Zillow and falling housing value

[the mule]

Here in Kensington we have groups who are very active in seeking out working class who are hit with foreclosure. The mod rate for those who respond is 2/3 thereabouts. That's not stopping new stock from going up in price.

Kensington gets lumped in with Frankford for the local market stats, so without doing the analysis myself it's hard to separate how much of that is Frankford and how much is Kensington. Prices in Kensington/Frankford dropped by nearly 6% in 2011 but I would wager a lot of that downward movement was in Frankford. New housing stock in Kensington is going to be somewhat insulated locally from those price pressures because we're talking about very different price ranges between new construction and foreclosures of existing homes, but there is a domino effect citywide when you consider the increase in inventory and banks' desire to price properties to sell quickly.

Those foreclosure prevention efforts should help prevent a local glut of foreclosures in Kensington compared to parts of the city (lower NE and NW in particular) where distressed sales are far more common and have clearly depressed housing values (7 and 9% drops respectively in 2011).

The Homestead Exemption would certainly be beneficial to those long term homeowners who have been more or less stable forces in those transitional neighborhoods, but the ancillary benefit is that it would remove one of the major arguments against development and gentrification. Developers in transitional neighborhoods generally don't have anything to gain by forcing out older residents; there are enough vacant parcels in places like Kensington, Brewerytown, Point Breeze, etc. to keep development happening for years without needing to fill in new vacancy created by rising taxes. As you said, people who lived through the worst would be able to stay and finally reap the benefits of the positive change.

Sure the racially motivated arguments will still be there, but most people really don't care about that. Most people are really just afraid of being priced out of their homes, so that fear needs to be eliminated.

[randomuser]

Sure the racially motivated arguments will still be there, but most people really don't care about that. Most people are really just afraid of being priced out of their homes, so that fear needs to be eliminated.

Racially motivated arguments... on both sides. It's not a one-sided thing, and I have seen PLENTY of racist comments directed at the natives of certain neighborhoods on every site having anything to do with Philadelphia.

Either way, I agree that there needs to be a way to help people who grew up in and held down certain neighborhoods from being priced out. That, as you said, is one of the main beefs with gentrification, though of course there are others, such as losing the character and culture of a neighborhood.

As far as falling housing prices go, people need to understand that the market will go through various cycles until it normalizes. The whole city, hell the whole metro is in such a transition and state of flux that it will take many years for it to become more fixed in many neighborhoods like it is in more established cities like New York or Chicago or others. Granted, I'm not a real estate agent but it's pretty common sense that areas transitioning from being ghetto, working class, or something else to being desirable, "hip" neighborhoods will have turnover and go through transitional periods. Hopefully, business tax reform will lead to more and more jobs in the city and that in turn will attract more and more people and the positive cycle will continue. My point is that people shouldn't worry about falling housing prices in "up and coming" neighborhoods. What matters is that the city continues to improve and progress in order to sustain and increase values.

[gren]

Why or how exactly? My friend has some houses passed down from the depression era in his family--one that's lived in some that are rented out. Should he get an abatement on those? Just for primary residences? He also makes a good living off of his properties so even though he can easily pay the taxes he should get the break since his family has owned it for so long?

I don't think people should be able to get it both ways. I think if you want a tax reduction in the short-term because you're afraid of being priced out then the City should have a lien on your house to recoup some of that lost revenue on any future sale. I think if you force people to pay their taxes now or forfeit value later you'll find that plenty of people are actually quite happy with their increased values.