Greater Harrisburg Real Estate Report

As I reported last month, the real estate market is still evolving and after the events of this past week, the market will continue to do so in the coming months. First, let me provide the statistics comparing September 2007 vs September 2008 and we see that the number of homes sold in September decreased by 18% year over year and the average sales price declined by 3% to $184,948. But this is still an improvement over August when the number of homes sold year over year declined by 27% and the number of days on market increased in 2008 to 69 days, which is still below the levels we saw prior to 2003 which were in the consistently in 90 to 100 day range.

Comparing the financing arrangements, we saw that FHA and VA loans made up a substantially larger portion of the settled transactions; 7% in 2007 compared to 28% in 2008. The reasoning for this is because of the challenges facing the financial markets right now and the “safe and sure haven” for qualified buyers are these two products. These products have been transformed over the years from being a last resort to a prime time vehicle for buyers who are purchasing homes. And at least in the short term these loans will be used by more buyers when purchasing a home.

Where do we go from here? With Congress discussing the “bailout” bill, I anticipate the market will improve, not immediately though. I will comment on this next week when the House of Representatives votes on the bill. But in my opinion, this is a very good start in providing liquidity for the mortgage market, assisting homeowners who may have problems with staying current with their mortgage payments and bringing some sanity to the economy. We still have a ways to go in order to get through this challenge and although there will be bumps in the road, I remain optimistic for the future.