Real Estate Information Archive

We came across a couple articles that piqued our interest this past week. One was on CNBC .com, where the writer laid out an interesting hypothesis on how fewer foreclosure sales could actually drive prices lower. The writer reasoned that foreclosures are in high demand and that distressed property buyers and sellers rule the market; therefore, if demand for foreclosed properties wanes, prices will wane as well.

A separate article appeared in The Wall Street Journal lamenting that mortgage rates aren't as low as they should be. The writer points to the spread between mortgage-backed securities (MBS) and posted mortgage rates, which is wider than historical norms. The writer deduces mortgage rates should be lower.

Both articles were interesting, but hardly conclusive. As for high foreclosure demand propping up overall prices, prices of non-distressed properties have held firm. If prices aren't firming in the new-home market, the surge in home builder optimism doesn't appear warranted. It seems to us that home builders are experiencing better pricing.

As for the spread between MBS and mortgage rates, many influential variables are at work besides MBS demand: time preferences, risk aversion, supply and demand, liquidity preferences are just a few. The spread between MBS prices and mortgage rates alone is a very incomplete picture of the mortgage market.

The point is, markets are dynamic and complex, so it's impossible to narrow price determination to only one or two variables. The variables can be insightful, to be sure, but they are hardly conclusive, much less predictive.

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 

So are things getting better or worse? We ask because the latest data on existing-home sales fail to provide a definitive answer. Sale were up once again, increasing 4.3 percent to a 4.57 million annualized rate in January, which, in turn, dropped supply to 6.1 months, the lowest inventory level in three years.The fact that existing-home sales are rising is good news. The not-so-good news is that sales appear to be driven by discounting. The national median price fell 4.6 percent to $154,700, while the national average price dropped 4.0 percent to $201,200.

In short, existing-home sales are trending higher, but the trend is being fueled in part by price discounting – at least at the national level.We're always quick to point out that all real estate is local. National numbers – averages in particular – strip local data of their individuality and meaning. That's why we are always more interested in locally produced data, which nearly always differs from what the national numbers say.

For example, data from Pro Teck Valuation Services and Collateral Analytics show significant improvement in South Florida, which a few years ago was one of the leading bubble markets. On the flip side, their data show significant weakness in a few Connecticut burgs, which mostly endured the post-2007 sell-off unscathed.

The bottom line is markets aren't homogenous: The country has experienced varying degrees of price corrections and sales volumes since the market peaks of 2006 and 2007. These degrees are often smoothed away in aggregated national numbers, thus limiting their usefulness.

The mortgage market, on the other hand, has seen few degrees of variability of late. Mortgage rates have held a bottom achieved a couple months ago. The consensus among mortgage pundits is that this bottom will hold for 2012.

It's difficult to argue with the consensus when you consider the Federal Reserve has openly stated it intends to hold the fed funds rate – the influential short-term rate – at zero through 2014. On the long-end of the interest-rate spectrum, the Fed has stated it will continue to purchase longer-term Treasury securities and mortgage-backed assets to keep mortgage rates low.

This doesn't mean that mortgage rates can't get more expensive, though. The FHA recently announced it was raising premium fees on its forward mortgages by 10 basis points on conforming loans and 25 basis points on jumbo loans. These costs must be recouped from the borrower.

It's also worth keeping in mind that the Federal Reserve isn't omniscient. Market forces – such an unexpected spike in inflation or economic growth – will move rates higher, regardless of what the Fed does. So take the consensus for what it is – an opinion and not a guarantee.

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.

At the International Builders Show in Orlando, Florida, Federal Reserve Chairman Ben Bernanke lamented the difficulty of creditworthy households and potential home buyers finding the credit they want.

The Fed chairman mentioned many reasons for this dearth of credit: Representatives and warranties were high on the list. Contractual commitments from originators to ensure the quality of the loan have the unintended consequence of reducing riskier loans. No one should be surprised, then, that fewer lenders are offering mortgages to borrowers with a FICO score of less than 620 and a down payment of 10%, even though such loans are within Fannie Mae's and Freddie Mac's guidelines. Actions have consequences: raising costs to lenders make lenders more risk adverse.

Mr. Bernanke also said something that we thought was particularly noteworthy: "Learning from our experience with securitizations over the past decade, lenders and regulators alike should look carefully at rules and practices that may unduly diminish the origination of prudently underwritten mortgages.

