Real Estate Information Archive

First, the good news: Sales of new homes came in at 481,000 units on an annualized rate for December. This was the best December since 2007. What's more, it appears builders were selling with little discounting. The median price of a new rose 2.2% to $298,100. Year over year, the median price is up 8.2%. At the current sales pace, 5.5-months worth of inventory is on market. Inventory below six months is considered normal.

Now for the not-so-good news: The struggles in the existing-home market continue. ThePending Home Sales Index decreased 3.7% to a 100.7 reading in December. Compared to December 2013, the index is actually up, but if we go back two years, it's flat. According to NAR chief economist, Lawrence Yun, prices and inventory are still an issue. The former is up, but the latter remains down.

Of course, there is the usual caveat: All markets are local, so national numbers frequently fail to capture local reality. It is interesting, though, that the new-home market at the national level is more fundamentally sound from a historical perspective than the existing home market. This suggests to us that the dearth of first-time buyers still weighs on the existing-home market.

Despite the mixed data, we still think 2015 will shape up positively for housing – new and existing. Rates are obviously favorable. In addition, the economy continues to grow and to create more jobs. Home prices also continue to rise, but at a more normalized rate. All these variables taken together point to more housing activity in 2015.

Information provided by 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

Lenders make money lending, not by not lending. This might seem obvious, but lenders are often a lightening rod for frustration. “We can't we get my client qualified?” is a repeated complaint.

We all know that we are not returning to the lending environment circa 2005, and that's a good thing. That said, we would like to go to a new lending environment, because the current one is too homogeneous (lacks diversity) and too formulaic.

There are simply too many one-size-fits-all rules and regulations in today's lending market. Banks have to adhere to uniform new regulations set forth by the Dodd-Frank Act. They also have to adhere to international rules, known as Basel III, which impart strict capital requirements.

More rules and tighter regulations, particularly ones that are uniform across the country, discourage lenders from venturing out past plain vanilla residential mortgages. If any business is forced to address increased regulation, mandated MBS repurchases, and increased litigation, that firm will tend not to venture far out on the risk curve.

What we need are rules and regulations that account for risk-based pricing tailored to particular markets. North Dakota and New York are different markets with different borrower profiles. Instead of forcing lenders to adhere to a uniform standard, regulators should permit a variety of standards and pricing policies based on the risk and borrower characteristics of different metropolitan markets.

Should that occur, today's clogged lending pipes would certainly flow more freely, allowing more funds to flow to more borrowers.

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 argument that housing isn't in full-recovery mode continues to weaken. Look no further than the sentiment of those whose living depends on bringing new supply to market – the home builders.

Confidence among builders has surged through 2012. A year ago, the builders were deep in the doldrums; their sentiment index was down to a very low 15. Today that index stands at 40. That's a remarkable change in sentiment. Optimism is no longer the exception; it's the rule.

The upward trend in housing starts is no doubt a contributing factor to rising optimism. Since August 2011, starts have been on a steady upward trajectory. For August 2012, the trend continued to move higher, with starts advancing 2.3% to 750,000 annualized units. Single-family units paced the gain, improving 4.5%.

To be sure, 2.3% advance isn't a spectacular, but slow and steady wins the race. Slow and steady also produces substantial advances over time. A year ago, starts were at 600,000 annualized units. Today, the pace in starts is up 25%.

Sales of existing homes are also moving in the right direction, though the pace is a bit more volatile. For August, existing home sales improved 7.8% – posting the largest percentage gain in over a year – to an annual rate of 4.82 million units. The higher sales pace, in turned, tightened inventory to a 6.1-months supply.

Existing home sales were helped by a slight drop in prices in some markets, which dropped the national median home sales price 0.2% to $187,400. Looking at the longer-term price trend, the national median home price is still up 9.5% year over year.

