Real Estate Information Archive

One of our frequent laments over the past year has been the lack of diversity in the mortgage lending market. Fannie Mae, Freddie Mac, and the FHA back more than 90 percent of all new loans today, up from a third five years ago.

Unfortunately, the level of diversity might not be rising soon. Housingwire.com reports that regulators are pushing for lenders who offer high-risk mortgages to hire certified, licensed appraisers to conduct interior property inspections. (A high-risk mortgage is defined as one secured by a home with an interest rate above a certain threshold.) What's more, if a seller acquires this high-risk property for a lower price within six-months, an additional appraisal must be supplied at no cost to the consumer.

Basically, the regulators' proposal would raise the cost of higher-risk loans, which means there will be fewer of these loans. In turn, higher costs could make lenders even more risk averse, which would further shrink the pool of potential home buyers.

At this point, we think it makes financial and economic sense for lenders to venture further out on the risk scale. We understand the concerns, given the number of loans that went sour a few years ago. But today, there are simply too many potential borrowers relegated to the sidelines because of excessive risk aversion and its accompanying regulatory costs.

Prudent and thoughtful lending doesn't mean eschewing risky lending, it means approaching risky lending with intelligent underwriting procedures.

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 looks like a new trend is developing in the second half of 2012: upping the home-price outlook. Last week, we mentioned that Zelman & Associates raised its home-price forecast for 2012. This week, it's Bank of America's turn.

At the start of the year, analysts at Bank of America predicted home prices would rise a mere 0.5 percent for 2012. Today, these same analysts believe national home prices will post a 2-percent gain, followed by another 2-percent gain in 2013, which is up from their original estimate for a 0.3-percent gain.

We weren't surprise to see Bank of America raise its price expectations. We also weren't surprised by its rationale. Bank of America cited many of the same variables we've cited over the past year: a shift toward shorts sales among creditors, a decreased flow of foreclosures, a reduction in supply. Increased demand also helps, which when coupled with decreased supply leads to the inevitable – higher prices.

Home builders have also held supply in check. Starts, especially on single-family units, remain at lows that are below those seen during the 1981-1982 recession.

Home builders still have a long way to go before they hit the long-term annual average, but they've been ramping up production over the past year. Housing starts came in at 746,000 annualized units in July, which is down 1.1 percent from June. It's important, though, to keep an eye on the big picture. In that context, starts are up 21.5 percent year-over-year. It appears starts will continue to gain momentum, considering permits rose 6.8 percent to 812,000 annualized units in July.

Increased new-home inventory won't materially change today's low inventory levels. In other words, home prices – new and existing – should continue to gain traction across the country. (Of course, all markets are local and the degree of traction will vary among markets.)

As for the overhang of shadow inventory, the longer it remains in the shadows, the less likely it will be inventory. Houses, we often forget, are depreciating assets if they are insufficiently maintained. Houses can, and do, go away. We actually lose over 300,000 housing units annually through neglect, fire, or natural disasters.

In short, we still see persistent price gains for much of the country.

Speaking of prices, the price of most mortgages rose this past week. This actually marks the third-consecutive week where mortgage lending rates rose. Granted, we are talking about a couple basis points in some instances, but it's still a trend.

An improving economic outlook (which raises loan demand) was the most repeated explanation for rising lending rates. Retail sales are trending higher, and increased sales reflect rising consumer confidence. Increased home-building activity is also bolstering the outlook for the economy.

So where are rates going? The 10-year U.S. Treasury note is a useful proxy for gauging mortgage lending rates, and it's been trending higher over the past month. So we don't expect a pull-back in rates this week. In fact, we wouldn't be surprised to see a fourth-consecutive week of rate increases.

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.

The problem with vetting national numbers is that local markets rarely reflect the national numbers. This causes problems, mostly due to false or unrealistic expectations if the local numbers don't gel with the national numbers.

The fact is there is never a perfect time to buy or sell a home. Only in hindsight do we realize that our timing was good, or maybe not so good. That said, it's important not to be paralyzed by the fear of not selling at the top or buying at the bottom or financing at rock-bottom rates.

