Real Estate Information

As we begin the first week of March, we are seeing the first signs of spring; the sun for more than a few minutes a day, the robins are out and we are now waiting for the next snow storm or a high wind warning. The same can be said of the local real estate market. Although the number of homes sold in February of 2010 is down by 15%, the average sales price comparing 2009 versus 2010 is up 11%. The increase in the sales price is partly due to the depressed level of last year due to the extreme uncertainty that was caused by the meltdown in the financial markets in late 2008 and naturally continuing into 2009. The average sales price in the region as reported by the Central Penn Multi List was $167,335 and in 2010 it is $185,483, and this average sales price was relatively consistent throughout the later months of 2009. In my opinion, the sales numbers would have been stronger if it had not been for the two snow storms that slowed down not only auto travel but foot travel, ie walking in homes that were for sale. But in the last two weeks, I have seen an increase in at least more inquiries across the board up to the $350,000 asking price, with the higher priced homes still seeing low activity.

What is in store as we go into the spring? We will still experience a slow rebounding market, but in light of that there are some promising signs just as spring arrives. We still have extremely attractive interest rates on 30 year mortgages, right at 5% and the home buyer tax credit is still available for contracts written before April 30 and settling before June 30 of this year. And there is an abundance of homes for sale, in excess of 4300 across all price ranges. AND there is plenty of mortgage money available and many, many lenders willing to lend to qualified borrowers. I am constantly asked whether the tax credit will be extended and my answer is I do not think so, but it could depend on the prevailing winds in Washington, DC. I would not want to rely on a definite maybe at best. Both buyers and sellers have great opportunities in the current market because as we go through 2010, one thing is almost certain. Mortgage rates will increase, which may place a lid on the activity, although it may be modest.

True, the current real estate market is not like it was three years ago and probably will never return to those levels. But this market is much more stable than it is in many parts of the US and I do not anticipate that to change. So my advice is naturally embrace the coming of spring and possibly a slightly improving real estate market in the Central Pennsylvania area.

Just a reminder to all the buyers that wish to take advantage of the home buyers tax credit that time is running out quickly. In order to take advantage of the creidt you must have an executed contract dated no later than April 30, 2010 and with a settlement occurring no later than June 30,of this year. There has been some conversation about the extension of the credit but from everything that I have read there is little, if any support in Congress at this time to extend the deadline. Naturally, things change cahnge but i do not expect that to happen again.

As a reminder the First Time Home Buyer Credit is up to $8000 and the first time home buyer is defined as someone that has not owned a home in the last three years. The $6500 tax credit is aimed at people who have lived in a home for at least five consecutive out of the last eight years. There are income considerations for both credits but many potential buyers will be able to qualify for most, if not all of the credit. So if you are considering a home purchase and you combine the tax credit with the very attractive low interest rates, why wait act now before the credits are history.

As we enter the second week of February 2010, there seems to be one subject besides real estate and that is global warming; and that debate whether there is global warming continues incessantly. Who is right or who is wrong on this issue will be determined in the future. With respect to real estate, I think that I am more right than wrong with my opinions in the past and what I see going forward, at least in the Central Pennsylvania marketplace. Comparing January 2009 with January 2010, the number of sales have decreases by 14%, and I know that does not look like a rebounding market that I have characterized in previous letters. But I will say that we experienced a similar result when comparing January 2008 and 2009, and we still were down for the year 2009, though not anywhere near the January numbers and I still anticipate that 2010 will be a positive year, although only slightly. And the January average sales price comparison is much improved over 2009 albeit down 7%.

Why didn’t we see more of an improvement or a continuation of the progress in the latter part of 2009? Three factors: 1) being that the Home Buyer Tax Credit extension didn’t occur until mid November, 2): the holiday season was upon us and in many instances buyers have traditionally slowed down their buying habits during December and January; 3) the weather, need I say anything more after 30+ inches of snow within the last five days!!

Moving forward, what is the most likely scenario that I anticipate? We will see a slow improvement in the number of home sales in the area and a slight increase in the average sales price as we go through 2010. Part of the increase will be due to the tax credit that presently has a date of April 30, 2010, in which buyers can qualify for the tax credit and with a closing date of June 30, 2010. I have been asked about an extension beyond April of this year and my response is that anything is possible in Washington, DC, but it is highly unlikely. Improvement will also come from buyers who do not want to rent any longer, sellers that want to either downsize or need a larger home and those who want to take advantage of the low mortgage interest rate that we continue to experience and we all should be aware that the low interest rate environment cannot continue forever. As I said in one of my recent posts, a 1% difference on a mortgage rate can increase your mortgage payment by almost $90.00 a month on a mortgage of $150,000. Yes, things will improve on a slow and steady pace, and when we see an overall increase in the economic climate the activity will improve even more, but do not anticipate a return to three or four years ago with substantial price appreciation because it is not going to happen.

