Real Estate Information Archive

We appear to hold the minority opinion on mortgage rates: Most market watchers believe they remain an important variable in sustaining both the housing and the economic recovery.

A few years ago, lower rates were an indispensable variable. Many households had mortgages three or four percentage points above today's rates. The savings realized by refinancing or purchasing a home at a lower rate could amount to hundreds of dollars each month. This was especially important to household cash flow at a time when the economy was mired in a recession.

But the fact is that most everyone will have taken advantage of today's historically low rates by the end of the year. After each refinance, the marginal economic benefit drops. In other words, the impact of lower rates has diminished.

Here's another consideration: Rising rates will likely be accompanied by greater economic growth. When we go back to the 1990s, mortgage rates were 300 or 400 hundred basis points higher than they are today, and the housing market performed fine. The key distinction is the 1990s were marked by strong economic growth, which meant more people were able to service a higher borrowing rate and a higher home price.

The point we want to emphasize is that higher mortgage rates won't stall the housing recovery if they are accompanied with economic growth, and that will likely be the only way rates will rise. This is why we say higher mortgage rates are nothing to fear, and if they are accompanied by higher economic growth, should actually be embraced.

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.

2012 was the year of the price increase.

Indeed, the median price for existing homes rose to $180,800 in December, an 11.5% gain over the median price a year ago. Prices rose steadily through 2012 on increased demand and reduced supply, which has fallen to 4.4 months at the current sales rate.

Low supply, though great for buttressing prices, is impeding sales-volume growth. Existing home sales posted at 4.94 million units on an annualized rate in December, which was below the consensus estimate for 5.09 million units.

That said, rising homes prices are still an overall benefit. Rising prices are shifting more home owners to a positive-equity position. This should help spur inventory growth, as more owners interested in selling won't be constrained by the prospect of bringing money to the table.

This rising equity offers an additional benefit: It raises the “wealth effect.” Home owners naturally feel more optimistic when they're not burdened by being underwater on their most important asset – their home. A rising wealth effect spurs additional spending and investing, which leads to more economic growth.

Additional investment is particularly important. Many economists focus on consumer spending, believing it's the key driver of economic growth. Spending is important, to be sure, but investment is the real driver, because production must precede consumption. In other words, you must produce to consume.

We see a lot of potential in residential investment, especially in the important single-family home sector. Over the past 50 years, single-family residential investment has averaged 2.5% of gross domestic product. We are far below that level today. This suggests to us that the market can support much higher levels of investment.

We are further encouraged by the trend in sales composition.

Many markets across the country have seen double-digit year-over-year drops in distressed sales as a percentage of total sales: Phoenix has seen a 32% drop; Colorado, a 29% drop; South Florida, a 14% drop; and Las Vegas (possibly the hardest hit bubble market), a 24% drop. If this trend continues, and we expect it will, residential real estate investment will move closer to regaining its rightful position as a primary economic driver.

As for mortgage rates, they haven't been trending lower or higher. The way financial markets have been performing lately, we don't see much impetus for rates to go lower. The economy is expected to pick up pace this year, and this is reflected in the higher yield on the 10-year Treasury note.

We might sound like a broken record on this point, but it's worth repeating: We simply see little reward (and more risk) in waiting to buy or refinance a home in this stage of the recovery.

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.

Implementation of a new Pennsylvania Law concerning electronic recycling is
now in effect. Please review the information and help us make the
environment a little better....

Electronic discards include computers, monitors, televisions, printers, and other electronic devices. Today’s consumer electronic products are characterized by rapidly evolving technology and a relatively short product life. The average lifespan of a computer is currently about three to four years, and advances in technology for all electronic equipment, particularly cell phones, soon renders them obsolete. Due to the relatively low price of new equipment, items that break or become obsolete are often discarded into the waste stream rather than being repaired or upgraded. Given the sheer volume of electronics and the hazardous materials they may contain, consumers and generators are encouraged to seek environmentally safe options such as reuse or recycling when their electronics reach the end of its useful life.

Why are they Potentially Harmful?

Electronic equipment contains metals that, if not properly managed or contained, can become hazardous wastes:

• Cadmium - The largest source of cadmium in municipal waste is rechargeable nickel-cadmium (NiCd) batteries.
• Lead - Old monitors and televisions contain a cathode ray tube (CRT) that contain leaded glass. CRTs are the largest source of lead in municipal waste.
• Mercury - Some electronic equipment also contains recoverable quantities of mercury.

