Real Estate Information Archive

A Mixed Bag, But It's One We'll Take

Is it two steps forward, one step back; or one step forward, one step back? Sometimes it's difficult to tell.

When it comes to existing home sales, one step forward, one-and-a-half steps back might be the better descriptor. Sales of existing homes drifted down 1.8%, to 5.05 million units, on an annualized basis in August. Year over year, sales are down 5.3%. Supply has again been fingered as the culprit for the sales-volume dearth. Supply for the month fell by 40,000 units, which drops total inventory to 2.31 million units.

The good news is that pricing continues to reflect reality. Existing-home prices have been relatively flat for the past six months. Year over year, the median price of an existing home is up 4.8% to $219,800. This is no surprise. We've seen price appreciation moderate through most of 2014. We expect that trend to continue into 2015.

When we vet new-home sales, the trend is definitely two steps forward, one step back. New home sales surged 18%, to 504,000 units, on an annualized basis in August. Pricing appears to be more favorable to buyers. The median price of a new home dropped 1.6% for the month to $275,600. Year over year, the median price is up 8%, but that rate of increase is slowing and will likely continue to do so. At the current sales pace, inventory has dropped to 4.6 months. This points to home-builder activity picking up through the end of the year. That's good news for the overall economy.

There's more good news specific to housing.

CoreLogic reports that nearly 950,000 homes were lifted into positive equity in the second quarter of 2014. Nationwide, home equity has increased by $1 trillion year over year. To be sure, we still have more room to improve. CoreLogic estimates that approximately 5.3 million homes, or 10.7% of all residential properties with a mortgage, were still in negative equity as of the second quarter. But that's a significant improvement over the 7.2 million homes in negative equity a year ago. We expect the equity trend to remain positive deep into 2015.

We see more positive news in a recent survey conducted by The Demand Institute, a nonprofit think tank. Demand's survey reveals what we've known all along: Millennials might be transforming the workplace, but at home they are very much like their parents and grandparents. They want to get married and have a family, and many of them want to raise that family in the suburbs – the domain of the single-family home.

We never bought into the notion that the United States is becoming a nation of renters. Many surveys we've read over the past year have confirmed our bias. The Demand Institute's survey is simply another arrow for our quiver.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

On Wednesday, the Federal Reserve released the long-awaited minutes of the latest meeting of the Fed governors. The minutes revealed what we expected they would reveal: The Fed will wrap up quantitative easing next month, so it will cease new purchases of Treasury notes and bonds and mortgage-backed securities (MBS). (The Fed will maintain its existing policy of reinvesting principal payments in MBS and rolling over existing Treasury debt.)

The minutes also revealed that the Fed intends to wait "a considerable time" before raising the influential federal funds rate (the rate banks lend to each other). The idea is that the Fed wants interest rates to remain low until “structural” issues related to the job market are rectified. In other words, the Fed would like to see more job growth in better-paying jobs before raising the federal funds rate.

If maintaining the low rates that materialized in the past month is what the Fed wanted, that's not what it got. After we learned the federal funds rates (which is at zero) is unlikely to rise until next year, the rate on the influential 10-year Treasury note rose nearly 10 basis points. Mortgage rates, unsurprisingly, also moved higher. In short, rates on the longer end of the yield curve rose. We doubt this is what the Fed was anticipating.

We're not predicting a steady rise in long-term interest rates – including mortgage rates. But it's worth keeping in mind that even if the Fed wants something, there is no guarantee it will get it. Markets are powerful and unpredictable forces. Mortgage rates might hang low for another six months, or even another year, but there are no guarantees.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

A Case of Cognitive Dissonance?

Home builders are feeling as perky as they have in nearly a decade. Indeed, the National Home Builders Sentiment Index posted at 59 this month. That's a number last seen in 2005 when the housing market was in full-bore mode.

