How Bad Are Your Credit Card Mistakes?
by Erin Peterson Yahoo Finance
Wednesday, October 21, 2009
provided by
Grade yours on a 10-point scale.
Nobody's perfect. When it comes to our financial lives, we've all done things we later regretted -- whether it's getting slapped with a $3 fee for using an out-of-network ATM or going on a Las Vegas bender and losing the house on an overly aggressive poker bet.
The key is to understand the scale of the transgression. With credit card blunders, that's no easy task -- is it worse to take a cash advance or to pay a bill a day or two late? Experts graded a range of credit card mistakes on a scale from 1 (losing a few bucks to a cash machine) to 10 (losing the house). Find out which worry the pros most -- and which may (almost) get a free pass.
Paying Late
How bad is it? 6
The details: Credit card companies are notoriously prickly about late payments -- even a payment that's late by a few minutes can pile up fees, interest charges and other penalties. Depending on how late the payment is, your card issuer may also report the problem to any of the credit bureaus, which can wreak havoc on your credit score. The good news, says Stacy Francis, president of Francis Financial, is that the error may be reversible. "You do have the option of giving the credit card company a call and asking them not to report it," she says. "If you've generally been an on-time payer, they may waive the fees and not report it."
Paying Only the Minimum on Your Card
How bad is it? 4
The details: Credit card companies love it when you pay off your debt slowly, but you should loathe it. It won't necessarily affect your credit score, but that doesn't mean it's a good practice. Sending in only the minimum payment "is definitely going to keep you in debt longer, and you're going to pay a heck of a lot more in interest," says Francis. "You may be paying twice as much -- or more -- as you would by paying in cash."
Buying On a Card Just For Rewards
How bad is it? 1
The details: If you're paying off your balance on time and in full, using your cards to grab extra rewards isn't necessarily a bad plan, says Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling. "You can win the rewards card game if you know how to play," she says. "But you do have to know yourself." Because most people spend more when they're paying with plastic than with cash, be cautious and recognize when you're buying something only because plastic makes the purchase painless.
Missing a Payment
How bad is it? 9
The details: Not only are you going to be slammed with fees, interest charges and other penalties when you miss a payment, but you'll likely see a rise in your interest rates. If that weren't bad enough, you'll also have to contend with a significant hit to your credit report -- about 35 percent of your credit score is based on your ability to pay bills on time. As a result, you'll pay more when you try to get a loan. "Missing a payment has both immediate and long-term consequences," says Clarky Davis, Care One Debt Relief's Debt Diva. "You may be dealing with the fallout for years."
Having Too Many Cards
How bad is it? 6
The details: If you're the type to apply for a card just so you can grab a discount on clothes or other merchandise, you likely have a huge stack of cards in your purse or wallet. You're probably not getting enough value from the card to make it worth the high interest rates or additional complications from additional bills and junk cluttering your mailbox -- and you're increasing the likelihood that a payment slips through the cracks or that you'll be a victim of identity theft. "There's rarely a good reason to get a new card if you've already got a general-purpose card, a rewards card and a low interest card," says Cunningham.
Maxing Out a Card
How bad is it? 7
The details: Maxing out a card can have a serious impact on your credit score, since about 30 percent of your score is based on "credit utilization" -- the amount of credit you've used relative to the amount you have available. More important, says Davis, is the fact that it likely signifies a distressing trend in your personal finances. "Maxing out a card may not have an immediate financial pull, but it's a sign that you're not budgeting or spending your money wisely," she says. "It means you don't have enough saved up to cover unexpected expenses."
Playing the Balance Transfer Game
How bad is it? 5
The details: Moving your debt from a high-interest card to a low-interest card with a balance transfer isn't as smart a move as you think, says Francis. "About 15 percent of your credit score is affected by your recent credit applications," she notes. Pile up a few transfers and your score will take a hit. "Credit bureaus don't (differentiate) that these cards are for the same [debt], they just see it as you getting pre-approved for more and more credit." Add in the fees that generally accompany balance transfers and you're not gaming the system -- you're getting hammered by it.