Electronics may also contain other materials such as hexavalent chromium, brominated fire retardants, lithium, and phosphorous coatings that, if improperly disposed, can pose a threat to human health and the environment.

Implementation Schedule

Beginning Jan. 1, 2012, the Covered Device Recycling Act (CDRA, Act 108 of 2010) requires manufacturers of desktop computers, laptop computers, computer monitors, computer peripherals and televisions to provide recycling services to residents of Pennsylvania.

Beginning Jan. 24, 2013, the CDRA bans the disposal of these devices and any of their components in municipal waste.

Recycling Locations

For a list of recycling opportunities and locations provided by manufacturers for these devices, please click here Electronics Collection Programs & Drop-Off Locations. Additionally, electronics retailers are required to provide customers with information on how and where to recycle the materials that have been banned from landfills.

You may also find counties, local municipalities, or non-profit groups that collect electronics for recycling. The materials accepted by these collections vary. For a list of these collection sites and other information, click here.

Many electronic items such as cell phones, computers and televisions can be recycled at local retailers that sell the items. Check with your retailer for details of any programs they may have.

Spent rechargeable Nickel-Cadmium (NiCd), Nickel Metal Hydride (Ni-MH), Lithium Ion (Li-ion), and Small (weighing less than 2 lbs./1 kg.) Sealed Lead (Pb) batteries can be recycled through many retail outlets. These batteries are commonly found in cordless power tools, cellular and cordless phones, laptop computers, camcorders, digital cameras, and remote control toys. Find out where you can recycle them using the consumer information at Call2Recycle.org

For further information regarding electronic recycling opportunities in your area, you can also call DEP’s Recycling Hotline at 1-800-346-4242.

Recycling Fees

The CDRA prohibits manufacturers and retailers from charging consumers a fee for the collection, transportation, or recycling of a covered device unless a financial incentive of equal or greater value is provided (e.g. a coupon or rebate). Covered devices include desktop computers, laptop computers, computer monitors, computer peripherals and televisions.

Collection locations may charge fees if they are not a retailer and are not affiliated with a manufacturer’s recycling program.

Any collection location, regardless of whether they are a retailer or are affiliated with a manufacturer’s recycling program may charge a fee for the recycling of non-covered devices.

How can I generate less electronic waste?

Reduce - Maintain and keep equipment as long as possible.

• Evaluate, compare and select desktop computers, notebooks and monitors based on their environmental attributes.
  • Electronic Product Environmental Assessment Tool from the Green Electronics Council
• A typical computer's lifespan is three to four years, but can be extended by two to three years with some upgrading.
• Buy a good monitor; it can last six to seven years or more. Keep it for use with your next computer.
• Always use a surge protector power strip with all electronic equipment.
• Cell Phone donation/reuse opportunities:
  • Call2Recycle.org
  • Earth911
  • WirelessRecycling.com
  • The Wireless Foundation
  • Wireless: The New Recyclable

We are speaking of the multi-family home market, where rents have been on a tear, and where apartment builders have been ramping up production. Over the past year, residential real estate investment trusts (REITS) have been the best performers in the REIT investment space.

Such a strong run in multi-family home construction begs a question: Is the multi-family sector forming a bubble? We have to ask, because over the past 25 years, we haven't seen this much multi-family construction packed into one year. We obviously don't have a definitive answer, but at a minimum we can say that the multi-family market deserves to be closely monitored.

On the other side of the coin, it appears the single-family sector still has plenty of room to run, and we think it will run in 2013. As rents continue to rise, home ownership will appear more attractive compared to renting. This paradigm will motivate more households to take the ownership plunge, and we see many of these households opting to plunge into single-family homes.

In short, we see a strong housing market for 2013, but we see more of that strength shifting to the single-family sector.

 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.

Home builders appear committed to making up for activity lost over the past few years.

We say that because housing starts surged 12.1% in December to 954,000 units on an annualized rate. For the year, starts rose a whopping 36.9%. What's more, home builders are expected to maintain the momentum at least through 2013.

As to be expected, the gains in starts and new-home sales have had a meaningful impact on home-builder outlook. This time last year, the Home Builder Sentiment Index stood at 25. Today, it's at 47.

The gains in home-builder optimism are impressive, to be sure, but it could be higher. Home builders are still frustrated with credit conditions that are too tight and property appraisals that are frequently too low. Most of us have had to deal with these two frustrating issues, but as 2013 progresses, we think these issues will become less frustrating.

