What’s Selling Now
There’s a new real estate reality on the Main Line, but closing a deal is possible. Just to be sure, we asked local sellers, realtors and builders.
Here’s what we found.
Sleepy No More
Malvern business owners are banking on developers Eli Kahn and David Della Porta to wake up King Street.
You Asked, They Answered
Local real estate experts tackle the tough questions.
Lavinia Smerconish (Realtor)
Christmas Day came early for Lavinia Smerconish this past December—in the form of a settlement on a $5 million home in Berwyn that had been on the market for less than a year.
“These high-end houses take a good, long time to sell—even in strong markets,” says Smerconish, a Bryn Mawr-based Prudential Fox & Roach agent who’s been selling Main Line real estate for 16 years.
While 2009 wasn’t exactly a strong year for sellers in our area, it certainly wasn’t catastrophic, says Smerconish. And if you’re a buyer who’s not in the market for the short term, you’ll be rewarded.
“The Philadelphia and Main Line real estate markets were not the epicenter of anything,” says Smerconish. “We weren’t the epicenter of enormous price increases, and we weren’t the epicenter of this cataclysmic decline.”
The local market has become “far more interesting and complex” for a number of reasons, she says. “People in the high-end market don’t have the money in their stock market [earnings] for a down payment,” she says. “The old days of putting down 10 percent are no more—mortgage companies want 30 percent.”
For homes priced $2 million and up, sales also slowed due to increased inventory, though cheaper properties continued to sell. By September 2009, however, Smerconish began to see an improvement at all price points. “Sellers have gotten the wake-up call and started to manage their expectations,” she says. “Buyers realized prices weren’t going any lower and decided that it was a great time to buy.”
Smerconish expects an equally active market in the coming months. “Houses look better in the spring,” she says. “We’ll have more competition, but more buyers will be looking.”
And loans for new construction are at a standstill these days. “There’s a set amount of new construction or lightly used product—and that’s it,” says Smerconish. “We probably won’t see a new construction project for at least two years.”
Also worth noting is the spike in home rentals. “The rental market used to be really slim because it was such a good buyer’s market for so long,” Smerconish says. “People are deciding not to sell their houses for the numbers the market is dictating and are renting them instead. So we now have a lot of competition.”
For more real estate coverage, click here.
Cas and Joan Holloway (Builders)
Several years ago, Main Line homebuilders began offering something not seen around here in decades: condominiums. Only, these were different—luxury units with all the bells and whistles available in high-end single-family homes.
Builders Cas and Joan Holloway got in on the action back in 2006 with Steepleview, 10 condos above three storefronts in downtown Wayne. But by the time the project was completed in 2008, the market had cooled considerably. “Certainly, I was concerned,” says Cas. “We didn’t want to start the sales process without buyers being able to see the finished product. So when we finished, we had no units sold.”
As it turns out, the Holloways’ concerns were unfounded. By April of last year, all units were spoken for—about six months ahead of schedule. “There’s definitely other projects that haven’t sold as briskly as Steepleview,” says Cas. “I think we were fortunate on a few counts: our location was in downtown Wayne, where residents could walk to all the amenities, including the train station; and we hit the right price point, with the average at $650,000; plus, we only had 10 units to sell.”
Cas is currently working on 102 Louella, another condo project in Wayne that’s a short walk from Lancaster Avenue. With nine units averaging 2,000 square feet and prices ranging from $875,000 to $1.25 million, it’s scheduled for completion in June. Four units have already sold.
And while the Holloways are open to other condo projects, it would have to be the right location and price. Currently, they’re trying to sell a 9-acre lot in Radnor Township. “Normally, we’d build a spec house and then sell it,” says Cas.
But times have changed.
“Lenders aren’t willing to finance spec homes anymore,” he says. “They want pre-sale properties.”
For more real estate coverage, click here.
This past September, the Strids sold their Devon home in just two days—a stunning development in this fickle real estate market. “We’d hoped that it would sell quickly,” says Karen. “But we had no idea it would sell that quickly.”
The Strids had been casually looking for a new house for a few years, chancing upon a perfect Bryn Mawr location. They negotiated a one-week settlement to get a better price, so they had to sell their home fast. Located in Devon, the 60-year-old, two-story Colonial has five bedrooms and three-and-a-half baths, a spacious kitchen, renovated second-floor bathrooms, and an addition with cathedral ceilings, fireplace and glass doors leading to a patio.
In this competitive market, the Strids knew the home needed to be in perfect condition. They painted the interior, installed new carpet in the guest room, cleared out the attic and basement, and made a few minor improvements to the outside walk. They also replaced the queen-size beds in the children’s rooms with singles to add space.
“We probably spent about $8,000 prepping the house for sale,” says Karen. “The painting and the carpeting made the house look brand new. I tried to make the rooms look really open and big by taking out a lot of extra furniture.”