It is my intent to give you the best of what I see in the market in order to assist you in making a real estate purchase; and please remember each sale is different even though there may be two homes that are exactly alike. Such factors as condition and buyer or seller motivation are two that come to mind. So if you are considering a purchase or a sale please contact me at Don@DonRoth.com or visit my web site www.DonRoth.com and view the search listings tab. Hope that we can say that the past week has been a global warming anomaly and we will see plenty of sunshine for a while.

Don Roth begins term as PAR president
Friday, January 29, 2010
By Kim Shindle

From left: Barb Roth, Don Roth and Jim Helsel
(Photo credit: Stuart Leask)

Donald D. Roth was installed as the 2010 president of PAR at the annual Inaugural Banquet held Tuesday evening in Harrisburg.

Roth, a REALTOR® from Harrisburg, was sworn into office by NAR Treasurer James L. Helsel Jr., also a PAR past president.

“I’m humbled, honored and excited to have this special opportunity to lead PAR in this challenging time. I will make our association a better one in the coming year,” Roth said.

Roth said association members will face many challenges in 2010 including regulatory, legislative, business and consumer expectations. He said the association has many ongoing projects it will focus on in the coming year including the Community Reinvestment Project (CORE), the statewide housing trust fund, educational requirements and cultural diversity outreach.

“The times have changed and we will continue to change to meet the changes in our industry,” he added.

Pennsylvania Rep. Sue Helm (R-Dauphin), Glen Grell (R-Cumberland) and Ron Marsico (R-Dauphin) made a special presentation to Roth on behalf of the House of Representatives during the evening’s festivities.

Outgoing PAR President Gregory Herb thanked members for the opportunity to serve as president. He reminded them, “Never has your PAR membership been more valuable than it is today.”

About Kim:
Kim Shindle is the Communications Specialist at the Pennsylvania Association of REALTORS®.

Don Roth to serve as PAR president
Tuesday, January 12, 2010
By Kim Shindle

“Changing with the Times” will be the mission of Donald D. Roth as he becomes the 87th president of the PA Association of REALTORS®. His theme will direct the association’s focus to the new issues facing REALTORS®.

Don Roth, PAR Presudent

“Our industry is going through an evolution. We’ve seen boom times and now we’re going through a substantial correction,” Roth said. “PAR has to be responsive to its members. We’re a source of information and we want to continue to provide tools for our members to better serve their clients.”

Roth spent 20 years in the financial industry before becoming a REALTOR® nearly 20 years ago. A REALTOR® with Prudential Homesale Services Groups, he primarily works in the residential market in the greater Harrisburg area.

While Pennsylvania has weathered the difficult economic climate and remained fairly stable, the market has seen a slight increase toward the end of 2009, Roth said. “We’ve seen some improvement in the market since September. More homes are being sold, although most of them are in the lower price range,” he added.

Roth said PAR task forces will continue to work on issues like climate change, educational requirements and appraisal management companies. In addition, a new task force will be appointed to help outline the goals of the new Community Reinvestment Project (CORE), a new PAR cooperative program.

Legislative issues that could affect the real estate industry in the upcoming year will continue to be assessed, Roth said. “Issues like the real estate transfer tax (RTT), reassessments, zoning, point-of-sale requirements all affect how we do business. We want to be at the table to make recommendations to the legislative bodies,” he added.

Roth will be sworn in on Tuesday, Jan. 26 at PAR’s Winter Business Meetings in Harrisburg.

About Kim:
Kim Shindle is the Communications Specialist at the Pennsylvania Association of REALTORS®.

Happy New Year to all. As I report on the real estate market in the region, I think most of us know that to say that it was a challenging year would be an understatement. In many of the areas throughout the U.S., the real estate market continues to be under siege. In Pennsylvania and especially the Greater Harrisburg area, we have fared much better, and there are signs that stabilization and improvements in the market are becoming a reality. When comparing 2009 to 2008, we saw the number of homes sold decrease by 44 sales, which is a very minor percentage in the real estate market. Yes, the average sales price of homes declined by approximately 5% when compared to 2008, but the month to month decline in sales prices was most significant in the earlier months of 2009.

