Real Estate

2019-middle-neighborhood

Middle Neighborhoods

The “middle neighborhood” is found in most legacy cities –defined by the Legacy Cities Partnership as those “located in the Great Lakes and Northeast region, with over 50,000 residents that have lost 20 percent or more of their population since the mid-century.”  There are 48 of these cities across the United States, including like Detroit, […]

The “middle neighborhood” is found in most legacy cities –defined by the Legacy Cities Partnership as those “located in the Great Lakes and Northeast region, with over 50,000 residents that have lost 20 percent or more of their population since the mid-century.”  There are 48 of these cities across the United States, including like Detroit, Baltimore and the even the cities of the Lehigh Valley.  Each of these cities has a “middle neighborhood,” characterized by decent, but older housing, low crime rates, and that historically housed the working and middle-class residents that contributed to the fabric of the larger city.  They are typically composed of single-family residences with an occasional small shop on a corner and are likely what comes to mind when we think of the small city, urban living in the middle of the last century.  There is nothing particularly distinctive about these areas. They are neither the most distressed in a city nor the most affluent, hence, their name.  Upon closer inspection, these neighborhoods have some great assets: many are walkable to shopping areas, have parks and green space and are near good community schools.  All of these elements harken back to a time where cars were less prevalent, walking distance to amenities was key, and people valued the neighborliness and familiarity of their community.

Despite their lack of distinct identity, these neighborhoods remain critical to a city’s success and overall stability. These properties have provided a relatively stable tax base for city operations, for despite overall population losses in legacy cities, middle neighborhood populations have remained fairly flat.  Because of their important economic contribution to their city, these neighborhoods are becoming a focus of urban planners as cities are observing their historically stable tax base becoming a bit less reliable.  Perhaps there has been an uptick in foreclosures and sheriff sales in the area. Maybe more children are qualifying for free or reduced lunch at the area school. A drive down the streets may reveal a number of homes that need repair.  There may even be an abandoned house on the once bustling block.

These areas are frequently surrounded by more distressed neighborhoods which puts residents on alert for any signs of bleed-over onto their streets. Many middle neighborhood homeowners are still financially able to make a choice as to where they live, unlike residents of truly distressed areas of cities, and many decide to leave as indicators of further neighborhood decline appear. Longtime residents may be observing a shift away from a middle-income neighborhood to a moderate income one, and any perceived negativity can result in a panic for homeowners who may decide it’s time to sell their home before conditions worsen. The more properties there are for sale, the lower the prices are pushed, artificially deflating the value of these homes.  Older homeowners are unlikely to have disposable incomes to invest in older homes, many of which need substantial upgrades and maintenance, making them unappealing to potential homebuyers.

People with less disposable income for upkeep and maintenance purchase these now-affordable homes, defer the much-needed maintenance and continue the cycle of decline. Homeownership rates in these areas are decreasing disproportionately to national and regional averages, while the rate of rental properties is increasing.  Moreover, property values in these neighborhoods are fairly low to average in comparison to other areas in the legacy cities where they are located, but costs to rent these very same properties are quite high, making the homes very attractive for investors.  Tenants are not likely to heavily invest in homes they do not own, and unfortunately, the vast amount of investors are not going to infuse the amount of capital improvements needed into this older housing stock to revitalize a neighborhood.  Municipal leaders are now targeting these more transient, destabilized areas for revitalization.

Middle-income neighborhoods need to market themselves to who they were originally built for in order to survive: working-class residents and middle class.  Unlike 50 years ago, they cannot be marketed only to families with children.  Empty nesters looking to downsize, first-time homebuyers who are looking to establish roots in a true community, potential residents attracted to the unique geography and offerings of the area are all potential targets for any middle neighborhood revitalization.   Providing a way of communicating the good things going on in these areas is critical to restoring confidence in the neighborhood and attracting long term homeowners and quality investors. Municipalities, neighborhood associations, and realtors need to tout the benefits of sustainable homeownership for families – less school transiency, better educational attainment and stronger social ties to their communities.  Even those communities who have realized that these neighborhoods are no longer attractive to homeowners must implement policies that promote stable, responsible landlords purchasing properties and put investors on notice as to acceptable property standards.  Providing quality municipal services to property owners, fostering a sense of community and allowing residents to participate in shaping the future of these neighborhoods will all allow the middle neighborhood to again be a sturdy, stable base of a postindustrial city.

Share This:

2019-hey-mom-dad

“Hey, Mom and Dad, can I borrow $100,000+ today?”

