Real Estate Information Archive


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Hope reappears in home market

by Don Roth

Hope reappears in home market

By Eric Veronikis
6/18/2009 3:18 PM


Don Roth of Prudential HomeSale Services Group opens a model home at the Townes at Forest Hills in Lower Paxton Township, Dauphin County. He said the $8,000 federal first-time homebuyer tax credit and other incentives have helped stir real estate interest. Photo/Amy Spangler

The housing market led the U.S. into a recession, and it has to lead it out, local real estate agents said.

But the high unemployment rate shares the blame, because job losses are fueling foreclosures and stunting house sales, they said. With the national unemployment rate at 9.1 percent and the state’s at 7.6 percent, the climbing unemployment figures don’t seem to be signaling a turnaround in the midstate.

House sales are down through the first quarter and most of the second quarter in the midstate compared with the same period last year. But real estate agents said there are signs that suggest a rebound could start to take shape this year. Some national real estate experts said they think improvements will start by early summer as more first-time homebuyers purchase houses.

More people are buying previously owned houses, too. Nationally, the number of people that purchased previously owned houses climbed 6.7 percent in April, and that was the fourth increase in five months, according to the National Realtors Association (NAR).

The second half of the year will be better than the first, said Andy Collins, president of Morgan-Collins Inc., a real estate group based in Spring Garden Township, York County. 

Homebuilder incentives, low mortgage interest rates of about 5.7 percent, reduced house prices, state incentives and the federal first-time homebuyer tax credit have stirred activity in real estate offices, agents said. And first-time homebuyers have to settle on their houses by November to take advantage of the credit, spurring people to move on sales. Congress might increase the tax credit to $15,000, too, agents said. A first-time homebuyer is anyone who has not purchased a house within the past three years. As of March, just before the credit took effect, 53 percent of those purchasing houses across the U.S. were first-time buyers, according to NAR. 

Incentives and prices are going to start moving mid-priced houses, too, because people want to take advantage of the low mortgage interest rates before they go away, agents said.

It’s too soon to gauge how many houses the tax credit has helped sell since it started in April. It takes between 30 and 60 days to settle a house, agents said. Plus, guidelines for the credit’s use with federal Housing and Urban Development (HUD)-issued mortgages are three weeks old; many first-time homebuyers go after HUD loans, said Fred Briggs, president of the Greater Harrisburg Area Association of Realtors (GHAR) and broker and vice president for Prudential Thompson Wood Real Estate based in Hampden Township, Cumberland County.

“We are seeing an increase, particularly in government loans,” Briggs said.

First-time homebuyers can use the credit for a down payment on HUD mortgages, but they still have to put down at least 3.5 percent in cash on those loans, Briggs said. It’s up to banks and customers with conventional bank mortgages as to how they want to use the tax credit, he said.

The incentives and credit couldn’t come at a better time. There were 227 fewer houses sold through the first quarter in the greater Harrisburg area than there were during the same period last year, according to the
Central Penn Multi-List, an extension of GHAR that tracks local real estate statistics. That’s 627 fewer houses sold during the first quarter compared with the first quarter of 2007. The multi-list tracks housing statistics in Cumberland, Dauphin and Perry counties.

There were 112 more houses sold last year from January through June 12 in Lebanon County than there were this year, according to the Lebanon County Association of Realtors (LCAR). Lebanon County was the only midstate county, however, where the average price of houses increased. Through the first half of the year, the average sale price was $163,457, according to LCAR. This year, it is $190,819.

There were 362 more houses sold through the first half of 2008 than there were this year, according to the Lancaster County Association of Realtors. Last year, there were 1,821 houses sold from January through the end of May. This year, 1,459 houses sold.

The picture is worse in York and Adams counties.

