Pre-Foreclosure Market Update – Q3 2020

Foreclosure Market Report

September showed record breaking sales in Philadelphia, but what about the dramatic spike in pre-foreclosure distressed properties? Does the foreclosure market threaten to haunt real estate values in Philadelphia?

Multiple realities of quantum physics

Market reports are complicated with what science fiction buffs might call “multiple realities” – especially true in our current national economy. You don’t have to understand quantum physics, but there are many sides to the story of current real estate market trends on the Main Line and in the greater Philadelphia area.

You’ve probably heard me say this before, analyzing real estate markets is a lot like watching the ocean. What appears to be calm water, can have cross currents and under tows to be aware of.

Let’s start with the good news!

September was record-breaking month for both number of sales and median sales price for Philadelphia County.

On the Main Line, demand continues to exceed supply with values on the rise and days on market declining.

Due to changing buying patterns due to COVID along with the exodus from New York and other dense urban areas our small, quiet Main Line townships have literally shifted into prime destinations.

What about October?

In October the number of showings and new contracts declined. However, all indications are that values remain stable in most areas.

Analysts explain “markets despise uncertainty” and it appears people were holding off on buying or selling until after the election.

An “undertow” of loan delinquencies

Looking backwards at September data one might think that it’s time to surf the big waves and catch the ride of your life.

However, there’s an ‘undertow’ most analysts reporting on real estate are not addressing – a sharp increase in loan delinquencies.

The extreme spike in the number of mortgages delinquent 90+ days or in pre-foreclosure is at a level we haven’t seen since 2009.

Mortgage delinquencies spike in 2020 due to COVID

The “backstory”

What complicates delinquent mortgage reporting in 2020 is the surge of mortgage forbearances entered due to COVID-19 CARES ACT.

Incorrect information and bad advise early in the COVID pandemic led to confusing a mortgage forbearance with a deferral. What also wasn’t clear was the impact on credit and ability to refinance.

Many owners did not know full “balloon” payments would be due at the end of their forbearance period and are in a difficult situation confused about what to do as their forbearance ends.

Could the delinquent property data be incorrect?

What the graph above doesn’t address is whether the spike in delinquencies could partially be due to incorrect credit bureau reporting of mortgages in forbearance.

For instance, ConsumerFinance.org advises checking your credit report if you have a forbearance as it should not be shown as a loan default;

“Servicers may report that your account is in forbearance. However, if you were otherwise current on your account and have received relief as defined by the CARES Act, your servicer or creditor is required to report your account as current”

What to do now?

As you can see, I’m a fan of analyzing data. However, when it comes to deciding the right time to buy or sell it’s important to look at the big picture of your goals. History has shown real estate values survive market changes in the long run. It’s all about what’s best for you.

Please contact me for a confidential consultation. We’ll look at the micro-market trends for your particular goals and location.

And if you know anyone facing problems paying their mortgage who wonders what to do now, it’s time to get help! For more information about short sales and options to avoid foreclosure, visit FightTheBank.org.

Be sure to subscribe for future blog updates. Let’s talk!

How I sold a Queen Village luxury home sight unseen during COVID-19 shutdown

Queen Village Luxury

Buying sight unseen is a bit scary, to say the least. To do it during COVID-19 shutdown took some real courage from both buyers and sellers.

809 S 3rd Street in Queen Village – SOLD for $1,075,000

While I’ve helped clients buy sight unseen since 2008 using custom virtual real estate technology and video previews, this was a very unique experience navigating the COVID-19 shutdown.

In fact, we closed and I still haven’t seen the home!

Each home purchase is a journey, a unique experience. It’s an honor and privilege to be able to assist my clients, making dreams come true.

It’s not just a transaction – it’s a life changing move and I take my clients’ trust in me to heart.

What the journey looked like

This story starts before COVID-19. In fact, I first met my clients at an open house a few years ago. If you’ve met me, you already know that I’m not a high-pressure sales person but view my role as a trusted advisor with a passion to help people accomplish their goals.

They remembered me “because I was nice” and contacted me when they were ready to upgrade to a larger home due to a baby on the way.

