Real Estate Information Archive

Though the news on home prices has been repetitive in recent months, we don't tire of reporting it. After reporting falling home prices over the past four years, there's a lot of ground to be made up on the upside.

Thankfully, the upside continues to dominate. CoreLogic provides the latest news on rising home prices, reporting that prices increased 1.8 percent in its May home price index compared to its April index, and are up 2 percent year over year. Remove distressed properties (which are becoming less distressed these days) from the mix and the index is up 2.3 percent month over month and 2.7 percent year over year.

The sustained uptrend is significant for an obvious reason: A price recovery trend stimulates more buying and selling. The trend also refutes many predictions made earlier this year – from CoreLogic, Trulia, Zillow, Case-Shiller – that prices wouldn't move up meaningfully until the end of 2012. It just goes to show how difficult the prediction game is.

That said, we are going to engage in a little predicting of our own. We think the upward trend in prices is sustainable over the long haul. For one, there's a dearth of inventory. Low supply, particularly in new homes, will help keep prices elevated.

The relationship between rent prices and home prices is another reason. Reis Inc., a real estate information firm, reports that national asking rents are the highest they've been in five years. The national average asking rent is $1,091. At the same time, vacancies are the lowest they've been in over 10 years. Low supply coupled with high demand means rents will continue to rise.

Concurrently, the home affordability index in many metropolitan regions is at multi-year lows. It's a great opportunity for people who normally rent to buy. In some markets, a starter home can offer a $200-to-$300 monthly savings in housing expense.

Mortgage lending rates have no doubt contributed to the high affordability index. Rates continue to drop a couple basis points week after week. Over time, these incremental drops have produced significantly lower lending rates.

Our soapbox issue at this point remains credit availability. Too many potential borrowers are still locked out of the market. The worst is over for financial institutions and the economy has stabilized. The best move regulators could make to improve participation is to ease the rules.

To be sure, lending prices need to reflect risk, but risk can be attenuated through judicious underwriting. Judicious underwriting, in turn, most often arises from a diverse, dynamic lending base. That's tough to conjure when costs associated with regulation are historically high.

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.

It's getting easier to understand why home builder sentiment keeps rising monthly: sales and prices are now in an established uptrend.Indeed, new home sales recorded a very solid 7.6 percent increase in May, posting at a much higher-than-expected 369,000 annualized units. Now, it's true that the national median price of a new home sold in May edged down 0.6 percent to $234,500 for the month but when we look at the past 12 months, we see that new home prices are up 5.6 percent.

We see no reason why prices will backslide for long. There simply isn't enough supply to satisfy demand. The surge of buying in May lowered new-home inventory to a 4.7-month supply at the current sales rate. This is the lowest inventory level since 2005.Lack of inventory is contributing to firming prices, to be sure, but it's also impeding sales growth. While the new home sales report exceeded the consensus estimate, sales might have posted an even stronger gain if builders had more inventory for sale. Having been burned in the past with false recovery signals, builders have maintained a conservative stance on both “spec” building and community-count growth, thus limiting sales potential.

Low inventory levels could become a greater issue in the existing-home sales market as well. Many of us have already dealt with lack of inventory in certain categories of homes. In many markets, supply is being kept tight for two primary reasons: Negative equity is one and expectations is the other.Potential sellers simply don't want to (or can't) come to the table with additional money, so they don't list their homes. As for expectations, more potential sellers are anticipating rising prices; therefore, they're holding inventory off the market anticipating higher prices. Expectations, in this way, is a self-fulfilling prophesy.

Given the trends in inventory and median prices, we weren't at all surprised to read that the S&P/Case-Shiller home price index posted a strong gain in April. In fact, the index surged 0.7 percent – an unusually large gain, last exceeded in April 2010. If you'll remember, back then, the market was riding on the expiration of the federal tax credits for first-time home buyers. The market today is without a doubt much healthier than it was in 2010.

We expect the market to remain healthy into the distant future. The NAR reports that home contract signings rose for the 13 th consecutive month, with pending home sales rising 13.3% over May 2011 and nearly 6% over April 2012. According NAR economist Lawrence Yun, we should expect to see a 9 percent to 10 percent improvement in total existing home sales for 2012.

The question that looms is, can shadow inventory derail the recovery? It's a legitimate question. After all, there are four million housing units that could potentially come to market as foreclosed or short-sale property. We're not particularly worried, though. We've previously argued that we don't think shadow inventory is a game changer. Banks are processing foreclosures in an orderly and rational fashion, while at the same time they are taking on more short sales. As we like to say, markets are clearing.