Debt Settlement Plans
How bad is it? 9.5
The details: If you're overwhelmed by debt, negotiating down your balance with the credit card company (also called debt settlement) sometimes helps you pay pennies on the dollar on your debt -- but you'll pay a steep price. First, there's the tax hit you'll take for the amount of debt that's forgiven -- it will count as income during that tax year. And your credit score will be decimated, so don't expect you'll be able to take out a loan soon after consolidation. Next to bankruptcy, debt settlement "is the most negative thing you can do to your credit score," says Francis.
Getting a Cash Advance?
How bad is it? 8
The details: It may feel like free money, but the truth is that it's anything but: You'll likely have a fee associated with the advance, and you'll likely pay a higher interest rate than you would by using the card associated with it. "You also have no grace period," notes Cunningham. "You'll start accruing interest from the moment you get the money." While these are all dangerous attributes in and of themselves, they're not the worst part, says Cunningham. "When you start using cash advances, you have to understand why you're using them as they're likely symptomatic of a deep financial problem."
Using a Card in a Pinch
How bad is it? 2
The details: If the fridge went on the fritz or the furnace conked out in mid-January, you might not have the means to fund its immediate replacement. Putting the bill on a credit card -- and paying it off quickly over the course of a few months -- is a pretty solid option, says Cunningham. "You don't want something like that to become standard operating procedure," says Cunningham. "But it's OK to have a balance on a card for a few months when you're going through a rough patch in your financial life. Just make sure it's on a card without an annual fee or with a very low annual fee."
Sports, Hip Hop and Marketing From a Sports, Hip Hop and Marketing Junkie!!!
Thursday, October 22, 2009
Thursday, October 15, 2009
Bill White For President...LOL
White's plan for housing bonus a bust
He drops idea to give real estate agents $5,000 for selling homes in depressed areas
By BRADLEY OLSON
HOUSTON CHRONICLE
Oct. 14, 2009, 10:20PM
Mayor Bill White Wednesday yanked a proposal that would have given a $5,000 bonus to real estate agents whose clients buy homes subsidized by the city in depressed communities.
Several City Council members from across the political spectrum objected to the plan, saying they did not believe taxpayer money should be used to boost the incomes of professionals and the money could be better spent on other affordable housing priorities.
“In these tough fiscal times, we really need to be careful how we spend the limited resources that we have,” Councilwoman Jolanda Jones said. “It would be hard to explain to a senior whose house is falling in that we gave $5,000 to a realtor.”
White acknowledged after the meeting that the Houston Hope Real Estate Brokerage Services Incentive Program most likely was dead, although Jones' council housing committee will consider the matter more fully today.
The proposal would set aside $250,000 of affordable housing funds to pay real estate agents $5,000 if they represent a client who qualifies for down payment assistance and moves into newly built homes in one of eight revitalization areas across Houston. For years, White has championed a set of initiatives called “Houston Hope” designed to spur investment and development in several depressed communities using land obtained from foreclosed properties that were delinquent in paying property taxes.
Homes $150,000 or less
The city has marketed the lots to developers under the condition that they be turned into energy-efficient homes that sell for no more than $150,000. The city provides down payment assistance grants of up to $45,000 for qualifying buyers who make up to 120 percent of Houston's median income, which city officials said is about $76,000 for a family of four.
The revitalization areas include Acres Homes, Denver Harbor, Fifth Ward, Independence Heights, Near Northside, Settegast, Sunnyside and Trinity Gardens.
White said Wednesday that development has been brisk in Sunnyside and moderately strong in other areas, but had lagged in Trinity Gardens.
“We are looking at various incentives in areas where it has been the slowest,” he said. He also told council members the city had nearly $15 million in unspent affordable housing funds and said a number of items would be presented to council in the coming months regarding how some of that money would be used. “It behooves us not to sit on these monies for a long period of time, particularly given the housing market,” he said.
