By Alan J. Heavens
Inquirer Real Estate Writer
Philadelphia-area housing prices have a small risk of being lower in two years, according to a study by the PMI Mortgage Insurance Co.
Using second-quarter data from the Office of Federal Housing Oversight, the Walnut Creek, Calif., company said Wednesday that the eight-county region has only a 2.1 percent chance of lower prices two years from now.
By comparison, the Fort Lauderdale, Fla., area has the greatest chance of further price drops of the 50 largest metro areas - 99.5 percent.
The 16 metro areas with the greatest chance of continued falling prices are in California, Florida, Arizona and Nevada, all of which experienced major increases in housing prices during the housing boom.
PMI chief economist David Berson said increases in foreclosures and unemployment had significantly heightened the risk of future home-price declines in these areas.
As a further indicator of how the region is faring, July data from Radar Logic Inc., a New York firm that tracks real estate transactions, showed that the Philadelphia region's year-over-year price decline was just 3.2 percent from July 2007 - another indication that, in the words of Philadelphia economist Kevin Gillen, "the downturn here is very mild compared to many other U.S. cities."
Radar Logic chief executive officer Michael Federer said, "What we are seeing now is a situation in which the [foreclosure process] is driving prices down in markets with relatively high concentrations" of distressed properties.
Various statistical measures show that housing prices in the eight-county Philadelphia area have declined just under 4 percent since what Gillen says was the region's peak: the 2007 second quarter.
City single-family home prices have fallen 6.6 percent since the peak, he said. Gillen's figures do not include Center City condo sales.
Prices in the suburban market have dropped 4.3 percent since the second quarter of 2007, Gillen said.
Intervention efforts by the city, Pennsylvania and New Jersey have kept foreclosure sales low even as filings have increased, though not in numbers seen elsewhere, according to RealtyTrac Inc., which tracks them.
Since Philadelphia began its pilot program for mortgage-foreclosure diversions in late spring, 42 percent of 552 properties have been saved from sheriff's sales, and the sales of an additional 36 percent have been postponed.
Delaware County officials had scheduled a meeting for last night with community leaders to discuss establishing a diversion program based on the Philadelphia model.


Contact real estate writer Alan J. Heavens at 215-854-2472 or aheavens@phillynews.com.