”Securitization is a very import source of mortgage liquidity. To increase liquidity, we suggest that the Fed change its own policy and let mortgage rates rise to attract more private securitization, thus creating a more diverse, more vibrant lending market. Rising rates would also mean more borrowers would be motivated to act today, instead of waiting – as they have been conditioned – for lower rates.

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.

Are the home builders portending better days ahead? We think so, because their sentiment continues to reflect more optimism and improving new-home prospects.

For proof, the NAHB/Wells Fargo Home Builder Sentiment Index gained four points in February, pushing the index to a 29 reading – the highest reading in over four years. What's more, February was the second-consecutive month of a four-point gain and the fifth-consecutive month-over-month gain.

Even more encouraging to us is the fact that home builder optimism isn't confined to specific index components or specific areas. Gains are evenly split among current sales, future sales, and buyer traffic, and evenly distributed by metropolitan region.

The latest data further buttress the case for a rosier housing outlook. In fact, the Co mm erce Department data show housing starts increased 1.5% in January, pushing starts up to 699,000 annualized units, the highest start rate since October 2008.

Many housing pundits have pointed to multifamily starts as reason for the upturn. To be sure, multifamily starts are in an uptrend, having increased 14% to an annualized rate of 175,000 units in January. It's worth noting, though, that single-family starts posted at 508,000 annualized units in January. That's a 1 percent drop from December's starts, but December's single-family starts were revised up strongly to 513,000 homes – a 12-percent gain from November.

In short, the resurgence in home construction isn't being driven by renters alone. People still want to own a home, and they are still willing to buy a new one.

Whatever type of home someone wants, it can be financed at record low mortgage rates. In fact, a new low was set again this past week. For this, we can thank the Greeks. As improbable as it might seem, what occurs in Athens, Greece impacts mortgage rates in Athens, Georgia.Modern financial markets are very interwoven. When investors become nervous about the debt situation in Greece, they pull their money out of Greek debt and put it in haven investments like U.S. Treasury securities. The securities (particularly the 10-year Treasury note), in turn, influence long-term mortgage rates: Treasury rates drop, mortgage rates invariable drop as well.

The Federal Reserve also influences mortgage rates by purchasing mortgage-backed securities. The Fed's purchases creates demand for these securities, thus driving mortgage rates down. The Fed has recently stated that it's willing to purchase more of these securities if needed. That means rates are unlikely to move significantly higher in the near future.

That said, they are unlikely to move significantly lower either, thanks to an improving economy. Therefore, we see no reason to wait to refinance or purchase a home for anyone so inclined. On the latter, the timing is unlikely to get better. According to the NAHB and Wells Fargo, buying a home today is more affordable than it has been any time in the past 20 years.

We've noted many times that low prices and high affordability don't last in perpetuity. Given the surge in home builder optimism and improved employment numbers, we don't expect homes to be as affordable at year's end as they are today.

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.

There is some good real estate news to report in the Harrisburg PA real estate. Really!! The number of homes sold in January increased slightly when compared to January 2011. And the number of homes that are under contract, but not sold, increased by approximately 10% over the end of 2011. Yes, when you review the selected numbers below you can see that not every area had an increase in the average sales price compared to 2011 and yes the days on market increased slightly in some areas. And I also know that one month is not a trend but I do see some improvement in our local market. When you see an increase in the monthly sales numbers, year over year and especially in January, you should take that as an indication of something good occurring. Also, since the beginning of February and totally unscientific I observed an impressive number of new listings go under contract within two weeks of being introduced to the market. Additionally, in conversation with Realtors® and mortgage lenders there appears an increase in buyer and seller activity.

Does this mean that we should have a party celebrating the return of the real estate market in our area? Not quite. There is much more to accomplish such as consumers having faith in the economy, homeowners believing that they can sell their homes, even with less than what they paid for it a few years ago, and believe that the next real estate purchase will be more equitable in the long run.  In my opinion we will experience some two steps forward and the one step back but in my 20 years we have had challenges before in real estate and we will see some more but if you look back ten years and what positives happened to real estate values we will see a much more positive market ahead. Examples I can point to are the historically low interest rate environment and the large inventory of homes to choose from.

The below examples of pricing encompass a large geographic area and if you are looking for some type of report that is more specific please let me know and I will initiate a Neighborhood Area Report for you which can be both more property and price specific. Please drop me a note at Don@DonRoth.com and request the report. Or you may search at your own convenience by logging on to, www.DonRoth.com and click on the search listings tab to see what is currently for sale in all neighborhoods of the Harrisburg area.

