Posted on Wed, Nov. 12, 2008
Phila.-area housing market still outperforming
By Alan J. Heavens
INQUIRER REAL ESTATE WRITER
The region's real estate market continued to outperform many other areas of the country and the nation as a whole in the third quarter, according to study released today by Zillow.com, the real estate search engine.
The study, which covers Philadelphia, Camden and Wilmington as a single entity, said home values in the third quarter fell 5.5 percent from the same period of 2007 — slightly more than half that of the United States as a whole in the same time.
What's more, just 4.4 percent of area homes bought in the last five years were considered "under water" — meaning that more is owed on them then they could bring if they were sold today.
The national figure: 29.3 percent, reported Zillow, which is based in Seattle.
The Philadelphia area is showing more stability than most other markets, said Stan Humphries, Zillow's chief economist, even though "the area is undeniably in the midst of a correction."
With a market peak in 2007 — one full year after most of the nation's markets experienced theirs — "it could take Philadelphia longer to reach a bottom," Humphries said.
Indicators suggest that the area's value declines may stay relatively small, Humphries said. Negative equity is much lower than in the rest of the country. The area has a "healthy five-year annualized appreciation of 6 percent," compared with 3.4 percent nationally, he said.
While many experts question Zillow's home-value estimates, some believe they are in the right ballpark.
"These are very reasonable estimates for the area," said Mark Zandi, chief economist at Moody's Economy.com in West Chester.
Said TD Bank's chief economist Joel L. Naroff: "I am not sure how they figured this, since there are so many submarkets," but while "conditions are not great, the region hasn't been hit by major housing problems."
Over the last 12 months, 30.2 percent of homes sold in the United States were done so at a loss, up from 23.7 percent at the end of the second quarter, according to Zillow.
In this region, just 9.3 percent were sold for a loss.
In 17 markets — 14 of which are in California — more than half of homes sold in the last year were sold for a loss.
Major home price drops in those areas are being fueled by high foreclosure sales.
Foreclosures made up almost one in five, or 18.6 percent, of all transactions in the last 12 months nationally. Not surprisingly, areas with the highest foreclosure rates are the markets with some of the greatest home value declines.
In California's Central Valley, 57.6 percent of transactions in Merced were foreclosures, and in Stockton, foreclosures made up 56.4 percent of transactions.
Put another way, in Stockton, 1 in every 60 houses is in foreclosure; in Merced, 1 in every 88 is. By comparison, 1 in every 2,500 houses in Delaware County has a foreclosure filing in September.
There are no other comparable Zillow data available for this region, although Zandi said that, based on Equifax credit-file data, 0.87 percent of first-mortgage loans in the region were in default at the end of September, compared with 1.38 percent nationally.
With continued intervention by the state and the city, it can take a year or more for a default to go to foreclosure sale, so the number of sales, anecdotally, remain minimal.
A third-quarter study by Philadelphia economist Kevin Gillen for single-family homes in the city (condos are excluded) showed median prices down 6.8 percent.
In the same period, the composite price of houses in 10 cities tracked by Standard & Poor's Case-Shiller Index was down 20.8 percent — including Los Angeles, Las Vegas, Miami, and Washington.
Philadelphia prices are still overvalued by about 2 percent, according an IHP Global Insight/National City measurement — meaning that they have that much more to fall before they reach bottom.
Gillen points out, however, Philadelphia prices in the 1990s continued to fall for much of the decade after hitting bottom, so there are no guarantees.
Said Humphries: "It seems Philadelphia may escape the worst of the housing market woes affecting much of the rest of the country."
Friday, November 28, 2008
Sunday, November 16, 2008
These Cities Are In Line for a Rebound
Have we reached bottom? In many cities, knowledgeable observers say yes.
In October 2005 at the peak of the boom, the median sales price for a U.S. home reached 7.3 times per capita income. By this May it was 5.7 times, just about the historical norm. Home inventories have flattened. The decline in sales has ended — and in some places sales have expedited."
The indicators are starting to look better," says Adam York, an economic analyst with Wachovia.Here are seven markets that Smart Money magazine says are in line for a rebound (implying that prices will begin to head back up again) :
Seattle
Raleigh
Des Moines
Philadelphia
Denver
Birmingham, Ala.
Salt Lake City Source: SmartMoney (11/01/08)
In October 2005 at the peak of the boom, the median sales price for a U.S. home reached 7.3 times per capita income. By this May it was 5.7 times, just about the historical norm. Home inventories have flattened. The decline in sales has ended — and in some places sales have expedited."
The indicators are starting to look better," says Adam York, an economic analyst with Wachovia.Here are seven markets that Smart Money magazine says are in line for a rebound (implying that prices will begin to head back up again) :
Seattle
Raleigh
Des Moines
Philadelphia
Denver
Birmingham, Ala.