House sales were down by 20 percent through the first five months of this year compared with the first quarter of 2008, said Steve Snell, chief executive of the Realtors Association of York and Adams Counties Inc. (RAYAC) But, from April to May of this year, sales grew by 1 percent, which he said is somewhat encouraging. There were 2,074 houses sold last year in York County at an average price of $183,925 through the first quarter, according to RAYAC. That fell to 1,647 houses sold from January to May at an average price of $169,005.

Unemployment is a big player in house sales, Briggs said. If job losses continue, the housing market will not recover, he said.

Collins echoed Briggs sentiments and used the recent talks about the possible closure of the Harley-Davidson Inc. plant in Springettsbury Township as an example. Last month, Milwaukee-based Harley-Davidson announced it was considering reducing the size or closing its largest plant in York County because of the economy.

“If Harley decides to close, that’s 2,500 families that will not buy a house,” Collin said.

The tax credit’s November deadline provides an incentive for people to look at houses, Collins said.

The tax credit also is helping to sell houses at the lower end of the market that cost between $100,000 and $200,000, said Jerrod Patterson, a real estate agent at Re/Max Realty Professionals Inc. based in Lower Paxton Township, Dauphin County. The spring and early summer are the busiest times of year at Re/Max Realty Professionals, but Patterson said he can tell that good deals and the credit are creating more business.

It’s still a buyer’s market, real estate agents said. Pricing, interest rates and builder incentives are moving houses priced $250,000 and above, too, they said.

It’s important that customers have their houses listed at the right price, said Don Roth a real estate agent with Lower Paxton Township’s Prudential Homesale Services.

Some people want to buy houses now because there is speculation that interest rates are going to go back up, and they want to lock in rates, Roth said. It might be too early to definitely say whether the tax credit and other incentives will reflect the start of a turnaround this year, but they’re sparking interest, he said.

“It is a catalyst moving forward,” Roth said. “It spurred buyers to at least consider purchasing a home.”

People are not drastically cutting prices on existing houses to sell their properties, Patterson said. Some will reduce their prices by up to 5 percent. It’s important to find out what similar properties throughout neighborhoods are selling for to find out what an appropriate price might be, agents said.

There are other factors, too. Buyers are not picking fixer-uppers, Patterson said, because their disposable income is going into the purchase.

“Everything boils back to price, condition and location,” Patterson said. “If it’s in good condition, it’s well maintained and priced appropriately in relation to comparable prices in the area, it sells.”

Housing market numbers expected to rebound

Real estate agents said the $8,000 federal first-time homebuyer tax credit combined with other incentives has helped stir activity.

However, statistics don’t show it because the tax credit came out in April, and it takes 30 to 60 days to close a contract on a house. Plus, guidelines for how to use the credit for federal Housing and Urban Development (HUD) loans only came out three weeks ago. And many first-time homebuyers use HUD loans. The tax credit’s November deadline has helped spur interest, too, agents said.

Builders are offering incentives such as material upgrades and help with closing costs to sell houses. Lower prices and interest rates also are helping, agents said.

So while the numbers have yet to reflect an improved housing market, agents said the second half of the year will look better.

Here is how house sales have fared this year compared with last. Harrisburg second-quarter numbers so far are not available, according to the Greater Harrisburg Association of Realtors. The GHAR figures reflect sales through the first quarter.

Housing market chart

SOURCE: Courtesy of Central Penn Business Journal.

Harrisburg Area Real Estate Info at Your Fingertips

by Don Roth

I am happy to provide to real estate home buyers and sellers new services in order to provide the most up to date information that is available. First, on my revised web site ( you can search real time for homes that are available for sale by clicking on the tab “search listings” and you can search by towns, zip codes and county to find information on specific properties and by price range. This category is updated many times a day, so the information is very current. And second is our company’s 24/7 phone number, which provides you one phone number to get all the listing information by using the listing ID from Prudential Homesale Services or any other real estate company in the area. So when you are out driving around, you just need to dial 717-798-3858. With the information changing so rapidly, I look at these two services as an aid to your real estate needs. In all cases, information on my web site is going to cover much of the area including Cumberland, Dauphin, Perry and York counties and it is provided courtesy of the Central Penn Multi List. If you have any questions or would like to have additional information on any of the homes you see, please contact me at