West Shore

School District

School                       2011                          2012              Days on Market

Camp Hill                    $149,850                     $225,733         56/61

Carlisle                        $195,349                     $148,285         124/142

Cumberland Valley    $242,919                     $248,766         97/110

East Pennsboro          $158,393                     $141,413         126/130

Mechanicsburg          $193,322                     $171,100         111/232

Northern York             $228,238                     $164,137         129/183                      

West Shore                $231,313                     $144,299         119/124

East Shore

School District

School                       2011                          2012              Days on Market

Central Dauphin        $178,259                     $165,859         132/129

Derry Township         $193,822                     $219,950         106/118

Harrisburg                  $ 44,505                      $ 46,022          115/141

Lower Dauphin          $230,865                     $186,973         154/112

Middletown               $143,675                     $186,973         112/166

Steel High                   $ 48,750                      $ 28,066          95/124

Susquehanna Twp     $158,634                     $142,427         115/104

We all have seen reports and indications from many sources and I have even stated it is a good time to buy your next Harrisburg PA home because of the low mortgage interest rates and the abundance of good quality homes that are currently for sale. But what about the home owner that doesn’t want to move and I am not going to list all the reasons that a homeowner does not want to move, they are too numerous. So if you are not considering a move does refinancing the existing mortgage on your Harrisburg PA home make sense? In many, many cases the answer would be yes. There is no magical dollar amount that you owe formula because every situation is different and the dynamics of every homeowner is different. There are many excellent lenders that I know that are willing and extremely able to determine whether a refinance is worth your while and most importantly save you some of your hard earned money.

If by any chance you are considering the purchase of a home and would like to know what is available in all the areas please visit my web site, www.DonRoth.com, and click the search listings tab and you will find the most up to date information available. Or you can contact me and I would be willing to create a Neighborhood Activity Report based on your criteria.

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.

In December 2011, Congress reached a last-minute deal to fund the payroll tax cut extension. The payroll tax extension will provide a 2% tax reduction for individuals earning up to $106,800, so the tax extension will be very helpful for many Americans who are struggling during these tough economic times. But like so many things in our tangled economy, there's a flip side. In this case, the tax cut deal has a rippling effect that will impact the mortgage world.

Here's what's happening and what it means to home loan rates:

What is happening and why? To put it bluntly, the passage of the payroll tax cut extension is being funded via a mandate to Fannie Mae and Freddie Mac (the nation's largest providers of mortgage money) to increase their guarantee fees or "g-fee's" by at least 10 basis points on the rate. So rather than giving a par rate of 4.00%, for example, the par rate is now increased by at least 10 basis points, or approximately 4.10%. But as you probably know...home loan rates are priced and offered in .125% increments, so this will most likely impact the consumer by .125% in rate. Whether you agree or not on the politics behind this cost being passed along to folks who are taking out mortgages, the Congressional Budget Office recently estimated that the increase will ultimately pay for about $35.7 Billion of the cost of the payroll tax extension.

What exactly is this "g-fee"?

The guarantee fee or "g-fee" is an amount charged by mortgage-backed securities (MBS) providers, like Freddie Mac and Fannie Mae, to help protect against credit-related losses in the overall mortgage portfolio. In other words, it acts a lot like insurance and helps lower the overall risk...which means home loans can be offered at terrific interest rates to borrowers that have good – but not perfect – credit.

What exactly is the impact of the rate increase? 

For example, for a $200,000 home loan, the increased g-fee (assuming a .125% increase in rate) would equate to $250 more per year in interest, or $7,500 more over 30 years. Someone buying or refinancing a home can certainly choose to buy down the cost with cash up front – but most folks will not do this.

Who will this impact?

The change will impact all new borrowers of Fannie Mae and Freddie Mac loans. The bill will also impact Federal Housing Administration (FHA) loans by increasing the annual mortgage insurance premium that borrowers pay by one-tenth of a percent.

When will it start? 

Officially, the increase to guarantee fees will begin on April 1, 2012. However, the increase is already starting to be seen in rate sheets right now, since home loans being originated now will likely not be closed, pooled and securitized until April.. .and therefore will need the increased g-fee priced in earlier.

How long will this be in effect? The increase will be effective through October 1, 2021.

The bottom line is that the g-fees will be going up... and this will impact homebuyers looking to obtain a home loan through Fannie Mae, Freddie Mac and FHA.

The good news is that home loan rates are still at historic lows right now, and it's a great time to purchase a new home or refinance. If you or anyone you know has any questions, please call or email!

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.