Role reversal in families often happens when we aren’t ready for it.  Mom & Dad can’t live on their own and take care of their home anymore, and it’s the responsibility of the children to figure out where the best place is and how they are going to pay for it. It’s not easy like […]

Role reversal in families often happens when we aren’t ready for it.  Mom & Dad can’t live on their own and take care of their home anymore, and it’s the responsibility of the children to figure out where the best place is and how they are going to pay for it. It’s not easy like when you were young and asked your parents to borrow money. In most cases, it is a substantial amount of money. Depending on the health or financial situation, will determine if the children are able to accommodate moving mom or dad in with them or if an assisted living/nursing facility is the best route.

No matter what the answer is, the biggest question is how to pay for either of these choices. 1. Do you make renovations to your existing home? 2. Do you sell your home and look for a new home with an in-law suite? 3. Do you find an appropriate facility?  No matter what you must sell your parents’ house.

Option #1 Making renovations to your existing home.  If you live in a community, with an HOA or not, you need to be sure the proper channels are taken to know if this is a viable option. What are those channels?  Contacting the HOA, Community, Township or City you live in is the first step.  Knowing if you have enough land to expand.  If you do, then finding the right contractor who will do the job up to the Code of the Township/City and applying for the proper permits is the next step. Then how do you pay for this?  Do you need to re-mortgage your home? Will your parents give you some of the money from the sale of their home to finance this? This is where your Realtor can be a big resource for you and help guide you with how not to over-improve your home for future sale, sharing a few names of contacts that they’ve done work with in the past. Making sure they are licensed and insured for your protection.

Option #2 Selling your home to find one that already has an existing in-law suite or extended family option.  You’ve done your homework to realize your current home cannot accommodate substantial renovations due to the Community or Township rules and regs so now what?  Let’s start looking for a home that already has what we need.  In today’s market, this is not an easy task as right now inventory is low and finding the right fit can be time-consuming. Time which is something you don’t have. Selling and buying can take several months to accomplish in any market.  Let’s not forget we still have to sell Mom & Dad’s house.

Option #3 Putting your parents into a Senior Living Facility. This process is usually very stressful, painful and emotional all at the same time.  Finding and knowing the right facility, being able to afford the care given at the facility, and your parents being accepting of this option. One of the biggest questions you should have when shopping these facilities is what if I run out of money? How much money do my parents have to live there before their home sells which is going to be the biggest asset people have to pay for this type of care.  Some facilities will take all the assets you have and once it’s gone so are you.  Now what?  Since option 1 & 2 didn’t work out now, another option is moving Mom or Dad to a state-funded facility. The process of enrolling is tedious, and the State wants nothing short of your first born to be sure there isn’t any hidden money they can tap into.  The state’s research process of your finances can go back as many as 5+ years.

In short, there is much to consider as we age, and the bigger question is how do I know what is best for my Mom & Dad?  Every family and circumstance are different for everyone, so there are no set rules.  That’s where hiring the right real estate agent is going to be one of the best resources to help you through this process.

Share This:

2019-six-things

Six “Things” That are (or Should be) in Every Lease

Here are six “things” that I think must be in every commercial real estate lease. You may have a different list. Also, state law may dictate changes or additions. The names of the landlord and the tenant. (That’s obvious.) The address of the premises. (This may also seem obvious, but in early 2015, I received […]

Here are six “things” that I think must be in every commercial real estate lease. You may have a different list. Also, state law may dictate changes or additions.

  1. The names of the landlord and the tenant. (That’s obvious.)
  1. The address of the premises. (This may also seem obvious, but in early 2015, I received a lease from a landlord that had no address for the premises – no street, city or state. Nothing. There were also other errors in the lease. When I pointed out these errors, I was told by the landlord that I was being “picky.” The lease took over three years to be signed.)
  1. Consideration – who’s giving what to whom? (Attorneys Jordan L. Paust and Robert D. Upp in their book “Business Law” defined it as follows: “Consideration is something of value which is a benefit to one party or a loss to the other party. It is the inducement to the contract.”) Rent is the most common form of consideration given by a tenant to a landlord, but it is NOT mandatory. There are many leases (particularly land that’s leased for farming where the tenant grows crops and removes the weeds) in which a tenant takes care of the property, but pays no rent.
  1. The use – what can the tenant use the space for? In my opinion, this is the most important provision in the lease. (This is different from the question “Why do you as the tenant want to lease space in the first place?” If it takes you longer than five seconds to respond with a succinct answer, you haven’t thought through the question. Remember – leases are LONG TERM CONTRACTS. You cannot terminate a lease except where it states you can (end of the term; fire; possibly landlord’s default; maybe others). You do NOT want to break the lease. Going to war with the landlord is very dangerous and often expensive.)

    Once you understand WHY you want to lease the space, then you must determine if the premises can be used for your intended purpose. If you’re the tenant and you cannot use the premises for your intended purpose, then you’re out of business. This provision also protects the landlord, because it can limit the tenant’s activities.

