The Philadelphia Inquirer du lieu suivant : Philadelphia, Pennsylvania • Page 189

section Nw about metropolitan area housing it. estate Sunday, May 31, 1987 DC real I Older sellers get Pa. break after July 1 the first $100,000. At current state tax rates of 2.1 percent, the savings could add up to $2,100. The exemption is similar to one contained in the federal tax law, which allows a one-time exemption of up to $125,000 in capital gains on a home sale.

Both New Jersey and Delaware offer exemptions identical to the federal statute. But those who go to settlement on their sale before July 1 will not qualify for the Pennsylvania tax break, according to John Currie, spokesman for the state Revenue Department. Morrison said that state officials failed to publicize the new law sufficiently, leading many sellers to schedule closings too' soon to take advantage of its provisions. "I've got a settlement June 15, and the guy is livid," he said. Currie said the revenue department was planning to get the word out.

"We're a new administration, and one of our major goals is increase-irig communication with people," he said. By Andrew Cassel Inquirer Stall Writer Older people planning to sell their homes can save up to $2,100 in Pennsylvania state taxes if they postpone the closing date of their sale beyond July 1, state tax officials say. A little-noticed state law passed a year ago offers older homeowners a one-time tax exemption on up to $100,000 in capital gains when they sell their property but the law does not take effect until July. Some real estate agents say they have not been told of the new law, which could mean a significant tax savings for many older people near-ing a sale of their homes. "It's really been quite a secret," said George Morrison, a broker with Remax Services in Blue Bell.

"If you make a cold call to 10 brokers and ask them about it, eight of them will say, he said. Under the law, anyone 55 or older who has lived in the same house in three of the last five years need not pay taxes on the first $50,000 in capital gains from the sale of the house. A married couple can avoid taxes on The Philadelphia Inquirer ANDY NELSON X-rated films and martial-arts movies are the bill of fare in the theaters that line the sidewalks of Times Square. Convertible loans let you shift gears 1 4 XJ iff i The convertible loan has many of the benefits of an adjustable while offering the option of converting to a fixed rate. Developer Carl B.

Weisbrod and a model of Times Square after redevelopment. The avenue they'll try to redo 42d Street By Jennifer Lin Inquirer Stall Writer NEW YORK On 42d Street on Manhat-. tan's West Side, just south of Times Square, the whispers for drugs seep from dark corners "Smoke? You want smoke?" while the screams for sex blast from every storefront and movie house. Live Sexy Girls! Video Peeps 25 cents! Erotic French Dreams! This is X-rated 42d Street, the one with the pimps and porn shops and peep shows. And then there is the other 42d Street, the one that could be.

That 42d Street is tree-lined and G-rated. a sparkling mixture of theaters, shops and offices. The movie palaces would be scrubbed to their former grandeur, and the street would be flanked at Seventh Avenue by four stately office towers and at Eighth Avenue by a hotel and merchandise mart for wholesalers. The city, state and a group of developers would like to see that vision of 42d Street come true. They are betting $2 billion on an ambitious redevelopment plan the largest city-state effort in the history of Manhattan that would rid the area of porn and grime and, they hope, draw more office workers and visitors to the neighborhood.

But the future of 42d Street is far from set. Six years have passed since planners first began sketching ideas for the 42d Street Development Project. In the time since, the project has been mired by legal battles, troubles with developers, escalating costs and reluctant tenants. Building owners and neighborhood groups fought in court to halt the project. The last of 25 lawsuits was settled in favor of development only two weeks ago.

The team of developers is in a state of flux. One of the developers, Michael Lazar, who had been hired to restore the theaters along 42d Street, was convicted last fall in a city corruption scandal. Another company that was part of a trio working on the merchandise mart, Trammell Crow Associates of Dallas, has backed out of the deal, leaving the status of the mart up in the air. The most secure component of the project, the office towers, has yet to find a lead tenant. The law firm of Dewey, Ballantine, Bushby, Palmer Wood dropped plans to take space in one of the towers because of the delays.

The law firm had hoped to move in by (See TIMES SQUARE on 4K) -jpOthStqo ga.n Central 7 (1 MJEII 7h i r48th st- "toi Hfe nr46thSt-iW ir hja ir45th St. times 1L 1 JLSquareJLf ILv'l ir44thSt. area gL Development Jttd StT Lower Manhattan, Project irf il JL lLjg jL 40th St. 39th St. if Li li- Ll By Kenneth R.

Harney Special to The Inquirer WASHINGTON After watching fixed-rate mortgage quotes balloon by 2.5 percentage points in barely two weeks, you may be wondering what to do about a mortgage this spring. Sign up for an 11 percent loan for 30 years? Look hard at a 15-year mortgage at one-half a percentage point less? Say a prayer and grab an adjustable-rate mortgage? Or just head for the beach and hope for lower rates in September? Try any one of the four that suits you. But before you make a final decision, you ought to know about a concept that has begun shaking up the national mortgage market during the last few weeks. It's called the 1987-model convertible loan. It's a cut-rate mortgage available in 22 states and certain to spread throughout the nation this summer, although this particular model is apparently not available yet in the Philadelphia area.

