Philadelphia Real Estate Blog

Philadelphia has been graced with some wonderful, and some not so wonderful additions to their condominium inventory over the past five years. Some are selling quite well, and some- well, not so much.

I think that the popularity of a certain building has to do more with the buildings cache, or “je ne sais quoi” rather than the normal fluctuations that occur within a given real estate market at any given time.  By that I mean that some buildings are, and have sold well due to either the builder’s name, or hype that surrounds such buildings. The lack of such hype can be devastating. 

From ultra-contemporary to elegantly conservative, Philadelphians seem split on the style design of the condos they prefer.  We have seen some very high end Penthouse units sell in Old City lately, and the addition of the most modern building to hit town become erected at 13th and South Streets.

New construction is favored by many, due to Philadelphia’s tax abatement , and the stylish finishes found in many new high and mid rise Center City condo buildings. Even high-end condos can be found, bursting with amenities, in some low rise Brownstone conversions projects found scattered about town.

In a town that brought you Ben Franklin, and Betsy Ross, historic and pre-war condos do have their place. But for some, there is nothing like a new construction condo here in Center City Philadelphia.

Like New? Prefer Old? Let’s chat! 

Mark Wade
www.CenterCityCondos.com
Prudential Fox and Roach REALTORS®
530 Walnut St., Suite 260 Philadelphia, PA 19106

One of the most distressing real estate topics we hear in the news is the foreclosure rate.  Realty Trac, the California based company that tracks foreclosure information, just released the news that foreclosures rose 81% in 2008.  But to put this in the proper perspective, one needs to consider two things:
 
The total percentage of homes in foreclosure is 1.84%.  An 81% increase appears dramatic, but the fact is that this overall percentage rate is relatively small.

 
 
The majority of foreclosures are in areas of the country where real estate values rose at unsustainable rates and/or land available for development caused excess new construction.  These include the coastal areas of California and Florida, as well as Arizona and Las Vegas, Nevada.  One of the primary reasons that there has been steep price declines in these areas is because of the number of foreclosed properties on the market. 
 
The eight-county Philadelphia region placed 77th of 100 metro areas nationwide in the number of foreclosure filings recorded in 2008, not too bad.

If you are looking to find a great deal here in Center City Philadelphia, give me a call at 215.521.1523 or drop me an email at Mark@CenterCity.com.

Mark Wade
www.CenterCityCondos.com
Prudential Fox and Roach REALTORS®
530 Walnut St., Suite 260 Philadelphia, PA 19106

Many buyers who email me about Fitler Square condos in the 19103 zip code favor a quiet neighborhood, with easy access to the University of Pennsylvania, or I-676, or perhaps strolling distance to Rittenhouse Square. Though few condos exist in this part of downtown (Center City) Philadelphia, the attraction of being near the Schuylkill River and the recent addition of the jogging trail next to the river make the Fitler Square area a destination of choice for many Philly condo buyers.

Most notably, Locust Point condominiums has recently added condominium inventory to the neighborhood. 251 S. 24th St. is a boutique style loft condo building with parking, and a relatively small association. Additionally, one will find a smattering of low rise, Brownstone styled condos in the neighborhood– each offering a unique floor plan, layout, or character specific to the particular building. The introduction of some very high end Brownstone styled condos like 2025 Spruce St, and 251 S. 22nd have added a bit of cache to the appeal of this small, yet diverse collection of condominiums that make up (sometimes) rare offerings of Fitler Square.

The one interesting bit of info I can tell you about my experience selling, and sitting open houses in the Fitler Square area is that it seems EVERYONE who is looking for a condo here, is fairly set on finding something in the neighborhood. The #1 question out of their mouths is “What else is available here?”

Mark Wade
www.CenterCityCondos.com
Prudential Fox and Roach REALTORS®
530 Walnut St., Suite 260 Philadelphia, PA 19106

I am not a tax expert, nor do I pretend to be. In fact, the issues of a 1031 exchange kinda’ confuse me. However, I have been in MANY transactions where either the buyer or the seller have participated in such an exchange. The exchange is all done via paperwork, prior to, and at the settlement table. It does seem like a nice way to basically defer taxes due on the sale of a piece of real estate. If you are looking to sell and buy another piece of real estate in Philadelphia, or elsewhere, you might want to consider what a 1031 exchange can offer. Here is a little info on the topic, garnered from www.1031.org:

In a typical transaction, the property owner is taxed on any gain realized from the sale. However, through a Section 1031 Exchange, the tax on the gain is deferred until some future date.
For more information, please visit www.1031.org, and find out if a “1031 exchange” is right for you and your Philadelphia condominium!

Section 1031 of the Internal Revenue Code provides that no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business, or for investment. A tax-deferred exchange is a method by which a property owner trades one or more relinquished properties for one or more replacement properties of “like-kind”, while deferring the payment of federal income taxes and some state taxes on the transaction.

The theory behind Section 1031 is that when a property owner has reinvested the sale proceeds into another property, the economic gain has not been realized in a way that generates funds to pay any tax. In other words, the taxpayer’s investment is still the same, only the form has changed (e.g. vacant land exchanged for apartment building). Therefore, it would be unfair to force the taxpayer to pay tax on a “paper” gain.

The like-kind exchange under Section 1031 is tax-deferred, not tax-free. When the replacement property is ultimately sold (not as part of another exchange), the original deferred gain, plus any additional gain realized since the purchase of the replacement property, is subject to tax.

Q – What are the benefits of exchanging v. selling?

• A Section 1031 exchange is one of the few techniques available to postpone or potentially eliminate taxes due on the sale of qualifying properties.

• By deferring the tax, you have more money available to invest in another property. In effect, you receive an interest free loan from the federal government, in the amount you would have paid in taxes.

• Any gain from depreciation recapture is postponed.

• You can acquire and dispose of properties to reallocate your investment portfolio without paying tax on any gain.

Mark Wade
www.CenterCityCondos.com
Prudential Fox and Roach REALTORS®
530 Walnut St., Suite 260 Philadelphia, PA 19106