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The Signs Are All Around Us

October 20, 2022 by Leave a Comment

The signs are all around us…on houses, on websites and social media.  The Philadelphia real estate market has shifted. This market surprised a lot of Agents and Sellers (and Appraisers).  The economy, rates and seasonality are all taking a toll.  Markets in the Philly Metro region are in one of three phases:

  1. The market is still showing signs of appreciation but, nothing like it was a year ago. It’s the last glowing embers of a hot market.
  2. The glow is gone. Things are cooling and are cooling fast. Homes are sitting longer. The showing lines are much shorter. Sales concessions and inspections are back in fashion. Sellers have lost their advantage and Buyers are in control.
  3. Yes, believe it or it or not, there are areas in our market that are in decline.  Not falling-off-a-cliff decline but, more like a slow-roll-down-a-hill decline. Sellers priced too high are getting lower offers or are being ignored. There are fewer buyers. Inventory is picking up as some Sellers try to catch the last bit of a wave that’s already passed. List prices are being “corrected” to align with the current reality.

What can you do as an Agent during this market shift?

  • Be aware of the shift and adjust your sellers’ expectations, accordingly
  • Look at listings. They are the best indicators of the current market sentiment and show you how the competition is reacting.
  • Learn to spot the declines, dig-down to understand your market.
  • Prepare to see declines reported in appraisals going forward.

Learn to drill down on your market. There are actually some great analytical tools available on Bright.  For instance, The Market Watch is a simple chart that you can set up to track the market as a whole or specific areas.

As of today, over the past 7 days, in the Philadelphia 5-county area, there were 1,046 Price Decreases, 1,082 New Listings, 166 Coming Soon, and 184 Back to Active. If you are a Listing Agent, Seller or have active listings, these numbers are telling you something.

They basically say that there are or will be some 1,432 new or renewed listings competing in the market. Trust me, these homes will be priced competitively for the current market.  The 1,046 Price Decreases should also grab your attention.  These are Sellers saying “we missed the mark with our original pricing and we are committed to pricing it more competitively, now.”

Proper pricing will be more important as we go forward. Buyers in the market will be funded (regardless of the rates), ready to buy and are not going to want to play games with unrealistic Sellers.

Another Bright report you should be looking at is the monthly Market Report.  The most recent September 2022 Market Report has some very interesting data that would indicate that things are entering the “decline” phase.  The report can be found at:

https://www.brightmls.com/article/market-insights-september-2022

Click on the Philadelphia Metro link and you will find a PDF of the report. There is a great summary of the findings on the first page labeled Philadelphia Market Key Findings:

My take away from these stats is that most of these numbers are heading in the wrong direction. Closed Sales are down, fewer sales.  Median Price is up but, these numbers are for September. It will be interesting to see what the October numbers look like. I have a feeling they will be lower.  Days on Market is growing, homes are taking longer to sell.  New Pending Sales are down, buying is slowing.  New Listings are down, fewer people are selling or have decided to wait-it-out.  Active listings are up, inventory is growing slightly (probably Sellers still trying to catch the wave). Months of Supply is up, more inventory accumulating due to fewer Buyers.

The last stat, Showings, is in my opinion the most telling.  This is a predictive number, measuring the activity of prospective Buyers. This number is way down. That suggest that there are fewer people actively looking at homes. Lack of interest, lack of money, fear of rates and the economy, regardless of the reason, prospective Buyers have pulled back.

Economics 101:  Decreased demand and increased supply equals lower prices.

So, sharpen your pencils and study your market. Get help pricing if you need it. As always, be aware of competing listings and be sure to confirm the GLA of your property.

If you need have any questions or need advice with pricing, measuring or any other appraisal related issue, please feel free to reach out.

appraisals@coyleappraisals.com

215-836-5500

 

 

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ATTENTION AGENTS!!!

June 7, 2016 by 6 Comments

Attention Agents - The Coyle Group

Attention all Real Estate Agents!  Do you want to stand out from the crowd and really stay in the minds of your clients and prospects?