Strid first sent out an informal e-mail to neighbors and friends announcing that she was putting the house on the market. A brokers’ open house netted two offers by the end of the next day. Listed at $1.1 million, the home received a full-price offer with contingencies and a second for $25,000 under the asking price without contingencies. They went with the latter. “We had four families seriously interested in the house, but it moved too fast,” says Karen.
Prudential Fox & Roach’s Mary Corrigan was the Strids’ realtor. “The house looked magnificent,” she says. “It’s located in a hot neighborhood, and they understood the importance of staging and presentation.”
And that last part was crucial, says Corrigan. “When a house is first on the market is when the excitement really starts,” she notes. “You have to be sure it shows well and is priced properly. We put the house on the market the Monday after Labor Day—once everyone was back from vacation—and we were signing the final agreement of sale on Thursday afternoon.”
The buyers weren’t as lucky. Though their old home was in the same neighborhood as the Strids’ place, it languished on the market. The two parties found a temporary fix: The Strids are renting their old home for the next year while their new one is under construction.
“Everything worked out for the best,” says Karen. “Now we just have to get our house built on schedule.”
When it came time to move her custom home furnishings business, Linda Ritter had plenty of options. But after six years in Glenmoore, she was ready to become part of a proper business district. She chose King Street in Malvern for its quaint, small-town charm. “The residents are so supportive of businesses here,” she says.
Eight years ago, Downingtown-based developer Eli Kahn also recognized downtown Malvern’s assets—only, he chose to look east from the stretch of King Street where Ritter’s UpHome Ltd. is now situated, along with the acclaimed Restaurant Alba, high-end retailer Posh Collections, and most of the other restaurants and shops. He saw an unimpressive smattering of businesses, homes and apartments. Beyond that, there was a 5-acre swath owned by AmeriGas and Fisher & Son Company—land he would come to own after negotiating relocation plans with its owners.
Quite simply, Kahn saw a juicy opportunity on King Street that he couldn’t pass up. And today, his multifaceted vision for this neglected part of the borough encompasses homes, boutiques, specialty shops, restaurants, office space and more. A two-building plan includes 200 luxury condominiums, 22,000 square feet of retail space and 332 covered parking spaces. A third office complex is proposed farther down King Street. The varying architectural styles will complement the area’s existing structures, with the objective of making anything new look like it’s always been a part of the town.
“Malvern has it all,” says Kahn, who’s hoping construction will begin next year. “It has the look, the infrastructure, the existing businesses. This town is going to experience a renaissance.”
To head up the project’s residential side, Kahn brought in David Della Porta, whose Villanova-based Cornerstone Communities is behind several luxury multi-family communities in the area—most notably Terrazza condominiums in Newtown Square. His portion of the King Street project will feature three floors of residential living above the retail space, with parking for each unit. Various floor plans will appeal to a wide demographic, from single professionals to empty nesters.
Many small towns shy away from density, but Della Porta and others see it as essential to support local business. “We’re creating a village—and there’s a desperate need for it,” he says. “You need a critical mass of residents within walking distance to support a thriving downtown.”
The King Street project is the epitome of transit-oriented development—one that’s in line with the growing trend of creating walkable communities centered around rail systems. “We’re not creating a great town here—it already exists,” says Della Porta. “People can walk to great restaurants and shops, or walk to the R5 station and head into the city.”
And Della Porta and Kahn firmly believe that if they build it, the rest will come. “The housing stock is older in Malvern,” says Kahn. “We’re offering something new.”
As exciting as all this is, it’s still a few years away. In the meantime, Malvern officials and business owners seem to be embracing it. “The borough had the vision years ago to have the zoning in place for a project like this—in case a developer came along who wanted to go ahead with it,” says Della Porta.
“We are really backing this project,” says Catalina Hallowell, president of the Malvern Business and Professional Association. “I personally think it’s a win-win for everyone—the homeowners and the businesses.”
Hallowell’s son owns Catalina’s Restaurant in town, and she operates the gift shop behind it. “It’s not about competition,” she says. “New stores and restaurants will bring more people to town.”
UpHome’s Ritter concurs. “Malvern is going to come alive with this project,” she says. “It will strengthen existing businesses.”
Also on board is Keller Williams Realty’s Alex Coates, who’s been selling commercial and residential real estate in Malvern and the surrounding area for six years.
“People want to support local businesses as often as they can,” says Coates. “It’s the biggest onetime development change the borough has ever seen.”
To learn more, visit malvern.org.
Question: We need to move because of a job relocation, and I have to sell my house fast. Is that even possible in this market?
Answer:Yes. Many sellers have done so with the help of a comprehensive pricing report and a full-service realtor. Know your market and price the property competitively. Buyers and appraisers are dictating prices, not sellers.
Homeowners have several advantages to selling now—historically low interest rates, the extension of move-up and first-time buyer tax credits, combined with this region’s strong economy. Interview realtors, and expect a quality presentation and marketing plan. It’s important to choose someone you can trust to negotiate on your behalf. The goal is to net the highest proceeds in the shortest amount of time at the least inconvenience to you.