He drops idea to give real estate agents $5,000 for selling homes in depressed areas
By BRADLEY OLSON
HOUSTON CHRONICLE
Oct. 14, 2009, 10:20PM
Mayor Bill White Wednesday yanked a proposal that would have given a $5,000 bonus to real estate agents whose clients buy homes subsidized by the city in depressed communities.
Several City Council members from across the political spectrum objected to the plan, saying they did not believe taxpayer money should be used to boost the incomes of professionals and the money could be better spent on other affordable housing priorities.
“In these tough fiscal times, we really need to be careful how we spend the limited resources that we have,” Councilwoman Jolanda Jones said. “It would be hard to explain to a senior whose house is falling in that we gave $5,000 to a realtor.”
White acknowledged after the meeting that the Houston Hope Real Estate Brokerage Services Incentive Program most likely was dead, although Jones' council housing committee will consider the matter more fully today.
The proposal would set aside $250,000 of affordable housing funds to pay real estate agents $5,000 if they represent a client who qualifies for down payment assistance and moves into newly built homes in one of eight revitalization areas across Houston. For years, White has championed a set of initiatives called “Houston Hope” designed to spur investment and development in several depressed communities using land obtained from foreclosed properties that were delinquent in paying property taxes.
Homes $150,000 or less
The city has marketed the lots to developers under the condition that they be turned into energy-efficient homes that sell for no more than $150,000. The city provides down payment assistance grants of up to $45,000 for qualifying buyers who make up to 120 percent of Houston's median income, which city officials said is about $76,000 for a family of four.
The revitalization areas include Acres Homes, Denver Harbor, Fifth Ward, Independence Heights, Near Northside, Settegast, Sunnyside and Trinity Gardens.
White said Wednesday that development has been brisk in Sunnyside and moderately strong in other areas, but had lagged in Trinity Gardens.
“We are looking at various incentives in areas where it has been the slowest,” he said. He also told council members the city had nearly $15 million in unspent affordable housing funds and said a number of items would be presented to council in the coming months regarding how some of that money would be used. “It behooves us not to sit on these monies for a long period of time, particularly given the housing market,” he said.
7-bedroom home for $7,000?
By James B. Kelleher James B. Kelleher
CHICAGO (Reuters) – The seven-bedroom, three-bath house in this city's West Garfield Park neighborhood had once been someone's American Dream.
But at a recent auction of about 100 foreclosed houses and condos, it was just Property No. 20 -- and drawing no bids from a roomful of buyers despite its bargain-basement price.
"Any interest in this home at $7,000?" fast-talking auctioneer Renee Jones asked the crowd. "If not, we'll move on."
Saddled with swollen portfolios of foreclosed and unsold properties in the housing crisis, U.S. lenders and builders are turning to professional auctioneers to help them unload the unwanted real estate in a hurry.
It is an open question whether the auctions indicate that the U.S. real-estate market is recuperating or is still in intensive care.
But the rapid-fire, under-the-hammer sales -- usually resorted to only after every other effort to market a property has failed -- are on the rise across the United States, providing a colorful burst of activity in a corner of the weak economy that needs all the life it can get.
"Over the last two years, we've progressively seen more and more of these," said Chris Longly, the deputy executive director of the National Auctioneers Association trade group. "It's a sign of the times."
Hard data on the number of foreclosed properties being sold at auction are hard to come by. "The foreclosure market is a moving target right now," said Dave Webb of Hudson & Marshall, one of the biggest auctioneers in the market.
But Hudson & Marshall and its rivals say they are gearing up for more in the coming months, convinced that a moratorium on foreclosures earlier this year only postponed what they believe is an inevitable avalanche of new repossessions.
"The foreclosures are going to explode again," said Webb.