Here's how it works: The 1987 convertible comes with a 7.875 percent rate plus 2 points (2 percent of the loan amount). The 7.875 percent rate is set in concrete from the date of loan commitment to the first anniversary of the closing. Once the second year begins, the convertible-mortgage feature comes into play. From that date until the start of the sixth year of the loan, you can at any time turn it into a fixed-rate mortgage at then-current market rates. Or you can continue year-to-year adjustments, tied to a Treasury-bill index.

If you choose to convert to fixed, you pay a $750 fee to the lender. If you leave it as a one-year ARM, you pay nothing. At the end of five years, if you haven't converted it to fixed, it lives on as an adjustable, On the pro side, the 7.875 percent rate gives you the equivalent of a deep-discount, first-year rate on what may well prove to be a fixed-rate, 30-year loan. Or, you can stick with the adjustable for a while longer. Left unconverted, the loan is a Fannie Mae-style (Federal National Mortgage Associa-.

tion) adjustable with year-to-year protective rate caps of 2 percentage points and a life-of-the-loan rate limit of 6 percentage points. The worst rate you could pay as an adjustable in 1988 is 9.875; the worst by 1989 is 11.875. The worst you could ever pay with the unconverted adjustable would be 13.875 percent, i.e., 7.875 plus 6 percentage points. The drawbacks? The principal one is that you may mistime your conversion, either by failing to switch to a fixed rate, or by bailing out of the adjustable just before rates drop. While the 1987 convertible is not available locally, other convertible ARMs are, according to the Mortgage Reporting Service in Jenkintown, which surveys 200 Delaware Valley lenders weekly.

Checking the service's Weekly Mortgage Guide, assistant director Diane Curran said, "There are three (such loans that will do bet- i terthan7, but they don't convert until at least the third year The standard fee to do that is one point." Another alternative available locally is what are called three year-Zone years, Curran said. With these mortgages, the interest rate is fixed for the first three years. "The best ones in the market are at about 8," she said. After the first three years, the borrower can opt for a fixed rate at current market rates or keep the loan at an adjustable rate, which changes each year. Unlike the 1987 convertible, these local convertibles allow switch to a fixed rate only at the anniversaries of the closing date.

You usually get only 30 days to decide each time. Proposed theater district projects 1) Criterion Theater site. Developer: Tishman, Speyer Properties, 800,000 sq. ft. of office space.

2) Feldman Equities. 350,000 sq. ft. of office space. 3) New York Land Co.

and Kumagai Gumi. 1 177 Ave. of the Americas, 900,000 sq. ft. of office space.

4) Bruce Eichner and VMS Realty Partners. 59-story hotel, retail and office building. 450,000 sq. ft. 5) Palace Theater site.

Developer: Silverstein Properties. Office space. 6 Solomon Equities. 750 Seventh Ave. 500,000 sq.

ft. of office space. 7) Sherwood Equities. 1580 Broadway. 300,000 sq.

ft. of office space. 8) Zeckendorf-Crowne Plaza Hotel. 1591 Broadway. 9) Solomon Equities.

1585 Broadway. 1 million sq. ft. of office space. ii Philadelphia InquirerDAVID PIERCE SOURCE: Real Estate Board of New York By GENE AUSTIN Remodeling p3y-backs in Philadelphia area 11 1 11 APPRAIStD VALUE AS APPflAIStO VALUE AS rfKTftt PROJECT PERCENTAGE COST OF PROJECT PERCENTAGE PR0JECT pS "vAuiE Ofsf PMJECT FWOIECT VALUE Of COST Deck adjiti0n $3,500 $3,500 1QO Sun-space addition $13,630 $7,000 51 Central air conditioning 2.1QO 2,100 1QO Windowdoor replacement 10.125 5MO 49 Attic conversion 9,900 7,500 76 Sliding door installation 75 500 47 9,475 7,000 -v 74 Exterior paint 3.5QQ,: Furnace replacement 2,100 1,500 71 Room addition 24,150 lOOOO 41 Interior face lift 3.9QO 2,500 64 Basement conversion 6,720 2,500 37 Vinyl siding' 5,520 3000 54 Skylight 1,475 0 0 igg home Cost and personal preference are important factors when considering home improvements, but homeowners who want to make the most profit when they sell will go a step further and find out what improvements a future buyer of the home will want and be willing to pay for.

Forecasting home-improvement futures is clearly an inexact science, but a new survey of home-improvement costs and pay-backs by Practical Homeowner magazine goes a long way toward making it feasible. One unusual feature of the survey is a regional breakdown, which brings out some fairly striking differences in potential pay-backs for various types of projects in different areas. In the Philadelphia area, for example, a homeowner has a good chance of getting back 100 percent of an investment in a professionally installed deck typically costing $3,500, a fireplace costing $3,010 or central air conditioner at $2,100. Improvements and their yields SOURCE: Practical Homeowner magajine By contrast, deck additions, central air conditioning and fireplaces are likely to lose money in Minneapolis, with the homeowner typically exterior paint (100 percent) and hardwood flooring (86 percent). The survey appears in the June (See REMODELING on 4-K) Viking territory are an interior face lift (new paint, wallpaper, carpeting, flooring and so forth, which can recover 128 percent of the investment), recovering only 43 percent, 71 percent and 83 percent of the investment, respectively.

The big-three investments with the best pay-back in am. JL. A A A i.