  1. The term – the beginning and ending dates of the lease.
  1. Signatures of the landlord and the tenant. Some state laws may permit the exchange of emails as “signatures.” However, I am not an attorney, so I urge you to consult a good commercial real estate attorney about this.

There are dozens, perhaps hundreds, of other provisions that are important and can appear in a lease. But if you don’t have all six of the above, then you have nothing.

Share This:

2019-Lehigh-Valley-evolution

The Lehigh Valley Is A Region that Embodies Meaningful Evolution

Those of us who live and work in the Lehigh Valley every day already know what a special place it is. Now we want to make sure the rest of the world knows as well. It’s not difficult to demonstrate the economic success our region has continued to experience. Just take a look at our […]

Those of us who live and work in the Lehigh Valley every day already know what a special place it is. Now we want to make sure the rest of the world knows as well.

It’s not difficult to demonstrate the economic success our region has continued to experience. Just take a look at our gross domestic product (GDP) – the measurement of a region’s economic output – which reached a record-high $40.1 billion this year.

That’s the first time we’ve ever surpassed the $40 billion mark, which means that, once again, the Lehigh Valley economy has never been better. Our GDP is larger than that of Vermont ($27.4 billion) and Wyoming ($34 billion), as well as 112 other countries in the world. In fact, if we were a country, we’d be the 88th largest in the world in terms of economic output.

Not only is our regional economy strong, but it’s also very well-balanced. In many metropolitan areas, much of the economic output comes from one single sector, and then there is a significant drop-off among the rest.

However, that’s not the case in the Lehigh Valley: our top two sectors are very close together, with finance, insurance, and real estate making up $7.6 billion, and manufacturing making up $7.4 billion. Likewise, our next two highest sectors are nearly even, with education, health care, and social assistance comprising $5.5 billion, and professional services at $5.2 billion.

What all of this means is, simply put, all our eggs are not in one basket. An economy that depends too much on a single sector means when that industry suffers, so too does the region. That’s not the case in the Lehigh Valley; the days of depending too much on a single employer like Bethlehem Steel are long gone.

And yet manufacturing is not just a thing of the past in the Lehigh Valley: it’s part of our present and future as well.

Manufacturing made up 18.4 percent of our overall regional economy last year, which is a much higher percentage than the 11.6 percent it represents in the overall U.S. economy. Manufacturing was also our fastest-growing economic sector, having grown just over 10 percent compared to the previous year.

This balance of our history and deep roots and the forward-thinking evolution of the Lehigh Valley economy is directly at the heart of a new marketing campaign LVEDC is rolling out this year, which will be anchored by the phrase: “Made Possible in Lehigh Valley.”

We’ve commissioned this campaign to increase outside awareness of the Lehigh Valley, develop a positive image of the region, and market it as a desirable and attractive place to live to drive talent acquisition and retention.

The availability of skilled labor is now the single largest important factor driving company locations, even more so than overall operating costs, which had been the primary consideration for many years. That’s why we’ve been focused at LVEDC on strategies and initiatives that will help the region attract, develop, and retain talent.

That’s why we commissioned a year-long study to analyze the regional talent market, the findings of which we are executing on right now. It’s also why LVEDC has created a new five-person workgroup responsible specifically for research and analysis and directing initiatives to support retention and growth of companies in the region.

Our “Made Possible in Lehigh Valley” marketing campaign was purposely designed so that companies and other stakeholders in the region can leverage it to attract new talent. This campaign will let people know we are a region that has something for everyone, with small-town charm and big-city amenities, where people can create the life they want, on their terms.

The Lehigh Valley exists today because of where it’s been, but it’s also a region that embodies meaningful evolution. It’s a community rich with opportunity and driven by hard work, resourcefulness, and reinvention. This is nothing new for those of us already here, but soon, the rest of the world will also know what’s been made possible in Lehigh Valley.

Share This:

Greater Lehigh Valley REALTORS® Release 2018 Annual Market Report

As the premier source of real estate information in the Lehigh Valley and its surrounding communities, the Greater Lehigh Valley REALTORS® is pleased to provide an in-depth report on the 2018 local housing market. The information that follows is an overall look at the 2018 housing market, in addition to predictions for 2019. 2018: The […]

As the premier source of real estate information in the Lehigh Valley and its surrounding communities, the Greater Lehigh Valley REALTORS® is pleased to provide an in-depth report on the 2018 local housing market.

The information that follows is an overall look at the 2018 housing market, in addition to predictions for 2019.