Back to Top

by Dirk Zeller
Think of your marketplace as your playing field, not unlike an athlete views a football field, basketball court, or hockey rink. The better you know every inch of that playing field, the more you can exploit it to your advantage.
Before I became a REALTOR®, in my early twenties, I was a racquetball professional. I played hundreds of tournaments over my sports career, and my best games were always at my home club. There, we had a court with floor-to-ceiling glass on the right side and back wall, making it particularly difficult to see in the back right–hand corner where the two walls of glass converged.
When players came for tournaments at my club, they struggled to pick up the ball in that corner -- giving me what you might call a significant home field advantage. I rarely lost a match on that court.
Real estate is like any other competitive endeavor. If you learn all there is to know about your playing field, you'll acquire a competitive advantage that will distance you from the competition and build the basis of your success.
The most challenging aspect of gaining market knowledge is determining what facts to collect and where to find the information you need. Fortunately, a number of readily accessible resources are available to REALTORS®. All you have to do is contact the right people and ask the right questions. The following sections will help you on your data quest.
Your Local Board of REALTORS®
All professional agents belong to REALTOR® associations that compile and make available a wealth of statistical information. The facts you can obtain from your local board include:
• The number of agents working in your marketplace. This information helps you understand your competitive arena. It also allows you to track whether your competition has expanded or receded over recent years.
• The production of the average agent in terms of units and volume sold. By obtaining this information and comparing it with your own production units and volume, you will be able to contrast your performance against the other agents on your local board. This information will be useful in your effort to calculate your share of the market. It also helps you understand how you stack up against the other agents your prospective customer might be considering.
• Experience levels of agents in your field. Most Boards of REALTORS® keep information regarding the percentage of agents recently licensed and those with three, five, and ten years in the business. This information provides you with another factor against which to measure your competitive position.
Meet with the executive director of your local Board of REALTORS® to learn the extent of information that is available to you, how frequently new research is released, and how you can obtain copies for your ongoing review.
Your Local Multiple Listing Service
The Multiple Listing Service, commonly called the MLS, keeps statistics of all the listings and sales in your area that are processed through the MLS.
The MLS does not cover every sale due to the fact that some sales bypass the system. Often, new construction builders, particularly in very robust markets, don't submit their inventory into MLS. Agents also sometimes sell properties themselves or in-house, and those sales are not submitted to MLS. However, the MLS, in most markets, covers more than 95% of all marketplace sales, and it represents the surest indicator of real estate activity in your region.
The MLS can give you key market statistics including:
• Days on the market averages
• Listing price to sale price ratios
• Listings taken versus listings sold ratios
• Geographically active markets inside your service area
Nearly all REALTORS® recognize the MLS for its significant role in increasing communication and exposure of real estate properties. Fewer REALTORS® recognize the MLS for its powerful but under-utilized role in reporting trends and performance of agents, companies, and subsets of the marketplace. Access and put this information to work to your advantage.
The National Association of REALTORS®
There are a number of national resources that you can access to obtain a wealth of knowledge and statistical trends. The best is the National Association of REALTORS® (NAR), which produces some wonderful studies, reports, and market statistics that most agents never use. The truth is most agents don't even know they are available.
Their monthly "Real Estate Outlook" publication provides a national view of real estate sales: What has happened in terms of sales, days on the market, what people are purchasing, what financing they are using, emerging trends, and predictions for the future. This is a powerful tool in the hands of a successful agent. If you aren't currently receiving and reading it, put it into your information arsenal immediately.
They also conduct annual surveys and studies of home sellers and homebuyers. They delve into why consumers selected particular agents, what services they sought from agents, and what geographic areas, home amenities, and features caused them to buy. This type of knowledge will enable you to provide the highest level of counsel and value to your clients.
NAR also issues reports on second home markets, investment properties, financing options, and many other topics. It's one of the best services that NAR provides, but it's the service that agents use the least. Make yourself an exception and dive into this deep pool of information.
Visit the NAR website at www.REALTOR.org to obtain an overview of the association, to access quick links to useful sites including REALTOR® Magazine Online, and to subscribe to receive e-mail updates on real estate topics and statistics.
Other Sources of Marketplace Information
Consult your broker about company-compiled statistics on regional trends and also on your firm's market share and market penetration. Especially if you work for a regional or national real estate company or franchise, your organization has likely commissioned studies that will be useful to your fact-gathering efforts.
Also, if you live in a state where sellers provide title insurance to buyers, the title companies often conduct market trend reports that allow agents to better understand the marketplace they are working in.
Published: October 3, 2008

Back to Top

by Peter L. Mosca
Find a community, a region or a market buoyed by job and population growth, investor interest and one that is also a tourism draw, and you have a recipe for development success. For Historic Real Estate Inc., these three components, and more, have led them to Houston and the site for building an exciting new economic district known as the WaterLights District. The $700 million mixed-use development, located just 15 minutes from downtown Houston, includes an array of office, hotels, restaurants, boutique retail, and residential structures amid a park setting along the banks of Clear Creek, just south of the world's largest medical and research center, the Texas Medical Center.
The 150-acre development will provide significant entertainment options for the people of Houston: the Restaurant Row of unique waterfront eateries, a planned 7,500-seat enclosed arena, and the 12-acre Presidential Park and Gardens, which features a picturesque lake and pathway lined with 20-foot statues of all 42 American presidents.
"WaterLights embodies time-sharpened practices of quality place-making. The design of the development will have long-lasting appeal," said Richard P. Browne, developer, who has planned dozens of noteworthy communities around the world, including the Columbia Town Center in Maryland and The Woodlands in Texas.
The WaterLights District, located in the rapidly growing Pearland community on Highway 288, is only eight miles south of the Texas Medical Center, the world's largest collection of hospitals and medical schools. Some 73,000 people are employed in the medical center and the work force will increase to 100,000 by 2014. Seventeen medical buildings, worth $3 billion, have broken ground recently in the Texas Medical Center.
"The growth at the medical center enhances the potential of WaterLights tremendously," said Browne.
The WaterLights District will be developed in accordance with the highest levels of sustainable practices, and the project is registered with the LEED "Gold" standard. Upon completion, the WaterLights project will have 1,400 units of residential, including condominiums, brownstones and luxury apartments. Allegro Builders, a prestigious Houston-based luxury homebuilder, is constructing the brownstone units. Many of the residential units will be situated on upper floors above street-level shopping in the master-planned environment.
"WaterLights is being embraced warmly by developers, retailers and restaurateurs who recognize the strength of this location," said David Goswick, executive director of Historic Real Estate Inc. "Houston's economy is outpacing the rest of the nation and the opportunity in WaterLights is attracting a lot of attention."
WaterLights's Presidential Park and Gardens will be a tourism draw, attracting visitors from Texas and neighboring states. The presidential busts, including all of the U.S. presidents, are the creation of internationally acclaimed artist David Adickes. In addition, the 7,500-seat WaterLights arena fills a growing niche for a conveniently located enclosed venue that can support concerts and ticketed entertainment.
Houston, buoyed by the strength of the energy industry, has led the nation in job growth, generating over 100,000 jobs new in a single year. This unmatched growth narrative has focused intense investor interest on Houston, which will add two million in population by 2025.
In real estate, there is a mantra we are all familiar with, "location, location, location." For builders, like Historic Real Estate, it's more than an axiom; it is the foundation that is helping them build America's next major economic districts.
[Note: Historic Real Estate Inc., based in Houston, Texas, is a private real estate investment and development company.]
Published: October 1, 2008

