings.
Probably the most overlooked effect on value to high rise condominium is the view that any particular piece of Philadelphia Real Estate has to offer. And not all views are created equal. Let compare and contrast a few different scenarios. All are based on my opinion, as a fairly seasoned Realtor who specializes in condo sales I have learned a great deal about the effect on value that particular views may or may not have, and any given buyer’s perception of how that view might affect their desire to purchase.
1) It is possible for a posh condo to nearly double in value if it has a highly coveted view. Think Central Park.
2) In some buildings, the highest values have been posted not only on the highest floors, but also on what we call “treetop” view. A very nice view of the treetops, say on the 5Th floor of a high rise condo can be very appealing to a number of buyers
3) A condo on a high Floor does not always warrant a higher sales price. IS there a benefit to looking directly into a neighboring high rise condo building- from the 27Th vs the 8Th floor?
4) I personally have found few buyers to discriminate between an East vs West view. However, a number of condo values are greatly affected by a North Vs South view.
5) Not all views from the 16Th floor of various buildings are the same. Think about ceiling height, and windows that run floor to ceiling. The building itself can manipulate either the view, or the feeling that the view offers, and this in turn will affect resale value and overall appeal.
At times, the need for a good view can be bypassed if a condominium has great light. There are many Rittenhouse Square condos that offer tremendous natural light, be it north or south, east or west, that don’t necessarily have great visuals. I find a lot of buyers will fore-go a great view if the natural light is strong. Conversely, I find that a great view will not overcome the weakness of a dark condominium. I would suggest that natural light is a stronger motivator than a great view- at least in terms of resale ability.
So know that it has been my experience that view does indeed affect resale price and the time it may take to sell any given Philadelphia condominium. Though direct “park views” are the most desirable, there are compensating factors, and issues that can compensate for a lovely tree lined view of say, Washington Square. One needs to consider the window size, ceiling height, amount of natural light, and of course floor height. All factors should be considered when determining the resale ability of any given Philadelphia condo.
Mark Wade
www.CenterCityCondos.com
Berkshire Hathaway Home Services Fox and Roach Realtors
530 Walnut St. #260 Philadelphia, PA 19106
Tags: Center City condo, condominiums, condos in Philadelphia, condos philadelphia
January 13, 2014
Some Philly Condos Appreciate and some Depreciate Like people in a swimming pool, some float, and some sink. The question is why.
Obvious factors are the showing ability and emotional impact that a particular condo unit does or does not possess: cleanliness, natural light, wall color, furniture, even the smell of a condo can add or subtract from the emotional beauty, and leads to a huge impact on a condos value. In my twenty years of selling real estate, I have never had a buyer tell me to find him the dirtiest, or the worst decorated condo available. Easily, as much a ten percent difference in value depending upon showing ability. And of course interior condition can also have a major impact on value. Beige bathtubs and appliances can crimp value fairly quickly in a lot of cases.
In addition, the physical characteristics of any given unit can help or hurt the units value (think- huge closets, a tax abatement, high ceilings,etc). Styles, like appliances and carpeting have a tendency to age, and that is usually accompanied by a slower rate of appreciation. Clearly, more recently rehabbed, say, Rittenhouse Square condos are going to retain their value better than a unit in a state of disrepair or decline in its finishes. Also prohibitive condominium association rules and policies can deter many buyers from specific buildings. A host of factors can cause units to sit on the market longer than normal, and almost always guaranteeing a lessened resale value.
Location is also a huge factor to the rate of either appreciation or depreciation. Stronger locations in town have a tendency to be a bit more elastic- they are the first neighborhoods to see a drop in inventory with any influx of buyers to the market. That’s a good thing. Recall the principles of supply and demand. I would argue that a strong location is going to depreciate less -because IF in a weakened marketplace, the first condos to remain unsold are in the weaker locations. (The flip side is that you might be able to strike a significantly improved deal, should you be looking away from an “A” location.)
I am just brushing the surface here, but know that not all Center City condos in town will appreciate or depreciate at the same rate. Or sell within the same given time frame. The best tools you have to insure your value remains intact is twofold:
1) Buy it at the right price in the first place and/or
2) Keep your unit looking like it just jumped off the pages of Town and Country Magazine.
Easier said than done, I am aware!
Mark Wade
www.CenterCityCondos.com
Berkshire Hathaway Fox and Roach REALTORS®
530 Walnut St., Suite 260 Philadelphia, PA 19106
Tags: Center City condo, condos in Philadelphia, Philadelphia condos
January 6, 2014
I have been selling real estate in exclusively in downtown Philadelphia for twenty-five years. I have done some stupid things in my career, and I have witnessed many buyers and sellers making equally stupid moves. I often see buyers and sellers either pinching a dime for a dollar, or just doing some absurd moves that are much more trouble than the expected payoff. And I am sure this is not limited to just Center City buyers…I have no doubt the scenarios play out in every real estate community:
Scenario 1: Having the Last Word
Seller asks $499k for a condo
Buyer and Seller go back and forth, and after a few days, buyer say $480,000 is my “Highest and Best” offer for this parcel. And then seller comes back and says $480,001. Really? You really want to be a douche bag and say that? You are pissing the buyer off, and it will probably cost you much much more in terms of anxiety, anguish, and animosity within the transaction as you are locked into a legally binding contract with this buyer for say the next 60-90 days. Perhaps you should just zip your lip and take the freakin’ $480k instead of having to have the last word. Don’t forget, buyers still have to perform a home inspection.
Scenario 2: Can’t See the Forest For the Trees
Seller asks $499k for a condo
This Philadelphia condo is a bank-owned sty that should be selling for $800k if it weren’t so dirty, missing all the appliances, and listed with Susy Bag O’ Donuts out of Erie, Pa. (it happens…bank foreclosures are often listed by those with no connection to the area). And as a buyer, you get the Big-Brain idea to come in at $400k…because after all, the market is slow, weak, and uncertain. OK….you are an idiot. If you can’t recognize such an overtly strong bargain, and see that the huge upside is the fact that the condo is grossly underpriced at $499k….then maybe you need to do a little more homework on prices and values here in Center City.
Scenario 3: Why Aren’t you Using a Magic Wand?
Sellers asks $499k for a condo
As a buyer, you top out at $480,000 and the seller will still not accept your offer. And recent “comps” suggest the seller is correct as no other unit in the building has sold for under $500k. You then turn to your Realtor and complain that you can’t get the property for $480k. And you are relentless. Even in the face of the facts. But you persist. You dump your Realtor because he or she refuses to wave their magic wand and make this deal happen. You then drive down the road, and see your Realtor Singing and Dancing in the middle of the intersection of Broad and Walnut.
No one likes a whiner. Not even in a “slow, weak, and uncertain” market place. There are bargains to be had and deals to be made. Opportunity exists in all market conditions, and the current state of affairs in Center City- which has weathered the overall real estate storm fairly well- should indeed be taken into account when negotiating the purchase or sale of any parcel in Philadelphia. But knowing when you have crossed the line and driven right into Crazy Town Pa. might be helpful when finding the right piece of Center City real estate. And help you negotiate the best possible, realistic terms.
Mark Wade CenterCityCondos.com
I welcome feedback!
Tags: Center City condo, Center City Real Estate, condominiums, condos in Philadelphia
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