Of course, real estate markets are local markets, and some home builders are feeling more perky than others. Home builders in the South, Mid-West, and West are more optimistic than the national 59 reading would lead you to believe, while builders in the Northeast are feeling less optimistic, if not dour. (The Northeast reading posted at 44.)

Home builders when aggregated are obviously anticipating a brighter future, even if the immediate past offers scant reason to break out the bubbly.

Housing starts drooped 14.4% in August to an annualized rate of 956, 000 units. The consensus estimate was for 1.03 million units. The mitigating takeaway was that most of the droop was seen in the volatile multifamily component, which fell 31.7% month over month. The more important single-family component was down a more modest 2.4%, which follows an 11.1% surge in July.

When we step back to view the big picture, we see housing starts are up 8% year over year. And if we step back even further and remove volatility by looking at the five-month moving average, we see a strong uptrend and significant improvement over the past five years.

The long-term trend in housing starts is good news for the economy in full. So many ancillary businesses are dependent on starts – home improvement companies, finance providers, commodity producers, retail merchants, and on and on. The uptrend in starts is nothing but a positive that is worth highlighting because of its importance to overall economic health.

Now, we'd like to see an uptrend established in mortgage purchase activity.

CoreLogic reports that cash sales have dropped to 33% of total home sales, down from 36.3% a year ago. To be sure, a large percentage of the drop is the result of fewer REO sales and short sales – many of which were cash transactions. Prior to the bursting of the housing bubble, 25% of sales were cash transactions. So, we expect a further reduction in cash transactions in the future. Therefore, to keep sales volume growing, mortgage financing will need to play a bigger role.

On that front, the Mortgage Bankers Association purchase index rose 5% last week. Could this be the beginning of a positive financing trend? We hope so, but we're not holding our breath. We've been disappointed too many times in the past to do that.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

Calm Before the Storm

Summer isn't officially over, but once Labor Day passes, for all practical purposes it is for most of us.

Now that we are back to work with no sight of a respite in the immediate future, we expect market activity to pick up. It's worth noting mortgage market activity (buying and selling of mortgage-backed securities) has picked up, and rates have become a bit bouncy over the past couple days.

Trader activity has surely picked up. To wit: Stocks rallied and bonds sold off on speculation that Russia and Ukraine might hash out a ceasefire. The headline was pure manna from heaven for bond and stock traders, who were given a reason to buy stocks and sell bonds.

But once the euphoria passed, stocks sold off and bond yields rallied.

The fact is that we remain in a fundamentally low-inflation environment, which is why interest rates in general, and mortgage rates in particular, continue to trade at 2014 lows. At the same time, and somewhat paradoxically, the economy appears to be growing at a brisk pace – one that has been creating 200,000-or-more new jobs per month for most of the year. We say “paradoxically” because when economic growth and job growth take flight, so, too, do interest rates. But not this time around.

That said, we expect interest-rate volatility to pick up. We say that because the languid days of summer are over, and that means more people are watching the market and offering their opinion – either through spoken or written words or direct buying and selling.

Nevertheless, we don't think we'll see a trend toward higher interest rates to materialize this year. Mortgage rates might be more volatile, but they'll likely be more volatile within this low range.

Going forward, the Federal Reserve will remain key. We expect rates won't ratchet higher with any fortitude until the Fed decides to raise the influential federal funds rate – the rate banks lend short-term to each other. When that occurs, rates will likely begin to take flight.

But we prognosticate with one caveat: Don't discount the ability of a strong jobs report or unexpectedly stout gross domestic product numbers to get mortgage rates moving higher. What has worked in the past may not be working at the present, but that doesn't mean it won't work again in the future.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

The News Gets Only Better for Housing

Everything is coalescing nicely for a sustainable uptrend.

Last week, we reported that new-home starts and home-builder confidence continued to gain momentum. This week, new-home sales gained momentum, though it might not seem so on first blush. New-home sales for July came in at 412,000 units on an annualized rate. This was slightly below expectations, but sales for June and May were revised higher by a total of 28,000 units. The market is still trending in the right direction.

