philadelphia real estate
Investors are switching to real estate
In the midst of the nation’s highest Covid-19 peak, with the deepest recession on record, and high unemployment, the housing market is soaring. The National Association of Realtors recently reported that sales of previously owned homes in the United States rose 24.7% – one of the best real estate showings on record.
“Housing prices are increasing not just in the United States but also worldwide, regardless of how hard a country has been hit by the pandemic,” said Ruchir Sharma, chief global strategist at Morgan Stanley Investment Management, in his New York Times OpEd.
Sharma credits the phenomenon to what he calls easy-money. “Since May 2020, new-home sales in the United States have climbed by 67 percent, and prices by 15 percent. Many investors are buying homes not as a shelter but as an alternative to stocks and bonds,” he said.
Here in Philly, investment in residential real estate is changing our skyline; the City resembles a massive construction site. A $60 mil condominium is rising at 2100 Hamilton. A $300 mil complex is underway in Port Richmond. And New York City’s Durst Organization recently won a contract to build a mixed-use tower at Penn’s Landing.
Solo Real Estate agent Alejandro Franqui is feeling the spike too. “Some areas are in high demand and they are selling the same day or within 24-48 hours,” said Franqui. “Many homes are selling at or way-above asking.”
Buying, selling, and renting during Covid demands complex and constantly changing safety restrictions. “We were not allowed to show houses from the middle of March through June. We shifted to 3D tours, as well as virtual tours,” said Franqui. “When we moved into a more open phase in July, a traditionally slower time, there was initially a surge of interest and intense bidding on properties.”
Showing houses and apartments includes maintaining proper social distance, limiting traffic, and doing verbal health screenings. State guidelines include allowing ample time between showings, no more than three people in a property at one time and avoiding touching surfaces as much as possible.
“I just wore my 400th pair of latex gloves yesterday!” said Solo Real Estate agent Jeff Carpineta. “Also, I miss being able to see clients’ whole faces, smiles, and speaking being a little easier, but it’s important to save lives in our communities and nation.”
Besides wearing masks, gloves, maintaining social distancing and virtual house tours, the City of Philadelphia urges realtors conducting settlements and closings to utilize remote notary, powers of attorney (POA), or the exchange of contract documents electronically or by mail wherever possible.
Hot Philly Neighborhoods
During the pandemic, East Kensington is continuing to experience growth and re-investment. While New York transplants seek affordability and space, local young professionals and families are drawn to the diversity and youthful spirit of this revitalized neighborhood.
“The shift from New York to Philly has been a steady trend over the past decade,” said Franqui. “It’s possible that Covid has accelerated that. I’ve always thought that unless someone is born and raised in New York, they will eventually realize the long term value just isn’t there.”
East Kensington and Fishtown attract professionals and families looking for housing close to downtown. These trendy neighborhoods feature Colonial and Victorian architecture and their own mix of music venues, nightspots, and restaurants. But the big draw is the value. A Solo Real Estate listing in Fishtown for a 2-bedroom house with a front yard is priced at $264,900.
Post Pandemic Outlook
Think times are good now for real estate? Todd Sinai, chair of Wharton’s Real Estate Department, says they will get even better. “I expect demand for apartments to be robust and student housing to go back to normal,” said Sinai in a recent article on commercial real estate. “I’m not convinced that remote working will be ingrained post-COVID-19. Once most employees return to the office, everyone will…. On the part of investors, there will be a flight to quality real estate, and we are seeing signs of this already.”
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