James Yoakum, SFR

This article from today's Philadelphia Inquirer gives a nice overview of the world of student housing around Temple University - a must read for investors in this area:

New Temple student housing stirs a renaissance west of Broad Street

Drexel University's new president, John Fry, announced a goal of improving the neighborhoods surrounding Drexel's campus. Given that he was part of Penn's initiatives to improve University City during the 1990's and 2000's I think it's safe to be optimistic that he will have a positive impact on the Powelton Village and Mantua neighborhoods just north of Drexel. Along with expanding Drexel's security presence, Mr. Fry announced plans to encourage Drexel employees to purchase and maintain homes in the neighborhood, and also spoke of cracking-down on sub-standard off-campus housing, a serious problem that too often flies under the radar throughout Philadelphia.

To read the entire article click here.

Yesterday's auction of 1441 Chestnut - a parking lot in Center City that has been awaiting redevelopment for years - gave some good indications of where the local commercial real estate market stands. The property traded hands for $12,000,000, with the winning bidder being one of the partners in the group that already owned the property and had been trying to develop it as a hotel and condo tower.

The main conclusion to be drawn from auctions like this one is that there is still very little demand for speculative properties in Philadelphia, especially vacant land. Even in one of the best locations in the city this property sold for roughly the same price that it traded for in 2000 when its development prospects were much murkier and Center City in general was a less-proven market.

Read a full report on the auction here.

Since I work with a lot of real estate investors in Philadelphia I'm frequently asked about the vacant land parcels you see scattered about the city. Even in some of the nicest neighborhoods of Philadelphia you can find large chunks or single plots of vacant land that have been sitting for years without any change. Anyone who's lived near a vacant lot in the city knows the trouble they attract, and any developer who's ever tried to acquire land in Philly knows what a pain that can be. I found two articles from PlanPhilly.com (see below) that are do a great job of explaining why there's so much vacant land in Philly, why it's so hard to get your hands on if you want to build on it, and what the future of the city looks like in terms of dealing with this issue. Take a look at the articles and let me know your thoughts.

Vacancy Victories are Rare, but City Says Reform is Coming

Vacant Land, Focused Plans

The summer of 2010 will be remembered by folks in the real estate business as a long vacation from serious, qualified buyers. Since the tax-credit deadline of April 30th, the number of active buyers in my market, Philadelphia, has been very slim, and I've heard similar stories from people in other parts of the country. This has been great for the few serious buyers who were looking this summer - they were able to negotiate great deals in a once-in-a-lifetime buyers' market. On the other hand, sellers have been having a very tough go of it the last few months with even the nicest properties sitting on the market for months without solid offers. It might be a little soon to say that things are turning around, but two pieces of anecdotal evidence give me some hope that serious buyers are coming back to the market as summer turns to fall:

1. I've been getting more calls the last couple weeks from first-time buyers ready to start looking with hopes of finding a place and moving in before the end of the year. While I still haven't seen a bump in 'move-up' buyers, if more first-timers start to buy up currently listed properties, that will have a domino effect allowing the sellers of those properties to become move-up buyers of higher-end houses.

2. The hits on my online listings have jumped up in the past week. This could be a random anomaly, but I'd rather see more people looking at online real estate listings than fewer, so it's something I'll be watching to see if it continues.

If you've been thinking of selling in Philadelphia I'd say it's still the type of market where you should only sell if you absolutely have to, but maybe it's time to start tackling some of those little fix-up projects so that your home will be ready if the buyers keep coming back over the next few months.

If you're thinking of buying it's time to really get moving. It looks like the longer you wait the more competition you're going to have from other buyers.