There are still pundits (most notably Fiserv) who think falling home prices are in our future. Unfortunately, that expectation gets reported at the national level and is interpreted to mean prices in most markets will fall. This isn't the case, but it tends to attenuate activity through fear.

We are keen to emphasize that markets are local. But even in local markets that are rising, there will always be concerns about prices backsliding or the economy tanking. The key is to always factor in where we are in a historical context. Looking at the big picture removes some of the worry and places a long-term investment like residential real estate in the proper perspective. It also increases the likelihood of making a profitable purchase or sale.

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 would be derelict in our duties not report that mortgage lending rates hit another new low this past week. The truth is, that's occurred so often over the past two months, it's difficult to keep track on how many consecutive weeks a new low has been reached.

The reason for this week's new low mirrors the reason for last week's new low: investors rushing into haven investments over European debt and economic growth concerns. (This itself is becoming redundant.) U.S. Treasury securities are the top investor havens. That said, our concern is that investors are overestimating the safety of U.S. Treasury securities, and this could impact mortgage lending rates.

The risk isn't that investors will miss a principal payment or an interest payment on Treasury securities; the risk lies in loss of purchasing power and capital losses if these securities need to be sold before maturity.

Most U.S. Treasury securities don’t compensate for inflation, and this can't go on indefinitely. When investors start demanding compensation for lost purchasing power, rates will have to rise. That means yields will rise, prices will fall, and investors will suffer capital losses.

That also means mortgage lending rates will have to rise. What's more, they could rise more than expected, because not only will individual investors suffer capital losses, so will the Federal Reserve, which has been the largest buyer of Treasury securities this year.

The point we want to emphasis is not to take anything for granted, and that includes today's low mortgage lending rates.

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.

As each week passes, the data on housing becomes more encouraging. This past week's data added to the good feelings.

Existing homes sales continue to post monthly gains, rising 3.4 percent in April to an annualized rate of 4.62 million units. If you go back to July 2011, you'll see a trend that is very noticeably up, with monthly sales trending 15-percent higher over the time period.

Perusing the existing home sales data a little deeper, we find many encouraging details. When local market prices are aggregated into the national number, we find the national median price has increased to $177,400 – a 10.1 percent improvement over the national median price in April 2011.

Strengthening home prices are surely the result of easing competition from distressed sales, which now comprise less than a third of total sales. Fewer lower-priced distressed properties in inventory obviously means less downward pricing pressure.

More seller interest is the corollary to less pricing pressure. The NAR reports that inventory increased to a 6.6-month supply in April from 6.3 months in March. A few commentators positioned the inventory increase as a negative, but we don't necessarily agree. Compared to last year, when inventory stood at a 9.1-month supply, 6.6 months is a vast improvement.

Composition of inventory is also worth considering, and the composition of existing-home inventory this year is of higher quality compared to last year. Better pricing invariably brings better homes to market. We’ve see pricier, higher quality homes hit the market over the past six months.

The trend in new home sales and pricing is also encouraging. New home sales increased 3.3 percent in April to an annualized rate of 343,000 units, easily beating the consensus estimate for 330,000 units. Meanwhile, the national median price of a new home rose to $235,700 compared to $234,000 in March and $224,700 in April 2011.

We don't see new-home prices backsliding any time soon. Inventory stands at a mere 146,000 homes, which is a 5.1-month supply at the current sales pace. A dearth of inventory, coupled with a rising-price environment, means that anyone looking to buy a new home should think hard about procrastinating; rising demand plus shrinking inventory always equals higher prices.

That said, a few opinion leaders are less sanguine than we are, at least on prices. New York-based Fitch Ratings weighed in on the subject and said it sees another 7.8% drop in national home prices this year. In our opinion, that's an awfully steep (and unlikely) drop at the national level when you consider the vast improvement in many formerly forlorn markets – Phoenix, Miami, Detroit, Orlando – that are recovering vigorously.Bottom line, we still see no persuasive evidence to think the majority of housing markets aren't recovering and moving forward.