Well, you’re in luck…its tax appeal season!  For the next few of months homeowners across the Philadelphia region will have a chance to appeal their tax assessments.  This is a great opportunity for real estate agents to reconnect with current clients, old clients and prospects!  It’s also an opportunity to bring real value and show them that you’re not just any-old real estate agent but, a trusted partner who is looking out for their best interest.

Over the next few weeks, try reaching out to your old clients and prospects suggesting that they might want to consider appealing their taxes.  Show them that you’re looking out for them and want to help them save money.  Imagine how happy your client would be if you were able to help them save hundreds or thousands of dollars off their tax bills each year!

If you have any questions on how the assessment and appeal process works (in Philly, Montgomery, Bucks, Delaware, Chester or Berks Counties) or how to figure out if your clients/prospects would be good candidates for an appeal, please feel free to contact our office.

The Coyle Group’s team of Philadelphia appraisers are a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing. If you need a guest speaker at your next sales meeting, please give us a call. We would welcome to opportunity to speak to your group and field any appraisal related questions you may have. For more information please visit our website at www.TheCoyleGroupLLC.com You can also contact The Coyle Group at 215-836-5500 or appraisals@coyleappraisals.com

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What Philly Agents Are Saying About 2014

April 22, 2014 by 2 Comments

As a Philadelphia Real Estate Appraiser, I know what trends I’m seeing day-to-day in the neighborhoods of Philly. However, I thought it would be fun to ask some area Agents what their thoughts were on a couple of issues. Below are the questions I asked along with some of the responses from some of the Philadelphia region’s top agents.

1. How would you describe the Spring market in Philadelphia Metro area so far? and where do you see it going for the remainder of 2014?

2. What do you think has the greatest influence on the market right now…Inventory? Interest Rates? Buyers back in the market?

 

The Coyle Group - Mark WadeMark Wade

Center City Condos

www.CenterCityCondos.com

I hear a lot of talk about the up’s and down’s of today’s 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 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 home in one day and that home 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 home 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 homes are selling within days, even hours after being listed for sale

I think the biggest influence today is the lack of overall inventory.

 

The Coyle Group - Dan CaparoDan Caparo

Coldwell Banker Preferred

Vice President
www.DanCaparo.com

Although we had a setback in sales due to the harsh winter for the first quarter for 2014 the spring real estate market has arrived and is brisk for buyers and sellers alike.   Our Real Estate market is built around school year more so than the seasonality of the warmer months – they just happen to go hand and hand.   People like to have their children finish school at their current district and start fresh with a new one by September.   There is a considerable inventory shortage in our regional marketplace and well-priced homes don’t last for more than a week.  I still find that price points of $800K+ are moving along in a more healthy fashion but still not to the level of the under $800K markets.

A housing shortage has a great impact followed by the continued challenges of mortgage financing and our tight money policy.  As the mortgage market opens up and loosens its restrictive barriers and other investors [in addition to Fannie / Freddie] enter the home finance market we will see continued improvement in unit sales volume and appreciation.  I believe that rates shouldn’t be a problem until they begin to reach 6%+ because at that point we will see affordability issues.

 

The Coyle Group - Matt DonnellyMatt Donnelly

Coldwell Banker Preferred

www.donnellyrealestategroup.com

BUSY! Any properties hitting the market that are priced right, move in ready, and in a semi-desirable location are going under contract within 3 weeks on the market. With rising interest rates and more consumers being approved for mortgages I expect 2014 to remain a hot market. Buyers are ready to purchase but need to act quickly because there is a lack of inventory of good, saleable listings.

There are plenty of buyers in this market, and interest rates are still historically low. The greatest influence right now appears to be lack of inventory. We need more sellers!

 

The Coyle Group - Frank DefazioFrank DeFazio

Berkshire Hathaway HomeServices Fox & Roach, REALTORS
www.CenterCityTeam.com

The spring 2014 market is off to a hot start likely due to the pent up demand from a frustratingly cold winder and fears about potentially rising interest rates.  Demand continues to outpace supply and so we are seeing a lot of multiple bids and escalation clauses which is driving home sale prices up. As long as inventory is low and demand is high prices will continue to increase, which is great for sellers but not for buyers.

