2014: Year of Recovery

Happy New Year!  I’m confident that 2014 will be the year of real estate recovery, in the PhiladelphiaThe Coyle Group Philadephia Appraisers 2014 region.  With that optimistic statement out of the way, let’s get down to reality.

While I do expect markets to appreciate (yes, remember that word), I don’t expect to see a huge upswing in value.  Instead, I expect that we will return to nice, steady, predictable increases in value.  Think in the range of 2-4% per year.  Sure, there will be some areas in the Philadelphia market that will outperform but, for the most part measurable, healthy growth will be the new norm.

What will keep values from ramping up like back in 2004?

Inventory is relatively low.  However, there is a huge shadow inventory of foreclosed properties that banks will start releasing to take advantage of the healing market.  In fact, a trend that I’ve noticed in the past few months is that more and more banks are pumping money into rehabbing their stock of foreclosures in an effort to get top dollar.  In 2014, it’s pretty likely that foreclosures will compete rather strongly with conventional sales in some Philly markets and the surrounding suburbs.  This, along with the typical Spring listing surge, will influence supply.

Agents tell me that there are plenty of buyers waiting in the wings.  However, interest rates are expected to increase.  This will keep some buyers sidelined, especially the first-timers and low-income groups.  This will influence demand.

It all boils down to Economics 101, supply and demand.  It always does.  I think that each will be kept in check by the other and that growth will occur, it just won’t be a rocket ride.  That being said, I expect a pretty healthy Spring Selling Season as eager Sellers and Buyers enter the market.  This should facilitate an evenly paced recovery with real legs.

What are your predictions for the 2014 Real Estate Market in the Philadelphia region?

Best of luck in 2014!

The Coyle Group’s team of Philadelphia appraisers are a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy and Tax Appeal.  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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“Anti-Flipping Waiver” Extended

On January 28, 2011, HUD/FHA distributed a press release announcing extension of the temporary  “anti-flipping waiver”.  This regulation was waived last year through January 31, 2011.  Now FHA will permit the waiver through the end of 2011.  

The release states: “This action will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.”  Follow this link to read the entire press release.

This program is a good thing for Philadelphia and the region.  It will help properties to move by allowing investors and market forces to operate free of cumbersome restrictions.  Prior to the “anti-flipping waiver” FHA required 90 days between the initial acquisition and the date when the property could be place under contract, again.  FHA research found that in the current market, purchasing, renovating and reselling a property typically takes less than 90 days.  Click this link to read the Anti-Flipping Waiver.

If you have any HUD/FHA or appraisal related questions, please feel free to contact our office at 215.836.5500 or submit your question through our Ask PAB! page link.

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Tax Credit Expires

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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