Posted on Fri, Oct. 3, 2008
Philadelphia area at low risk of housing-price drops
By Alan J. Heavens
Inquirer Real Estate Writer
Philadelphia-area housing prices have a small risk of being lower in two years, according to a study by the PMI Mortgage Insurance Co.
> Using second-quarter data from the Office of Federal Housing Oversight, the Walnut Creek, Calif., company said Wednesday that the eight-county region has only a 2.1 percent chance of lower prices two years from now.
> By comparison, the Fort Lauderdale, Fla., area has the greatest chance of further price drops of the 50 largest metro areas - 99.5 percent.
> The 16 metro areas with the greatest chance of continued falling prices are in California, Florida, Arizona and Nevada, all of which experienced major increases in housing prices during the housing boom.
> PMI chief economist David Berson said increases in foreclosures and unemployment had significantly heightened the risk of future home-price declines in these areas.
> As a further indicator of how the region is faring, July data from Radar Logic Inc., a New York firm that tracks real estate transactions, showed that the Philadelphia region's year-over-year price decline was just 3.2 percent from July 2007 - another indication that, in the words of Philadelphia economist Kevin Gillen, "the downturn here is very mild compared to many other U.S. cities."
> Radar Logic chief executive officer Michael Federer said, "What we are seeing now is a situation in which the [foreclosure process] is driving prices down in markets with relatively high concentrations" of distressed properties.
> Various statistical measures show that housing prices in the eight-county Philadelphia area have declined just under 4 percent since what Gillen says was the region's peak: the 2007 second quarter.
> City single-family home prices have fallen 6.6 percent since the peak, he said. Gillen's figures do not include Center City condo sales.
> Prices in the suburban market have dropped 4.3 percent since the second quarter of 2007, Gillen said.
> Intervention efforts by the city, Pennsylvania and New Jersey have kept foreclosure sales low even as filings have increased, though not in numbers seen elsewhere, according to RealtyTrac Inc., which tracks them.
> Since Philadelphia began its pilot program for mortgage-foreclosure diversions in late spring, 42 percent of 552 properties have been saved from sheriff's sales, and the sales of an additional 36 percent have been postponed.
> Delaware County officials had scheduled a meeting for last night with community leaders to discuss establishing a diversion program based on the Philadelphia model.
Contact real estate writer Alan J. Heavens at 215-854-2472 or http://mail.prufoxroach.com/exchweb/bin/redir.asp?URL=http://www.philly.com/inquirer/business/20081003_Philadelphia_area_at_low_risk_of_housing-price_drops.html?adString=inq.business/mailto:aheavens@phillynews.com.
Philadelphia area at low risk of housing-price drops
By Alan J. Heavens
Inquirer Real Estate Writer
Philadelphia-area housing prices have a small risk of being lower in two years, according to a study by the PMI Mortgage Insurance Co.
> Using second-quarter data from the Office of Federal Housing Oversight, the Walnut Creek, Calif., company said Wednesday that the eight-county region has only a 2.1 percent chance of lower prices two years from now.
> By comparison, the Fort Lauderdale, Fla., area has the greatest chance of further price drops of the 50 largest metro areas - 99.5 percent.
> The 16 metro areas with the greatest chance of continued falling prices are in California, Florida, Arizona and Nevada, all of which experienced major increases in housing prices during the housing boom.
> PMI chief economist David Berson said increases in foreclosures and unemployment had significantly heightened the risk of future home-price declines in these areas.
> As a further indicator of how the region is faring, July data from Radar Logic Inc., a New York firm that tracks real estate transactions, showed that the Philadelphia region's year-over-year price decline was just 3.2 percent from July 2007 - another indication that, in the words of Philadelphia economist Kevin Gillen, "the downturn here is very mild compared to many other U.S. cities."
> Radar Logic chief executive officer Michael Federer said, "What we are seeing now is a situation in which the [foreclosure process] is driving prices down in markets with relatively high concentrations" of distressed properties.
> Various statistical measures show that housing prices in the eight-county Philadelphia area have declined just under 4 percent since what Gillen says was the region's peak: the 2007 second quarter.
> City single-family home prices have fallen 6.6 percent since the peak, he said. Gillen's figures do not include Center City condo sales.
> Prices in the suburban market have dropped 4.3 percent since the second quarter of 2007, Gillen said.
> Intervention efforts by the city, Pennsylvania and New Jersey have kept foreclosure sales low even as filings have increased, though not in numbers seen elsewhere, according to RealtyTrac Inc., which tracks them.
> Since Philadelphia began its pilot program for mortgage-foreclosure diversions in late spring, 42 percent of 552 properties have been saved from sheriff's sales, and the sales of an additional 36 percent have been postponed.
> Delaware County officials had scheduled a meeting for last night with community leaders to discuss establishing a diversion program based on the Philadelphia model.
Contact real estate writer Alan J. Heavens at 215-854-2472 or http://mail.prufoxroach.com/exchweb/bin/redir.asp?URL=http://www.philly.com/inquirer/business/20081003_Philadelphia_area_at_low_risk_of_housing-price_drops.html?adString=inq.business/mailto:aheavens@phillynews.com.