DREAMS ON THE CHOPPING BLOCK
The cadence and rhythm of the auctions, and the great deals that many buyers walk away with, make the events exciting to watch -- and make it easy to forget the heartache that lies behind almost every forced property sale in a country where home ownership is often equated with "The American Dream."
At the weekend Chicago event, Jones managed to race through the 100 properties up for bid in less than two hours.
When a home did not immediately attract interest or the minimum price, Jones, wielding her gavel in front of a giant tote board, wasted no time moving on.
Kendi Kiogora, a 28-year-old first-time home buyer, said she felt like she "won the lottery" when she bought a one-bedroom, one-bath apartment in Chicago's trendy South Loop neighborhood, with skyline views and heated parking, for just $105,000 -- $62,000 less than its last listed price.
Real-estate professionals in attendance were less euphoric.
Antonette Taylor, an agent at a brokerage that plans to start holding auctions this fall, said the low prices -- most sold for 30 to 50 percent below their last deeply-discounted list price -- made her "a little nervous for my sellers."
Other troubling signs: buyers passed on almost half the properties offered in Chicago and fewer than 100 bidders showed up for the event, which also attracted some online buyers.
"We're having a difficult day," said Tom Atkins of Zetabid, the company holding the auction. "There was a $1,000 property that no one bid on. You'd think a slum lord at the very least would buy it and put a (federal housing assistance voucher) renter in there for $600 a month."
Atkins said bidders at auctions are generally evenly split between first-time homebuyers and veteran investors. Zetabid has a special VIP area near the auctioneer's dais so bidders can raise their paddles with one hand even as they sign contracts with the other.
Among the investors was Thomas Smith, 48, who paid $16,000 for a five-bedroom, three-bath home in Englewood, a notoriously violent neighborhood on Chicago's South Side he called "the murder capital of the world."
Smith figured another $15,000 in repairs would render the place rentable and said his ideal tenants would be "people...who fell off the ladder a little bit. I'm not trying to make a million dollars or anything."
BETTER THAN NOTHING
Later, when the nine-bedroom, four-bath property that David Kosak's boss had been trying to sell for a year went under the hammer, it fetched just $15,000 -- less than one-third its last list price but a figure the 23-year-old broker's assistant called "better than anything we've gotten."
Asked if he thought the auction activity might be a sign the property market was improving, Kosak was less upbeat.
"If it's getting better, we're not seeing it," he said. "We only do foreclosures, and we're only getting busier."
Whitney Tilson, a managing partner of T2 Partners and Tilson Mutual Funds and the author of "More Mortgage Meltdown: 6 Ways to Profit in These Bad Times," said there is a reason Kosak's office is getting busier.
After Barack Obama's election as U.S. president last year, Fannie Mae and Freddie Mac, the two government-sponsored mortgage giants, imposed a foreclosure moratorium that lasted about four months. Many private banks followed suit.
As a result, there was a gap in the pipeline of foreclosed homes that pushed into late spring. That helped auction prices stabilize for a few months and permitted some analysts to claim the market had found its bottom.
But the moratoriums have now expired. With the mortgage modification and foreclosure prevention efforts championed by the Obama administration unable to keep pace with defaults, as many as 7 million homes and condos may eventually enter foreclosure before the dust finally settles, according to a report by Amherst Securities Group issued in September.
"There are a lot of things that have temporarily stabilized the market," Tilson said. "But those things are going away ... Delinquencies are spiking. This is going to be a mess."
(Editing by Peter Bohan and Vicki Allen)
CHICAGO (Reuters) – The seven-bedroom, three-bath house in this city's West Garfield Park neighborhood had once been someone's American Dream.
But at a recent auction of about 100 foreclosed houses and condos, it was just Property No. 20 -- and drawing no bids from a roomful of buyers despite its bargain-basement price.
"Any interest in this home at $7,000?" fast-talking auctioneer Renee Jones asked the crowd. "If not, we'll move on."
Saddled with swollen portfolios of foreclosed and unsold properties in the housing crisis, U.S. lenders and builders are turning to professional auctioneers to help them unload the unwanted real estate in a hurry.