We say that because we expect home prices to continue to trend higher. The corollary to rising home prices is falling negative equity. Indeed, rising home prices lifted more than 100,000 homeowners out of negative equity in the third quarter of 2012, according to CoreLogic. Through the first nine months of 2012, 1.4 million homeowners were elevated into a positive equity position.

Should home prices continue to appreciate (as we expect), the lending purse strings should loosen somewhat. Experience has taught us that rising prices and economic growth tend to persuade regulators to take a less risk averse and a more accommodating stance. In other words, regulators tend to give lenders more latitude in underwriting.

Of course, history never exactly repeats itself, and this time could be different. Indeed, many industry watchers are concerned that new regulation, namely the Ability-to-Repay/Qualified Mortgage (QM) rule, issued by the Consumer Financial Protection Bureau (CFPB), has placed a formidable hurdle for many potential home buyers to overcome. The new rule, scheduled to go in effect in January 2014, codifies eight requirements for lenders to verify a borrower’s ability to repay.

That said, we remain sanguine on the credit outlook nevertheless. Yes, the new CFPB rule could make it more difficult for home buyers to get a mortgage. Keep in mind, though, we still have 12 months to go before the rule takes effect. A lot will happen between now and then, and we expect much of what will happen will be positive.

As for the here and now, mortgage rates have leveled off after rising over the past month. We think this presents an opportunity to lock in a rate.

Now, we'll freely admit there is no guarantee rates won't fall, particularly if the debt-ceiling (which the federal government has reached at $16.4 trillion) elevates risk-aversion in financial markets. This would lead to more money flowing into haven investments like the 10-year Treasury note.

That said, the yield on 10-year Treasury remains near a six-month high, which suggests to us that mortgage rates, particularly on the 30-year fixed-rate loan, are unlikely to test recent lows. In short, we still see no reason to sit on the sidelines.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.

Recently I have had a number of inquiries concerning the tax rates for the areas in the greater Harrisburg areas. Below you will find the rates for Dauphin County and although it is listed for the year 2013 some, if not all will change on July 1, 2013 since that is the beginning of the school fiscal year. So naturally I will update the rates after the beginning of July. To determine a tax liability you would multiply the total of 25.87360 (Derry Township) times the assessed value. For example if the value was $100,000 the calculation would be $100,000 x .02587360 and the result will be $2587.36 on your home. If you have  any questions, please contact me at Don@DonRoth.com.

Mortgage rates are at historical lows due to the Federal Reserve's unprecedented purchases of Treasury and mortgage-backed securities. The Fed had said previously that it would continue to buy these securities indefinitely. Now, there are signs that “indefinitely” could be closer than the Fed had previously suggested.

At the last meeting of the board of governors, there was heavy debate about how long the Fed should continue buying Treasuries and mortgage-backed securities. A few governors believe economic growth is on track. Other governors expressed concerns that the Fed's mounting debt purchases will be difficult to unwind and could roil credit markets.

The bottom line is that the Treasury and mortgage-backed securities purchases could end before the end of the year, which would be sooner than most Fed watchers had anticipated. Should the Fed cease its debt purchases, interest rates and mortgage-lending rates will surely rise.

A couple weeks ago, we said that mortgage lending would likely become a more “normalized” market. To that end, a more normalized mortgage-lending market entails a market without a Federal Reserve subsidy.

The point we want to emphasize – one we've emphasized many times – is that the risk of holding out for lower mortgage rates (or expecting current rates to be maintained) is rising, and this rising risk is something all refinance candidates and home buyers need to keep in mind.

 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 are still early into 2013, but the data releases so far are extending the trends established in 2012.

Consider inventory: The numbers continue to drop. According to data provider Movoto Real Estate, inventory dropped 9%, or by 9.551 homes, month over month in December. The latest monthly drop means inventory levels ended 2012 27% lower than where they began.

Falling inventory has been a mixed blessing: On the one hand, less supply has helped lift prices higher. (The paradigm of falling supply/rising demand will always do that.) On the other hand, lower inventory has truncated sales activity. It's obvious to say that we all could have been busier if there were more homes for sale.

Inventory has been squeezed for two reasons: (1) Many homeowners remain underwater, so they're in no position to sell; and (2) the rising price trend has kept properties off the market, because potential sellers believe a higher price is forthcoming.

Both these situations will rectify themselves over time: Rising prices coupled with continued mortgage amortization will lift many underwater homeowners above water. Rising prices will also reach an action point for more homeowners, where the price finally justifies putting the home on the market. In short, we expect inventory levels to rise as the year progresses.

