We’re Moving!!!

The Coyle Group is pleased to announce that on October 10, 2014  we will be expanding to a new office.  We will be moving to 433 Germantown Pike, Lafayette Hill, PA 19444.  Only our address will change.  You will find the same great people and service at the new location.  Even our Phone and Fax numbers will be the same.  Join us in celebrating!  We look forward to assisting you our clients and friends at our new location for years to come!  Click below for our Moving Notice and map.


The Coyle Group - Were Moving Sml








HUD REOs for only $100 Down!

In a recent article on the DSnews.com website, Carrie Bay writes about a new HUD initiative aimed at reducing their REO inventory in several markets across the US. 

I can understand the desire to reduce the inventory and get these properties into the hands of qualified homeowners.  However, the idea of possibly putting distressed properties into the hands of individuals with very little “skin in the game” is concerning.  Sure the 203K program will be able to help the owners finance repairs but, it does nothing to prepare and assist these owners with the unforeseen complications of owning an REO property.  Oftentimes, these homes have unseen issues that the typical buyer is not aware of or cannot adequately prepare for. 

While I can see that the program has good intent, I am not sure if this is a great idea.  What do you think?   Below is the full article.

HUD has approved a program aimed at putting foreclosed homes back into the hands of owner-occupant buyers.

In select states, from now into October of next year, buyers need a down payment of only $100 to purchase a HUD-owned REO home.

The buyer must be an owner-occupant, utilizing financing insured by the Federal Housing Administration (FHA). Standard FHA underwriting guidelines apply, and the sale must be for the full amount of the current list price.

The $100 down payment incentive program has been approved for two of HUD’s four national regions – the regions managed by theDenver Homeownership Center and the Atlanta Homeownership Center. HUD homes in the states listed, as well as the Caribbean are currently eligible for the program.

Denver Homeownership Center’s Jurisdiction:

  • Arkansas
  • Colorado
  • Iowa
  • Kansas
  • Louisiana
  • Missouri
  • Minnesota
  • Montana
  • Nebraska
  • New Mexico
  • North Dakota
  • Oklahoma
  • South Dakota
  • Texas
  • Wisconsin
  • Wyoming
  • Utah

Atlanta Homeownership Center’s Jurisdiction:

  • Alabama
  • Florida
  • Georgia
  • Kentucky
  • Illinois
  • Indiana
  • Mississippi
  • North Carolina
  • South Carolina
  • Tennessee
  • Caribbean

HUD’s $100 down payment incentive program can also be applied to an FHA 203k loan, which can be used to fund repairs and renovations on the home. The 203k program allows buyers to finance both the mortgage and additional money for rehabilitation needs with a single government-insured loan.

Matt Martin, CEO of Matt Martin Real Estate Management (MMREM), says this is one of the most exciting features of the new incentive program and should drive a lot of exposure to FHA’s 203k offering.

MMREM is under contract with HUD to assist with disposition sales of its repossessed homes. MMREM handles properties throughout 16 states, or about a third of HUD’s REO portfolio.

With an FHA 203k loan, “buyers can find a property that needs some TLC, fix it up however they want to, and finance the whole thing for $100,” Martin explained.

“MMREM is excited to work with this recent initiative, in a way that it supports putting HUD homes back into the hands of homeowners,” Martin said.

In addition to $100 down instead of FHA’s typical 3.5 percent down payment, HUD says it will also cover up to 3 percent of the closing costs in most cases.


Inventory Levels

Inventory levels in the Philadelphia housing market are up over January 2010.  The latest data TReND MLS reports the following:

County Available Units Months of Inventory
Philadelphia 8,138 9
Montgomery 4,829 8
Bucks 3,421 8
Delaware 3,367 9
Chester 3,361 9

* Calculations based on single family dwellings as of 02/14/2011

These numbers basically tell us that if no more homes were listed for sale as of today, it would take 8 or 9 months to sell off the current inventory of homes.  This is an over-supply.  When there is an oversupply in the real estate market this puts downward pressure on pricing. 

Back when the market was on fire in 2004-2006, it was not uncommon to see inventory levels in the 2-3 month range.  In some areas, there were months that the levels went under 2 months.  Homes were selling the day that they went on the market.  This was a classic example of undersupply.  An “in balance” inventory is generally viewed as being between 3-6 months of supply.

It will be interesting to see how inventory levels are affected as the Spring Selling season begins.  Traditionally, Spring is the time when Sellers list their homes.  So we may see an uptick in inventory as new listings hit the market.  The question is, will the Spring Buyers be there to soak up the inventory?


Camden’s Woes

Walt Whitman once called Camden, “A City Invincible”.  Undeniably, Camden is far from invincible at this point; perhaps, “unprotectable” would be more appropriate. 

Despite last minute efforts, ongoing negotiations and political wrangling, the fact remains that, Camden, New Jersey, laid off 168 police officers and more than 60 firefighters.  That’s more than 45% of the entire Camden Police Force.  Unbelievable!

Just to refresh your memory, this is the same Camden that was named the nation’s second most dangerous city in the United States in 2010…having lost it’s spot as the most dangerous city in the U.S. in 2009.

This situation is the result of a $26.5 million dollar deficit, declining State aid, dwindling tax revenue and inflexible unions.  Camden is one of the nation’s most impoverished, corrupt and violent cities.  The median household income is less than $27,000 per year.  Once an industrial hub along the Delaware, the city has been eroding and with no reason to stay, businesses and industry have been fleeing Camden for decades.  The most recent evacuee was Campbell’s Soup, leaving hundreds unemployed and a huge hole in the tax base.   

From a real estate value perspective, this could be the kiss of death for Camden.  Who wants to live or work in a community where you do not feel safe?  Granted, the feeling of safety is relative but, now with almost half of the “good guys” gone, the vulnerability felt by the average Camden resident and business is only going to be amplified. 

Many of the fundamental principles that drive real estate values are tied directly to human needs.  One basic human need is for a person to feel safe in their own home.  Another human instinct is flight from danger.  Inevitably, those residents who can afford to will leave Camden for safer havens.  Those remaining will be those who can’t afford to leave, the poor, and those who don’t want to leave, the criminals, the dealers and the addicts. 

When residents begin leaving, the ripple effects will be felt throughout the Camden real estate market.  Rental vacancies will increase resulting in decreasing rental incomes.  Listing inventories will swell and prices will begin to drop as more and more sellers try to attract fewer and fewer buyers.  Vacant and abandoned homes will also add to the problem as property owners decide to cut their losses and walk away.

The simple economic principle of supply and demand would point toward continued declining property values in Camden, in the near and foreseeable future, regardless of whether or not an agreement can be reached between the City and Police Union.

Despite all Camden’s social, governmental and economic woes, there is room for hope.  From a real estate viewpoint Camden does have some good things going for it.  It has the waterfront, bridge access to Philadelphia, rail access to New York, Cooper Hospital, Rutgers University, The Comcast Center, the Camden Adventure Aquarium and the Rivershark’s Stadium.

With luck, entrepreneurial spirits will step forward, and private investors and developers will decide to take a risk.  It may not happen in the next few years.  It may not happen in our lifetime.  However, I believe that the private sector will step in as some point and initiate a profitable effort to reinvent the decaying city, making it once again worthy of Whitman’s words.

In the meantime, we can only hope and pray for the safety and well-being of our neighbors (and remaining Police and firefighters), in Camden.