Why do I anticipate an improvement for 2010? Well, one reason is that interest rates are still very attractive, although there is every indication that mortgage interest rates will climb higher as we go through 2010. The impact on mortgage payments is evidenced below for a $150,000 mortgage amortized over 30 years.

Pretty substantial increase in the cost of a mortgage, isn’t it? We can say it is only a 1% increase in rates, but is actually a 20% increase in the cost of your housing payment. Something to keep in mind is that a rate increase has the effect of reducing the price of a home a buyer could afford. But there is still more positive news for the real estate market. First of all, the first time home buyers credit of up to $8000 is still available for contracts written by April 30, 2010 and closed by June 30, 2010. Also, the other home buyer credit of $6500 is also available under the same time guidelines (more about that in a separate article). Second, there is plenty of quality, well priced homes available for sale, and in my opinion, the asking prices for homes to a great extent is more in line with the market expectations at this time. Maybe I see the glass half full, but I do expect more positive real estate news being disseminated in the coming months; at least in our area.

As we can see, the average sales price in some areas differ from year to year. Although I did not drill through the numbers, my opinion is that there have not been as many expensive homes that have sold. With the availability of the tax credit in 2009, many buyers took advantage of that, and in many cases, we had a higher number of those homes selling in 2009. Also, we did not escape the foreclosure and short sale experience in the area, but the impact was substantially smaller than in other areas of the country. No one likes to see those types of transaction, but unfortunately that is the world we live in right now and those transactions will have some impact on our market going forward.

Lastly, VA and FHA loans are having a bigger impact on the market, partially due to the credit crisis and also because of the changing lending environment we are experiencing. The percentage of those loans went from 22% in 2008 to 36% in 2009. These are still quality loan products and they do not have the negative connotation from previous years. If you would like more specific information on any area, please contact me at 717-579-2879 or email at Don@DonRoth.com. And if you would like to search available homes for sale please go to www.DonRoth.com and click on the search button. Again, wishing you all a Happy and Prosperous New Year.

With the beginning of the New Year, many potential home buyers should make a resolution to purchase a home and have the ability to take advantage of the Home Buyer Tax Credit. Extended by Congress in 2009, this credit is available to buyers who sign a purchase contract before April 30, 2010 and settle on the home prior to June 30, 2010.

There are two eligibility categories designated by the Tax Credit Law:

1. First Time Home Buyers. Defined as a buyer that has not owned a home for the past three years and the credit is up to $8000 or 10% of the purchase price of the home. The income restrictions are $125,000 for a single buyer and $225,000 for a couple purchasing the home. One of the more attractive conditions of the law is that the credit is truly a credit with no repayment provisions as long as you own the home for three years. If you sell prior to the anniversary, the total credit amount must be repaid.
2. Current Home Owners who may want to purchase a home. The credit is $6500, and the home being purchased must be the buyers’ permanent residence. If a buyer wants to continue to own the home they are currently residing in, that is allowed, but again the home being purchased must be the new residence and be occupied by the buyer. One other condition in this category is that the buyer must have lived in their previous residence for five consecutive years of the last eight years. The other conditions that pertain to the First Time Home Buyers are similar.

Why is this credit so important? One of the reasons Congress extended the credit is to stimulate the housing market in the beginning of 2010. Also, with prices of homes in many areas of the country at or below previous levels it is anticipated that buyers can purchase a home at an attractive price and possibly give current homeowners the opportunity to do the same. And with mortgage interest rates still at an attractive level, possibly provide more purchasing power to a buyer.

This bill passed by Congress is the third version of the Home Buyer Tax Credit and from everything that I have seen or read Congress is not likely at this time to provide any further extensions in the future. Naturally, with any specific tax questions, it is highly recommended that you talk to a tax professional. And if you have any questions concerning available real estate for sale in the Greater Harrisburg area, please contact me at Don@DonRoth.com.

GOOD DAY!! As you can see by the article below, it appears that the very successful First Time Homebuyer Tax Credit has been extended until April of 2010 AND it also has some benefits to current homeowners. Although this is not signed, sealed and delivered, all of the conversation out of Washington says that this extension will be signed by the President by the end of this week. One item to consider is that the original bill states that a purchase contract must be signed by April 30, 2010 but may settle as late as June 30, 2010. This is great news if you are buyer and were not sure that you could close on a home by the end of this month; and if you are currently a homeowner, this may encourage you to move up to a home that may have just appeared on the market. There are some caveats, such as remaining in the newly purchased home for three years, but the credit is a true credit if you remain for longer than the three year timeframe. As is with all cases, if you have tax questions, please contact your tax professional. And if you are looking to take advantage of the credit and need assistance, please contact me at your convenience at Don@DonRoth.com or visit my web site, www.DonRoth.com. You can view all the available homes in the area by clicking the search listings tab.