It is an open question whether the auctions indicate that the U.S. real-estate market is recuperating or is still in intensive care.
But the rapid-fire, under-the-hammer sales -- usually resorted to only after every other effort to market a property has failed -- are on the rise across the United States, providing a colorful burst of activity in a corner of the weak economy that needs all the life it can get.
"Over the last two years, we've progressively seen more and more of these," said Chris Longly, the deputy executive director of the National Auctioneers Association trade group. "It's a sign of the times."
Hard data on the number of foreclosed properties being sold at auction are hard to come by. "The foreclosure market is a moving target right now," said Dave Webb of Hudson & Marshall, one of the biggest auctioneers in the market.
But Hudson & Marshall and its rivals say they are gearing up for more in the coming months, convinced that a moratorium on foreclosures earlier this year only postponed what they believe is an inevitable avalanche of new repossessions.
"The foreclosures are going to explode again," said Webb.
DREAMS ON THE CHOPPING BLOCK
The cadence and rhythm of the auctions, and the great deals that many buyers walk away with, make the events exciting to watch -- and make it easy to forget the heartache that lies behind almost every forced property sale in a country where home ownership is often equated with "The American Dream."
At the weekend Chicago event, Jones managed to race through the 100 properties up for bid in less than two hours.
When a home did not immediately attract interest or the minimum price, Jones, wielding her gavel in front of a giant tote board, wasted no time moving on.
Kendi Kiogora, a 28-year-old first-time home buyer, said she felt like she "won the lottery" when she bought a one-bedroom, one-bath apartment in Chicago's trendy South Loop neighborhood, with skyline views and heated parking, for just $105,000 -- $62,000 less than its last listed price.
Real-estate professionals in attendance were less euphoric.
Antonette Taylor, an agent at a brokerage that plans to start holding auctions this fall, said the low prices -- most sold for 30 to 50 percent below their last deeply-discounted list price -- made her "a little nervous for my sellers."
Other troubling signs: buyers passed on almost half the properties offered in Chicago and fewer than 100 bidders showed up for the event, which also attracted some online buyers.
"We're having a difficult day," said Tom Atkins of Zetabid, the company holding the auction. "There was a $1,000 property that no one bid on. You'd think a slum lord at the very least would buy it and put a (federal housing assistance voucher) renter in there for $600 a month."
Atkins said bidders at auctions are generally evenly split between first-time homebuyers and veteran investors. Zetabid has a special VIP area near the auctioneer's dais so bidders can raise their paddles with one hand even as they sign contracts with the other.
Among the investors was Thomas Smith, 48, who paid $16,000 for a five-bedroom, three-bath home in Englewood, a notoriously violent neighborhood on Chicago's South Side he called "the murder capital of the world."
Smith figured another $15,000 in repairs would render the place rentable and said his ideal tenants would be "people...who fell off the ladder a little bit. I'm not trying to make a million dollars or anything."
BETTER THAN NOTHING
Later, when the nine-bedroom, four-bath property that David Kosak's boss had been trying to sell for a year went under the hammer, it fetched just $15,000 -- less than one-third its last list price but a figure the 23-year-old broker's assistant called "better than anything we've gotten."
Asked if he thought the auction activity might be a sign the property market was improving, Kosak was less upbeat.
"If it's getting better, we're not seeing it," he said. "We only do foreclosures, and we're only getting busier."
Whitney Tilson, a managing partner of T2 Partners and Tilson Mutual Funds and the author of "More Mortgage Meltdown: 6 Ways to Profit in These Bad Times," said there is a reason Kosak's office is getting busier.
After Barack Obama's election as U.S. president last year, Fannie Mae and Freddie Mac, the two government-sponsored mortgage giants, imposed a foreclosure moratorium that lasted about four months. Many private banks followed suit.