2018: The Year of Low Inventory, Rising Prices, and Picky Buyers

Home buyers, now steeped in several years of rising prices and low inventory, became more selective in their purchase choices as housing affordability in 2018 achieved a 10-year low. In turn, the housing market over the last year saw a more seasoned prudence toward residential real estate.

Yet the appetite for home buying remained strong enough to drive prices upward in virtually all markets across the country, including the Lehigh Valley. In 2018, we saw pending sales increase 0.8 percent to 8,544. Closed sales were down 0.6 percent to finish the year at 8,373.

Home prices were up compared to last year. The overall median sales price increased 7.6 percent to $199,000 for the year, and sellers received, on average, 98.1 percent of their original list price at sale, a year-over-year improvement of 0.4 percent. Single Family home prices were up 6.8 percent compared to last year, and Townhouse-Condo home prices were up 6.7 percent.

Year-over-year, the number of homes available for sale was lower by 11.9 percent. There were 1,571 active listings at the end of 2018. New listings decreased by 1.1 percent to finish the year at 11,481.

Distressed? Not in the Lehigh Valley!

The foreclosure market continues to be a hint of its former unhealthy peaks. In 2018, the percentage of closed sales that were either foreclosure or short sale decreased by 47.9 percent to end the year at 0.7 percent of the market.

What to Expect in 2019

Consumer optimism has been tested by four interest rate hikes by the Federal Reserve in 2018. Meanwhile, GDP growth was at 4.2 percent in Q2 2018, dropped to 3.4 percent in Q3 2018 and is expected to be about 2.9 percent in Q4 2018 when figures are released.

We anticipate the biggest potential problem for residential real estate in 2019 to be human psychology. A fear of buying at the height of the market could create home purchase delays by a large pool of potential first-time buyers, thus creating an environment of declining sales.

If the truth of a positive economic outlook coupled with responsible lending practices and more available homes for sale captures the collective American psyche, the most likely outcome for 2019 is market balance.

Full Annual Report

Curious to know what else the Annual Report entails? Contact a Realtor® today for more information or for a full market analysis. You can find a Realtor® at www.GLVR.org

Share This:

title-insurance

Title Insurance: What is it and why do I need it?

Purchasing a home is the largest investment that most people make in their lives.  As part of the home buying process, title insurance is often required, especially if you are financing the purchase, and is always recommended.  However, many people do not understand what title insurance is or why they are required to purchase it.  […]

Purchasing a home is the largest investment that most people make in their lives.  As part of the home buying process, title insurance is often required, especially if you are financing the purchase, and is always recommended.  However, many people do not understand what title insurance is or why they are required to purchase it.  Instead, people tend to view title insurance as a necessary closing cost with little or no explanation.  This article addresses what title insurance is and why it is important.

Title insurance is an insurance policy that covers title issues that arise after you purchase or refinance a property.  Title insurance guarantees that the seller of the property owns it free and clear of any liens or encumbrances and that the seller is able to transfer clear title to you as the purchaser.  If a title issue comes to light that negatively impacts the property after you close on the purchase, title insurance will kick in and do what is needed to resolve the issue.  For example, you may find when you try to sell the property that a prior mortgage was never satisfied or you may learn at some point that a prior deed was fraudulently recorded.   Likewise, a search of a property with a mortgage foreclosure in the chain of title may reveal a glitch somewhere in the process that causes a cloud on the title.  Without title insurance, you would be responsible for any costs needed to clear the issue.  This may involve hiring attorneys, paying outstanding liens or unsatisfied mortgages, or possibly even losing the property.

Unlike homeowner’s or mortgage insurance, both of which cover potential future issues, title insurance covers from the time of purchase back in time.  The title insurance premium is a one-time fee that is paid at the time of settlement.  In Pennsylvania, the premiums charged by most title insurance companies are regulated and approved by the Pennsylvania Insurance Department.  Your title insurance premium includes a title search of the property, the preparation of standard closing documents including the settlement sheet, and the handling the settlement itself.  Tax certifications, notary fees, recording fees, and similar fees are paid in addition to the title insurance premium.  In Pennsylvania, the buyer is commonly the party to pay these fees.

Both lender’s title insurance policies and owner’s title insurance policies are available in connection with a transaction.  If you are taking out a loan to purchase the property, the lender will almost always require you to purchase a lender’s policy.  Lenders also require a lender’s policy if you are using real estate that you own as collateral for a loan separate from a purchase.  A lender’s policy is issued in the amount of the mortgage and protects the mortgagor in the event that an issue arises.  Many lenders also require endorsements to the policy (for an additional fee, of course) based on specific circumstances of the purchase.  For example, endorsements are often required in lieu of a survey, if a property is part of a condominium or planned unit development, or if the loan has a variable interest rate.  A lender’s policy lasts throughout the term of the mortgage.

