by Matthew Jahn
Should you buy?
In my opinion, right now is a good time to buy a home on the Main Line. Prices have dropped steeply across the United States, and while they may continue to fall, it is definitely not clear how far they may go. Interest rates are historically low, so while prices may continue to drop, interest rates may rise and negate your savings. In certain parts of the country, prices have dropped so low, you could not even build a replica house for the price some are selling for. The hardest hit places are, of course, parts of California and Florida.
The real reason you are at this website though is because you are interested in Philadelphia real estate, particularly the Main Line. Unlike other parts of the country, Philadelphia’s real estate did not get as out of hand, and inflate into the realm of unjustifiable numbers. Philadelphia is certainly more expensive than many smaller cities and rural areas, but when compared to nearby cities like New York, Baltimore or Washington D.C. it is practically a bargain.
Main Line market stable
Housing stock is moving slower than before in Philadelphia because of buyer uncertainty and a harder time acquiring loans. And certainly some outlying suburbs are having harder times than others, especially areas that tried to mimic the Main Line. The Main Line however is entirely different. Areas such as Lower Merion Township have always historically been an extremely wise investment, maintaining value and steadily increasing in value at a gradual but not artificially inflated pace. Location and school systems drive real estate values, and the entire Main Line has both.
The Main Line has very few foreclosures, and as the most desirable suburban setting in an area of well over 5 million people, it would be one of the last places to crash. True, houses are not selling as fast as a couple years ago, but housing values have dropped very little and sellers are being quite stubborn on the Main Line. Data from this year suggests things are picking up sales wise, but it is certainly still a buyers’ market. You need to do the research and make the decision yourself, but with low interest rates and great deals, I truly believe now is a good time to buy. When factoring in location, school district, and prestige, it is hard to envision Main Line homes losing much value now or in the future, even in this turbulent real estate market.
Tax credit for new buyers
Currently, in an effort to revitalize the housing market, the government is offering a tax credit for up to $8,000 (10% of purchase price) for home buyers. You can now get the money ahead of time for down payment or closing costs on an FHA loan. You must have the required 3.5% down payment but can add the credit on to increase your down payment. Otherwise, you can amend your taxes and get the money later. It does not have to be repaid as long as you live in your house for 3 years. More information HUD News.
The bottom line
As a Realtor my opinion may be better informed, but ultimately you need to make the final decision regarding the current market conditions yourself and decide whether now is the time to buy or sell on the Main Line.