Here's a another consideration on shadow inventory. We consistently write about housing starts and new home sales, but we rarely talk about lost homes; that is, homes that are lost through neglect, fire, and natural disasters. According to U.S. Census data, we lose an estimated 300,000 housing units from such events, most of these are existing home, and many, we suspect, are in the shadow inventory. So, again, we think the housing recovery is on track for good.

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.

If you meet a home builder, don't be surprised if his gait is imbued with a little more pep and his voice tinctured with a little more enthusiasm, for his mood has likely been lifted by optimism these days.

The latest home builder sentiment index shows that builders are expecting more construction, more sales, and better pricing for 2012. The index moved up an impressive four points to 25 in January. This is the best reading since mid-2007 and marks four-consecutive months of sentiment improvement.

A cynic might counter that home builders are getting ahead of themselves. After all, housing starts did fall 4.1 percent, to an annualized rate of 657,000 units, in December. That said, a few details are worth exploring. November was an unexpectedly strong month for starts, and the fact remains that December's starts still adhere to an established uptrend. If you look back to February 2010, you'll see month-over-month improvements revealed in higher lows and higher highs.

Permits suggest more of the same going forward. Permits in December inched up 0.1 percent to an annualized rate of 679,000 units, which is a 7.8 percent improvement over December 2010. The gains aren't spectacular, to be sure, but we're not looking for spectacular, we're looking for sustainable. We think the gains are sustainable.

The trend in mortgage purchase applications has been encouraging to both home builders and existing-home sellers. Purchase applications jumped 10.3 percent in the January 13 week, the best posting in a month. Removing the holiday hiatus, the trend in purchase applications has been mostly up over the past few months.

The trend in refinance applications has also been up, and to a much greater degree than purchase applications. Refinance soared 26.4 percent in the latest reported week, hitting an activity level unseen since August 2011.

Mortgage rates inching lower to another multi-decade low was one factor in the surge in mortgage activity. But the increase in fees for loans purchased by Fannie Mae and Freddie Mac starting April 1 is the more influential factor. This increase translates to a 0.125 percent to 0.25 percent increase in mortgage cost (though some pundits argue that longer-term these are low-end estimates). The fees are already being implemented, but they've been offset by the mortgage-rate drop that has occurred over the past month.

We think the days of record-low mortgage financing are numbered. Fannie's and Freddie's fee increase will obviously raise costs. The revamped version of the Home Affordable Refinance Program, HARP 2.0, will also pressure mortgage rates higher due to a surge in mortgage demand: rising demand usually means rising costs.

Bottom line: we think it's advisable to act now on a refinance or a purchase to avoid the possibility of getting tangled in a refinance boom that many industry watchers are expecting to emerge in the next month or two.

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.

It might be a little stale, but data from S&P/Case-Shiller show home prices continue to stabilize across the nation. Specifically, Case-Shiller's August home price index shows no change. That said, the index points to a slight price contraction going forward. But this really isn't news; recent data from Clear Capital, Zillow, and other data aggregators already show some price weakness in September.

The pricing weakness is likely due in part to aggressive discounting by homebuilders trying to spur demand. The strategy appears to be working. Sales of new homes jumped 5.7 percent in September to an annual rate of 313,000 units. This rise in sales volume, in turn, pushed down supply to 6.2 months at the current sales rate –the lowest supply level in 18 months.

That's the good news. The bad news for homebuilders is that the median national home price is down 3.1 percent to $204,400, posting a third-consecutive monthly decline. What's more, year-over-year price contraction is 9.9 percent –the steepest yearly decline since the recession.

Some of the sting on new home prices is mitigated by the fact that most of the discounting occurred in the West and South: in other words, in the overbuilt regions in Florida, Arizona , and California . It is still possible these regions will continue to skew price data into 2012.

That said, we remain convinced that prices and sales in many parts of the nation will continue to claw forward. Our conviction is bolstered by news on gross domestic product, which improved to an annual growth rate of 2.5 percent in the third quarter. We were particularly encouraged to see more business investment lead by durable goods orders. We mentioned in a previous edition that business investment is just as important as consumer spending to sustained economic growth. The consumer recovered long ago, and now it appears the business investor is recovering as well.

We think this is good news for housing heading into 2012. More economic spending and investing will mean more jobs and less unemployment. Employment, more than anything, is what's needed to pull us out of our doldrums.