 Low inventory. Agents have been pounding the pavement for listings since January of 2013 but demand is strong and homes that are priced well and move in ready continue to sell in days, often with multiple offers.  Builders have taken note and new construction inventory is coming towards the end of the summer but for now low inventory continues to cause feeding frenzies and high competition among buyers.

 

I’d like to thank Mark, Dan, Matt and Frank for their insights.  I find it interesting that they all cited “low inventory” as being the greatest influence on the Philadelphia 2014 real estate market.   I couldn’t agree more.  This market is quickly turning into a text book Sellers Market.  We all know when inventory is low and demand is high, prices will rise.  That’s good for everyone…except maybe Buyers.

The Coyle Group’s team of Philadelphia appraisers is a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing appraisals.  If you need a guest speaker at your next sales meeting, please give us a call.  We would welcome to opportunity to speak to your group and field any appraisal related questions you may have.  For more information please visit our website at www.TheCoyleGroupLLC.com  You can also contact The Coyle Group at 215-836-5500 or appraisals@coyleappraisals.com

 

 

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FHA Guidelines (a Cheat Sheet)

December 9, 2013 by Leave a Comment

The Coyle Group - HUD LogoThis is a special announcement to all of our real estate agent friends out there.  The Philadelphia Appraisers at the Coyle Group just published “The FHA Cheat Sheet”.  It was developed in response to agents, who for years, have asked us “is there a comprehensive list of FHA requirements?”  Well, it may not be comprehensive but, The Coyle Group has compiled a list of 40 of the most frequent FHA repair items and issues that face sellers, buyers and agents.  Gain some insight on how the FHA views defective paint or cracked pavement.  See what to do about broken window and graffitti…plus a whole lot more.  We’ve even include a BONUS Tip at the end!

If you are interested in receiving a PDF copy of the FHA Cheat Sheet, please send an email with your full name and email to appraisals@coyleappraisals.com be sure to put FHA in the subject line. 

For more information be sure to visit our website at www.thecoylegroupllc.com or contact us by phone at 215.836.5500

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HELP! My Condo Shrank!

March 6, 2012 by Leave a Comment

Last week, while looking at condo in Center City, the owner showed me a copy of her tax record which indicated that square footage of her unit was 3,155SF.  She was concerned because a previous appraisal stated that the unit was 2,678SF.  In her mind she was sold (and was paying taxes on) a unit that was 3,155SF.

As I measured the unit, I showed her my measurements and made the calculations in front of her.  I came up with 2,698SF, which supported the numbers from the first appraisal.

Then why did the developer, the agent who sold them the unit and the tax records all say that their unit was 3,155SF?  The answer is pretty simple. 

When calculating a unit’s square footage, developers and architects will typically include areas taken from the approximate centers exterior walls to the approximate centers of interior demising walls.  They will also include portions of perimeter walls, ducts, chases, beams and other concealed areas contained within the boundaries of the unit.  This can really add up, especially if the exterior walls are 1’ to 2’ thick like some of the older condo conversions in Philly.  To perpetuate the problem, the tax assessors will typically get the square footage for a unit from the developer or architect’s plans.

Appraisers tend to measure condo units from interior wall to interior wall.  We look at “useable interior living space”.  If you can’t stand on it, it’s generally not included in the Gross Living Area (GLA).  This method is consistent with guidelines published by Fannie Mae.

This can really pose a problem for appraisers when making comparisons to other units.  Often, we have to rely on the public records, condo plans or a developer’s website when researching comparable units.  Who is to say that the GLA reported in the records is representative of the unit’s “useable living space” or if it includes portions of exterior walls?  This is why it is so important for appraisers to know their market, intimately.  It is just as important for the appraiser to clearly explain and reconcile the inconsistencies in GLA; and make an adjustment when necessary and deemed reflective of the market.

This is also something that agents must be aware of, as well.  Make sure you educate your clients about possible discrepancies in reported square footage.  If your client thinks he’s buying a 1,200SF unit, you better be sure that’s what you’re selling.  The number one reason that agents are sued these days is for misrepresenting the size of the property.  If you’re not 100% sure that the square footage is correct, measure it yourself or hire an appraiser to measure it for you.

