It is no secret that the last year and a half of the pandemic has wreaked havoc on many industries. The real estate market is no different, with disruptions to business simultaneously leading to properties needing to be sold, but many buyers being unable to afford them.
However, for those who canpurchase now, one appealing advantage is the current record low interest rates. For investors looking to get involved with properties around Philadelphia, a few real estate professionals offer some sage advice on the most promising areas right now.
“There is a lot of potential still in South Philly,” said Mario Flacco, a listing agent with Spectrum Realty who has worked in real estate for three and a half years. “19145 is very hot. 19148 is very hot.”
However, Flacco emphasizes the importance of doing your research before investing. “You go off what’s sold in the area, and the resale, and the work that could be done in the property. If the numbers make sense, you go forward with it and make the move.”
While there is understandably a lot of focus on how the pandemic has impacted the market, other big changes are also continuing to happen. For Barbara Capozzi, those other imminent transitions are what concern her.
Capozzi is a third-generation realtor who has been with Keller Williams for 30 years. She is an associate broker who handles many construction projects around 20th street, Packer Park and other nearby neighborhoods. She continues to expand in that area and recommends the neighborhoods, but also cautions that speed is of the essence. She stresses complications will be arriving come January 1st due to several new laws and regulations going into effect.
“With the change in the 10-year tax abatement, the 1 percent construction tax, with inclusionary zoning, I think most people will not be able to build in Philadelphia anymore,” said Capozzi, voicing concern about how these regulations will impact the market. “I think people better jump on whatever they see now, because all building is going to be harder come January 1st. And I think whatever’s around now, there is very little inventory, and I think there will be even less in January.”
Problems with labor shortages and increases in the cost of construction materials are realistic concerns. It slows down the development of new projects and is part of the reason why current real estate inventory has risen in price.
As Capozzi went on to say, “There is a lack of supply. Because of all the rules, and because of Covid, and because of all the slow downs and delays. And you can’t get material and the material you do get is twice the price. So what’s around now will do well, but it’s at a higher price than it would normally be.”
Development is still happening in the neighborhoods Flacco and Capozzi each recommended, but you will likely be spending more to invest now than what would have been standard two years ago prior to the seller’s market. However, being able to adapt and continuing to invest is what will balance that. The more that is on the market, the more prices will even out. As Capozzi accentuated, it comes down to “supply and demand.”
Both Capozzi and Flacco acknowledged the pandemic has driven up prices and that there is no clear end to that in sight. The consensus from both agents is that waiting for things to go back to “normal” may be fruitless. If there is a property that interests you, both realtors recommend not letting the current environment hold you back.
“If you want it you’ve got to go get it,” said Flacco. “And you’ve got to get it quickly. You can’t hesitate.”