While they have a lovely home in Queen Village, they needed more space but also wanted parking, first floor living area and outdoor space in William Meredith School district for under $1M.

Time to find that “forever” home to be filled with love, laughter, little people and years of happy memories.

Prior to the coronavirus we saw a few that might fit, but something wasn’t just right. When you have buyers that want what we fondly call a “unicorn” (a unique property that’s hard to find) it’s time to get creative!

Finding that perfect match!

You might call me a real estate “match maker,” connecting buyers and sellers to create success for both.

After doing extensive outreach, letter writing and research within their micro-market, I found a narrow selection of possibilities. One was of particular interest and a potential perfect match.

Both the owners and my buyers were flexible on timing, but the little one on the way wasn’t waiting for Gov. Wolf to lift the real estate COVID-19 shut down!

Buying sight unseen

By law, I literally could not physically do any real estate related activities – not even place a sign or lockbox.

The owners did not want to list their home, and in fact had no sense of urgency about selling. However, after a few conversations, emails and Zoom calls, they were open to a potential “match” with my clients.

After a Zoom call and walk through with both buyers and sellers, they loved it! I knew this one would be a huge regret if we let it get away.

Their inclination was to wait for the COVID restrictions to be lifted and then make an offer. We discussed the possibility of a sight-unseen contract but understandably that made them feel uneasy.

As an advisor, it’s my role to offer possibilities and explore options not previously considered. Recognizing that the market would be more competitive after the shutdown, and their rights would be protected by the “sight unseen” contract addendum, the buyers agreed to do what they never thought they would – make an offer without seeing the home in person!

How does a sight unseen contract work?

Because of COVID-19, I suggested to the owners they go under contract as For Sale by Owners rather than have me represent them. By law they could interact with the buyers in ways that I could not, and it would also ‘sweeten’ my buyers offer price by reducing their cost of selling.

We minimized any in-person contact throughout the process. The owner privately contacted the buyers for their walk through during the “sight-unseen” contingency period and they weren’t in the property again until our final walk through on day of settlement.

Home buying during COVID19

With all parties grave concern regarding COVID-19, I did not go in the home even at the settlement day walk through but stood by outside to answer questions. Once this pandemic is over, we will all celebrate in person and I’ll love seeing what they’ve done with the place.

I’m so happy for all involved! The sellers found a perfect new home and did a sell/buy double closing on the same day. Everyone was a delight to work with.

Happy ending

Putting my clients needs first is more than a slogan, it’s at the core of my personal and professional ethics. I’m only successful when it’s a positive result for my clients. Your success is my success!

“Susanna Kunkel did a wonderful job of finding our dream home in Queen Village! She went above and beyond in the time of the pandemic to find us a home that wasn’t even on the market. It doesn’t get much better than that! She is a thorough professional who knows the ins and outs of the business and with tons of contacts. In addition she has always been accessible to us and super easy to work with. She genuinely cares about her clients. We highly recommend her without any reservations”

To explore how you can buy or sell using “sight unseen” strategies, or at least minimize your risks during COVID-19, please contact me for a confidential consultation.

Open House signs antique? like typewriters?

After returning to an “open” business environment after three months, the future of Open Houses seems to be bordering extinct. Or more accurately obsolete, like the typewriter.

Can you write with a typewriter? Yes, but why would you? Can you have an Open House? Yes, but with all the restrictions necessary and appointments required, why would you want to go?

Open House Pivot

Pivot is a word often used to express the dramatic and rapid changes impacting the real estate market due to COVID19. Some changes were underway but became accelerated, like virtual selling.

Others, like Open Houses, have completely “pivoted” to something other than what they were.

The non-committal and casual nature of Open Houses was a way to explore local real estate without an agent, or appointment.

Virtual Open Houses were a work around during our COVID19 shut down, using video previously taken or with the owner’s cooperation via Zoom video conference.

The new standard is to present a virtual Open House on Zoom with the agent guiding a tour of previously recorded video or navigating the Matterport 3D layout. Appointments are required, and if you “stop in” late you miss the video tour.

While it’s better than nothing, and a way to get a “peak” at the interior of the home, it’s not the casual easy way to explore real estate that we have enjoyed for so long.

