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Surviving 2009 in NW Philadelphia Real Estate

January 1, 2010

   

Unfinished development project destroyed by lightening

Unfinished development project destroyed by lightening

 The NW Philadelphia  real estate market remained relatively stable inspite of the 2009 recession.  Real damage resulting from the boom market excesses of previous years, while painful, has been limited.  But we have not been spared changes resulting from a global financial crisis.

 NW Philadelphia, like the rest of the country, has been changed by the behavior of the big banks, by Fannie and Freddie, and by HUD. For an overview of the decade, and how we got to the 2009 real estate market, Boom and Bust: A Decade of Misadventures in Real Estate – Developments – WSJ offers a collection prescient articles.  

We will remember 2009 as the year when the ‘too big to fail’  banks got bailed out, and became bigger; when new regulations were implemented to stop past abuses, and created new problems;  when the Fed tried to prop up home sales with a Tax Credit, and qualifying for financing became more difficult. Meanwhile  new opportunities became available for those who were looking out for them.  

Housing Counseling for Distressed Home Owners

City of Philadelphia Advertises Housing Counseling Services

To end the year, here are my Top 10 Trends in NW Philadelphia Real Estate in 2009:   

  1. Prices in NW Philadelphia fell overall to 8-12% below the high of mid-2007 making homes more affordable, but not drastically depreciated.
  2. Interest rates stayed at all time lows making refinancing and 1st time home buying attractive, if not always attainable.
  3. An $8000 Tax Credit created a min-boom in residential home sales, in the $100,000 to $400,000 price range, in November.
  4. Quality renovations in selected neighborhoods sold at a premium, providing incentives for well-funded, quality developers.
  5. New appraisal rules were adopted preventing mortgage originators from directly hiring or communicating with the appraisers for the properties they were financing. Appraisals became unpredictable, sometimes arbitrary, leading to re-negotiation or the termination of many home sale.
  6. Private mortgage insurance became unavailable, restricting loan options to government insured FHA loans with 3 ½ % down payment, or conventional loans with 20 % down payment.
  7. Condo sales slowed, and ‘spot’ FHA approvals for condominiums became unavailable, leaving only conventional loans for most condo financing.
  8. Act 91 offered help to home owners facing foreclosure negotiate loan modifications or sell properties with short payoffs, while the lenders stalled and made the process daunting.
  9. Financing for commercial properties became more and more difficult to get for most borrowers, foreshadowing problems in the future.
  10. Stimulus programs, and grants were a bright spot, bring  funds to the area for projects including renovating train stations and up-grading business facades to the area a more attractive and better place to live.

    Mt Airy USA Germantown Ave Facade Upgrade

    Able Plumbing Gets a New Look

Looking back, the year was full of changes both challenging and frustrating. Many people couldn’t do what they wanted to do, whether it was to buy, sell or refinance. At the same time the overall impact of recession has been much less in NW Philadelphia than elsewhere, and there were new opportunities for the making the area a more desirable place to work and live.

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3 Comments leave one →
  1. January 1, 2010 7:00 pm

    Nice site. Theres some good information on here. Ill be checking back regularly.

  2. January 11, 2010 1:37 am

    Keep up the superb exercise. Look forward to studying more from you in the future.

  3. January 12, 2010 11:26 am

    Thank you for posting this real estate trends update in NW Philadelphia. This is a great resource!

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