Fall Q3 2020 Real Estate News and Market Reports

Home Office Demands

Telling the story of the current Main Line and Center City real estate market for Q3 2020 is not a simple task. At this particular time, we have a dramatic real-life example of how there are multiple “realities” depending on what numbers we view in which market segments.

Oversimplified reports can lead to bad decisions, especially during challenging times. No one wants to hear “it’s complicated” when dating – or when buying or selling real estate. However, that is the case in the Greater Philadelphia area for Q3 2020.

Now more than ever, it’s important to have detailed information for your particular situation as reported in my Fall 2020 Newsletter.

Fall 2020 Newsletter for Main Line and Center City

In fact, what started out to be my normal market update turned into various reports covering luxury markets in Gladwyne, Villanova and Bryn Mawr on the Main Line, Rittenhouse Square and Mid-Town in Center City as well as the dramatic spike in pre-foreclosure distressed properties.

This is a unique point in time where each of these market segments has been impacted by our national COVID pandemic, political uncertainties and national news coverage of protests and violence in Center City.

Q3 2020 Market Report Summary

Philadelphia broke records in September for number of sales and median sales price primarily driven by a spike in activity after our COVID shut down during Q2.

Philadelphia Market Report

While these results can make an amazing story, it’s not clear that this is a sustainable trend. However, the steady demand and consumer confidence during challenging times speaks well for the stability of the Philadelphia real estate market.

Main Line and Center City Luxury

Luxury Market trends on the Main Line and in Center City are best viewed by year-over-year changes. Smaller number of sales at high values can skew statistical shifts month-over-month.

The biggest Q3 2020 shifts are reflected in Gladwyne luxury market with a decrease from an average of 10 months of inventory to 3 months, and a 26.59% increase in median sales price over the past 12 months.

Gladwyn Luxury Market Report

Other Main Line luxury markets such as Villanova and Bryn Mawr remain in high demand with low inventory. However, the shift isn’t as dramatic because these areas were in high demand pre-COVID due to easy access to shopping, dining and regional rail commuting stations.

Conversely the Rittenhouse Square and Mid-Town luxury markets softened to approximately 16 months from an average of 9 months of inventory. Both of these luxury market segments are largely driven by luxury condo sales such as Two Liberty and The Residences at Ritz-Carlton located in the center of the civil protests during the summer.

Does that mean that Center City luxury is dying? Not at all. Life on Rittenhouse Square is thriving.

Demand for mid-sized cities like Philadelphia within an easy commute to New York and Washington DC make Center City a prime destination for relocating buyers and commuting executives.

Gary Vee predicts we are going 100% into a mixed office environment with a standard for work from home with occasional office visits.

This lasting trend will help support the recovery of Center City.

Pre-Foreclosure Spike

The pre-foreclosure market segment has cross-currents as well. Misinformation from forbearance reporting errors adds to the increase in delinquencies. Although this spike cannot be ignored, it may not be what it seems.

Spike in 2020 Foreclosures

Mortgage crisis vs. COVID

News and analysts typically dismiss the increase in pre-foreclosures as not being the same as the mortgage crisis, citing the strong possibility of forbearances being extended into 2021.

Will forbearances be extended? Most likely. That may only postpone foreclosures if home owners remain in financial difficulty and are unable to bring their mortgage current.

The distressed property market today is not like 2009. An abundance of forbearances is indeed a different scenario than bad loans. However, a different cause doesn’t negate the results. Much hinges on our economic recovery, and home owners ability to convert their forbearance into a loan deferral.

Like other market segments, there are many layers to this “story” and it’s a trend we need to watch.

How’s the real estate market?

A quote I heard years ago applies now more than ever;

“Asking how’s the real estate market from a national perspective is like asking what’s the temperature in America”

There is technically a temperature for the United States, if you average all the temperatures across the country. However, that won’t help you plan your day or know if you need snow boots or an umbrella.

Similarly, if you ask me how’s the real estate market in the greater Philadelphia area, the answer is “it’s complicated.”

As I reported 10 years ago from Kauai’s luxury second home market, it’s a bit like quantum physics. Multiple realties for various market segments. At this point in time in the Philadelphia area, that’s especially true.