Virtual Selling – the new standard of practice

In today’s market, virtual selling should be a standard of practice. I’ve sold homes virtually using video since 2008. It doesn’t make sense to book an appointment for a video tour that I already have access to, or should.

Every listing should provide a video tour. For my sellers I do a marketing video, think of it like a movie trailer;

Then I do the actual walk through video which takes you through the home as if you are there.

The home buying process has “pivoted.” Home buyers used to wait to interview and hire an agent until they were ready to buy. Now it’s best practice to do that at the beginning of your search.

Likewise, your pre-approval is needed early in the process as it’s required along with a COVID19 form to book showings.

Open House Standards Due to COVID19

Now that physical Open Houses are allowed, understandably there are awkward restrictions. As an example, here are highlights of a current brokerage’s Open House guideline for agents;

1. Sales associates and all open house visitors must wear a mask.
2. Social distancing rules should be maintained.
3. Disinfect all high-touch areas prior to and between each group of visitors; provide hand sanitizer if possible.
4. Sales associates should limit open house attendance to one group at a time to maintain appropriate distancing and accompany them through their tour to minimize unintended touching of surfaces. Additional groups can be asked to wait outside and to maintain social distancing while doing so.
5. Maintain a record of everyone entering the property, including name and E-mail address or cell phone number.

COVID19 is “here to stay” – we must adapt

The Economist recently published – COVID 19 is here to stay. People will have to adapt :

“The worst is to come. Based on research in 84 countries, a team at the Massachusetts Institute of Technology reckons that…without a medical breakthrough, the total number of cases will climb to 200m-600m by spring 2021.”

We cannot just return to “business as usual” as the battle against this pandemic is far from over.

Protecting buyers and sellers from unnecessary public exposure and utilizing current technology to present a virtual buying experience is now a necessary standard of practice – not just an option.

While our local market is now pushed to pivot in this direction, it’s long overdue in terms of providing the highest level of service to our clients.

Home buying is a journey – not a transaction

I provide information, support, advise and guidance from early exploration of the market through negotiations and closing as my personal standard of practice. Sometimes the answer is to not buy, which is perfectly fine. It’s all about what’s best for you!

The rush to provide virtual Open Houses has been a push to generate “leads” or meet prospective buyers. Open Houses have always been more of a networking opportunity for the agent than a true selling tool for the home owner. Virtual Open Houses provide marketing exposure for the agent but present an awkward experience for buyers.

Virtual Home Buying Service

Using virtual selling expertise, I create video walk throughs of properties throughout the home buying process to narrow down selections and fine tune the home search for my clients. That way, the showings we book in person are in reality 2nd showings. This saves time, protects home buyers and sellers from unnecessary exposure and streamlines the home buying process.

Open House Signs – an antique?

When I sold luxury real estate on Kauai, my open house signs were often stolen and used for fighting rooster sheds, an illegal but popular local sport.

One way of repurposing them but not a big demand on the Main Line!

While I haven’t thrown my Open House signs away, they are in the back closet for now! My ‘go bag’ is full of video equipment instead.

Top 5 new features to sell your home post COVID-19

How has COVID-19 affected home buyer demands?

The list of “must haves” has shifted. Buyers want their home environment to meet critical needs that arose during COVID-19 stay at home orders.

Preparing a home to sell means we must “stage” it to tell the story of your home emphasizing features in high demand from today’s buyers.

That doesn’t mean a major remodel – but it does mean taking a fresh look at how the areas within your home are presented.

Integrate these 5 “must haves” into the story your home tells in marketing for a successful sale in today’s real estate market.

Today’s TOP 5 new features on buyers’ demand list:

#1 – Multiple work zones

Multiple work from home zones are a must have with today's renters and buyers

No longer do people want an old fashion home office, closed off and perhaps near the front door. COVID-19 stay-at-home showed us the need for flexible space as well as multiple work from home zones.

Home office areas need to be light and inspirational. An empty bedroom can be staged as a home office.

One of my favorite easy solutions is to add a desk and chair to a large open space as an inexpensive and effective way to tell the story of multiple work spaces.