What does this encouraging news on GDP growth mean for mortgage rates? An improving economy will mean more demand for loanable funds and possibly rising consumer prices. Admittedly, the economy has improved slower than most (including us) believed it would. But recent events in Europe suggest the Greek debt crisis won't destroy Europe 's banks and the surge in stock market activity points to more risk taking and more economic activity down the road.

In short, the market is leaning toward higher mortgage rates. Next week's data on employment will be key to getting a better idea on where rates are headed.

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.

What a difference a month makes. In September, homebuilder mood was in the doldrums, where it has been for most of the year. In October, that mood turned noticeably positive, with the homebuilder index jumping four points to 18 – the highest posting in nearly 18 months.

There is still a long way to go before homebuilders approach the heady days of a few years ago, but at least the market is progressing. Builders began work on an annual rate of 658,000 houses in September, a 15-percent increase over August's starts and the most since April 2010. Much of the increased activity was centered on multifamily homes, which surged 51.3 percent. However, work on single-family homes also increased, 1.7 percent, to an annual rate of 425,000 units.

The National Association of Home Builders, which compiles data for the homebuilder index, warns that builders face pricing pressure from foreclosed properties. The good news is that foreclosures appear less onerous than they did a year ago. At the same time, homebuilders are adding to supply at a record low rate. In other words, the economics of home building are much more encouraging than they were earlier in the year.

The economics of the existing-home market continue to adhere to the recent past. Total inventory declined 2 percent to 3.48 million homes at the end of September, with the sales rate declining 3 percent to 4.91 million units. This came as no surprise; August's sales were exceptionally strong and a slight drop off in the sales pace was expected.

Homes that were purchased over the past two months have been financed with mortgage rates that were prevalent during the youth of the purchaser's parents. In the past couple weeks, though, rates have been trending higher and are up around a quarter percentage point from where they were a fortnight ago. That said, mortgage financing is still a very good deal.

But will mortgage financing become a better deal? Many in the industry think so. We are less sure, especially when factoring in growing price inflation. Overall producer prices are up nearly 7 percent this year, while the core rate, which excludes energy and food, is up 2.5 percent. On the consumer side, overall prices are up 3.9 percent, while core prices are up 2 percent.

The Federal Reserve is trying to hold mortgage rates low by buying longer-term Treasury and mortgage-agency debt. Problem is, the market has been pushing back in recent weeks, as evinced by the spike in 10-year U.S. Treasury note yields. Bottom line, the falling mortgage-rate trend is much less a sure thing than it was a month ago.

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 reported frequently on the encouraging data on home prices. The most recent encouraging data comes courtesy of Zillow, which shows that home prices inched 0.1 percent higher in August, with the average home price moving to $172,600. Zillow's data also show that the national foreclosure rate dropped to 9.2 homes out of every 10,000 homes, down from 10.9 homes out of every 10,000 in 2010.

Unfortunately, the good vibes on pricing and foreclosures were tempered by a warning that foreclosures will accelerate once the controversial robo-signing imbroglio passes. In fact, Zillow believes foreclosure inventory will pressure home prices and that prices won't bottom until 2012 “at the earliest.”It's possible we could see national average and median home prices fall. Locally, prices could just as easily fall, stagnate, or rise. In fact, a rise might be more in the offing for many local markets. After all, national data is skewed by a few regions – Nevada , Arizona , Central Florida and Central California . Overall, we still see prices firming and rising in many markets, though that trend might not be reflected in national numbers.

As for mortgage rates, we can say categorically that they have been rising nationally and locally since last Friday, thanks in part to an employment report that showed the economy created more jobs in September than most economists had expected. In many markets, rates were up 20 basis points on the 30-year fixed-rate loan. This shouldn't come as a surprise; the yield on the 10-year US Treasury note – the foundation for long-term mortgages – has risen 35 basis-points over the past 10 days.

To be sure, mortgage rates could reverse course and return to the long-term down trend, but there is a real danger to a strategy predicated on returning to the long-term trend in a market that has been trending higher; that is the obvious: the short-term trend might not reverse.

Another danger is supply and demand. Falling mortgage rates do stimulate demand, but if supply isn't rising at an accommodating pace, there is no guarantee that an ultra-low mortgage rate will be filled. Loans, like all good and services, are rationed by price. If you can get a higher price for your product, you get it.In short, if someone is satisfied with his rate, the best strategy is to ignore the daily vicissitudes and lock. Regret is a tough emotion to overcome, particularly in a market that is showing signs of wanting to move higher.

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.