January, 2006

Market Commentary

Local real estate markets show new signs of life.

Despite a slow market, a post-holiday pickup in real estate business is indeed happening.  And, the real estate market appears to be in good health.

There’s no question that nationwide, the residential real estate market slowed in the second half of 2005.  Buyers became more tentative, and most houses took longer to sell.  This was certainly true in the volatile Washington DC market, but also occurred to some degree in the Delaware Valley .  At the same time, the seasonality of the real estate market played a role – December is almost always the slowest month of the year. 

After each New Year, we look for indicators that might show us whether and how the market might pick up after the holidays.  There’s always the possibility that the slow December real estate market may extend into January and February.

We’re happy to report that within our service areas, the market has become reenergized after the holidays.  Our sales team has reported a sharp increase in calls from new buyers, and they’ve told us that this actually began on December 27^th.  This is a positive sign – normally, we look for this increase on January 2^nd.  A large quantity of active buyers is definitely good for anyone selling a home this winter.

However, don’t misinterpret this as the beginning of another seller’s market.  2006 will not be a return of the 2004-2005 whitehot market we’ve experienced.  In fact, in many areas, this will be a buyer’s market.  Properties will still take time to sell, and they must be priced well in order to generate buyer interest. 

Instead, what we’re saying is that the market is healthy, and that a well marketed, well priced home will likely sell within a reasonable amount of time.  It also means that we’re not encountering a “halting” of the market, nor are we on the brink of any kind of “bursting bubble.”

Understand that this outlook can change over time.  As the new year continues, we’ll keep you posted on the market’s evolution.

Home Improvement

One home improvement expense you WON’T recoup at resale.

There are many home improvement investments that will increase your home’s value at resale – wallpaper isn’t one of them.

Done correctly, wallpaper can be a beautiful addition to a home.  Some wallpapers can have a excellent visual impact on a room’s overall interior design.  A few of our staff members think the old 19th Century William Morris wallpaper designs are quite beautiful.

But ask any real estate agent – it’s a rare occurrence when a home’s potential buyer actually likes the previous homeowner’s taste in wallpaper.  Unlike paint, choices in wallpaper are an extremely personal matter, often selected to match furniture, drapes, bed linens, or accessories.  We find that in most cases, when a purchaser considers a home containing a large amount of wallpaper, he or she often begins the exercise of calculating how many weekend hours it will take to strip it all. 

On occasion, the presence of wallpaper can actually diminish the value of a house, rather than enhancing its value.  If the wallpaper is worn, is peeling at the edges, or is not well installed, homebuyers will take note.  Unlike paint, wallpaper designs can go out of style.  And if a home is vacant, wallpaper can look odd without any furniture to provide a context for it.

So here’s the bottom line.  If you’re going to wallpaper your house, do it because you want it, and because you like the way it looks.  Think of it as an expense – not as an investment.  Choose high quality wallpaper, and be sure to install it correctly.  And if you’re on the fence about it, we recommend paint.

Regional Commentary: Delaware Valley, Pennsylvania

Home prices in the Delaware Valley?  Suburbs – up. Center City – way up!

Last year, average home prices increased 13.6% in the Delaware Valley , with the highest growth rate in Center City .

According to TrendMLS, average housing prices in the Delaware Valley increased from $185,400 in 2004 to $210,000 in 2005 -- a 13.6% year-over-year increase.  Although this figure is far lower than the increase experienced by a handful of other markets in the South and on the West Coast, it represents a solid increase in home values relative to historical norms.  In Montgomery and Delaware Counties , housing prices experienced more modest increases – 7.9% and 5.0%, respectively.

In Philadelphia , the average price of a home increased a whopping 30% -- from $100,000 to $130,000.  Throughout 2005, purchases of Center City real estate by out of town investors have been widely reported.  We believe that this purchasing pattern has contributed to this price increase.

Area employment is a significant factor driving real estate values.  According to the Bureau of Labor Statistics, nonfarm employment in the metropolitan area has increased by 0.9% from last year.  This is lower than the 1.4% increase for the nation. 

As for 2006, the Pennsylvania Association of Realtors predicts that the housing market will say healthy, but that growth in home prices and sales will grow more slowly than in 2005.  We concur, and believe that in most areas, average home prices are likely to increase between 5% and 8% in 2006.

"Really cool... and scary!" Have you tried Google Earth?

When you’re researching a particular home, aerial photography from Google Earth enables you to take a close look at your potential home from above.  It’s incredibly valuable for understanding what’s nearby.

On your browser, go to http://maps.google.com/.  Then, type in any address – Google provides a map of the area.  Click on the “Satellite” or “Hybrid” button in the upper right of the screen, and Google will display a satellite image of the area.  From here, you can zoom and pan the image.   Depending on the resolution of photographs in your city, it’s possible to zoom in very close.  It’s a bit eerie – we almost feel as though we’re spying on people.  And maybe people are “spying” on us too.

How is this useful to homebuyers?  Looking at homes in this way really provides a good sense of what’s nearby.  If a house backs to a grove of trees, it’s in your interest to understand what’s on the other side.  If you know that a railroad, highway, or body of water is nearby, you can find out exactly how far away these things are.  And, you can see some of the neighboring homes, and can determine whether they’re larger or smaller than yours.

None of this is a substitute for the normal due diligence conducted by real estate brokerages, but Google Earth can provide extra insights about a home that can assist in the buying decision.

Notable Neighborhoods: Arlington, Virginia

The most affordable condominiums on the Orange Line.

Arlington's Orange Line area has become extremely popular - and expensive. We think Arlington Oaks provides an opportunity to live live near the Metro at a reasonable price.

For buyers on more modest budgets who still want to be in the thick of things, we like Arlington Oaks.  It’s an older condominium located a few blocks from the Ballston Metro.  It may not have the style or amenities of the newer luxury high-rises in the area, but it offers great space in buildings that have stood the test of time.  The community is garden style – a plus for buyers who don’t like high rises.  And although it is older, many of the units have been renovated in recent years.  Interestingly, while many older condominiums don’t permit washers and dryers in individual units, Arlington Oaks permits unit owners to install the necessary plumbing to accommodate washers and dryers.

Two bedroom units typically sell in the $300,000 to $400,000 range. Corus Home Realty has one such unit available for $359,000.  The unit has substantial upgrades, including newer kitchen appliances and bathroom fixtures.  Additionally, the unit is situated on a quiet courtyard – a unique feature in this area.

For more information on this unit or on other units in Arlington Oaks, call Amy Richards or her team at 888-812-6787.

The inside track on this summer's beach rentals

A leading broker of vacation properties has sound advice for would-be beach house renters: "Plan Ahead!"

Celeste Valiant, the founder of Seacoast Realty, has a message for those planning a vacation this summer: “Plan ahead!”  According to Ms. Valiant, “Over the years, more and more people are discovering Bethany Beach, and vacation rentals here are increasingly popular.  The best values and the choicest locations in the area get rented quickly.  While you may not be thinking about the beach during these cold winter months, it’s to your advantage to make plans now.”

Bethany Beach has a wide range of rental homes of varying sizes and prices.  Sea Colony, a large condominium complex, offers excellent amenities and beach access.  For those who prefer golf, rentals are available at Bear Trap Dunes, a Freeman-developed golf community a short distance inland from the beach.

For more information on rentals, purchasing vacation properties, or for an introduction to a Seacoast agent, Contact Amy Richards at Corus Home Realty: 888-812-6787.