RISMEDIA, November 5, 2009— After two weeks of delay, the Senate cleared the way to pass a seven month extension and expansion of the tax credit for homebuyers. By an 85 to 2 roll call vote, the Senate voted to cut off debate on a package of measures that includes the homebuyer credit, making it virtually certain that the legislation will reach President Obama for his signature this week.

The homebuyer tax credit, due to expire at the end of November would be extended through April 30 of next year. First-time buyers who are in the process of making a purchase would not need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline.

For the first time, the legislation that was recently cleared makes move-up buyers as well as first-time buyers eligible for a credit. The $8,000 maximum first-timer credit will continue and will now be available to couples with income up to $225,000, a nearly $55,000 increase above the level in existing law. A new $6,500 maximum credit would also be available to move-up homeowners who have lived in their current residence for five of the prior eight years.

For homebuyers across the country, the expanded tax credit would allow more people to qualify for the credit. While two-thirds of American families own their own home, and most earn less than the income limits that have been established within the extension, more buyers may be eligible. Move-up buyers don’t have to sell their current home to qualify for the new credit, but the money cannot be used to buy a vacation home. “It’s only for a primary residence,” said Regan Lachapelle, a spokeswoman for Sen. Harry Redi (D-Nev.), who helped engineer the deal. “In expanding the tax credit, we are helping first-time home buyers, as well as homeowners looking to move up to a new home, but we would exclude from the credit speculators who may have recently purchased a home intending to flip it for a fast profit,” said Senator Max Baucus, Democrat of Montana and chairman of the Finance Committee.

Hello to fall. I’m looking out the window as I write this report after just having come in from the outside and the feel of fall is in the air. I’m sure there will be many of non-fall like temperatures in the coming weeks. We hope!

I am pleased to report the real estate activity for September 2009 compared to September 2008 and the anticipated improvement that I have been speaking about in the past few months is coming to fruition. In addition to the improvement in the real estate market, I have made, I hope, an improvement of how the results are formatted. I have changed the format from municipality to school district because more and more buyers are looking at school districts rather than the municipality. Hopefully, this will give a better comparison since in many instance the school districts overlap more than one municipality. I hope you will find this change beneficial.

The number of homes sold in September 2009 compared to September 2008 declined by 3%, and the average sales price declined by the same 3%. These numbers are the best year over year numbers that we have seen in the Greater Harrisburg Market in some time, and although the coming months may not totally reflect that trend, I think it is again giving home buyers and sellers a true indication of what we can expect in 2010. The average sales price for the area for September was $187,007, and the days on market increased to 78 days. The number of homes available in all residential categories increased slightly to 4,271 properties.

The trend in the type of financing, FHA and VA mortgages, was 45% of the total transaction compared to 27% in 2008. Much of this is still due to the $8000 First Time Home Buyer Tax Credit, which will expire November 30, 2009; more on that later. But in retrospect, these results are improving and again that trend should continue.

As can be seen in this report, as well as previous reports, the variances in price and days on market can be substantial on a month to month basis, but overall, the numbers are representative and only a comparison by neighborhoods will give you the specifics for areas that a buyer or seller may be looking. If you need specific details on neighborhoods, please contact me at Don@DonRoth.com.

With respect to the continuation of the $8000 First Time Home Buyer Tax Credit beyond November 30, please click on the following link
http://www.donroth.com/Blog/First-Time-Home-Buyers-Tax-Credit-May-Be-Extended

Legislators in Congress are considering some type of the popular First Time Home Buyer Tax Credit past the November 30, 2009 deadline. In my opinion, for the buyers and sellers in the Greater Harrisburg, PA region, this would be an excellent event since we have seen the positive effects in this area. Knowing how long it takes to accomplish the passage of legislation in Washington, this is not a given and if you are buyers who qualify for the current tax credit, you may want to contact you local legislator and encourage the extension beyond November 30. Please read the article from the attached link. And if I can answer any questions concerning who qualifies, please contact me at Don@DonRoth.com.

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