Back to Top

by Phoebe Chongchua
Termites can be a major concern and even stall the sale of your home if you don't inspect your home routinely for these pesky insects.
"It's really important to have regular inspections and preventative treatment measures in place so [a termite problem] doesn't get established," says Ron Harrison, director of technical services for Orkin.
Harrison says, without routine inspections, a termite problem can be penetrating your home without your even knowing it. He says about half to three-fourths of the United States is prone to having termite problems and just because you don't see them doesn't mean they don't exist.
"Once you get a termite infestation, you probably won't know it for at least five years," says Harrison.
By that time, significant damage could have occurred and if your home is on the market, handling the infestation can slow the sale process as well as be a costly corrective-measure.
Typically, when a home is put on the market a seller will get a termite inspection but it doesn't always mean the home is termite-free.
"To buy a home, in most states, the seller only has to provide you with a letter that says 'there is no termite activity that was found'. So that doesn't mean it's not there, it's just that they couldn't find any [sign of termites] and usually that guarantee can be from three months to a year which would be very odd for termites to show up during that period of time anyway," explains Harrison.
He says routine inspections are really the preventative step to ensure that problems aren't developing. "You hate to put another investment on your home, but, I'll tell you, if you don't, the down side is [the possibility] that someone may have to open up some sheetrock in your house which will cost thousands of dollars just to get in there," says Harrison. He adds, "It would be a great prevention and long-term investment to have a [termite] protection plan." The plan can also be transferred to the new buyer.
Having a general understanding about termites can help you recognize when a problem is developing. Termites are most active in moist areas, warmer temperatures (60 - 70 degrees), disturbed soil, and wherever there are objects to follow. "So if you have pipes underground or roots, they will follow those just like a highway," says Harrison. He recommends not having plants that have roots that extend to the foundation of the home.
There are at least 1,900 species of termites on earth but three are extremely prevalent throughout parts of the United States. Subterranean termites live in the ground and then come up and feed. However, their main colony is under the ground.
The second type is very common in southern areas of the United States. Drywood termites do not have a connection with the ground. "They swarm into your house and establish up in rafters or furniture. They're quite slow growing and they have relatively small populations," says Harrison.
Formosan termites, originating in Asia, are the third species that Harrison talked about. "This is a much more aggressive termite. It can eat 10 times as much as the typical native subterranean termite," says Harrison.
He says it's very important to make sure you know which species of termite you are dealing with. "You may be dealing with one or two, or three of them and therefore the treatment strategy is going to be a lot different based on what species you're working with," says Harrison.
You can learn more about termites at termite101.com
"The product to take care of termites can be quite expensive," says Harrison. You have to be sure you hire a trusted company with a solid reputation to care for your home or else you might end up with "a diluted-down product that doesn't do the work".
"It's not like changing your oil or even washing your car -- things that a lot of us have other people do but we really could do it ourselves. Termite work takes a lot of expertise and the equipment that we use isn't just like a screw driver and a wrench that you have in your garage. It's specialized equipment -- drills going through cement -- and product applications have to be just right to ensure that you have that protection," cautions Harrison.
Published: October 10, 2008

Back to Top