Salt Lake City Source: SmartMoney (11/01/08)
Trademark Properties Lawsuit vs. A&E Proceeds
There are many valuable lessons to be learned in life and that includes business as well. Sometimes, business people, especially those holding high-ranking positions, tend to ignore minor issues involving their relationship with reputable partners. They feel they can get away with everything just by making verbal agreements. Take the case of A&E which was sued by Trademark Properties in July 2006 for failing to pay the latter of what should have been due them. Trademark Properties was the original producer of the popular TV show “Flip This House” aired over A&E. Flip This House is a real estate show focusing on property flipping projects. After the first successful season of the show, A&E failed to pay Trademark Properties its share of revenues prompting Trademark president Richard Davis to sue the TV network.
The trial of the controversial lawsuit filed by Trademark Properties against A&E in 2006 has already started. U.S. District Court Judge C. Weston Houck, during the July 11, 2007 trial, ruled that there is reasonable evidence suggesting that a verbal agreement was made between Trademark and A&E officials to equally share profits from the Flip This House television show. The judge, in his ruling, also denied a request by A&E to dismiss the case filed by Davis.
The TV network stressed it never made any verbal agreement with Davis to share the show’s profits. A&E’s lawyer Jeremy Feigelson argued that if no evidence exists that the two parties made an oral agreement for revenue sharing, then Richard Davis has no case at all. “The contract is not enforceable because of too many missing pieces,” he said. Meanwhile, the attorney of Richard Davis, Frank Cisa of Mount Pleasant, revealed the emails and other communications between Davis and A&E that referred several times to the supposed arrangement on the sharing of profits. Judge Houck, however, ruled that there’s sufficient proof about the oral agreement. He pointed out that an agreement does not need to be in writing to be enforceable. Richard Davis attended the hearing Wednesday but refused to comment on the case. A&E’s lawyers also avoided making a comment after the trial. It’s been a year since Davis filed a multi-million dollar lawsuit against cable network A&E and production firm Departure Films in the Court of Common Please in Charleston, South Carolina where his company Trademark Properties is based. Davis cited breach of contract, fraud and seven other counts in filing the case.
Davis claims that Flip This House is rightfully his, being the executive producer of the show, and that A&E has no right to continue the show over its network with a different cast. Davis, in his complaint, stressed that he created Flip This House in April 2004 and owns the rights equally with A&E based on a verbal agreement with a network executive. In his earlier statement, Davis said assured their devoted fans and viewers that they will not change for the sake of a network. “We are who we are, flaws and all, and don’t care to show you anything but who we really are, what we really do and how we really do it, successful or not.”Davis and his Trademark team returned on air in April 2007 via “The Real Deal” over Discovery’s TLC. The show, still on property flipping, has changed its name to “The Real Pros” which aptly describes the team members composed of real professionals in the real estate business.
UPDATE: November 12, 2008 - A jury awarded Richard C. Davis 4 Million Dollars in damages. “I’m very pleased with the verdict,” said Mount Pleasant attorney Frank M. Cisa, who represented Davis. “These cases are very tough to prove.”
The trial of the controversial lawsuit filed by Trademark Properties against A&E in 2006 has already started. U.S. District Court Judge C. Weston Houck, during the July 11, 2007 trial, ruled that there is reasonable evidence suggesting that a verbal agreement was made between Trademark and A&E officials to equally share profits from the Flip This House television show. The judge, in his ruling, also denied a request by A&E to dismiss the case filed by Davis.
The TV network stressed it never made any verbal agreement with Davis to share the show’s profits. A&E’s lawyer Jeremy Feigelson argued that if no evidence exists that the two parties made an oral agreement for revenue sharing, then Richard Davis has no case at all. “The contract is not enforceable because of too many missing pieces,” he said. Meanwhile, the attorney of Richard Davis, Frank Cisa of Mount Pleasant, revealed the emails and other communications between Davis and A&E that referred several times to the supposed arrangement on the sharing of profits. Judge Houck, however, ruled that there’s sufficient proof about the oral agreement. He pointed out that an agreement does not need to be in writing to be enforceable. Richard Davis attended the hearing Wednesday but refused to comment on the case. A&E’s lawyers also avoided making a comment after the trial. It’s been a year since Davis filed a multi-million dollar lawsuit against cable network A&E and production firm Departure Films in the Court of Common Please in Charleston, South Carolina where his company Trademark Properties is based. Davis cited breach of contract, fraud and seven other counts in filing the case.
Davis claims that Flip This House is rightfully his, being the executive producer of the show, and that A&E has no right to continue the show over its network with a different cast. Davis, in his complaint, stressed that he created Flip This House in April 2004 and owns the rights equally with A&E based on a verbal agreement with a network executive. In his earlier statement, Davis said assured their devoted fans and viewers that they will not change for the sake of a network. “We are who we are, flaws and all, and don’t care to show you anything but who we really are, what we really do and how we really do it, successful or not.”Davis and his Trademark team returned on air in April 2007 via “The Real Deal” over Discovery’s TLC. The show, still on property flipping, has changed its name to “The Real Pros” which aptly describes the team members composed of real professionals in the real estate business.
UPDATE: November 12, 2008 - A jury awarded Richard C. Davis 4 Million Dollars in damages. “I’m very pleased with the verdict,” said Mount Pleasant attorney Frank M. Cisa, who represented Davis. “These cases are very tough to prove.”
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