Center City Philadelphia Building is Still Going Strong!!!
Center City building is still going strong<br />By Alan J. Heavens Inquirer Real Estate Writer<br /><br />Given the inventory of unsold properties – and the rise in the number of days it takes to sell each one, even as median prices continue to increase – you’d think residential construction in Center City would be slowing.<br /><br />Yet from Front Street to the Schuylkill, and well north and south of the traditional boundaries of the business district, high-rises are rising and low-rises are spreading across what had been abandoned lots.<br /><br />The housing market may be sluggish, but 30-year fixed-rate mortgage rates remain low and available to buyers with good credit. And there’s still that 10-year tax abatement for units in new construction and converted buildings.<br /><br />Among the major projects under construction or nearing completion are:<br />Western Union Building, 11th and Locust Streets; 100 condo units, 70 percent sold. The first owners began moving in last week. Price range: $399,000 to $2.6 million.<br /><br />Residences at Two Liberty, 19th and Chestnut Streets; 100 units (down from 123 because some buyers bought multiple units to combine). The first 59 are under construction, with delivery in January. Prices start at $1 million.<br /><br />Symphony House, Broad and Pine Streets; 163 units, 25 remaining. The first owners arrived in June. Price range: $500,000 to $5 million.<br /><br />Residences at the Ritz Carlton, 10 Avenue of the Arts; 270 units, about 50 percent sold. First move-ins expected in late 2008. Price range: low $600,000s to $12 million.<br /><br />The Ellington, 1500 Chestnut St.; 160 units, 85 percent sold, immediate occupancy. Price range: $370,000 to $1,295,000.<br /><br />2200 Arch St.; 145 units, five left. The last owner is expected to arrive in April. Price range: upper $300,000s for one-bedroom, upper $400,000s for two-bedroom.<br /><br />22 Front, 22 Front St.; 42 condo units, 16 sold, first move-in Nov. 1. Price range: $395,000 to $2.5 million.<br /><br />Thus far, credit tightening hasn’t been a major issue in the downtown market.<br />Jon Orens, a partner in Orens Bros. Real Estate and the developer of 2200 Arch St. loft condos, said no deals had died as a result of the credit crunch. “I’ve seen loans blow up on the day of settlement, but the buyer has always been able to get a replacement quickly.”<br /><br /><strong>Fred Glick, a mortgage broker and Realtor in Old City</strong>, said a lot of buyers, especially first-timers, think that they can’t get a mortgage, “that values are going down. But the reality is that there are still 100-percent programs out there.”<br /><br />With city developers so focused on condos since the late 1990s, the supply of rental apartments has been squeezed, and rents are beginning to equal mortgage payments.<br /><br />”Once rents start skyrocketing, you’ll see more buyers,” <strong>Glick</strong> predicted.<br /><br />Though median sale prices in the city are still rising, albeit at a slower pace than in 2004 and 2005, the inventory of existing houses on the market is still high, as is the number of days on the market.<br /><br />Philadelphia has, to date, not suffered badly in the downturn that has been suffocating residential markets in Las Vegas, Miami and even Baltimore.<br /><br />Still, there’s a lot to look at, and existing condos and townhouses, some of them less than five years old, are competing with hundreds of new units coming on the market every month.<br />Prospective buyers “want to see everything that’s on the market,” said Prudential Fox & Roach agent Bari Shor, who sells in Washington Square and Society Hill. “Yet a lot of them don’t want to wait, and those who do still want to see and touch what they may be buying.”<br /><br />Allan Domb, developer of 22 Front, the Lanesborough, Parc Rittenhouse, Warwick, the Bank building, and the Lippincott, said it was a lot easier to sell a unit as a building approached completion.<br /><br />”In Philadelphia, people do not believe buildings are going to be built, with good reason – so when it is done, it becomes a reality,” Domb said.<br /><br />In the contest between existing and newly built units, which will win? It depends.<br />Absent the all-important “location, location, location” factor, people will purchase existing homes, said Bruce Lang, of Coldwell Banker Realty on Columbus Boulevard.<br /><br />”Over 85 percent of buyers are buyers of necessity – marriage, divorce, relocation for work,” Lang said, and they will go with something already built.<br /><br />If the new construction is at the highest end – such as the Residences at Two Liberty, 10 Rittenhouse Square, 1701 Rittenhouse, and the Residences at the Ritz Carlton – the buyers fall into the “don’t-mind-waiting” category.<br /><br />These high-end buyers have few worries about money, but they do need a place to live in the meantime, and that becomes part of the real estate agent’s job.<br /><br />”So we try to find them suitable rentals while they wait,” said Joanne Davidow, vice president of Prudential Fox & Roach, who manages and sells real estate from an office in Rittenhouse Square.<br />The hot spot in the Center City market remains the $350,000-to-$550,000 range. But that’s where a lot of the unsold inventory can be found, as well.<br /><br />Size influences the limits of price range. Orens, for example, has set the limit on two-bedroom units at $500,000 because he doesn’t believe the typical buyer will pay more than that.<br />Like Shor and Domb, Orens said people wanted to see evidence of construction before they decided to buy.<br /><br />”When we started showing the building, they’d ask: ‘How do we know you’ll build it?’ But those questions stopped with the arrival of the first two stacks of drywall,” Orens said.<br /><br />”That’s the answer. Two stacks of drywall, whether we’re ready for them or not.”