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MARKET ACTIVITY March saw a flurry of sales activity. Montgomery, Chester, and Delaware Counties all posted the highest March pending sales totals since 2007. Inventory increased ever so slightly. Homes are selling fast with multiple offers in many instances. Despite a slight increase in overall inventory, all three counties had the lowest inventory of available homes in March since 2007, and are hovering right around 4 months of accumulated inventory. Most homes are being purchased as quickly as they are coming on the market. Settled prices are up close to 2% vs. 2016 in Chester and Montgomery Counties and over 6% in Delaware County. The Main Line areas of Lower Merion, Radnor, and Tredyffrin-Easttown are not seeing as robust activity as other parts of these counties. Settled units in these areas are still behind 2016 totals through March though most of this can be attributed to a lack of inventory.
YTD SETTLED TRANSACTIONS BY COUNTY MAR 16 MAR 17 %Change
Chester County 1,054 1,149 9.01%
Delaware County 1,128 1,217 7.89%
Montgomery County 1,677 1,729 3.10%
PENDING TRANSACTIONS BY COUNTY MAR 16 MAR 17 %Change
Chester County 493 762 15.3.%
Delaware County 549 749 12.0%
Montgomery County 588 741 26.0%
INVENTORY ACCUMULATION BY COUNTY MAR 16 MAR 17 %Change
Chester County 3.7 4.1 -14.6%
Delaware County 3.9 4.3 -24.6%
Montgomery County 3.5 3.6 -21.7%
MORTGAGE NEWS
U.S. MORTGAGE RATES DROP TO FIVE-MONTH LOW WITH 30-YEAR AT 3.97%. U.S. mortgage rates dropped for a fifth week, sending home-loan costs down to their lowest point since the week after the presidential election. The average rate for a 30-year fixed mortgage was 3.97%, down from 4.08% last week and the lowest since November, Freddie Mac said in a statement Thursday. The average 15-year rate decreased to 3.23% from 3.34%, the McLean, Virginia-based mortgage-finance company said. Yields for the Treasuries that guide mortgage costs have dropped on investor expectations that an economy under President Donald Trump won’t be as robust as anticipated, according to Guy Cecala, publisher of the newsletter Inside Mortgage Finance. “The real factor has been the stock market and investor perception of how the U.S. economy is doing,” he said. “After we saw health-care reform efforts fail, the stock market reacted and investors started rethinking what was doable under a Trump administration.” The decrease in mortgage rates may encourage homeowners to refinance in the short term as buyers take advantage of lower borrowing costs. An improving job market is increasing demand for real estate as supply of homes for sale tightens. Source: Bloomberg, 4/20/17
FANNIE MAE SEES FASTER FED RATE HIKES. Fannie Mae has moved its projected timeline for further Federal Reserve price hikes forward by several months. The company's Economic & Strategic Research (ESR) Group points to an increase in the Fed's favored measure of inflation, the personal consumption expenditures (PCE) deflator, which increased by 0.1 percent in February, bringing it 2.1 percent higher than a year ago. This was the first time in nearly five years the PCE had exceeded the Fed's 2.0 percent target. Combined with the unemployment rate which was down 0.2% to 4.5% in March, the ESR says "firming inflation will prod the Fed to raise the fed funds rate in June and September, compared with September and December in the prior (ESR) forecast." The minutes of the March Federal Open Market Committee (FOMC) meeting also point to an upcoming change in the committee's reinvestment policy, one that would begin shrinking the Fed's balance sheet and its huge portfolio of Treasury and mortgage-backed securities. Fannie Mae sees a slight uptick in inventories, perhaps as some sellers chose to lock in profits from recent price increases, and this, along with buyers jumping into the market before rates rise further, should push home sales up by 3.0% this year. The company is still forecasting that 30-year fixed rate mortgages should have an average rate of 4.3% by year's end and that mortgage originations will decline by about 20% this year to $1.58 trillion. The refinance share will drop by 50% from 32% last year to 16% in 2017. Source: Mortgage News Daily, 4/19/17
LOCAL NEWS