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.

One question we field as often as any is “What determines lending rates?” The short answer is that many factors – seen and unseen – go into the lending rates borrowers are quoted.

That said, a few factors are more impacting than others. The Federal Reserve is an obvious factor. When the Fed purchases long-term Treasury securities and mortgage-backed securities, it creates demand. Increased Fed demand, in turn, means lenders can offer loans at lower rates than if there was no Fed demand. The Fed, in a sense, creates a market.

The level of risk acceptance or aversion among investors also influences lending rates. When investors are more risk averse, as they have been for the past month, they flock to haven securities – Treasury notes and bonds and other high-quality, low-yield debt. This “flight to safety” pushes mortgage lending rates lower because investors are more willing to lend at lower rates because of demand for higher-quality securities.

The dynamic interaction of supply and demand also works on lending rates. If demand for borrowable funds is brisk, lenders are in a position to quote rates or charge points higher than the national average. If the supply of loan able funds increases, as it's prone to do when investors are more risk accepting, lending rates will drop to entice people to borrow. 

But perhaps the greatest influencing factor is anticipation – each individual's outlook on the market. If more individual lenders believe economic growth and inflation are in the future, rates will rise today in anticipation. The reverse will occur if more lenders see slower growth and lower inflation.

Anticipation also happens to be the most difficult (if not impossible) factor to quantify. What's more, anticipation can be very fickle and can change on a dime; thus making prognosticating very difficult.

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.

Once again we are compelled to lead with home prices. That's actually a good thing, because home prices are increasingly on the rise and increasingly portend higher prices.

The latest pricing data, from Trulia, show that asking prices rose nationally 1.9 percent in the three-month moving average from February to April. When you look at monthly comparisons, asking prices were up 0.5 percent from March to April.

Of course, asking isn't getting – an asking price isn't the sales price. But we all know that we set prices rationally. It's important not to waste time on an unrealistic asking price. In other words, Trulia's data suggests that prices are rising, and rising strongly, in many markets. This, in turn, suggests that we should expect higher reported sales prices from S&P/Case-Shiller and Corelogic in the near future.

Seeing a rising national asking price is nice, but it's really meaningless to any particular market. The price trend in Denver has no bearing on the price trend in Philadelphia or vice versa. The same can be said for most combinations of any two markets.

What we find interesting, though, is the price trends in the most hardest hit areas – such as Phoenix and Miami – are posting double-digit increases. If we've said it once, we've said it numerous times over the past couple years: markets clear. In other words, prices fall to reach a level where they draw sufficient interest to clear inventory. Once inventory clears, prices again start moving higher.

Clearing markets is painful but salutary, and maybe not as painful as our expectations lead us to believe. We mentioned a couple weeks ago what turned out to be the non-issue of an explosion in option ARM defaults that were expected to sink the market. That never occurred.

The foreclosure overhang that everyone has been talking about for the past six months also appears to be a non-issue. CNBC reports that the number of homes entering foreclosure is up for April, but is still down more than 30 percent from a year ago.

Earlier this year, most financial outlets were lamenting impending doom once banks started foreclosing in earnest and dumping properties on the market. Lost in all the rhetoric was the fact that bankers are rational. Short sales, deeds-in-lieu, re-negotiation make a difference, and they've been on the rise. Bankers don't want to upset markets, especially through mass REO sales.

The lesson here is that it's rarely the anticipated that upsets market; it's mostly the unanticipated. The distressed property overhang has been anticipated and is being dealt with accordingly and rationally.

What we anticipate, and what we would like to see at this point are more accommodating lending standards. The current overly strict standards is the number one hindrance to the recovery in our opinion. To be sure, mortgage lending rates remain at historical lows, and that's good for those able to get the rate. But what we really need are rates and mortgage products to accommodate all borrowers needs, not just those with 800 FICO scores.

