Philadelphia Real Estate Blog

Center City Philadelphia
Condos and Lofts

 

Subscribe To Receive
 Blog Updates By Email

Calendar

November 2017
M T W T F S S
« Oct    
 12345
6789101112
13141516171819
20212223242526
27282930  
 
 

February 22, 2016

Like A New Car- New Construction Condos Can Initially Depreciate

Filed under: Center City Real Estate,For Buyers,General Real Estate — Center City Philadelphia Real Estate Agent @ 11:48 am

New condos that have never been occupied are a strong draw for many buyers here in Center City and there are premiums to be paid for that novelty/aspect of any particular new condo in town. And there also is a premium for floor height and view in all of our new construction pieces.

can't keep a Secret

If we do see any initial depreciation of a new construction condominium, we generally see that played out in the premiums paid for floor height and any such depreciation usually occurs within the first year or so.  Buying a new condo then trying to resale within the first year can result in a somewhat mild “hit” on the value of the condo. Sellers are taking away the shine or appeal of the premium paid for a unit being brand spankin’ new and will often see a drop in value. Though usually not a striking drop in value, but a drop in value none the less.  We see this most often in condos where the seller has paid for upgrades that may suit their needs, but don’t always suit the needs or tastes of the buyers that follow.  And sometimes the attribute that pulls the value down is the premium paid for floor height.  Subsequent buyers come at the building looking for an average sale price of a given type of unit and want to pay based upon that figure.  Stronger locations in town, like Rittenhouse Square, have a tendency to be a bit more elastic- they are the first neighborhoods to see a drop in inventory with any influx of buyers to the market. That’s a good thing.

This scenario and resulting depreciation is usually wiped off the books after year one. It is the initial depreciation of a new condo that is loaded towards the front of ownership- like in the first year. Once that hurdle is cleared- the possibility of depreciation lifts as well.

Tags: , , ,

• • •

No Comments

No comments yet.

Comments RSSTrackBack URI

Sorry, the comment form is closed at this time.

 
 

530 Walnut Street, Suite 260
Philadelphia, PA 19106
Direct: 215.521.1523 ~ Office: 215.627.6005
Fax: 215.627.3142
Email: Mark@CenterCity.com
Copyright Mark Wade | All rights reserved.
Site Admin | Log Out