In addition to a lender’s policy, most purchasers also elect to purchase an owner’s title insurance policy.  An owner’s policy is issued in an amount equal to the property’s purchase price and protects you (as opposed to the lender) as long as you own the property.  When purchased along with a lender’s policy, the cost for an owner’s policy is minimal.

Many lenders, real estate agents, and builders are affiliated with title insurance companies and, in turn, often recommend an affiliated agent to issue the title insurance policy and handle settlement.  These affiliated relationships must be disclosed to buyers in writing and you, as the buyer, always have the right to shop for and choose the provider of these services.  Since the cost of title insurance is regulated and any cost savings would be minimal, you are encouraged to choose the agency that you are most comfortable dealing with to protect one of the largest investments that you will ever make.

Share This:

Mortgages, Spelled Out

Mortgages, Spelled Out

Picture the spelling bee in your mind.  The elementary school-aged child stands under the bright light, alone listening intently as the pronouncer provides the history of the word the child is required to spell.  The voice echoes through hidden auditorium speakers, “its background is both Old French and Latin; the root word is ‘mort.’” Then […]

Picture the spelling bee in your mind.  The elementary school-aged child stands under the bright light, alone listening intently as the pronouncer provides the history of the word the child is required to spell.  The voice echoes through hidden auditorium speakers, “its background is both Old French and Latin; the root word is ‘mort.'” Then there’s silence.

“Mortgage.  M o r t g a g e; Mortgage” spills the child nervously into the microphone.  Rightfully so; it’s one of the most commonly misspelled words in the English language.

Logic and reason suggest the process itself should then be equally as challenging; and lonely, right?

No and No.

First, let’s do a quick little test.  Don’t worry; there’s no right/wrong answer no pass/fail; only bragging rights among friends.

Grab a pen or a pencil and a blank sheet of paper.  Ok; close your eyes.  No cheating now… Don’t look at your wristwatch (if you don’t wear a watch because Apple or Samsung tell your time don’t look at your phone).  Spin that watch under your wrist.  Flip that phone over.

Now open your eyes.  The task?  Sketch a detailed picture of your watch/phone screen.  Artistic talent is not a criterion.

You have 15 Mississippi’s; without a watch or phone timer, you’ll have to do it like we did on the school playground… count it out loud or in your mind; it’s part of the test.  Ready, set… GO.

Did you manage to draw each and every detail?  Is the sketch higher or lower than the standard you quickly advanced yourself credit for?   Here’s a good question… did you draw the actual time and date?

Right.  Items we interact with time and time again on a daily basis.  When asked to sketch a rendering with elementary distraction we find it harder a task than we initially thought.  Now imagine nothing was more important; life depends on it.

Ok.  Let’s go get a Mortgage.

Wait.  Wait.  Do we want to put no money down or a lot of money down?  Do we want to borrow a lot or just a little?  What’s the best use of our money?  Are you a first-time buyer or is this your 2nd or 3rd time buying a home?  Are you a Veteran?   What is a transfer tax in the State of Pennsylvania and how much is it?   Appraisals… cool… I get a copy, right?  Can I afford all of this?  What effects do real estate taxes have on the process?  Just what is a title company/closing attorney and what crucial, important role do they play? What’s a flood zone?  What are points and do they benefit the lender or me? How does all of this work in the present market conditions?

We will need to choose a type of loan, a term for that loan and the type of rate.  We can choose among conventional, FHA, VA, Rural Housing (USDA), first-time buyer, construction, swing or Jumbo.  All of these loan programs offer solutions to meet specific needs; individual needs.  Some require little to nothing out of pocket while others are tailored to what you determined is best for you.  Terms are available between 10 and 30 years each with options for fixed or adjustable rates.

Regardless of the type, term or rate the Federal Government requires lenders collect a 2-year history of residency, a 2-year work history, 2 years of income tax returns & w2s/1099s, 2 months of bank statements and 1 month of pay stubs in order for a mortgage loan to be compliant with its regulatory standards.  Everything we need to succeed… hey, we come across all that in the course of our day, month and year (que Emeril; BAM!).  Thanks Emeril.  That’s really good news because time is running on the low side… the closing date just around the corner and it’s pretty important; it’s where we’re going to live.  We can sketch that out, right?

Right so… how is it that we defy logic and reason?  Service; S e r v i c e.

Minute by minute, hour by hour, day by day, month by month award winning service paints a perfect picture of your immediate future.  It starts with meeting the Loan Officer, then to processing, after that the money is wired and into the title company you go!  Pick up the keys.   Regardless of what the industry would lead you to believe… that can be done with eyes closed.