How would you feel if you paid around $1.5MM for a condo only to realize that its 457SF smaller than you were told?  What’s the big deal you might ask, it’s only 457SF?   Well, that’s a  21′ x 22′ room.   Assuming that at 3,155SF the price per square foot is $475/SF…that missing living space cost them approximately $217,075!   That’s another reason why using price fer square foot (the go-to method for many agents and developers when pricing units) is not a valid technique for valuing condos but, that’s a discussion for another day.

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Another Reason to get a Pre-Listing Appraisal

April 11, 2011 by 1 Comment

Just the other day, I received a phone call from a Mortgage Broker friend of mine. Yes, appraisers and Mortgage Brokers are still allowed to be friends.

He wanted my input on a situation in which one of his former clients found themselves.  Let’s call them the Utley’s. (For the privacy of the parties involved, I will not use the actual names, streets, pricing or house photo in this post.)  The Utley’s currently have their home listed for sale in Springfield Township, Montgomery County for $345,900.  There home has been on the market for 39 days and they have an offer on the table for $339,000.  The Utley’s are concerned about whether or not they should accept an offer this “low”.

I began buy pulling up the information on the Utley’s home in the MLS and public records.  It is a nice 1939 colonial with three bedrooms, 1.5 baths, approximately 1,500 Sq.Ft.  A very common home in this area.

Then, I took a look at the sales and listing activity in the immediate area for similar homes.  What I found was surprising.  The last three sales in the neighborhood in the past year sold for $370,000, $370, 000 and $412,000.  There are currently two competing listings in the neighborhood listed for $370,000 and $469,900.  The home listed at $469,900 was a larger, four bedroom that was completely renovated, probably not the best comparable.

However, there was also one pending sale right around the corner from the Utley’s.  This house was last listed for $339,900 but, it lacked a powder room and was roughly 220 Sq.Ft. smaller.  It had also been on the market for over 160 days with an original list price of $364,000.

After looking at this information, my question to my Mortgage Broker friend was “why did they list it so low?”

By listing at $345,900, the Utley’s are basically telling the market “Hey, this is my pie-in-the-sky, hope I can get it number…but, I am probably willing to take less!”  The reason they are receiving “low” offers is because they apparently under listed their home, based on available market data.  They (and their agent) may have shot themselves in the foot.

To compound the issue, it turns out, the Utley’s agent is a “friend of the family” (probably not for much longer after this experience) that is a licensed agent but, who is not very familiar with their neighborhood.   In the end, the Utley’s may be leaving thousands of dollars on the table or may have to re-list at a higher price.

This is a perfect example of why Sellers and Agents need to have a Pre-Listing Appraisal completed prior to listing a property.  A Pre-Listing appraisal can assist Sellers and their Agents maximize their selling price without over or under pricing.  If the Utley’s and their Agent had an appraisal of the home done prior to listing they might have developed a different price point and might not be in a situation where they are entertaining such “low” offers.

For information on The Coyle Group’s Pre-Listing Appraisal services, please call our office at 215.836.5500 or visit this link.

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Tax Credit Expires

May 3, 2010 by Leave a Comment

It happened over the weekend without much fanfare or comment.  The $8,000 homebuyer tax credit expired.  For some, it helped them make the move to homeownership.  For others, it was a much needed shot in the arm that boosted business and made everything feel like 2004-2005, again.  Many real estate agents, mortgage brokers and appraisers found themselves busy, some were even overwhelmed by the surge of business.  It felt so good that many pundits were touting the end of the housing crisis, claiming that the economic recovery is underway…look out, good times ahead!

While the economic recovery may be underway, it was not the tax credit that spurred it along.  The tax credit may prove in the weeks and months to come to have been a crutch upon which the housing market was propped. 

It will be interesting to see if the recovery has any legs now that the crutch has been removed. 

Based on what we’ve noticed in the Philadelphia markets, I think that we may see a dip in home prices in the near future.  The expiration of the tax credit may keep some first time buyers from entering the market.  This, along with new listings being added, will force pricing pressures downward as more listings chase fewer buyers.  It will be more important than ever for Philadelphia area Agents and Sellers to price their properites correctly and competitively.

The hand-out is over, interest rates are still artificially low and the tsunami of foreclosures is still on the horizon…it will be an interesting next few months.

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