2009 First Time Home Buyer Tax Credit

by Don Roth

Great News
2009 First Time Home Buyer Tax Credit
Revised Guidelines for a Home Purchase

On May 29, 2009 HUD announced improved guidelines to assist first time home buyers for the purchase of a home. Under the guidance, FHA-approved lenders can develop bridge loans that home buyers can use to help cover their closing costs, buy down their interest rate, or put down more than the minimum 3.5 percent.

The loans can't be used to cover the minimum 3.5 percent, senior HUD officials told reporters on a conference call Friday morning.

Thus, buyers applying for FHA-backed financing with an FHA-approved lender that offers a bridge-loan program can get a bridge loan to bring down the upfront costs of buying a home significantly but would still have to come up with the minimum 3.5% down payment.

There remain many sources of assistance for buyers needing help with the 3.5 percent down payment, including many state and local government instrumentalities and nonprofit lenders.

In addition, some state housing finance agencies, such a PHFA in Pennsylvania, have developed their own tax credit bridge loan programs, so buyers in states whose HFAs offer such programs can monetize the tax credit upfront to cover all or part of their down payment. These programs are separate from what HUD announced today.

The first-time homebuyer tax credit was enacted last year--and improved upon earlier this year--to help encourage households to enter the housing market while interest rates are low and affordability is high. The credit is worth up to $8,000 and is available to households that haven't owned a home in at least three years. The credit does not have to be repaid, and is fully reimbursable, so households can get their credit returned to them in the form of a payment

Who Qualifies?

First-time home buyers, who purchase homes between January 1, 2009 and December 1, 2009.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?

The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Will the Credit Be?

The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:

The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000 The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.

Depending on the purchasers circumstances please check with a local lender in your area and if you are now sure, please contact me at your convenience.

Source: HUD and The National Association of REALTORS®

Central Pennsylvania Real Estate Sales Report May 2009

by Don Roth

The real estate market in our area is beginning to experience some improvement when compared to the previous four months of 2009. The average sales price increased by 3% in May compared to April 2009. The comparison of the number of sold homes decreased slightly when compared to May 2008, but the month to month increase in the sales price is a very good indicator going forward and although the days on market had a slight increase from April, the trend appears to be moderating.

As in previous months, the lower priced homes are selling at a quicker pace than the homes in the higher ranges which right now is over $350,000, but some increased activity is occurring. Part of the increase, I’m sure, has been the $8000 federal tax credit that is for first time homebuyers and which now has been modified by HUD to allow buyers to monetize part of this credit and allow the credit to be used to pay for closing costs for the purchase of a home. Combine the credit with still extremely low mortgage interest rates and we can see why there has been sustained activity in what we would consider the first time homebuyer market. And I would anticipate this positive trend to continue in the coming months. Another positive sign is the number of pending but not settled transactions is up about 45% since the end of 2008, giving a good base for future sales to occur in the near future.

Average Sales Price May 2009
West Shore
Days on Market
Camp Hill
New Cumberland
East Pennsboro
Hampden Township
Silver Spring Township
Upper Allen Township
Lower Allen Township
Fairview Township
East Shore
Lower Paxton Township
Derry Township
Swatara Township
East Hanover Township
South Hanover Township
West Hanover Township


Again as last month, the percentage of homes financed by FHA and VA has increased from last year. And as I mentioned in April this trend will continue for a while. For those sellers that have not been involved in this financing, the guidelines are now very similar to conventional financing and as you can see by the percentages, this type of financing has become the norm in today’s environment. And if you have questions about the value of your home or activities in your community, please contact me at your convenience. Just remember all real estate is local and although there has been a correction, we are still in good shape when compared to other communities across the country.

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