Local Main Line Area Real Estate News
Lower Merion School District Officials Lower Final Tax Increase
Lower Merion School District officials recently announced that the final proposed tax increase for the 2013-14 school year will be slightly lower than the previous 4.4% increase projected two months ago. A slight increase in tax collections and a reduction in some contract services have allowed the district to reduce the proposed tax increase to 3.82%. The new budget figures would increase the millage from 23.4841 mills to 24.3817 mills, with one mill equal to $1 in tax for each $1,000 in assessed property value. The average home in the district assessed at $250,680 could see a tax bill of $5,887 – a $225 increase over the last year – if the proposed budget is adopted.
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Local High Schools Rank High on Best List
US News recently published its ranking for Best High Schools. Three local High Schools ranked in the top ten for Pennsylvania. Conestoga High School ranked fifth, Radnor High School was eighth and Lower Merio ranked ninth. Source: US News and World Report
Pennsylvania Fairs Better Than Most
Outside of Pennsylvania, the typical U.S. home has depreciated in value by more than 30 percent since the bursting of the housing bubble, according to Case-Shiller’s 20-City composite house price index. That is a larger decline than what was even seen during the Great Depression. But here in Pennsylvania, the average home has fallen in value by only nine percent, according to the Federal Housing Finance Agency (FHFA); less than a third of the national decline.
Even though the Commonwealth’s largest city of Philadelphia has fallen 19 percent from its peak, that’s still less price deflation than in 18 of the 20 cities tracked by Case-Shiller. And the Commonwealth’s second-largest city, Pittsburgh? Its average home price has fallen zero percent, according to FHFA. You read that right: zero deflation.
Of course, price deflation puts homeowners underwater: owing more money on their mortgages than what their houses are currently worth. Currently, about a quarter of all U.S. homeowners are in such a situation, according to one popular website. (Maybe they should be referred to as “homedebtors,” instead?) In Pennsylvania, only about eight percent of homeowners are in such a situation. Not only is this significantly less than the national average, but only three states (NY, OK and ND) can claim a lower percentage of negative equity than us. Source: Kevin Gillen, Ph.D
Chester County growing fast
According to a study by the Pennsylvania State Data Center this month, Chester County will grow more over the next 20 years than any other county in the state. The county is projected to grow by 258,533 residents between 2000 and 2030, a 59.6 percent increase. Relative to neighboring counties, Chester County has a higher birth rate and more immigration from within the state, the country and overseas. Montgomery County should add 138,168 residents over that period, and Delaware County will add just 33,078 residents. That state´s population is projected to increase by 7.4 percet overall. Source: Suburban Wayne Tiimes
Region’s “Classic Towns”
The Delaware Valley Regional Planning Commission (DVRPC) is touting some of Philadelphia´s first suburbs as “great places to live, work, and play.” The new marketing effort, titled “Classic Towns of Greater Philadelphia,” will feature the following townships and boroughs: Landsdowne (Delaware County), Media (Delaware County), Manayunk (Philadelphia), Overbrook Farms (Philadelphia), West Chester (Chester County), Doylestown (Bucks County), and Ambler (Montgomery County). The Classic Towns initiative is committed to the growth, revitalization, and support of the region’s older communities. Source: Philadelphia Inquirer
Pennsylvania Heath Rankings
New health rankings, available at www.countyhealthrankings.org, include a snapshot of each county in Pennsylvania with a color-coded map comparing overall health rankings. Researchers used five measures to assess the level of overall health or “health outcomes” for Pennsylvania by county: the rate of people dying before age 75, the percent of people who report being in fair or poor health, the numbers of days people report being in poor physical and poor mental health, and the rate of low-birth weight infants.
Down Payment Help
A new downpayment and closing cost assistance program was unveiled by the PA Housing Finance Agency (PHFA) last month.
The Keystone Advantage Assistance Loan (KAAL) will provide an amortized subordinate loan of up to 2 percent of the sales price (maximum of $4,000) to qualified borrowers obtaining a PHFA first mortgage. This program will replace the agency’s Keystone Assistance and Keystone Government Assistance Loan programs. The program is to assist lower-income buyers.
