Philadelphia may begin offering tiered property discounts
Real estate in Philadelphia, PA, is finally being purchased in some neighborhoods, while other districts continue to struggle. In the first quarter of 2012, nearly 3,148 single-family houses were sold in the city, and one-third of the sellers were lenders, government agencies and Fannie Mae and Freddie Mac, The Inquirer reports.
The records represent an excessive amount of distressed-home transactions over the course of 2012, surpassing numbers seen in the past 24 quarters, stretching back through 2006. With a wide array of homes on the market for significantly low prices, buyers may be able to be a little more stringent on the properties they shop between. People remain hesitant to enter the marketplace, so for those buyers who do feel confident in their financial standings, the time to buy is now in Philadelphia.
The City has recently unveiled its plan to acquire land and buildings through a sheriff's sale, the news source reports. The current inventory is more than 6,300 listings, but Philadelphia's policy of selling properties at appraised values has done little to entice buyers back into the marketplace. In fact, 50 percent of transactions never make it to closing when appraised value is made known to potential buyers.
Officials and real estate experts have to act savvy in order to encourage new sales, and the only solution may be to further reduce prices to stimulate growth.
Recently, Council President Darrell L. Clarke released an article in The Inquirer that promoted a new idea on how to relinquish inventories in the city. The bill would create development districts throughout the city, scouring city-owned property based on the level of distress in the area. The districts would be evaluated based on public ownership, vacancy and tax delinquency. Clarke suggests discounted properties by 50 percent when two of the three factors are present at a 10 percent level. What's more, at a 30 percent level, properties would see a 90 percent price decline.
While the proposed bill is still in its planning stages, homebuyers may be encouraged to enter the marketplace in the future to take advantage of appealing deals in Philadelphia. When looking for affordable housing, real estate officials may be inclined to offer unique discounts in areas with distressed property listings, so shopping for short-sales may be worthwhile for first-time homebuyers.