At this point, the best course of action is to let the market recover on its own. The chart below reveals what can happen when good intentions interfere. The spikes in existing home sales that occurred in November 2009 and May 2010 were a reaction to the impending expiration of the federal home tax credits. After November 2009 and May 2010, sales fell off a cliff. Future demand was simply pulled into the present, thus leaving a future void.

Around September 2011, a slow, slightly volatile, uptrend formed. The good news is that the trend that formed in 2011 is genuine and sustainable.

The trend in mortgage rates is less genuine, because the Federal Reserve has openly influenced the mortgage lending market. This week, mortgage rates did ease a couple basis points across most product offerings. Such a minor decrease suggests that rates really don't want to go much lower.

Activity in the 10-year Treasury note also points to a rate bottom. When the Federal Reserve announced it would continue to buy mortgage-backed securities and Treasury securities last Thursday, the yield on the 10-year Treasury note actually increased (since then it's been moving marginally lower).

Given the Fed's strategy to add $40 billion to the base money supply monthly, investor concerns could be shifting toward consumer price inflation and away from slow economic growth. If inflation becomes a front-burner issue, interest rates will be very hard pressed to go lower.

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.

There was yet more confirmation this past week on what we already know: Home prices are rising. The S&P/Case-Shiller Home Price Index provided the latest positive data set. According to Case-Shiller, home prices pushed ahead a very strong 0.9 percent in May, which follows a 0.7 percent gain in April and a 0.8 percent gain in March. Best of all, the latest gains were widely dispersed, with 18 of the 20 cities Case-Shiller follows posting gains.

We tend to give Case-Shiller short shrift, because the data are two months old. Fresher data are found at Trulia, Zillow, and CoreLogic. But Case-Shiller is widely followed in the media, so this string of positive numbers should help to dispel any lingering concerns over a double-dip home-price recession.

The trend in foreclosures is a key factor in resurgent home prices. CoreLogic reports foreclosures continue to abate. In June, 60,000 foreclosures were completed, a 25 percent drop from the 80,000 foreclosures completed in June 2011. The current monthly rate of foreclosures is at a level unseen since 2007. Fewer foreclosures means less supply. Less supply, in turn, helps elevate home prices.

The number of foreclosures processed could have actually been smaller. CoreLogic CEO Anand Nallathambi addressed an issue we've been addressing off and on for the past year – regulation. In CoreLogic's foreclosure report, Nallathambi said, “[W] believe even more can be done to reduce the inventory of foreclosures by decreasing the level of regulatory uncertainty and expanding alternatives to foreclosure."

Regulation is an issue most of us share a common opinion. There's simply too much of it today. At this point, it's beneficial to encourage more risk taking, albeit rational risk taking. In other words, lenders should have more leeway in assessing borrower risk. The big frustration many of us confront are borrowers who don't fit the template, but who would make a good credit risk nonetheless. A slower housing recovery is the corollary to excluding these potential borrowers from the market.

With that off our chest, we can report that mortgage rates once again touched a new low, but just barely. In fact, rates across most products moved slightly higher as the week progressed. The most repeated explanation for the slight uptick is that investors are somehow less concerned over the ongoing European debt crises, so they've moved some money out of haven U.S. Treasury securities and into other investments.

When the European debt crises – centered on Spain, Greece, Portugal, and, to a lesser extent, Italy – will finally be resolved is anyone's guess. We expect it won't be resolved anytime soon. So when you couple continued fear in the market, which motivates people to invest in safe, low-yield debt, with the Federal Reserve's policy to hold long-term lending rates abnormally low through 2014, you're likely looking at sub-4 percent 30-year lending rates through the first quarter of 2013.

Of course, this can all change should the economy suddenly ignite, but it's difficult to see that occurring until uncertainty surrounding the November elections is removed. In other words, borrowers have time on their side, at least when it comes to accessing money. Problem is, if they are borrowing to buy a home, time isn't on their side. Waiting means they risk paying a higher price. That's something worth repeating to clients.

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.