In the meantime, there is little reason for anyone interested in buying a home not to buy. Despite steady price increases, homes remain very affordable. The NAR's Housing Affordability Index will likely have ended 2012 at a record high. 2013 is also expected to be a high-affordability year (though affordability is expected to drop as the year progresses).

In addition, rent payments and mortgage payments have reached a multi-year gap, with rent payments becoming much less attractive when compared to mortgage payments.

We thought it was interesting that the NAR mentioned in its release on housing affordability that “a more sensible lending environment that makes it easier for other financially qualified buyers to get a mortgage would allow many more households to enter the market, boosting home sales as much as 10% to 15%.”

Of course, we agree. We also think that as the economy improves, the lending environment will become more “sensible.” The downside is a more-sensible lending environment will likely lead to a higher-rate environment. In fact, 2013 has been marked by higher mortgage rates. We're not surprised given the recent surge in the 10-year U.S. Treasury note yield.

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.

No sooner had news on the “fiscal cliff” reached the market when frets and worries turned to the debt ceiling. The federal government hit its legal borrowing limit of $16.4 trillion this past week. Now pundits and professional worriers are fretting over what implications this impasse will have on financial markets and the economy.

No need to fret or worry, because perfection is impossible. Markets will always be encumbered with uncertainty. To wait for perfection is to wait in perpetuity and to never act.

In fact, the best time to act is when the outlook appears most dire and sentiment is decidedly negative. That's when the best values appear. We saw that in the residential real estate market in 2011 and early 2012. Many people who bought a home then are already sitting on a tidy gain today.

We still see value, just not as much of it. Low mortgage lending rates have been an extenuating factor, but we believe if borrowers (and refinanciers) wait much longer the value of that factor will fall should rates rise.

The point we can't emphasis enough is not to wait for perfection, because perfection doesn't (and never will) exist.

 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.

homes for sale, Harrisburg Pa Real Estate, Don Roth, market report

It appears Congress and the president have finally reached a compromise on the “fiscal cliff” – the agglomeration of tax increases and spending cuts that were set to take effect in January 2013. The good news is the housing and mortgage markets survived unscathed.

The Mortgage Forgiveness Debt Relief Act remains in force for another year. This means forgiven mortgage debt will remain untaxed. Without this extension, short sales, foreclosures, and loan modifications would have become encumbered with a tax burden. This would have been a serious blow to the recovery. These basic market-clearing mechanisms were vital to the housing recovery in 2012, and will continue to help the recovery along in 2013.

The mortgage interest deduction also remains intact, which means mortgage financing remains a very good low-cost deal. It also means mortgage financing remains a savvy leveraging strategy for purchasing an asset (residential real estate) that is rising in value; thus providing a means to increase returns on invested capital.

In other words, the housing recovery is here to stay, and the latest round of price data supports this conclusion. Trulia reports that asking-price gains accelerated throughout the past year. In the first quarter of 2012, national home prices increased 0.8% quarter over quarter; by the fourth quarter, the pace had increased to 2.3%. Year over year, national home prices were up 5.1%.

Fueling the home-price acceleration was the former left-for-dead Phoenix market, which staged a remarkable resurrection that continues to this day. Home prices in Phoenix were up 25% for the year.

We've frequently written that falling prices will eventually produce more buyer interest, which, in turn, will lead to an eventual recovery. Phoenix is proof this economic maxim works.

Las Vegas also proves the maxim. It seems like it has taken an eternity, but the Las Vegas housing market is on the mend. Home prices in Las Vegas were up 10% year over year in December, building on a price-recovery trend that begin in the second half of 2012. We noted early in 2012 that a recovery in the Las Vegas housing market would likely mean the recovery had become a country-wide phenomenon. This appears the case today.

Home prices around the country remain on the rise, and it's appearing more likely that mortgage rates will be rising too. Over the past couple weeks, rates have been inching higher. What's more, events in the debt market point to even higher rates.

We are speaking specifically of the 10-year U.S. Treasury note – a benchmark for the mortgage-backed security market and the 30-year fixed-rate mortgage. The yield on the 10-year Treasury has moved considerably higher over the past month. In fact, the yield on the 10-year Treasury today is approaching its highest point in nearly four months.

The trend in the 10-year Treasury yield is worth following, because if the job market and economy continue to improve (as we expect), then you can be sure that the yield on the 10-year Treasury note will continue to rise. Should this occur, mortgage lending rates are sure to follow.

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.