When preparing for a quick sale, bring in a stager and de-clutter if necessary. Show the home as it was built to be—whether it’s a maintenance-free condo, a family-friendly house with a great yard, or a one-of-a-kind property. It’s important to keep in mind that you’re selling a lifestyle. Once buyers imagine their lives unfolding there, you’re one step closer to selling your home.
Laura Caterson and Dana Zdancewicz
Prudential Fox & Roach, Devon
(610) 804-1834, thecatersonadvantage.com
Question: I just found my dream house. Will I be able to get a loan?
Answer: Mortgages are still readily available to qualified buyers. FHA loans are good for those who don’t have a lot of money for a down payment. If you’re borrowing $417,000 or less, conventional loans are plain vanilla—so long as you have 20 percent to put down, plus the qualifying income and credit scores for approval.
There are also programs that allow for 10 percent down without significant impact on the cost of the loan. Jumbo loans (those above $417,000) are available for slightly higher interest rates—typically about .5 percent higher than conventional loans. Just be aware that the underwriting process takes a little longer than it did a few years ago, and lenders need several weeks to provide final loan commitments for purchase transactions.
Keller Williams Real Estate, Malvern
(610) 647-8300, malvernrealtygroup.com
Question: Are there many foreclosure or short-sale/pre-foreclosure opportunities around here?
Answer:They’re rare in the Main Line area. While some foreclosures can be found, we’re stable compared to the areas hardest hit by the recession. About one in 3,000 properties in the lower Main Line area received a foreclosure notice in December 2009. Compare that to cities like Las Vegas, where one in 19 properties received notice that same month.
If you’re still interested in a foreclosure property, keep in mind that they aren’t always the best deals. Banks obtain an independent appraisal and make intelligent marketing decisions. In many cases, more debt is owed than the current property value, so they aim to minimize their loss. They’ll insist on selling for a fair value, which doesn’t always offer much of a buyer advantage. Bank-owned properties are often in poor condition and don’t generally come with a complete property disclosure, so a detailed and thorough home inspection is essential. And be extra-vigilant when it comes to getting advice from realtors, lawyers and title experts.
If you’re in the market for any new home—foreclosure or no—the best bet is to look in good locations with quality schools, well-kept streets, plus nearby transportation and other services.
Duffy Real Estate, St. Davids
(610) 724-2880, debdorsey.com
Question: My house has been on the market for months with no offers. What should I do now?
Answer: If a property has been on the market for more than three months with no offers, it’s in the best interest of the sellers to arrange a meeting with their realtor to re-evaluate their initial market analysis. In today’s marketplace it’s not only “location, location, location”—it’s “location, condition, pricing.” In other words, the location and condition of a property will dictate the pricing.
If the house is “tired” or cluttered, it may be a good idea to consult a home stager who can give an honest opinion of what should be done so the property shows better. The work usually can be accomplished for a minimal amount of effort and expense—and it often makes a world of difference.
The seller and realtor also should review what’s been done to date in regards to how the property has been exposed to the marketplace. They should go over the multiple listing information, advertising, Internet exposure, other printed materials and open houses. If all of these aspects have been addressed then, in all likelihood, the pricing must be adjusted. Once the seller agrees to reduce the asking price, the information must be sent out to other realtors by submitting it to the Trend multiple listing service and potential buyers who’ve already previewed the home.
Though there’s been much negative national press regarding the housing market, we’ve found that if a home in our area is in good condition, in a good location and priced properly, it will sell fairly quickly.
Duffy Real Estate, Narberth
(610) 667-6655, duffyrealestate.com
First-Time Homebuyer Tax Credit
It’s equal to 10 percent of the purchase price up to a maximum of $8,000 and applies only to homes priced at $800,000 or less. The IRS defines a first-time buyer as someone who hasn’t owned a principal residence during the three-year period prior to the purchase.
The credit doesn’t have to be repaid unless the home is sold or ceases to be a principal residence within three years after the initial purchase. It applies to sales occurring on or after Jan. 1, 2009, and on or before April 30, 2010. In cases where a binding sales contract is signed by April 30 of this year, a home purchase completed by June 30, 2010, will qualify.
Move-Up/Repeat Homebuyer Tax Credit
It’s equal to 10 percent of the purchase price up to a maximum of $6,500 and also applies only to homes priced at $800,000 or less. Buyers must have owned and lived in their previous home for five consecutive years out of the past eight.
The credit doesn’t have to be repaid unless the home is sold or ceases to be a principal residence within three years after the initial purchase. It’s available for homes purchased after Nov. 6, 2009, and on or before April 30, 2010. In cases where a binding sales contract is signed by April 30 of this year, a home purchase completed by June 30, 2010, will qualify.
To learn more, visit irs.gov.