Lack of inventory has hampered new-home sales over the past year, but that should be less of an issue moving forward. Starts have ramped up, and that's reflected in more inventory. Supply of new homes increased to 205,000 units compared to 197,000 in June, which pulls up the monthly supply to six months at the current sales rate.

Moderating price appreciation will also help sales. The median price of a new home fell 3.7% to $269,800 in July. Year over year, the median price is up only 2.9%.

That year-over-year price gains are slowing is no surprise. The S&P/Case-Shiller Home Price Index has been reporting slower year-over-year gains in recent months. For the latest month, June, Case-Shiller shows the year-over-year increase for its 20-city index slowed to 8.1% versus 9.3% for May. Month over month, prices actually decreased in 13 of the cities Case-Shiller follows.

Slowing price appreciation will bring both new supply to market and increased buyer interest. The former will be less motivated to hold for a higher price; the latter will be motivated to buy into a more stable pricing market.

Existing-home sales are expected to improve in coming months. The Pending Home Sales Index posted a strong 3.3% increase in July. The monthly gain easily exceeded top-end expectation, and points to rising sales through 2014.

We see nothing but better days ahead.

Next Friday, another monthly jobs report will be issued. So far the economy has racked up six-consecutive months of 200,00+ monthly payroll increases. We expected a seventh month when the report for August is released. The consensus estimate is for 223,000 new jobs for the month. We would not be surprised to see more.

Job creation should continue at a brisk pace because the economy is almost certainly on the mend. Gross Domestic Product (GDP) growth was revised this week to 4.2% for the second quarter, up from the original estimate of 4.0%. All signs point to GDP growth maintaining this pace through the third and fourth quarters.

Now all we need is purchase-mortgage activity to trend higher. Perhaps a trend is in the works: Purchase activity was up 3% for the Aug. 22 week.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

The housing market is a mixed-bag nationally. The mortgage market, on the other hand, is trending higher.

To be sure, we are still plagued by a dearth of purchase activity (though purchase applications increased 0.3% for the latest reported week). We'd love to see purchases trend materially higher; for no other reason that it will signal a more normalized housing market – one driven by owner-occupied buyers.

We mentioned a couple weeks ago that lending standards have eased considerably over the past two years based on the MBA's Mortgage Credit Availability Index . We don't expect that trend to reverse. We see further easing in the future.

For one, the state of the mortgage market looks pretty darn good. Black Knight (formerly LDS) reports loan delinquencies are down 15% year over year. Overall, foreclosure inventory is now at its lowest since May 2008.

Fewer loan delinquencies and lower foreclosure inventory are by-products of improved job growth and higher home prices. On job growth, the economy has been adding 200,000+ new jobs a month for the past five months. An improving employment outlook makes lenders more willing to lend – more jobs, more risk tolerance.

At the same time, mortgage loans are still cheap. Bankrate.com shows the national average on the 30-year fixed-rate loan below 4.3%. Freddie Mac shows it below 4.15%. These are 2014 lows.

Today, the mortgage market is as favorable to lender and borrower alike as it has been in the past six or seven years. Therefore, we highly recommend borrowers take advantage of the opportunity, because it's impossible to know how long it will last.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

Bond markets were given a slight jolt this week on unexpectedly high consumer-price inflation.

Specifically, the Consumer Price Index (CPI) jumped 0.4% month over month in May. This was the largest monthly increase since February 2013. The latest increase in consumer prices lifted annual CPI to 2.1%. This is within the Federal Reserve's tolerable inflation range, but it still raised a few eyebrows.

Eyebrows were raised because inflation influences interest rates. When inflation rises, bond yields rise as well. At the same time, bond prices fall. Investors want to be compensated for lost purchasing power over time (which is the result of inflation). If investors anticipate higher inflation, they will demand a higher interest rate.