A free consultation with a quality loan officer will answer all of your questions select the loan type, the term and the rate structure that meets your individual needs.  That won’t be done in general; rather, it’s at this moment that you meet your banker as both an educator and trusted advisor.  In the midst of your search you and your real estate agent and your loan officer will communicate on a consistent basis.  You and your real estate agent ratify the purchase contract.  Lastly, the loan officer will collect a formal application tailored specifically to you.  You’ll walk out knowing exactly how what you’ll be spending.

Processing will review the necessary documents you’ve submitted ensuring they meet regulatory standards and work with you to achieve compliance.  When put to task and coupled with your help processing can complete your review and approval in a day or two.

The closing department then works together with the title company your real estate agent recommended.  The property’s ownership history is clean.  The cost to close is sharpened to the penny and the loan funds are wired to the title company in advance.  You’ll receive a copy of the finalized settlement cost statement reminding you of how much cash is required and your transaction is funded.

The total process can be completed in just 8 days; many times, over.  Whether a buyer’s market, a seller’s market or in between you need service you can trust, and it is present in the industry.  You can be a priority.  Your closing date provides more than enough time for that level of service.

Call and ask questions, too; they’re important.  Find the artist that draws your picture day in and day out.  One who uses one of the easiest words to spell, not one of the hardest.  Time will fly when you’re having fun. F u n; Fun.

We’ll stand on your stage, by your side and at the ready – holding a perfectly painted picture in one hand and Webster’s dictionary in the other.

Share This:

Quality of Life in the Lehigh Valley

As a fiscal conservative and small business owner keeping my eye on the bottom line is something I must do if I expect to stay in business.   However, living in the Lehigh Valley and selling homes here as a Realtor, makes quality of life as important to me as quality of schools, proximity to major […]

As a fiscal conservative and small business owner keeping my eye on the bottom line is something I must do if I expect to stay in business.   However, living in the Lehigh Valley and selling homes here as a Realtor, makes quality of life as important to me as quality of schools, proximity to major highways and employment.   Who wants to live in a place that has nothing to do, no place to go and no entertainment?   We are lucky to live in an area where local government has budgeted for and is aware of how good quality of life can affect the economy of the region as a whole.

First, let us talk about parks and recreation, starting with the biggest amusement park in the area, Dorney Park.  Wow has that changed since I was a kid and you could drive right through it.  Now it rivals any amusement park in the state if not the country.  Not a bad deal either, if you get your kid a season pass and take advantage of some of their promotional deals.

Trexler Nature Preserve is an outdoor park on 1,100 acres with the Lehigh Valley Zoo near its center. The preserve provides a habitat for elk, plains bison, and whitetail deer. There are miles of trails for hiking, walking, mountain biking, and bird watching. The Lehigh Valley Zoo is a big attraction all by itself within the preserve. The zoo features penguins, giraffes and loads of other animals.   Another scenic state park is Jacobsburg Environmental Education Center which is a 1,186-acre PA state park near Wind Gap in Bushkill Township.  The park offers 18 miles of cross-country skiing trails, fishing, and hiking

How about Lehigh Valley Rails to Trails which are former railroad beds converted to trails for biking, walking or jogging.  The Saucon Trail runs about 7 miles from Hellertown to Coopersburg ending at the Living Memorial Community Park.  Ironton Rail Trail is a 9.2-mile course that includes a 5.2 mile almost fully paved loop through developments and parks.  If you love nature and enjoy outdoor fitness, find a trail near you.  You won’t be disappointed.

Next, let’s talk sports.  If you have not seen an Iron Pigs game at Coca-Cola Park, you don’t know what you’re missing.  From the great food to the live music to the entertainment between innings.  It’s great fun, and the baseball is not bad either.  If hockey is your thing, you have to go to a Phantom game.  They play at the newest arena in the area, the PPL Center.  You can catch Villanova play Lafayette in hoops or catch an Elton John concert.  If winter sports are what you’re into, then we have two outstanding resorts, Bear Creek Mountain Resort in Macungie and Blue Mountain Resort in Palmerton.  Both have skiing, tubing, restaurants and banquet facilities.

Golf anyone?  Boy, do we have the golf courses.  I think we are spoiled here in the Lehigh Valley. We have about 12 courses within 25 minutes of Allentown.  The prices are reasonable for a round and average from $25.00 to $70.00 per round.  Try finding those prices closer to Philly.  You can’t!

If you’re a car enthusiast, the valley has some great places to visit.  America on Wheels Museum focuses on the history of transportation technology.  See some iconic automobiles and learn about the history of the industry.  Held at the Macungie Park, Das Awkscht Fescht is one of the country’s largest antique and classic car shows for over the last 50 plus years.  Also held at the Macungie Park the weekend before Labor Day, is the Wheels of Time Rod & Custom Jamboree. The car show boasts over 2,000 street rods and custom vehicles.   There is live entertainment, games for the kids and plenty else to see.

