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James Yoakum

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Multiple Offers

03-19-08
James Yoakum

More proof that the investment market in Philly is red-hot even with the national economy melting-down all around us (if you believe the media hype that is). I just put a property under contract that was on the market exactly one week, and that sold for 11% over asking price with multiple (5+) offers! Even to an eternal optimist like myself this was a shockingly easy sale in what is supposedly a rough market. If you've got cash or good credit there really hasn't been a better time to buy, at least in the Philadelphia market, in the past 5 to 10 years.

Happy Investing!

James E. Yoakum
Long & Foster Real Estate Inc.
Independence Hall Office
601 Walnut Street, Suite L-10
Philadelphia PA 19106
Office: 215-409-6900
Cell: 267-496-7739
Email: james.yoakum@lnf.com

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Buy A Block Workshop...

03-17-08
James Yoakum

How many times have I heard my investor clients say "I'd like to buy this house but I'd really LOVE to buy this whole block!"? I hear it all the time!

In Philadelphia making a good real estate investment is just as much about the block, street and neighborhood that you buy into as it is about the property itself. This means two things for investors:

1. Don't base your buying decision on the property alone, look at the zip code, neigbhorhood, street, and most importantly the individual block on which the property is located. The desirability (and value) of a property can be vastly different depending on the dynamics of the block on which it's located. This is pretty simple to understand just from walking around.

2. The second, and maybe more important thing for an investor is that buying an entire block of properties usually has way more profit potential than just buying one property. When buying one property you can spruce it up and make it look nice, but the neighboring homes may still be in total disrepair, making it hard to rent or resell your property for top dollar. However, if you can spruce up an entire block all the homes become much more valuable all at once and you reap all the benefits because you own them all! Additionally, if your investment is spread over a full block it begins to make sense to invest in things like setting aside vacant lots as pocket parks, installing high-end street lamps, or planting sidewalk trees - all things that make a block feel a truly special place to call home. This doesn't even take into account the fact that it's much easier (and less-expensive) to renovate and manage multiple properties when they're all on the same block than if they're spread throughout the city.

So, I'd like to offer a twist on a tried-and-true piece of real estate advice. You've probably heard that you should buy the smallest/cheapest/worst-condition house on the best block/street/neighborhood. Well I say you should buy the cheapest/worst-condition/most-distressed block in the best neighborhoods/zipcodes/city.

If you'd like to learn more about the actual process of acquiring a full block in Philadelphia (it's a long and complicated process but well-worth the effort) please give me a call or email. I currently have two listings on a block in West Philly that would make a great start towards acquiring about 70% of that entire block over the next one to two years. There are also similar opportunities all over the city and I'd be happy to find one that can work for you.

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My Most Recent take on Philly's Market

03-03-08
James Yoakum

I sent this out as an email to all my past and present clients this week to give them an update of the developments I'm seeing in the Philadelphia real estate market. If you have any questions about Philly please give me a call!

Just writing to give you a quick update on Philadelphia's real estate market as I've been seeing it over the past few months. Two recent articles, one in the Inquirer (Click Here) and one in the March issue of Philadelphia Magazine have done a good job of explaining that the Philadelphia metro market has not been severely hurt by the 'subprime meltdown' and 'housing crisis' that many other parts of the nation are experiencing. In fact, median home prices rose in Philadelphia in 2007, albeit by a meager 0.7%, and some suburban areas are experiencing even stronger growth such as Delaware County's 8.1% jump from December 2006 to 2007. While median prices get the most press, a second, even more encouraging statistic is that from February 2007 to February 2008 the average residential sale price in Philadelphia rose 11%, showing the influence of a higher proportion of big-ticket sales, many of which are Center City condos.
In short, pricing on good quality homes that are marketed well is still relatively strong, although the amount of time it takes to sell has certainly increased. Days on the market in February 2008 averaged 74, up slightly from 71 last February, but up dramatically from 55 in February 2006, and the current inventory for Philadelphia represents a 13 month supply at February's sales pace. However, this 'glut of inventory' is not a sign of pending doom, but an expected consequence of the 150% run-up in prices over the past decade as those who bought five or more years ago look to cash in on this appreciation, and it provides the chance for buyers to cross-shop numerous properties in any given neighborhood and choose only the best.
While strong fundamentals like job growth, relative affordability, and high quality of life have insulated the Philly market somewhat, the effects of the national downturn did hit later here than in other areas, only starting to show up in data for the last quarter of 2007. Therefore it seems like we're still in a slow decline and even with the usual spring pickup in sales it may be the third or fourth quarter of this year before the market reaches a level of balance between buyers and sellers.
The main point of all this is that we're still in a serious buyers' market and there's still time and plenty of inventory to find great value-priced properties for investors or end-users. There's also an argument for selling now in certain stronger neighborhoods because although you may not get the absolute peak price for selling you can realize immense savings by buying a replacement property in the current low-interest-rate, high-seller-concession, bargain-pricing environment. Additionally, recent federal government incentive packages, while having little direct effect on our market, should generate enough good press to bring a few reluctant buyers off the fence.
I see the following as things to be optimistic about in Philadelphia and all of these can point to great real estate investment strategies:
  • Continued job growth in the typically recession-resistant fields of healthcare, education, and pharmaceuticals.
  • Massive public and private investments in the two planned casinos and the entire Delaware riverfront, the Convention Center expansion, UPenn's eastward expansion, the Navy Yard redevelopment, the Wachovia Spectrum site redevelopment, and the list goes on and on.
  • A very strong rental market.
  • Strong and improving office market fundamentals in the Central Business District.
  • Optimism about the new mayoral administration.
  • Value home pricing and a great cost-of-living compared to D.C., New York, and other competing markets.
Overall it's a perfect time to buy, invest, or refinance and even if you're on the selling end of things I'd love to talk to you about the best strategy for surviving the current market. I hope to hear from you soon, and feel free to refer any friends or family my way!
Cheers,
James
p.s. For an excellent, in depth, look at real estate prices and trends in Philadelphia with a neighborhood-by-neighborhood breakdown see Kevin Gillen's latest report here.
James E. Yoakum
Long & Foster Real Estate Inc.
Independence Hall Office
601 Walnut Street, Suite L-10
Philadelphia PA 19106
Office: 215-409-6900
Cell: 267-496-7739

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