Easy home staging solutions for open extra home office space needed post COVID-19.
Easy staging solution to add a work zone

I recently hosted Christina Henck, owner of award winning Henck Design on my LIVE Broadcast who shared excellent home office design tips addressing COVID-19 work from home needs and demands.

Staging can be minimalist. Think of theatre – the stage isn’t furnished, just enough to tell the story and your mind fills in the details.

It’s about visual impact and creating a mental and emotional comfort for buyers that their needs are met.

#2 – Resort style outdoor space

Relaxing, working and entertaining outdoors is in top demand

Demand for outdoor space has become a premium! I hear from luxury agents across the country that it’s a must have for renters as well as buyers. If you have any outdoor space, it’s critical to showcase it and create an indoor / outdoor flow, with space to work, relax, host conversations and BBQ.

Both with work from home on high demand, and obstacles we face traveling for a quick getaway, homes now need to have a staycation element.

How can we tell the story of your home so that it feels like you’re in the Hamptons?

Main Line homes with pools are suddenly in high demand!

Pools are in high demand, but you don’t have to have a pool to successfully create an at-home retreat. From small decks to large yards, it’s important to open up the indoor / outdoor flow.

Changing window coverings, rearranging furniture inside and out as well as staging outdoor patio furniture will allow buyers to visualize working from home and soaking up Vitamin D without travel.

#3 – Grand central kitchen

Open flow kitchen with room for conversations and entertaining

We’ve all found ourselves cooking at home out of necessity during our COVID-19 shut down.

I’ve never understood why as an artist I didn’t feel creative in the kitchen. That broke through during our stay-at-home and I’m loving cooking!

Unfortunate for my daughter that this happened now, instead of when she was little. But it shows that no one’s hopeless. 😁

While restaurants are starting to open, cooking at home is a lifestyle shift for busy professionals that will stay. Meal prep is an event – part of open living with dynamic conversations, not a one-person chore.

Kitchens need to be stylish, inviting, polished, open and have space for fluid conversations.

#4 – Safe and smart tech

Smart technology, for safety and security are in high demand

Smart features of a home are in top demand. Both for technology connectivity as well as convenience and safety. If your home currently is not wired for today’s tech, let’s explore some modest updates to showcase your home for today’s buyers.

For instance, install a home security system with cameras. You can use a service and have them do the install. This also provides peace of mind while it’s on the market.

A smart app for front door access such as the August App won’t require a complete re-wire of your home but will greet buyers with high-tech security that they want.

While surround sound has been in high demand for new construction, the security and convenience of remote access and control is more important in today’s market.

#5 – Decompress zones

Yoga rooms are one of the easiest staging solutions

Personally, I cancelled my gym membership at the end of last year and while I thought about signing up in a new location during the New Year’s specials – I’m glad I procrastinated.

The future for gym memberships may be uncertain – but the demand for space to work out at home, and decompress is not going away.

Yoga rooms and home gyms along with mediations space are key demands for staging for success

Staging a yoga room is easy and inexpensive. I take an empty bedroom, or odd extra space – add a yoga mat and yoga ball, some calming art or zen like features and it’s done!

For larger homes often a challenge is too much furniture.

Move an extra chair into a sunlit area with a staged open book to attractively tell the story of a reading nook in a bedroom, or part of an open living space.

Staging isn’t an insult to your personal interior design taste. It’s literally theatre – setting the stage for buyers to be able to visualize themselves as the stars of their own show, instead of guests in your home.

When I work with my clients to successfully sell their home, I create a unique PR / Marketing plan to tell the story that will connect the best possible buyers to the home, maximizing exposure, creating sizzle and high demand from qualified buyers.

Our initial consultation can be done remotely using Zoom or FaceTime as we go through the home and construct a room-by-room marketing strategy for your success. Let’s talk!

1031 Tax Exchange Seminar – real estate investment strategies

Do you often wonder how does a 1031 Tax Exchange work? And if you can apply it with your investment properties?

Normally David and I host seminars with food and drinks. My apologies as we aren’t able to do that now – but please make yourself comfortable, and enjoy the LIVE webinar by clicking below.

Feel free to ask questions by contacting me. We are both here to help!

Click below to download David’s presentation slides.

