James Yoakum

This article from Realtor.org says that adding an additional bathroom to a home or remodeling an existing bathroom can be a good investment for homeowners - adding more to the value of the home than the cost of the addition or renovation. This contrasts with many other home improvements that, on average, fail to recoup their costs upon sale.

My experience in Philadelphia certainly supports this article - I find that an extra bathroom or half-bathroom greatly increases a home's attractiveness to buyers. Since most Philadelphia rowhomes originally had only one bathroom, you can set your house apart from competing properties by adding a second bath or even a small powder-room. To be truly valuable though I think an extra bathroom needs to be conveniently located (not in the basement) and big enough to be practical (not a converted coat closet).

If you're thinking of selling soon it may be worth the cost to squeeze a second bathroom into your floor-plan.

Rates on 30-year fixed mortgages have dropped back below 5%! One local lender that I work with is quoting 4.74% for purchase loans this morning and they usually offer even better rates to first-time buyers. If you're thinking of buying this could be a perfect time - prices are still low but showing signs of bottoming out, there are loads of houses on the market, and interest rates are amazingly favorable. Happy house hunting!

The unemployment numbers for the Philadelphia region that came out this week don't look great but they could certainly be worse. In Philadelphia county August unemployment rose to 10.5% from 10.3% in July - worse than the national unemployment rate which just hit a 26-year high of 9.8% for September. The Philadelphia region as a whole is doing better though, clocking in at an 8.3% unemployment rate - up just slightly from 8.2% in July. On a county-by-county basis there's pretty big range with a low of 6.6% in Chester County and the 10.5% high in Philadelphia county.

So what does all this mean for the local real estate market? As I've discussed in previous posts, the housing market and commercial real estate markets are both strongly tied to employment and until we start seeing new job creation it's unlikely that we'll see much increase in demand for real estate. Thankfully the strong suburban job markets should provide continued stability to the market and prevent further decreases in real estate activity. Additionally the City of Philadelphia looks like it will avoid major budget cuts and layoffs which would have likely been a big hit to the local real estate market. Overall I'd say we're in for several more months of slogging along at the current slow pace of sales and stagnant pricing. On the bright side - as soon as the employment picture does start to look brighter we should see some of the pent-up demand in the real estate market return to the table.

For further discussion of local employment trends see this article in the PBJ.

This article from today's Inquirer describes a couple of nice roof decks in Philadelphia. Roof decks have been a growing trend in Philly for years, and why not - the typical Philadelphia rowhouse is great for many reasons, but an abundance of private outdoor space is not one of them.

I often think about finding a creative way to use to the top of my house for more than just keeping the rain out, but so far I've found it easier to take advantage of my friends' decks and avoid the expense and maintenance involved in constructing my own. My favorite roof deck is one where you can get a good view of 4th of July fireworks and where you can host a good size party without fear of anyone falling off.

If you're considering buying a house with a roof deck a few things to consider are:

1. Many Philadelphia roof decks were built without permits. While it's not a major deal-killer to have a non-permitted roof deck you'll want to know whether or not your roof was built to code. An 'illegal' roof deck could cause issues with insurance claims or roof warranties.

2. Roof decks make roof repairs and maintenance much more difficult and expensive. Be sure that the roof under the deck is in good shape and accessible for maintenance because that's what's ultimately keeping your house dry.

3. As highlighted in the article, if a roof deck isn't easy to access and an enjoyable place to hang out you'll never use it. Don't let a cramped, difficult to reach roof deck influence your housing decision too much. Only truly outstanding and functional decks really add long-term value to homes.

4. Electricity and a small wet-bar on the deck make roof parties much more fun and are more common throughout the city than you would think!

As national retailers go bankrupt left and right and retail real estate owners hustle to maintain profitable occupancy and rent levels, Center City Philadelphia continues to enjoy a relatively healthy retail market. Sure there are still empty storefronts in Center City, but the restaurant scene rivals any other city of comparable size in the country, and national and local retailers continue to open up shop, offsetting the few who have been forced to shut down during this recession. A few of the big names that have recently come to Center City include Barney's CoOp, Esprit, and three new high-end steakhouses - Butcher & Singer, Del Frisco's, and Union Trust. These types of tenants continue to pay rents that would have seemed astronomical just a few years ago, even if they're slightly down from the peak.

The Center City District (CCD) along with several other local business organizations just launched a great website aimed at making it easier for retailers and real estate investors to research Center City Philadelphia and find available retail space for lease. This article from yesterday's Inquirer also provides a realistic, but still encouraging review of the local retail scene.

Center City has a lot going for it, including forward thinking boosters like the CCD who are doing everything they can to attract new businesses. As it becomes clear how our national and local economies will emerge from the recession Center City should provide plenty of opportunities for savvy retailers and the savvy real estate investors who lease space to them.