A note from Brendan Reilly
Greetings! My newsletter covers local and national real estate trends to keep you abreast of current conditions. If you or anyone you know is looking to buy or sell a property in Suburban Philadelphia, I would love to help!
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Philadelphia home values up 4.6 percent in past year, says Zillow
Median home values in the Greater Philadelphia region rose 3.3 percent year-over-year to $199,200, according to newly released data from Zillow. The July 2014 study found that the Philadelphia area's median home value is 13.9 percent higher than the national average of $174,800. Here's how the Main Line stacked up:
Area Increase Avg. Price
Ardmore 1.5% $269,900
Bryn Mawr 9.6% $491,700
Lower Merion 7.4% $588,300
Radnor 7.8% $637,100
Tredyffrin 6.5% $532,400
To see all of the Philly metro home prices and values, visit http://www.zillow.com/local-info/PA-Philadelphia-Metro-home-value/r_394974/
Construction of new homes hits eight-month high in July
New-home construction in the U.S. surged to an eight-month high in July jumping 15.7% from June to a seasonally adjusted annual rate of 1,093,000. Sales of previously owned homes, the largest portion of the market, have risen in recent months but remain below year-ago levels. July was the sixth straight month that the U.S. added more than 200,000 net new jobs — a streak not seen since 1997. Sluggish demand from first-time home buyers, along with a shortage of skilled construction workers and ready-to-build lots, has held back construction. Since the recovery began, new construction has largely taken place in more expensive, highly sought-after locations. Builders are wary of constructing large developments in suburban fringes where first-time home buyers often look for affordable homes.
Bank of America agrees to pay nearly $17B settlement
Bank of America has agreed to pay $16.65 billion to settle charges of knowingly selling risky mortgages to investors. It's the largest civil settlement with a single entity in American history. As part of the settlement, $7 billion will go toward struggling homeowners, borrowers and communities affected by the bank’s conduct. Bank of America has also agreed to pay a $5 billion penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) – the largest FIRREA penalty ever. Almost $10 billion will be paid to settle federal and state civil claims by various entities related to RMBS, CDOs and other types of fraud.
Court: Homeowners' warranties apply only to first buyer
The Pennsylvania Supreme Court has ruled that homeowners' warranties against defects apply only to a property's first buyer, and cannot be passed along in subsequent sales. The unanimous decision, reversing a Pennsylvania Superior Court decision, said homeowners' warranties are based on the contractual relationship between a builder of a new home and its purchasers. There is no such relationship between the developer and subsequent purchasers, the court said in an opinion written by Justice Seamus P. McCaffery. In finding that such warranties can only be exercised by first purchasers of new homes, the court rejected the reasoning of Superior Court, which said such warranties are aimed at equalizing the "disparate" positions of home sellers and buyers, and exist even in the absence of any contract between the two. But the Supreme Court, ruling in a case brought by a Bucks County couple against the Cutler Group, a developer, said extending such warranties to a second purchaser was a matter of public policy and thus a decision better left to the state's General Assembly.
NAR applauds new credit scoring system
The nation’s dominant credit-scoring system is being revised in a way that could improve credit scores for many consumers. FICO introduced its new FICO Score 9 as a way to assess consumer collection information, bypassing paid collection agency accounts and differentiating between medical and non-medical collection agency accounts. The revisions, to take effect this fall, will alter the formulas used to generate the credit grades used in more than 90 percent of the decisions that lenders make about how much consumers can borrow and at what interest rates. As a result, median FICO scores for consumers whose improved scores could make it easier to qualify for mortgages and car loans and get lower interest rates. Experts cautioned, though, that borrowers might have to wait a year or more to see the effect of changes because lenders will not quickly overhaul their systems to evaluate consumers and price loans for them.
Zillow to buy Trulia for $3.5B
Searching for a home online may have just changed forever. Zillow, one of the largest and most expansive real estate Web sites, has just purchased top competitor Trulia for $3.5 billion in stock. The Boards of Directors of both companies have approved the transaction, which is expected to close in 2015. Both the Zillow and Trulia consumer brands will remain after the deal is closed. There's no doubt that both companies are industry leaders. In June, Zillow reported 83 million unique users across its mobile and Web platforms, while Trulia reported 54 million. Other competitors include Realtor.com and MLS.com. Both Zillow and Trulia offer buyers, sellers, homeowners and renters access to information about homes and real estate.
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