As a result, there was a gap in the pipeline of foreclosed homes that pushed into late spring. That helped auction prices stabilize for a few months and permitted some analysts to claim the market had found its bottom.
But the moratoriums have now expired. With the mortgage modification and foreclosure prevention efforts championed by the Obama administration unable to keep pace with defaults, as many as 7 million homes and condos may eventually enter foreclosure before the dust finally settles, according to a report by Amherst Securities Group issued in September.
"There are a lot of things that have temporarily stabilized the market," Tilson said. "But those things are going away ... Delinquencies are spiking. This is going to be a mess."
(Editing by Peter Bohan and Vicki Allen)
Tuesday, October 13, 2009
Future looks bright for Center City housing
Report: Future looks bright for Center City housing
By Alan J. Heavens
INQUIRER REAL ESTATE WRITER
If the experts are correct and the future will bring a shift to urban from suburban, then Center City merely needs to hang in through the current hard times to reap the benefits.
That's the gist of a report, "Residential Development 2009: Riding Out the Storm," presented today by the Center City District and based, among other things, on a survey of residents in eight zip codes from Tasker Street north to Girard Avenue and between the Delaware River and the Schuylkill.
Nearly 3,100 residents, or 3.3 percent of the population of those zip codes, responded to the June survey, district president Paul Levy said.
The survey was conducted amid continued bad economic news nationally and as the city wrestled with a severe fiscal crisis. Yet 81 percent of the respondents expressed confidence in Center City's future, Levy said.
Trends are favoring downtown housing, says real estate analyst Jeffrey Otteau of Otteau Valuation Group Inc. in New Brunswick, and not because of young professionals and empty-nesters returning to cities.
In the post-recession economic cycle, Otteau said, incomes will actually drop, and affordable housing will be concentrated in urban areas. "Two-thirds of households will have no children at home, energy costs will rise, and vertical construction in the downtowns [will be] more sustainable."
Levy said this was the first major recession in which the city has lost fewer jobs than either the region as a whole or the nation, noting, "Philadelphia is extraordinarily well-positioned for economic and residential growth."
Between July 2008 and August 2009, the city lost 3.08 percent of its jobs, while the region declined by 3.32 percent and the nation 4.2 percent, according to recent data from the U.S. Bureau of Labor Statistics.
Philadelphia "has the right mix of industries to weather this economic storm, including health care, educational services and asset management," said Moody's Economy.com chief economist Mark Zandi.
Although the real estate market here has not fared as badly as comparable first- and second-tier cities, sales remain well below normal levels, economists said.
"Currently, home sales are about 30 percent below what they would be in normal times, and 60 percent below what they would be during very good times," said Econsult Corp. vice president Kevin Gillen.
Still, some luxury condominiums in the business district notwithstanding, prices were just 3.6 percent lower in the first six months of 2009 from the first half of 2008, according to data from Trend Multiple Listing Service.
The $8,000 tax credit for qualified first-time buyers has boosted sales in the below-$400,000 market.
"I'd been renting, but saving for a down payment and looking around at properties since I moved here in 2006," said Johanna Ashley, 31, a pharnmacist who bought and is rehabbing a unit at Pier 3 condominiums on Columbus Boulevard.
Though she doesn't expect to get the whole tax credit because of income requirements, "it was a huge thing," although a price in the neighborhood of $300,000 and parking also were important.
Ashley was also impressed by how well Pier 3 had held its value. After acquiring Pier 3 (built at the site of the former Girard Piers) for $7.2 million in 1994, Miami developer Joe Gamel sold 172 units at prices ranging from $49,000 to $150,000.
Over the last five years in Center City, 227 new or converted condo units came on the market annually. Right now, there are 515 units unsold, or a 2.5-year supply.
"While unsold units are very painful to developers and lenders, one consolation is that there are no units in the pipeline behind them," Levy said. If the market were to return to normal tomorrow, it would be two or three years before any new housing would reach the market to compete with them.