INCREASE IN PROPOSED DEVELOPMENT ALONG WEST SWEDESFORD ROAD IN TREDYFFRIN. New projects are slated to get underway while others are in the early planning stages and could reshape that section of the township. Gulph Creek Development expects to break ground next month on a $16 million Fairfield Inn by Marriott on 2.1 acres it is buying from Keystone Property Group in the Westlakes Corporate Center. The 61,000 sf hotel will have 124 rooms. Construction is expected to be completed in a year. In addition, at 1057 and 951 Howellville Road there are separate proposals with the township to build a total of 37 townhouses. Nolen Development Group is in the early stages of seeking to have a property at 950 Cassatt Road developed for a residential care facility. Echo Realty has plans to construct a 5,067-square-foot building on a parcel at Swedesford Plaza. Brandywine Realty Trust has plans to eventually construct a 4,000 to 7,000 sf building on property it owns fronting Cassatt Road that would house a restaurant. Brandywine owns about 600,000 sf of office space in that submarket. Vertex, which now occupies five buildings totaling 130,000 sf at 1041 Old Cassatt Road, is scheduled to move out this summer, giving the owner of that complex an opportunity to redevelop the property. Source: Philadelphia Business Journal, 4/20/17
11-ACRE WATERFRONT PARCEL IN BALA CYNWYD BEING DEVELOPED. Penn Real Estate Group’s Sean McCloskey has spent 17 years plotting a $50 million mixed-use development on an 11-acre parcel along the banks of the Schuylkill River, the site of Pencoyd Iron Works since 1852. Last month, Pencoyd ceased operations at the site, allowing Penn Real Estate to move forward with its plans to break ground on the first phase of Pencoyd Landing. The initial phase will include a public square, two hotels, a restaurant and the offices of Penn Real Estate Group. Other nearby development includes O’Neill Properties Royal Athena, a 275-unit apartment complex with 600 units possible at buildout; Post Brothers’ Presidential City redevelopment; Realen Properties 156-unit Isle and the Wilde Yarns Factory loft apartments; and the $46 million Venice Island Performing Arts Center. The recently opened Pencoyd Bridge is steps away from McCloskey’s project and will allow visitors to use the nearby Cynwyd Heritage Trail to cross the river into Manayunk. Source: Philadelphia Business Journal; 4/14/2017
LOWER MERION OFFICIALS DISCUSS CYNWYD TRAIL EXPANSION. Lower Merion commissioners recently approved a motion to receive a new report on the proposed expansion of the Cynwyd Heritage Trail from the Cynwyd Train Station to City Avenue. The proposed trail would run along the tracks from the Cynwyd station for about one-half mile, continue under the Union Avenue Bridge and then join with Philadelphia midway under the City Avenue bridge between Conshohocken State Road and Bala Avenue. There has been no final decision or approval on the construction of the trail extension, expected to cost about $560,000. Discussion then moved to the larger goal of connecting the Cynwyd Trail to a regional trail system, linking trails to the Bala Cynwyd office region and improving lighting on portions of the trail, including the Manayunk Bridge. Source: Main Line Times, 4/14/17
DEVON YARD. At its public meeting on Monday, April 3, the Board of Supervisors approved both preliminary land development and conditional use applications from Anthropologie, Inc. The Applicant's next step is to submit a final land development application to be reviewed by the Planning Commission at a future meeting. Source: Easttown Township Planning Commission, 4/5/17.
UPPER MERION SUPERVISORS OK ELEMENTARY SCHOOL DEVELOPMENT PLAN. Upper Merion Township Supervisors recently approved a development plan for the proposed Gulph Elementary School. The new 91,000 sf school has been proposed by the Upper Merion Area School District to be constructed at 650 S. Henderson Road. Source: Times Herald; 3/20/2017
DELAWARE COUNTY REASSESSMENT RULING. A Delaware County Court judge’s ruling that the county must reassess all 200,000 homes within its borders could lead to similar actions in neighboring counties. The county’s last reassessment, conducted in 1998, was also court-ordered, and was spurred by reassessments in Chester County. According to the Inquirer, only about 30% of Delaware County properties are assessed reasonably accurately, based on legal standards. The ruling was prompted by a lawsuit filed by two pairs of homeowners from Haverford and Rose Valley who protested tax bills that turned out to be illegally high. “There was a tremendous variation among property owners in the county in terms of their taxes compared to their fair market value of their homes,” said John J. Murphy, a lawyer for the homeowners behind the suit. Source: Philadelphia Inquirer; 3/31/2017LOCAL SCHOOLS ARE PA'S BEST IN 2017 U.S. NEWS AND WORLD REPORT RANKINGS. Conestoga High School (#3), Radnor High School (#6) and Great Valley High School (#10). Click here for the complete list and criteria used in the study.