Although real estate shifts are normal, this is a very dynamic time, unlike any other real estate market shift we’ve experienced. The question that’s most important is how to best navigate these changing currents for your success.

What’s the future look like?

Both negative and positive Q3 shifts can be attributed to the impact of COVID and political unrest. What can we expect for the coming months?

No one has a crystal ball to predict the future or how sustainable these trends may be. Even the exodus of New Yorkers to large suburban homes may shift to more of a cosmopolitan lifestyle in Center City communities like Queen Village where you have the best of suburban and urban living.

Dr. Lawrence Yun, chief economist for the National Association of Realtors, recently predicted “it will be one of the best winter sales years ever.” Of course, that’s a national generalization. I certainly hope that holds true. However, now is not a time to passively wait and see. It’s a time to apply smart, creative strategies in your particular market to create success for you.

What are your real estate goals?

What’s most important is how we can maximize on current trends to meet your particular short-term and long-term real estate goals.

I’m passionate about supporting my clients with information and concierge, VIP support. As detailed as these market reports are – nothing compares to a personalized analysis for your particular goals.

Let’s talk! Please book a call or Zoom chat on my calendar or feel free to comment below. Your information will remain confidential.

From New York to the Suburbs of Philly

Moving from New York

Have you heard about the exodus from dense urban centers like Manhattan to the suburbs?

There’s been a lot of press covering home buyer demand moving from dense urban areas to more open suburban lifestyles across the country, from San Francisco to New York.

Gary Vee recently posted about how changing work from home trends are going to dramatically impact real estate, now and into the future:

Yes we can contribute this rush to the suburbs as a post-COVID market impact. However, the effect of COVID-19 on the housing market is complex. Much like the ocean, there are trends that appear like a big wave – but there’s also cross-currents and potential undertows.

Okay, you can tell I lived by the ocean for a very long time! I still take my shoes off when I come home 😎🏄🏼‍♂️

Fleeing Manhattan to the suburbs

One of the big waves that got a lot of press is the huge uptick in demand for suburban living from Manhattan. The NY Times reported in August New Yorkers are fleeing to the suburbs; the demand is insane’ :

“Moving companies have said they cannot keep up with the demand. Metropolis Moving in Brooklyn said the number of quotes for out-of-state moves jumped by more than 200 percent in May and in June.”

Moving from Manhattan to Suburbs

Most of the press highlighted an increase in demand for suburban areas close to Manhattan like Northern New Jersey. However, here in the “6th borough” of Philadelphia, we’ve welcomed a lot of New Yorkers as new neighbors on the Main Line and in Center City.

Main Line suburban living

While a large Main Line 6,000+ sf estate home on 3-5 acres sounds ideal after quarantine with multiple generations all working / schooling from home, the reality of remote large estate living isn’t for everyone.

What sounds good at first can settle into a different set of frustrations, such as upkeep and maintenance. Reminds me of my clients on Kauai who visualized a 5 acre home, only to realize in Hawaii 5 acres is like managing a farm! The lifestyle they desired was in reality better met with a home on a 1/2 acre parcel.

Family fun in Center City

Many people moving from dense urban areas crave more space but still long for a cosmopolitan lifestyle that can be comfortable and safe for the entire family.

The Main Line is comprised of townships which started as villages, and they retain quaint character along with rich history. However, in the heart of Center City there’s a village that offers the best of both worlds.

Queen Village – cosmopolitan, historic and friendly

Philadelphia’s first neighborhood and rich in history, today Queen Village simmers with modern energy, making it an ideal neighborhood if you love fashion, food and fun but want a low-key local village lifestyle.

Hear first hand insights from my Queen Village clients who love the charming, safe, friendly, village lifestyle with cosmopolitan amenities:

Two “suburban” features that are the hardest to find in Center City are a large, fenced yard and 2-car garage.

You’ll find both at 814 S Swanson, the perfect Queen Village luxury home that offers a large fenced yard, 3 outdoor decks, 2-car garage, elevator, home office and in-law suite:

Time will tell if our new friends from New York settle into the large homes on the Main Line for good, or perhaps desire a more cosmopolitan lifestyle and shift towards a different kind of quiet village community with cosmopolitan, funky vibes such as Queen Village.

Please be sure to subscribe for future updates and comment below with your thoughts and insights.

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.