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 all acutely aware of the looming overhang of distressed properties. Since the beginning of the year, we've been saturated with stories of millions of foreclosed and REO properties that are just waiting to hit the market as soon as the banks can complete the paperwork.

We came across some persuasive musings at Calculatedriskblog.com that lead us to believe that the distressed properties market might not be as bad as all that.

The author references Lending Processing Services data, which show about two million properties in the foreclosure process and another 1.7 million loans 90 days or more delinquent. Many of these loans, though, are in judicial states. They will still take considerable time to work through the courts, the author reasons. In other words, it's hard to imagine a huge wave of foreclosures, if anything it will be more like a sustained high tide in many judicial foreclosure areas.

There are also other extenuating factors at work that are often overlooked: we have lenders offering cash incentives to do short sales; government-sponsored rent-to-own programs that allow banks to hold properties as rentals; and HARP 2.0, which allows underwater borrowers to refinance and stay in their homes.

Distressing news always outsells uplifting news. The good news is the distressing news is rarely as distressing as it first appears. Remember the disaster that was supposed to occur on the huge Option ARM reset a few years ago? If you don't, don't worry; neither do a lot of other people.

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.

All good things really do end, and that includes optimism. Home builder sentiment had been improving measurably for the past seven months, until this month when the NAHB/Wells Fargo Housing Market Index fell three notches to score 25 compared with March's 28.

Many home builders had expected the volume of signed contracts to pick up at a faster pace by this time of year. Unfortunately, that hasn't been the case. Recent economic data over the past month point to a sputtering, if not stalled, economy.

The latest housing starts data, no doubt, impacted home builder sentiment. Starts dipped 5.8 percent in March after decreasing 2.8 percent in February. The March pace of 654,000 annualized units fell far below market expectations for 700,000 units. March's drop was driven by a nearly 20 percent decline in multifamily starts. Home builder sentiment might be down on volume, but it should be up on price. We were all somewhat concerned on the direction prices were taking at the beginning of the year, but that appears to have changed for the better in many markets. According to RE/MAX's latest price report, home prices in the 53 largest cities it follows increased 5.8 percent year-over-year, with the median sales price rising to $184,525, in March.

It's worth noting that RE/MAX CEO Margaret Kelly shares our sentiment on markets and prices, in that real estate markets are local, wholesale price declines are behind us, and prices are stabilizing and improving. Ms Kelly says, "Although we don't expect home prices to rise in every market at the same rate, the worst is definitely behind us, and a slow, steady recovery is taking hold." We couldn't agree more.On the other hand, we don't necessarily agree with many of our colleagues on mortgage lending rates. Rates have been volatile and mostly lower over the past two weeks. Rates are again near an all-time low. This has created another spurt of refinancing. Rising interest rates shook many borrowers back to reality. When rates dropped, borrowers didn't want to miss an opportunity that could prove fleeting.

Taking advantage of these low lending rates is a smart move. We've laid out a case over the past couple months on why we think interest rates will head higher, at least in the long term. No new data have convinced us otherwise.

Admittedly, it's impossible to predict interest rates with certainty in the near term, but a few factors are worth considering: We've seen a marked increase in rate volatility that has moved the market back to a sideways trend. To be sure, rates could be higher or lower over the next month, but given their proximity to all-time lows and their unwillingness to move lower, we think there's more risk than reward in waiting for still lower rates.

Last month, lending rates shot up nearly 50 basis points, which shocked many borrowers. Those who thought they missed the boat got lucky, but they might not be so lucky on the next lending rate spike.

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.

Whether you are moving across town or across the country most Central Pennsylvania home buyers are looking for up to date information in the areas that you are moving to. We now have an continuous guide for many of the areas in Central Pennsylvania that we hope you will find beneficial when relocating. Please enjoy and let us know of any recommendations you want us to consider. The following Central Pennsylvania counties are included in this guide; Adams County, Cumberland County, Dauphin County, Franklin County, Fulton County, Huntingdon County, Juniata County, Lancaster County, Lebanon County, Perry County and York County. 

Welcome Home. The relocation guide to Central Pennsylvania!

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.