The CPI was released Tuesday, and mortgage rates rationally rose. But they've actually eased back since. When we look at the national averages we don't see much change week over week: Bankrate.com's survey has the 30-year fixed-rate loan at 4.33%, a basis point lower than the previous week. Freddie Mac's survey pegs the 30-year loan at 4.17%, a three-basis point decrease.

To be sure, the national surveys unlikely captured the full impact on rates when the CPI was released. (The 10-year U.S. Treasury note serves as a good proxy for the 30-year fixed-rate mortgage. You can see that the 10-year note's yield spiked higher .) But there is a mitigating factor for rates to remain subdued – low Gross Domestic Product (GDP) growth.

We've been cautiously optimistic that growth would accelerate this year. Indeed, we've been encouraged by the trend in job growth, with the economy adding 200,000-plus new jobs each month for the past three months. This seemed like a good omen.

Today, we are a little more cautious and a little less optimistic. This past week, the Fed cut its growth prediction to 2.2% from 3% for 2014. That's a sharp reduction and reflects the 1% economic contraction that occurred in the first quarter. The reduction also suggests the Fed is still wary that widespread predictions for an economic growth breakout will not occur.

Low growth, in turn, will hold inflation at bay, because loan demand will remain muted. For anyone unfamiliar with how our banking system – which is based on fractional reserves – works, more lending increases the money supply. More money chasing the same amount of goods and services eventually leads to consumer-price inflation.

Today, the 30-year fixed rate mortgage is as close to 3.5% as it is to 5% – the year-end prediction we proffered in January. So do we still think we'll hit 5% by the end of December? We have to confess that it's appearing less likely. That said, keep an eye on the monthly employment numbers, which are released the first Friday of every month. Should the economy continue to create jobs at a 200,000-plus rate each month, 5% on the 30-year remains a possibility.

Courtesy of Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

We've been keeping a close on employment numbers since the 2009 recession. Many times in these pages we've noted that as job growth goes, so goes the economy... and, of course, so goes housing.

Job growth is finally going the way we want. The economy added 217,000 new jobs in May, with the private sector by far leading the increase, adding 216,000 new jobs. The gains in May come on top the 282,000 new jobs in April and the 203,000 in March.

This is good news, because we haven't seen monthly job growth continually exceed 200,000 each month until recently. To sustain a recovery, the economy needs to add 200,000-or-more jobs each month. With the recent gains, total employment is now 98,000 above the pre-recession peak and at an all-time high. (Though it's worth noting that the population continues to grow as well: 10 years ago there 290 million of us; today there are 317 million).

Interestedly, another month of strong job growth hasn't had much impact on mortgage rates. Rates moved up this past week, but only slightly. Looking at the national averages, Bankrate.com's survey shows the 30-year fixed-rate mortgage averaged 4.34%, which is two basis points higher than the previous week. Freddie Mac's survey shows the 30-year loan averaged 4.20%, a six-basis-point increase. Rates are still very reasonable.

More borrowers took advantage of low mortgages last week. The Mortgage Bankers Association (MBA) reports that application activity for the week ending June 6 was up strongly. Week over week, refinances were up 11%, while purchase applications were up 9%. This is one of the strongest weekly gains in months.

Our enthusiasm is somewhat tempered, though. Too many times we've seen purchase applications string together two or three weeks of gains only to reverse course. But with institutional buyers (the cash buyers) pulling back, we are cautiously optimistic the individual buyer – using mortgage financing – will pick up the slack. Recent job growth is behind our optimism.

Given recent job data, we wouldn't be surprised to see mortgage-purchase activity trend higher. More people working is obviously a plus. At the same time, mortgage credit continues to avail itself to more people. The MBA, which produces the Mortgage Credit Availability Index (MCAI), reports that the MCAI rose in May to 115.1, from 113.8 in April. So, yes, underwriting standards are easing, and actually have been easing over the past two years when you consider the MCAI base was 100 when it was introduced in March 2012.

This isn't a surprised. As the economy improves (which it has), lenders become more willing to extend loans, and to extend loans to lower-rated borrowers. This is another positive trend we've seen developing in the past two years, as evinced by the MCAI.