I’m just scratching the surface with what I mentioned.  I left out the State Theatre, the Crayola Experience, Sands Casino, SteelStacks, the wineries and micro-breweries, and all the great restaurants.  The Lehigh Valley offers such a variety of things to do, places to go and things to see, making it a great place to live and work.  What does that do for all of us you ask?  Well, it keeps your property values up.  It makes it really inviting for companies and industry to move here which keeps unemployment down and disposable income up.  It helps the tax base which provides for good schools and good government.

The Lehigh Valley is an exceptional place to live!!

Share This:

real-estate-leases

Why are Real Estate Lease Negotiations Often Like Playing Poker?

There are two main reasons. The first is that there is often a lot of bluffing. Each side will bluff as long as is necessary to get what it wants. The second reason is that in poker, there’s only one winner of each hand. Each person wants to win, and therefore everyone else must lose. […]

There are two main reasons. The first is that there is often a lot of bluffing. Each side will bluff as long as is necessary to get what it wants.

The second reason is that in poker, there’s only one winner of each hand. Each person wants to win, and therefore everyone else must lose. Players watch their opponents for signs of weakness, or for giving away information about what they have. So, it’s “Win/ Lose.”

Sometimes this attitude carries over into lease negotiations. One side or the other (or both) perceives that the negotiations have to be “win-lose.” “I win, and you lose” is an expression frequently used.

The problem is that “win/lose” often doesn’t work when negotiating a lease. If you made a deal (i.e., signed a lease) but didn’t trust the other side, or if the negotiations were bitter and you signed a lease anyway, you’re facing a potential disaster. You’ve signed a lease, and now you have to live with it. You’re stuck with the other side, probably for years. If you saw the Academy Award-winning movie “The Sting” and remember the brutal, high stakes poker game between Paul Newman and Robert Shaw, you will understand what I mean. That is NOT the kind of negotiation to have and expect that the relations between the parties (who were enemies) will automatically improve.

Early in my real estate career, I was told a story about a large negotiation that occurred in New York in the early 1980s. The landlord desperately needed to lease a large amount of space, and the prospective tenant knew it. The tenant not only obtained a below-market rent but pressured and then obtained so many significant concessions that eventually the deal became very personal to the landlord. The landlord reluctantly signed the lease but exacted his revenge when it was time to negotiate a renewal of the lease. The story may be apocryphal, but the message was clear to me: don’t infuriate the other side.

Sophisticated negotiators know better than to infuriate the other side. To them, it’s more important first to know their needs and priorities and identify if someone can reasonably meet those needs. It’s “win-win” rather than “win-lose.” Bluffing is part of the process, but only to a point. If you don’t get what you need, you’ve lost.

In the early 1990s, I was the lead negotiator for the lease of over 60,000 sq. ft. of office space for my employer. (This was a large deal at the time.) The landlord’s chief representative was the nicest negotiator I have ever met. She was pleasant in every instance where we disagreed, and our side never felt any hostility. As a result, we simply recognized that there were disagreements, so we resolved them amicably. The needs of both parties were met.

Stephen R. Covey described this very well in his masterpiece book “The Seven Habits of Highly Effective People” when he discussed “Win/Win or No Deal.”

There are many, many parts to a commercial lease. What is very important to one side may be minor to the other side. So, one of the keys is to find out what the other side really wants and simultaneously determine if those things are important to you, while you decide what you want and see how important they are to the other side. Rent is only one aspect.

So, what could be important? Here are some examples: timing (how soon can the tenant occupy the premises); length of lease term; options to renew; annual rent increases; options to expand to adjacent space; an option to decrease the amount of space leased; option by the tenant to terminate the lease early; an option by the tenant to purchase; the landlord’s right to relocate the tenant within the building or complex; hours of operation (if in a retail building); the tenant’s right to not remove its renovations and improvements after the lease ends; and the tenant’s right to self-repair (if the landlord doesn’t perform the repairs as required). There are many more.

In my career, I have represented two multibillion-dollar organizations hundreds of times each as both landlord and tenant. I have also represented clients (both landlords and tenants) who only had 2-5 employees.

Life is too short to become involved in lease negotiations that eventually resemble brutal poker games. I strongly recommend that you avoid them at all costs.

Share This:

Looking Back to Look Ahead: 2018 Market Wrap Up and What to Expect in 2019

Consumers should expect home sales to flatten and home prices to continue to increase, though at a slower pace, according to a residential housing and economic forecast session at the National Association of Realtors® (NAR) 2018 REALTORS® Conference & Expo in November. As Lawrence Yun, chief economist for NAR, presented his 2019 housing and economic […]

Consumers should expect home sales to flatten and home prices to continue to increase, though at a slower pace, according to a residential housing and economic forecast session at the National Association of Realtors® (NAR) 2018 REALTORS® Conference & Expo in November.

