Unfortunately, new development condos in Center City Philadelphia can depreciate before they appreciate in value. The value of a lived in one year old condo generally can't compete with the value of a brand new one!
Similar to the initial depreciation when buying a new car, condos in Philadelphia can initially depreciate, once they have been purchased - even in a stable real estate market. There is clearly a value to buying something new, and not used. Be it a purse, a TV, or a condo. New is new, and certainly holds an element of value.
There are a variety of reasons why a buyer may find value in a new condominium here in Center City Philadelphia. Perhaps the idea of a toilet that has never been used, unstained grout in the bathroom, almost virgin qualities of the bedroom carpeting, whatever, there is a premium that a condo buyer is going to pay for any given unit being free of any previous occupant. The full ten year tax abatement, where applicable, certainly is a "value-added' feature of new condos in Philly as well.
The emotional excitement that accompanies a new construction condo is something that is very appealing to many condo buyers- be it in Philadelphia, or any large metropolitan area. And that emotional excitement is a factor that carries a certain value. Once that initial "newness" of any unit has been spent, many condo owners can find an initial depreciation of the value attached to that particular unit. And it doesn't matter if the master bedroom carpeting is as fresh as it was a year ago, or that the refrigerator looks like it has never been opened. The value of the one year old condo generally cannot compete with the value when the condo possessed when it was new. The sheen has been worn off, even if not visually evident.
There are exceptions to this rule. Especially if a buyer bought his or her condo from the developer's "initial public offering"- a time when many developers are first presenting a building to the public, and he or she needs to have a number of presales, in order to obtain financial backing from a lending institution. Another exception is if the initial buyer has added emotional elements to the particular unit that other values may lack. Be it interior design features like a great color palate, or modern wallpapers to specific areas, or something as simple as gorgeous furniture- buyers react with their pocketbooks when seeing a condo that emotionally sweeps them off their feet. The fact that "showing ability" is a very strong element to newer home sales should surprise no one who follows the market with even a passing interest. Sizzle does sell, and once that steak comes off the grill, there can indeed be some excitement, and therefore value lost.
During the late 1980s, Mark fell in love with the Philadelphia real estate market. The first condo he bought for himself was in Old City. Working with bank foreclosures on multi-unit buildings, Mark began to carve his niche as a condominium specialist. Since that time, Mark has progressed into helping developers turn apartment buildings into condominium buildings. Having been inside countless condos in the Center City real estate area, Mark is intimately familiar with the available properties. Mark prides himself and impresses others of his vast knowledge of what's trendy and knows which finishes buyers look for when selecting a home.... so much so that he's been seen on HGTV's What You Get For The Money, CN-8's Money Matters and was the 2005 winner of Philadelphia Magazine's Kitchen of the Year contest.