The trends we see in job growth and mortgage lending bode well for housing, which is why we remain bullish on housing.

Courtesy of Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

All the hype and hoopla that centered on shadow inventory and its ability to depress the housing market earlier this year seems a little overdone in retrospect.

Indeed, shadow inventory has almost become a non-issue these days, and heading into 2013 it will likely become even less of an issue. We say that because the Mortgage Bankers Association reports mortgage delinquencies hit a four-year low in the third quarter. At the same time, the foreclosure inventory rate fell 20-basis points, posting the lowest quarterly drop since the MBA began surveying the market.

The delinquency and foreclosure trend has actually been on the decline since peaking two years ago. We expect it will continue to decline through 2013, and very likely beyond. There are a number of reasons we think distressed properties won't spoil the recovery.

For one, negative equity is declining. Zillow reports that negative equity declined 30% in the third quarter of 2012, the largest percentage decline Zillow has ever reported.

The decline in negative equity is the corollary to rising home prices. Over the past year, we've continually, and almost without fail, reported on rising home prices. Keeping the streak alive, we report this week that Zillow's data show home values rose 1.3% in the third quarter compared to the second quarter, with the national median home price rising to $153,800.

A dearth of inventory will keep home prices rising, and thus further reduce the negative-equity overhang. New-home inventory is at record lows. The National Association of Realtors will report existing-home inventory next week, and most industry watchers are expecting inventory levels will be down sharply year over year in October. Low supply plus rising demand equals rising prices.

The current interest-rate environment should continue to ensure a minimum level of demand going forward. We are all aware that mortgage lending rates are at multi-decade lows, and that's unlikely to change through 2013.

Underwriting is the more pressing issue these days. Lending standards remain tight, particularly with lower-rated borrowers. A less diverse lending environment is one reason they remain restrictive. Private investment has yet to return in mass following the financial-sector meltdown in 2008.

Risk aversion is another reason. Lenders are rightfully concerned with the costs Obamacare will impose on the economy next year. They are also concerned with the fiscal cliff, which would mean tax-rate hikes and spending cuts. It also appears more likely that Europe could fall into recession. If that occurs, the probability rises that the United States could fall into recession too.

The fiscal cliff is the most oppressive concern these days. Democrats and Republicans have attempted to pound out various compromises. We've heard some chatter that the mortgage income tax deduction is on the table. One bipartisan plan would limit the deduction to $25,000 worth of mortgage interest annually. Other proposals include eliminating the deduction for taxpayers earning $250,000 or more, ending the deduction on second homes, and even ending the deduction entirely (this last option is unlikely).

In short, there is a heckuva lot of uncertainty in the financial markets today. Until some of the uncertainty is removed, we can expect mortgage rates to remain low, but we can also expect for underwriting standards to remain elevated.

Courtesy of Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

The “fiscal cliff” has taken center stage after the election. The fiscal cliff is Fed Chairman Bernanke's shorthand for the combination of federal tax increases and spending cuts that are scheduled to go into effect January 1, 2013. If we were to hit the cliff full throttle, we'd experience $500 billion in expiring tax cuts and automatic government-spending reductions.

The fiscal cliff's attention is well deserved. The Congressional Budget Office (CBO) estimates the economy will be pulled down into another recession, with gross domestic product (GDP) shrinking 0.5%, if Congress fails to act. In turn, unemployment will rise to over 9% from today's 7.9%.

In other words, there is an elevated level of uncertainty still weighing on housing; however, we expect this uncertainty to be removed before the end of the year. We will likely see a compromise on income-tax rate increases; and we will likely see a compromise on federal spending cuts.

Once the uncertainty of the fiscal cliff has been removed, we expect business investment and hiring to increase, which will lead to more normalized economic growth rates (between 3% and 4% annually). Should that occur, the odds increase that we will be looking at fewer value-priced homes and higher mortgage lending rates this time next year.

Courtesy of Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.