Traditionally, a 1031 Exchange is used to defer payment on capital gains on investment properties. However, in today’s confusing market it can also be a strategy to minimize risk as well.

How has COVID-19 affected your real estate rental portfolio? Do you find that you are at risk of tenants not being able to pay their rent?

Are you considering taking advantage of the COVID-19 increase in demand for suburban rentals and wonder if a 1031 Tax Exchange can work during a forbearance?

There are several key strategies worth considering to minimize risk and maximize profit. One example is leveraging a forbearance to create a buffer of time to sell and transfer the proceeds into a less risky area, or a HUD guaranteed rental property.

For more insights for landlords and real estate investors, also visit my recent interview with Michael Daiello, Esq who shares key insights on What to do if your tenants can’t pay their rent due to COVID-19.

Let’s meet for “coffee” and discuss options – click on this link and pick a time that’s convenient for you.

How do I transition a traditional home to attract today’s luxury millennial buyers?

Millennial home buying trends have become a hot topic in luxury real estate. Millennials include anyone born between 1981 and 1996, and they’re quickly becoming a dominating force in real estate. In 2018, millennials represented the largest cohort of home buyers at 37 percent, according to the National Association of Realtors’ 2019 Home Buyers and Sellers Generational Trends Report.

This group now outnumbers baby boomers, and what they’re looking for in a home is drastically different than what their parents wanted when they entered the market.

Now more than ever, luxury buyers are viewing time as a luxury. How does that translate?

Homes need to be move-in ready. It’s not just about the money. The time it takes to renovate is too “expensive” in terms of what it takes away from quality of life.

So how do you transition a traditional home with stately architecture to attract a modern millennial buyer? My LIVE broadcast guest, Christina Henck, owner of award winning Henck Design shared some valuable tips and insights:

When we talk about “less is more” it relates to a key design element we artists called “negative space” – that’s the “blank” or “empty” space on a canvas surrounding an image, or the space between and around elements of a sculpture. The negative space is as important in design as the “positive” space (image, element – or in this case furniture).

Check out the clean design and flow created in the “negative space” in this luxury home.

The “negative space” creates a visual flow as well as a physical flow for walk through traffic on home buyer tours as well as videos.

Both are important elements of creating the kind of “sizzle” you want to drive buyers to take action!

Let’s talk! Please book a private consult on my calendar, and we’ll look at your home through FaceTime or Zoom and discuss ideas to maximize the market appeal for today’s buyers.

Home Office Design Tips

What used to be a “like to have” on buyer’s wish lists has become a “must have” not only now but into the future as our way of life has changed due to COVID-19. Working from home, remote college classes and public schooling at home make this a very complicated, challenging part of interior design – and a must have as we face an ongoing battle over the next 18-24 months.

Award winning interior designer Christina Henck, owner of Henck Design offers Home Office Design Tips LIVE that can help even the most awkward home office convert to a functional, pleasant space. Check out Christina’s Portfolio of amazing transformations in Center City and the Main Line and click below to view our LIVE broadcast.

Complications of multi-generation home schooling and working remotely can overwhelm and challenge even the best planned home office.

I don’t feel so bad about my home office “studio” in the man cave when I see national late night hosts like Seth Meyers broadcast from his attic! 🙂

Having a well designed home office is no longer just a luxury amenity. Working with luxury buyers relocating from New York recently, we needed to find space for both parents and the kids to be able to work/school from home, along with space for music and art.

Luxury amenities like a home office and home gym don’t have to come at luxury prices!

Two examples for you – both under $300K!

Gorgeous move-in ready Germantown rehab offered for only $219K and includes finished basement perfect for home gym, plus 3rd floor loft that can function as a 4th bedroom or large home office.

For an urban, hip lifestyle – cherish the exposed brick and luxury details in this Fishtown rehab at 2360 E Harold St. Make the 2nd bedroom your home office, gym or art studio and walk to the best food, parks, bars and community activities that make Fishtown a #1 choice.

Be sure to follow Facebook LIVE and subscribe to YouTube for future LIVE Broadcasts. And check out my Luxury LIVE interviews every Wednesday.