“The Keystone Advantage Assistance Loan will allow qualified homebuyers to borrow a portion of the funds needed to cover their downpayment requirement and/or closing costs associated with the purchase of their home,” according to Kate Newton, PHFA homeownership programs director. “This loan will carry the same fixed interest rate as the first mortgage but a term of 10 years. And, there’s no prepayment penalty for paying off the Advantage loan early.” Source: PAR Just Listed
It’s Time to Buy That House
Two of the silliest mantras during the real-estate bubble were that a house is the best investment you will ever make and that a renter “throws money down the drain.” Whether buying is a better deal than renting isn’t a stagnant fact but a changing condition that depends on the relationship between prices and rents, the cost of financing and other factors.
But the math is turning in buyers’ favor. Stock-oriented folks can think of a house’s price/rent ratio as akin to a stock’s price/earnings ratio, in that it compares the cost of an asset with the money the asset is capable of generating. For investors, a lower ratio suggests more income for the price. For prospective homeowners, a lower ratio makes owning more attractive than renting, all else equal.
Nationwide, the ratio of home prices to yearly rents is 11.3, down from 18.5 at the peak of the bubble, according to Moody’s Analytics. The average from 1989 to 2003 was about 10, so valuations aren’t quite back to normal.
But for most home buyers, mortgage rates are a key determinant of their total costs. Rates are so low now that houses in many markets look like bargains, even if price/rent ratios aren’t hitting new lows. The 30-year mortgage rate rose to 4.12% this week from a record low of 3.94% last week, Freddie Mac said Thursday. (The rates assume 0.8% in prepaid interest, or “points.”) The latest rate is still less than half the average since 1971. Source: Jack Hough, SmartMoney.com
Ideas for a Down Payment
As reported recently in the NY Times, most homebuyers these days need to put down 20% to get the best interest rates and many just have not been able to save that much. Here in the Philadelphia area, lower rates are only available up to $417,000 and then jumbo rates apply. Rates are at historic lows, but buyers cannot take advantage. So what is a cash-short buyer to do?
Many are turning to that age-old resource, the parents. Some estimates suggest that 30-50% of first time buyers have a gift as part of the down payment. The good news, if there is any, for the parents, is that under federal law, up to $52,000 a year can be gifted by two parents to a child and a spouse. And that can happen twice if it is done at the end of one year and then again at the beginning of the next. So best case (for the kids), would be $104,000. That would allow purchase of a $500,000 home, including closing costs.
Parents without the means to gift such sums may want to loan the money and perhaps forgive the debt later, but that loan would have to be disclosed to the lender and might interfere with the underwriting process. It would have to be taken into consideration as a debt when calculating the ratios allowed for the loan.
Philadelphia Magazine names 15 ‘Most Family-Friendly Philly Suburbs’
As part of the Best of Philly series, Philadelphia Magazine has named The 15 Most Family-Friendly Philly Suburbs. The towns were selected from those with populations over 2,000 where at least 25 percent of the population is below the age of 18 and had low crime rates. Education was a key component to the selection, and each town had school districts that scored a minimum of 520 on the SAT exams in reading, math and writing. Click here to view the list. Source: Philadelphia Magazine
Several townships adopted changes to their student housing policies for rental properties. The Alliance staff have monitored and reviewed any ordinance related to housing policies. Both Radnor Township and Tredyffrin Township (Chester County) adopted provisions limiting the future possibility of tangential student housing in single family residences. Both municipalities also currently have a registration requirement for any rentals that are leased by students. For more information visit Tredyffrin and Radnor township websites.
Philadelphia Ranked in Time-Saving Cities
Real Simple magazine ranked Philadelphia 12th among 21 cities in it’s 21 Top Time-Saving Cities. The survey was based on criteria in 5 catagories for a total score. The categories included; getting around, health and safety, information and technology, green time-savers and lifestyle. The magazine found the city “very walkable and notably uncongested”. Source: Real Simple
Tax Assessment Appeals Increase
Residential assessment appeal submissions are up in our area. In Pennsylvania, real estate taxes are based on the assessed value of a property. Often, the assessed value is less than the actual (fair market value) of the property. The appeals process involves a home owner providing the county tax appeals board with recent market data (neighborhood home sales, appraisals, etc.) regarding their home’s value. Based upon a short hearing and the documentation provided by the property owner, the board will determine a new fair market value for the property. A property may be overassessed if the value the property has appreciated more slowly than the county or if the area property values have not increased or have decreased. At this time in the year, only interim assessments appeals may be filed. Click here to learn more about the assessment appeals process.