Most of the unsold units are concentrated in a handful of buildings that came late to the market, just as empty-nesters began having trouble selling their homes and jumbo mortgages (above $417,000) became more expensive and difficult to obtain, he said.
The Center City population continues to grow as the rest of Philadelphia contracts, however, and the 10-year tax abatement, effectively reducing high construction costs, has helped add 12,121 units of housing to the business district since 1997.
By Alan J. Heavens
INQUIRER REAL ESTATE WRITER
If the experts are correct and the future will bring a shift to urban from suburban, then Center City merely needs to hang in through the current hard times to reap the benefits.
That's the gist of a report, "Residential Development 2009: Riding Out the Storm," presented today by the Center City District and based, among other things, on a survey of residents in eight zip codes from Tasker Street north to Girard Avenue and between the Delaware River and the Schuylkill.
Nearly 3,100 residents, or 3.3 percent of the population of those zip codes, responded to the June survey, district president Paul Levy said.
The survey was conducted amid continued bad economic news nationally and as the city wrestled with a severe fiscal crisis. Yet 81 percent of the respondents expressed confidence in Center City's future, Levy said.
Trends are favoring downtown housing, says real estate analyst Jeffrey Otteau of Otteau Valuation Group Inc. in New Brunswick, and not because of young professionals and empty-nesters returning to cities.
In the post-recession economic cycle, Otteau said, incomes will actually drop, and affordable housing will be concentrated in urban areas. "Two-thirds of households will have no children at home, energy costs will rise, and vertical construction in the downtowns [will be] more sustainable."
Levy said this was the first major recession in which the city has lost fewer jobs than either the region as a whole or the nation, noting, "Philadelphia is extraordinarily well-positioned for economic and residential growth."
Between July 2008 and August 2009, the city lost 3.08 percent of its jobs, while the region declined by 3.32 percent and the nation 4.2 percent, according to recent data from the U.S. Bureau of Labor Statistics.
Philadelphia "has the right mix of industries to weather this economic storm, including health care, educational services and asset management," said Moody's Economy.com chief economist Mark Zandi.
Although the real estate market here has not fared as badly as comparable first- and second-tier cities, sales remain well below normal levels, economists said.
"Currently, home sales are about 30 percent below what they would be in normal times, and 60 percent below what they would be during very good times," said Econsult Corp. vice president Kevin Gillen.
Still, some luxury condominiums in the business district notwithstanding, prices were just 3.6 percent lower in the first six months of 2009 from the first half of 2008, according to data from Trend Multiple Listing Service.
The $8,000 tax credit for qualified first-time buyers has boosted sales in the below-$400,000 market.
"I'd been renting, but saving for a down payment and looking around at properties since I moved here in 2006," said Johanna Ashley, 31, a pharnmacist who bought and is rehabbing a unit at Pier 3 condominiums on Columbus Boulevard.
Though she doesn't expect to get the whole tax credit because of income requirements, "it was a huge thing," although a price in the neighborhood of $300,000 and parking also were important.
Ashley was also impressed by how well Pier 3 had held its value. After acquiring Pier 3 (built at the site of the former Girard Piers) for $7.2 million in 1994, Miami developer Joe Gamel sold 172 units at prices ranging from $49,000 to $150,000.
Over the last five years in Center City, 227 new or converted condo units came on the market annually. Right now, there are 515 units unsold, or a 2.5-year supply.
"While unsold units are very painful to developers and lenders, one consolation is that there are no units in the pipeline behind them," Levy said. If the market were to return to normal tomorrow, it would be two or three years before any new housing would reach the market to compete with them.
Most of the unsold units are concentrated in a handful of buildings that came late to the market, just as empty-nesters began having trouble selling their homes and jumbo mortgages (above $417,000) became more expensive and difficult to obtain, he said.
The Center City population continues to grow as the rest of Philadelphia contracts, however, and the 10-year tax abatement, effectively reducing high construction costs, has helped add 12,121 units of housing to the business district since 1997.
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