How to host a virtual open house

Virtual Open Houses are likely to become our new “normal” even after social distancing directives are lifted. For now, working together virtually as business partners, we can successfully showcase your home online and create a virtual first “walk through” for interested buyers.

4 Tips for how to host a virtual open house during #stayathome:

  1. Communication – we will do a consultation first via Zoom going over how to prepare, what to expect and choosing a time that works for you and your family. We’ll prepare and discuss features you’d like me to highlight the day of the virtual open house.
  2. Coaching – I’ll teach you how to “host” using your phone’s camera connected through my Zoom account. My hacks and tips I’ve developed from over 12 years of doing real estate videos will make it easy for you!
  3. Preparation – cleaning and decluttering will be necessary just as you would for an in-person open house. Also, the day of the open house all lights should be on, and be ready to open and close cupboard and closet doors. Buyers will also want to see the basement and garage.
  4. Q&A – at the end we’ll leave time for questions and answers. In our coaching call, I’ll help you prepare how to address buyers questions if necessary.

Marketing is my speciality! I’ll create a Facebook event and promote heavily on all social media platforms, linked to an event site asking for registration. The Zoom link will be sent only to those people who RSVP.

You’ll be able to easily share the event with friends and family on your personal social media sites. My marketing strategy gives your property high visibility both to consumers and realtors, creating maximum exposure.

Virtual Real Estate

Recent COVID-19 crisis “stay at home” orders have up-ended traditional real estate activity. However, sellers still want to sell and buyers need new homes.

Virtual showings now become a primary tool for both buyers and sellers to overcome the COVID-19 challenges and accomplish their goals.

For instance, the video below is a walk through preview I did for my clients last week during a brokers open house. There’s so much detail, sense of place and flow of the design one can get from a virtual walk through that you can’t get with profession videos or even the best photos.

Working remotely with both buyers and sellers was a foundation of my business while selling luxury 2nd homes in Hawaii as most of my clients were remote. Some buyers went under contract “sight unseen” based on video walk throughs I shared with them, and then flew in for the home inspection. Of course, that was based on our strong working relationship and clarity of their vision for their new home.

Now is the time when you need a realtor with cutting-edge technology skills as well as experience and expertise. Let’s have “coffee” via Zoom video conferencing and discuss what’s going on in your local market and various strategies to accomplish your goals.

What is smart marketing?

What’s the secret sauce to create the “buzz” and exposure needed to position your property in front of the right buyers, in targeted demographic areas? It’s strategic, or smart marketing. Please allow me to explain.

Traditionally, real estate selling falls into 3 P’s:

  1. Place on the MLS (or generic posts on social media)
  2. Put up a sign
  3. Pray for an offer

In a hot sellers market, this minimalist approach might work. And unfortunately, that reinforces the mindset that it is effective. I understand the thinking of For Sale by Owners, because if this is all that’s done, in effect the house seems to be selling itself.

When the market starts shifting into more of a buyers market, the truth comes to light that this strategy simply doesn’t work. Even in a hot sellers market, it doesn’t yield the highest net from market activity.

For my seller clients I create a personalized strategy to position the property in its best possible light, tell the unique “story” of the lifestyle of the home, and create a specific marketing plan to position the property in various ways to targeted buyer demographics. That’s in addition to extensive marketing to both consumers and realtors in local market segments as well as networking with realtors nationally.

For instance, I had an opportunity to help the seller of a new construction condo in Queen Village that hadn’t sold after being on the market for more than 10 months. The objections were the size. Analyzing the market, I felt the asking price was competitive but we needed to present the lifestyle and target specific types of buyers where the layout wouldn’t be an objection.

I created a multi-faceted marketing plan and re-listed it at the same price. The marketing included:

  • Staging the two decks emphasizing the outdoor areas
  • New video under 1 minute for use on social media
  • Multiple Instagram and Facebook ads targeting working professionals, technology, medical and education industries and showcasing “work from home”
  • Telling the story of living in Queen Village
  • Geographic areas targeted outside of Philly included New York – where the buyers ended up coming from!

We had competing offers and got it under contract within the first 3 weeks on the market without lowering the price!

For a detailed analysis and marketing proposal targeted to meet your goals, please contact me today.