Kathleen Sheridan

Philadelphia has been operating a pilot program to assist home owners facing foreclosure since 2008. This program provides counseling, help with negotiating a loan modification, and assistance to stop the Sheriff's Sale.

The Mayor of Philadelphia has become a spokes person for the campaign to inform homeowners of the program, appearing in ads such as the one posted on the back of the 23 Septa bus that runs from the top of Chestnut Hill in Northwest Philadelphia to Oregon Street in South Philadelphia.

A ruling of the Court of Common Pleas in Philadelphia enacted the Residential Mortgage Diversion Pilot Program to keep as many homeowners as possible in their homes. If a homeowner is facing foreclosure, help is available through one of the non-profit, OHCD (Office of Housing Counseling and Development) counseling agencies that are located around the city.

The court order gives homeowners the right to have a conference with their lender under the supervision of the court.

Any Philadelphia homeowner who is behind in their mortgage payment can contact the Save Your Home Hotline 215-334-HOME, or visit www.phillysheriff.com for more information and for a referral to one of counseling agencies.

Homeowners can also call a neighborhood counseling agency directly. In Northwest Philadelphia assistance is available at Mt Airy USA; phone 215-844-6021 and ask for the Senior Housing Counselor.

Who is eligible? These services are for owner occupied properties within the City of Philadelphia.

Is there a cost? The services are offered at affordable rates, and may be FREE for qualified individuals.

Can these services really save homes from foreclosure? Yes. The counseling agencies can stop the foreclosure sale, providing time to assist the owner to negotiate a debt resolution agreement with their lender. Many homeowners have been able to stay in their homes with this program. Some homeowners have determined that selling with a short payoff to their lender is their best solution, known as a Short Sale. In either case, foreclosure can be avoided.

Kathleen Sheridan is a Short Sale Specialist

Weichert, Realtors® - McCarthy Associates

6901 Germantown Ave, Philadelphia, PA 19119

Office: 215-843-1414 ext 230

Call Today for Assistance: 215-740-3320

It's Labor Day, the end of summer, and the one year anniversary of the federal government take over of Fannie Mae and Freddie Mac. Just a year ago the world was on the brink of world wide financial collapse. So, how are we doing now?

Client and friend continually ask me about the path we are on in the real estate market. These are my answers.

Is the recession over? No.

The economy is relatively stable here in Northwest Philadelphia, still there are signs of recession all around. I went to buy something from the pet store on City Ave. and found an empty store with a 'for lease' sign in front. My favorite clothing store in Chestnut Hill has closed, another empty store with another 'for lease' sign. Car wash 'entrepreneurs' are turning up on the streets. Some 'garage sales' have become ongoing enterprises. City revenues are down, and Mayor Nutter continues to threaten to enact his 'Doom's Day' budget, which would cut 3,000 City jobs. Philadelphia needs the State to pass it's budget and come to Philadelphia's rescue. Pennsylvania hasn't passed a budget because politicians don't want to make the difficult choices required by reduced funds.

Are property prices still falling? In Philadelphia, some property prices are down while some are not. It depends on the price range, the type of property, and the condition. Why? There are fewer buyers. And, the financing that is presently available favors some price ranges and types of properties over others.

I wanted to refinance, why is my appraisal so low? An appraisal at present is based on only the most recent comparable sales. The market has been slow, so there may not have been any sales of properties that are really comparable to yours. Sometimes the appraiser, or the lender's underwriter, is anticipating falling prices and reducing the appraised value proportionately.

I want to take advantage of the Tax Credit, can I get a mortgage? There are some very attractive mortgages available presently, and the rates are low, so you should apply. The qualifying criteria are high. Some buyers will need to raise their credit scores and/or reduce their overall debt before they can buy. If you can't buy now, you can work on improving your credit score. If you need help knowing what to do Mt Airy USA provides Housing Counseling at no cost.

Is the $8000 Tax Credit artificially increasing the price of homes? I haven't seen any evidence of that here. Most buyers get the money after the sale has settled, so it's not part of the sale negotiation, and it is not something that the appraiser is going to consider.

