Thinking about a condo in Center City?
So are a lot of other people. Buyers are scooping up available move-in-ready units going for $250,000 to $750,000 each, observers of the downtown real estate market say.
"Our office had as many sales [the week of July 31-Aug. 4] as in a week during the hottest part of the market," said Joanne Davidow, manager of Prudential Fox & Roach's Rittenhouse office. Most were for $350,000 to $750,000 and were sales of already-built condos.
But there's trouble ahead, too, industry observers say. Rising construction costs and softening demand could deep-six many of the 2,500 condo units still in the development pipeline - especially at the luxury end of the market, where many experts see an oversupply.
"For those proposing building units, it is clearly time to be cautious as . . . it is becoming a buyers' market," said Joel L. Naroff, chief economist at Commerce Bank.
"Too many developers . . . want to build luxury from the ground up, and there's a limit to the market," said Jon Orens of Orens Bros. Real Estate, which is converting 2200 Arch St. to mid-price condos.
Units in that $250,000-$750,000 mid-price range helped propel Center City and adjacent neighborhoods in the first six months of 2006, keeping them just ahead of the real estate slowdown.
This, despite the fact that the number of properties (townhouses and detached homes, as well as condos) available for sale in those neighborhoods almost doubled over the last year, and the number of days that homes stayed on the market increased by two weeks, to 34 days, according to Prudential Fox & Roach's HomExpert Market Report for January to June.
The median home sale price in Center City rose 5.1 percent, to $340,000, and sales volume increased 10.2 percent over the same period in 2005, says the HomExpert report, based on Trend Multiple Listing Service data on existing-home sales.
Thus far, sales data for 2006 bear out industry concerns about the luxury-condo market.
According to the HomExpert report, just eight more existing homes priced at $1 million or more sold in the first half of this year versus the same period in 2005 - 48 homes (17 condos) compared with 40 homes (13 condos) - for an increase of 20 percent, even though the number of high-end homes for sale increased almost 60 percent (185 versus 116 in 2005).
HomExpert spokesman James Angstadt said it was difficult to pinpoint how long it took for those homes to sell.
