Philadelphia Metropolitan Area Real Estate Law Blog

The residential real estate market in Pennsylvania is most active during the spring and summer months, but there are a number of reasons why those looking for a new home might be wise to wait until the fall to begin their searches. The real estate information company RealtyTrac studied 15 years’ worth of data and more than 30 million American home sales, and they found that houses sold for prices about 2.6 percent lower than their estimated market values when transactions closed during October.

Pennsylvania real estate investors might be interested in learning about a trend for those who live in high-priced markets along the East and West Coasts. Investors are increasingly purchasing properties in areas with low home prices but competitive rents in other states using firms.

Pennsylvania commercial real estate developers could discover that their funding options are increasingly limited. The Office of the Comptroller of Currency and the Federal Deposit Insurance Corporation have cautioned CRE lenders multiple times on the grounds that their loan terms weren’t sufficiently rigorous. This has resulted in fewer small lenders wanting to originate new loans.

Experts say that commercial real estate, or CRE, has grown increasingly attractive to investors with cash to burn. Individuals with a high net worth are using CRE investing to heighten yields and generate significant amounts of income as opposed to simply trying to maintain their existing capital. Their readiness to invest in markets that other institutions shy away from means that in smaller cities and secondary markets, private investors are becoming important sources of funding.

Commercial real estate markets in Pennsylvania can be affected by economic factors in the state, the nation’s economy as a whole and world events. Investors that want to stay up-to-date on current market trends should look at a variety of news sources to understand what’s coming in 2017.

Commercial real estate development is booming in Pennsylvania and around the country. Big cities like Philadelphia, Miami and New York are seeing a surge in the construction of office buildings and luxury rental properties, while other areas are experiencing a demand in shopping centers and warehouses. However, the Federal Reserve has repeatedly issued warnings about a potential bubble, and the Office of the Comptroller of the Currency has increased its scrutiny of CRE lending practices of commercial banks and forced some banks to increase their reserves. This has caused many financial institutions to cut back on their portfolios.

Pennsylvanians who are involved in the commercial real estate market might want to follow Deutsche Bank. The U.S. Department of Justice has announced that it is fining the bank $14 billion for its role in issuing residential mortgage-backed securities leading up to the mortgage crisis in 2008.

Pennsylvania commercial real estate investors may have heard about the recent $150 million sale of the Datran Center in Miami. The deal, which was made jointly by Acre Valley Real Estate Capital and ABS Partners Real Estate, reflects the trend of investors moving from major to medium-sized cities.

Pennsylvania investors might look to current real estate trends to determine whether there are certain areas that may be approaching oversupply. This can indicate that some markets have become overbuilt due to continued expansion in certain locations.

The hospitality sector has become increasingly interesting to commercial real estate investors throughout Pennsylvania and the U.S. in recent years. However, backing a restaurant can still be an extremely risky proposition. Studies show that 60 percent of new restaurants fail within three years of opening, and a quarter fail to even make it through their first year before shutting their doors for good.