Will the end of the Tax Credit mean the end of real estate sales? The Tax Credit motivates some people, but it doesn't help them buy a home. There are so many other factors involved in buying and selling real estate. A credit can't create or destroy the market by itself.

What needs to happen for the real estate market to recover? More financing is needed. Investors who fanned the flames of a hot market with 'no doc, no income, no credit, no cash' financing are still in a 'no lending' mode. FHA loans have become the primary loan option locally. Still, FHA has a limit on the maximum sale price, and can only be used for owner occupied 1 to 4 unit properties. And, FHA has raised it's mimimum down payment, raised it's minimum credit score, and no longer works with first time buyers who don't have enough credit history. Conventional loans from Fannie and Freddie and some local banks and credit unions are available, for those with more cash and very good credit.

How long will it take for prices to go back to where they were at the top of the market? We aren't going BACK, at least no one without a DeLorean is going back. Depending on how much prices have fallen from the high in 2006-2007, properties purchased at the top of the market should see the value return to that level in somewhere between 5 and 20 years.

A former investor client of mine owned a couple of properties that he bought and renovated at the top of the market in 1987. When he couldn't sell them without losing money, his strategy was to hold onto them and rent them out, taking the annual loss on his tax return, until they recovered their value. His estate sold these properties at a profit in 2006.

Should I sell my property now? Yes, if you are selling to move forward in your life. Yes, if the alternative is foreclosure. Maybe not, if you can wait and your property is in one of the categories which are under-selling in the present market. No, if you want to sell for the 2007 price.

Kathleen Sheridan (Weichert, Realtors(R) - McCarthy Associates)

NW Philadelphia Home Sales, Short Sales, Investement Properties

Philadelphia housing price statistics provided by the TREND Multiple Listing Service for housing sales are now available for the 2^nd quarter of 2009. According to the report the housing market in Philadelphia peaked in the 3^rd Quarter of 2007. Average prices citywide have declined by 12.3% since that quarter, with most of the decline ( 84.1%) coming within the past 12 months.

The statistics provide an interesting snapshot of what Northwest Philadelphia home sales looked like in the 2^nd Quarter of the Year where there were two types of buyers. Leading the way were 1^st time home buyers who could take advantage of the $8000 Federal Tax Credit. The 1^st time buyers were purchasing homes that were good buys, mostly in good to very good condition priced between $100,000 and $400,000, with most sale being in the $200,000 to $300,000 range. The other group of buyers were investors buying the lowest priced 'as is' properties that could be renovated for use as rental properties.

Sales of Northwest Philadelphia homes over $400,000 were rare. Overall there were 18 homes sold in the price range between $400,000 and $1,000,000. There were 2 sales of homes over $1,000,000.

The table below shows the Market Watch Statistics by zip code.

Northwest Philadelphia 2^nd Quarter Home Sales Statistics*

Zip Code Median Price Avg Price Price Chg Ttl Sold % Chg DOM S/A

*Data Provided by TREND Multiple Listing Service

Roxborough (19128) led the way in number of sales and only .077% decline in prices. This is a neighborhood where most houses fall into the $200,000 - $400,000 price range.

Chestnut Hill (19118) with the highest valued homes in the area saw a low number of sales and an apparent decline in prices due to most sales being in the strongest $200,000 - $400,000 price range.

Mt Airy (19119) had the widest range of sales from $40,500 to $1,795,000 while ½ of the sales fell into the $200,000 - $400,000 price range.

Cedarbrook/E Mt Airy (19150) saw the greatest decline in average price while sales increased, because this popular neighborhood for 1^st time buyers in the $100,000 to $200,000 price range was also popular with investors picking up distressed properties at low prices.

The other areas with low median prices (19138, 19141, and 19144) also saw strong sales of the lowest price houses.

One statistic that was consistent in all neighborhoods was the ratio of selling price to asking price. Overall, homes were selling at around 95% of the asking price when an offer was received.

In summary under market homes are selling well, but with many available prices are low. Mid priced homes are selling well when the are in good condition and prices are stable. Larger, higher priced homes may or may not be holding their value, few are on the market and fewer are selling. Buyers are looking for value and make below asking price offers.

Kathleen Sheridan

NW Philadelphia Home Sales, Investment Properties, Short Sales