As Lawrence Yun, chief economist for NAR, presented his 2019 housing and economic forecast, he was joined onstage by Lisa Sturtevant, President of Lisa Sturtevant & Associates, LLC, who discussed the importance of affordable housing in the U.S.

Much of Yun’s presentation focused on recent declines in home sales, but in the context of long-term trends to illustrate the housing market’s actual performance.

“Ninety percent of markets are experiencing price gains while very few are experiencing consistent price declines,” said Yun. “2017 was the best year for home sales in ten years, and 2018 is only down 1.5 percent year to date. Statistically, it is a mild twinge in the data and a very mild adjustment compared to the long-term growth we’ve been experiencing over the past few years.”

In Lehigh and Northampton counties, year to date, home sales are up 0.1 percent, according to the Greater Lehigh Valley REALTORS® most recent market report released for October. The Median Sales Price is up 8.1 percent. The Lehigh Valley is known, as seen here, for following national housing trends. Carbon County, which is its own unique market, has been experiencing a stellar year, partly due to homebuyers looking for inventory not currently available in the Allentown-Bethlehem-Easton area. In Carbon, home sales and home prices, year to date, are up 13.4 percent and 17 percent, respectively.

As to the possibility that we are currently experiencing a small bubble, Yun was quick to shut down any speculation. “The current market conditions are fundamentally different than what we were experiencing before the recession ten years ago,” said Yun. “Most states are reporting stable or strong market conditions, housing starts are under-producing instead of over-producing, and we are seeing historically low foreclosure levels, indicating that people are living within their means and not purchasing homes they cannot afford. This is a stronger, more stable market compared to the loosely regulated market leading up to the bust.”

Yun’s words on foreclosure levels hold true for the Greater Lehigh Valley. According to October market statistics for Lehigh and Northampton counties, only 1.1 percent of the available market (23 properties) were labeled as lender-mediated. In Carbon County, lender-mediated properties came in at 0.6 percent (two properties). Lender-mediated properties are those marked as foreclosed, REO, bank owned, pre-foreclosure or short sale.

Both panelists also discussed housing affordability. While the U.S. is experiencing historically normal levels of affordability, potential buyers may be staying out of the market because of perceived problems with affordability. “NAR research shows that a lower percentage of consumers think that now is a good time to buy, while more are indicating that it is a good time to sell,” said Yun. “Problems could arise if the market is flooded with too many sellers and not enough buyers. Fortunately, that does not appear to be the case, as indicated by months’ supply of inventory at below five months.”

Again following the national trend but marching a tad lower, the Months Supply of Inventory for Lehigh and Northampton counties in October came in at 3.0 months. In Carbon County, the Months Supply of Inventory was 6.1 months. Carbon has been a more balanced market between buyers and sellers throughout the year, while Lehigh and Northampton counties have seen more buyers than there are sellers.

Sturtevant discussed the importance of homeownership on a social level – how homeowners tend to be in better physical and mental health and have greater opportunity for economic self-sufficiency. Additionally, communities with more homeowners tend to be more economically prosperous and better able to attract and retain workers.

“I am a researcher, not an advocate; but the results of my research have compelled me to see the importance of affordable, stable housing, and the positive economic impact to local communities,” said Sturtevant.

Looking to next year, Yun shared his forecast for home sales and median home prices. “The forecast for home sales will be very boring – meaning stable,” said Yun.

With a few months of data remaining in 2018, Yun estimates that existing-home sales will finish at a pace of 5.345 million—a decrease from 2017 (5.51 million). In 2019, sales are forecasted to increase to 5.4 million, a 1 percent increase.

The national median existing-home price is expected to rise to around $266,800 in 2019 (up 3.1 percent from 2018 this year and $274,000 in 2020. “Home price appreciation will slow down – the days of easy price gains are coming to an end – but prices will continue to rise.”

All of these forecasts, however, are dependent on higher levels of home production. “All indications are that we have a housing shortage. If you look at population growth and job growth, it is clear that we are not producing enough houses.”

Commenting on the overall health of the U.S. economy, Yun noted that the economy is “good.” He noted that we have low unemployment, record high job openings, historically low jobless claims, job additions for eight straight years and wages beginning to increase. “This type of activity in the economy should support the housing market, even as interest rates rise,” said Yun.

* National data provided by the National Association of Realtors® and Lawrence Yun, NAR’s Chief Economist and Senior Vice President of Research

Share This: