Straight to the dogs some might say !Â Chris and I talk about this 24/7. We live in aÂ Northern Liberties new construction condo right now, I rented in the Art Museum for years, and we moved from Old City
where we still own one of our old condos for investment purposes.Â So,
when I speak with our "opinion", I am doing so having much of our own
hard earned money invested in these areas of the city.Â Not to mention
we have experience as modestly successful Realtors.
The Center City Philadelphia condo market and some of the "fringe neighborhoods" such as Northern Liberties, parts of Fishtown, the Art Museum area, even Old City, that have an abundance of new construction condos and condo rehabs, are handcuffed by the mortgage industry.Â It looks like the only developer doing well is Bart Blatstein with Tower Investments.Â Â He is a genius because he builds posh apartment housing and then creates a village around them that will not only provide for their every need but create an attraction for the entire city (The Piazza is a great example).Â It is a brilliant business model and a generous city planner. (Bart Rocks !)
Developers and rehabbers cannot go any lower on their prices without being upside down on their loans. One opinion is that developers are defaulting on their loans is because the buyer pool for their 1-2 bedroom condos areÂ nonexistent. Well, maybe not completely nonexistent, but for the most part, the buyer pool is more like an evaporating puddle.
Who are the buyers for most of these beautiful condos ?Â They are you. They are typically young, first time buyers, with good credit, and a great job making decent pay but they typically do not have a lot of cash saved up.Â Their savings are perhaps 10-15% shy of qualifying for a mortgage for a new condo.
The buyers that are out there right now do not qualify for new condos.Â Many can only qualify for an FHA loan which rules out most of the condos out there in the city.Â (see Philadelphia Condos - Even if You Qualify, the Condo Building May Not) .Â That is why neighborhoods like Old Kensington, Fishtown and the Art Museum, as well as Pennsport and Graduate Hospital have been where many sales transactions are occurring.Â The condo buyers move to the closest neighborhood next to Center City and buy row homes there.Â As long as there is a demand for FHA friendly housing, the prices in those neighborhoods will not go down dramatically.
If the loan products do not become more user friendly, then sellers will have to either lower their price and suck up the loss, rent their home/condo until the market ripens, choose a short sale if they have proof of hardship, or throw the towel in and let the bank foreclose on the property.Â We are seeing all of the above in our Real Estate practice for Philadelphia condos.
As for condo pricing, it has come down, but perhaps not as much as it has in New Jersey,Â and certainly not as much as it has in other states. The Developers are holding on and renting as an option. The Marine Club is one example (there are many more) of a fabulous, large, Luxury condo conversion that has amped up on rentals rentals because it is unattainable for first time buyers that can only qualify for an FHA loan.
That is our opinion. At least that is one of them : )
WeÂ hope this info on PhiladelphiaÂ CondosÂ helpsÂ answer some of your questions.Â If you find the information informative and helpful, please subscribe to our blog !Â Is only a click away !Â If you are in our neck of the woods, please contact us via phone or email or ask about our new office location in Northern Liberties !
If interested in buying or sellingÂ a condoÂ in Philadelphia, contact Chris and Stephanie Somers at firstname.lastname@example.org or 215-400-2612 .Â You canÂ connect with us on Facebook and TwitterÂ .Â For investment properties, check out our new investor site at Philly Investor Hub and ask us about Philadelphia Foreclosures and Short Sales .
The Somers Team - Philadelphia Real EstateÂ - our main site
Areas of specialty include Northern Liberties, Old City, Center City, Fishtown, Graduate Hospital, Art Museum, Queen Village, Pennsport, Old Kensington, Port Richmond, Bridesburg, Society Hill, Loft District, Spring Garden and more !