Year-end 2020 real estate report

Year-end 2020 Market Report

Looking back on 2020 to make decisions in 2021 is a bit like driving while looking in the rear view mirror. No pun intended but you know that saying “hindsight is 2020?” While the past may not predict the future, we are seeing trends that can help navigate a quickly changing market in 2021.

To start, you’ll find an overview of the North American Luxury Market for 2020 with highlights and statistics for Main Line and Center City communities in my year-end Luxury Market Report:

Shifting markets

While a market shift was predicted as early as 2017 due to normal real estate cycles, the effects of the COVID pandemic in 2020 created quickly shifting micro-market changes no one anticipated.

The market is hot, except where it’s not. I don’t mean to be sarcastic but for sellers who were on the market in 2020 and didn’t sell – it can be painful to hear how hot the market is when that wasn’t their experience. Even in a hot market, successful selling requires an aggressive, creative strategy with targeted marketing locally, nationally and internationally.

For buyers, many have felt scorched by the heat of escalating values, competing offers and limited inventory, especially in the suburbs.

There’s no one easy answer to “how’s the market.” In complicated times it’s more important than ever to take a deep, consultative look at the specific market trends that can impact your real estate goals.

What does all that data mean?

Main Line market statistics
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I’ll cut to the chase and share my personal insights.

Philadelphia and communities on the Main Line survived the mortgage crisis without a dramatic bubble and burst. We’ll weather through this pandemic as well.

Do we have a bubble? Leading economists say price escalations are not a bubble but a market response to high demand and low inventory. That’s reassuring, but it also means values are likely to shift as supply and demand changes in 2021.

Philadelphia’s Center City

We can anticipate the desirability of Philly’s low density cosmopolitan lifestyle to retain value. How much and in what areas is impossible to predict.

Pied-a-terre condo

However, as detailed in my market report, the number of new contracts increased in Rittenhouse Square end of 2020 meaning buyers are taking strategic advantage of a strong buyers market, following a national trend for pied-a-terre condo purchase in metropolitan centers.

Main Line suburban communities

Many Main Line home owners who planned to downsize decided their home actually fits for them long term. However, for those who have considered selling in the near future, now is the time to take action and benefit from high demand and low inventory.

You’ll see below that New York suburban markets began cooling off at the end of 2020 with fewer sales, an early indicator of a softer market.

We cannot assume that escalated suburban market values today will remain the same throughout 2021.

New York buyers on the Main Line

From Manhattan to the Main Line was a common story for 2020. Buyer demand for suburban homes on the Main Line made a huge impact.

Competing cash offers for luxury homes that had previously languished with months, even years on the market literally flipped luxury market areas like Gladwyne with a movement you might call Billionaire’s Row to Billionaire’s Village.

Homes with pools and the ability to add a pool became a top post-COVID ‘must have’ for buyers along with work from home flex space, gyms and media rooms. Large estate homes that were seen as undesirable in 2019 started receiving competing cash offers.

What can we learn from New York’s market changes?

Much of the 2020 increase in demand and values on the Main Line was driven by post-COVID urban flight from Manhattan to the Main Line. When the pandemic hit New York city early and hard, we saw an influx of Manhattan buyers on the Main Line as early as February.

Just as New York was months ahead of Philadelphia facing the pandemic, their real estate market may serve as an early indicator for trends coming in 2021.

A recent New York Times article summarized the complex market effects of COVID-19 for New York boroughs – The Market Collapse of 2020 highlighting trends in Manhattan as well as suburban areas.

Is demand for suburban living cooling?

New York appraiser Johnathan L. Miller who covers Manhattan, West Chester, Long Island and Fairfield Connecticut sees the New York suburban demand cooling;

Suburban demand cooling

“The pandemic didn’t create a new class of suburban buyers — mostly, it accelerated the plans of New Yorkers who were already thinking of moving. And while sales remain elevated in several suburbs, compared to last year, their meteoric rise plateaued in the late summer. I think peak suburb has passed.”

While New York suburban demand is cooling, we still have a strong demand suburban living as we can see in the December statistics below:

Montgomery County 2020 Statistics
December 2020 Statistics for home sales in Montgomery County

Will the Main Line follow New York and cool off in 2021? Perhaps, but I anticipate a spring surge of buyer activity as leases signed during the early COVID urban exodus in 2020 come to an end. Buyers are making a more final decision in 2021 on where and what to call home.

We face the potential of a softening demand by summer or fall of 2021 following the trends in New York suburbs as adjustments to our post-COVID work from home realities settle in as our new normal.

Rental decline

Rents for Center City prime locations struggled in 2020 following similar challenges throughout the country in cosmopolitan locations.

For instance, the median rent in Manhattan dipped lower than 2010.

Manhattan rental trends

As reported on my blog, Paul Levy, President and CEO of Center City District spoke to the Path to Philadelphia Recovery in November. Council Member Allan Domb joined the discussion with comments about about Center City’s soft luxury rental market.

As you can see, the effect of COVID on our housing market on the Main Line and in Center City is complex, and quickly changing.

For more information about your specific market, reach out for a confidential consultation. For an instant home valuation visit HomeValuesbySusanna.com.

Luxury Short Sale Success

Luxury short sale success

Do luxury short sales work? Yes indeed! As an example, it was my honor and privilege to recently help my client through a very complicated distressed property situation to successfully sell this gorgeous home, with multiple offers, and debt forgiveness.

610 S Front Street – Successful Luxury Short Sale in Queen Village

We closed successfully during our early and awkward COVID shutdown in April of 2020. What really matters is how my client feels afterwards:

“Susanna is one in a million in her field! In addition to her knowledge, her professionalism and ethics are of the highest caliber. I have been a real estate developer for over 35 years and found my self in a short sale situation. I have never been in this situation before but Susanna was able to get the lender to forgive a part of this loan. She is cool, calm, confident and very thorough. I would highly recommend her for any real estate transaction.” – R.K, Seller

Another luxury client with a complicated, challenging situation described me as a classy, demure lady who under the surface is a pit bull 🤩. When I make a commitment to my clients, I follow through and indeed hold on to their goal for success like a pit bull with a bone!

Connecting with the right legal advise, networking for maximum exposure, tailoring the marketing and sale process to fit my client’s needs and goals is what creates success.

Why do luxury short sales fail?

Sadly, I’ve seen too many luxury home owners not get the right advice. No one should face foreclosure, no matter what their situation.

I’ve helped luxury home owners with multiple properties, significant assets and who are not behind on their mortgage successfully resolve under water market values with a short sale and debt forgiveness.

Without the right help, both the home owner and the lien holder suffer. For instance this recent foreclosure in Villanova at 1425 Mount Pleasant Road shows how the bank yielded a much lower amount after taking possession through foreclosure and selling as an REO than they would have with a short sale. Both seller and bank lose in this scenario.

While the final purchase price of this property as an REO listing of $1.3M may seem positive for the buyer, there are more risks with buying a bank owned foreclosure than a short sale.

During a short sale the owner remains involved, is obligated to give a complete sellers disclosure and maintain the property.

The time it takes to legally foreclose, clear title and then offer it as an REO bank-owned listing can be from many months to a year. During that time the home deteriorates and is at risk of vandalism.

For more insights on how short sales work, and whether it’s better to buy a foreclosure vs a short sale, be sure to subscribe to this blog. Check out Top 10 Short Sales Myths for more info, then be sure to book a confidential consultation with Susanna Kunkel, Short Sale Expert.

What’s the future for Center City real estate?

Welcome to Center Cityt

Center City Philadelphia has had some unique challenges this year to say the least. What’s the future for the business focused Center City real estate market?

Literally just days before Philly initiated the new “safer at home” restrictions to fight rising COVID cases, KW Philly hosted the following dynamic presentation by Paul Levy, President and CEO of Center City District about the Path to Philadelphia Recovery.

It’s just over an hour long, so grab a cub of coffee and some snacks. Be sure to stay tuned as Council Member Allan Domb adds some important insights you won’t want to miss at the end during the Q&A session.

Market Reports for Center City

Detailed below are Q3 Center City Luxury market trends, specifically focused on Rittenhouse Square and Mid-Town Philly luxury:

Call me a hopeless optimist, but just like one of Philly’s faves from 2012 – I always have to look at the Silver Lining. In this case, it’s a great time to buy luxury in Rittenhouse Square or in Mid-Town Philly.

In the long run, the livability of Center City Philly with easy access to NY and Washington, DC supports a recovery and resurgence in the area.

Be sure to subscribe below to stay in touch!

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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.

How to transform your library

How to get the highest offer in today’s market? Staging is not just furniture, it’s about telling a story that makes the right buyers fall in love.  One of the mainstays of Main Line estate homes is a gracious library. Many of today’s luxury buyers no longer view a library as desirable. They look for technology based amenities, like Control 4 smart systems. Yet a library is a very positive feature if positioned creatively.

Too many design elements – need to simplify and lighten the room

How to present the features and benefits of a library, but also appeal to modern luxury buyers? Staging can transform the area making it attractive to both traditional and modern luxury buyers.

Spare elements on shelves, staging as open living area

Staging is not just furniture. It’s about re-packaging the property in the best possible way for today’s buyers.

How can we present your home to net you the highest price in today’s market? Let’s talk – I have solutions for you!

Just sold – 23 S 23rd in Rittenhouse Square

How to sell amidst objections? I created a story for this Rittenhouse Square luxury condo that would appeal to New York buyers who love access to Philly’s 30th St Station where it’s an easy commute.

Selling luxury requires successfully sharing the emotional experience of the home’s lifestyle, not just property photos.

This delightful one bedroom has a 800 sf private deck offering a unique indoor / outdoor lifestyle in the heart of Rittenhouse.

What matters is the end result for my clients. In this case they were long distance and we did everything remotely. The market was challenging and didn’t offer what they ideally would want, but we accomplished the highest net possible and here’s the end result which is all that matters.

“We found that Susanna was up-to-date on the market conditions in Central Philadelphia. We appreciate her frankness and honesty about realistic pricing. She was very accommodating arranging contractors, cleaning personnel and staging companies to present our property in the best light. I consider  this a true one stop shopping experience. I must also command Susanna’s staff, for handling the logistics in a smooth and painless manner. This was especially important to us as we do not reside near Philadelphia.”

For more information on how to sell in today’s market – let’s talk!