Real Estate Information Archive

Home prices continue to garner front-page attention. CoreLogic reports that prices declined for the sixth-straight month in January, dipping 1% from December. Year-over-year prices are down 3.1%. In short, CoreLogic says that prices are about where they were 10 years ago.CoreLogic offers one set of data on home prices, Clear Capital offers another, less ominous set. According to Clear Capital, national home prices declined only 1.9% year-over-year. What's more, its data show short-term prices being more stable, with prices falling only 0.6% from the third quarter to the fourth quarter of 2011.

Everyone is keeping a close eye on distressed properties. Now that last year's “robo-signing” foreclosure imbroglio is behind us does that mean we will see a surge in foreclosed and REO properties? And if so, how will they impact inventory and prices?

Pertinent questions, to be sure, and ones we don't have a ready answer for. We do know that the inventory of existing homes for sale declined 21%, or by 600,000 units, in 2011. At the most recently reported sales pace, that means we are looking at 6.1 months of supply – the lowest inventory level since April 2006. Lower supply supports higher prices.

Today's low inventory is attributed to falling foreclosure volume. But now that banks are free to foreclose, two million more homes are expected to hit the market over the next two years. If that's the case, then distressed inventory will rise sharply. Returning to economics: higher supply leads to lower prices.

There are a few extenuating factors though. The economy is improving, and continues to add jobs at an increasing rate. The private sector added 216,000 jobs last month, according to the latest national employment report from Automatic Data Processing. That's a significant increase over the 173,000 jobs added in January. More people working means more people who can afford a home.

The rise in REO properties could be offset by a decrease in other market segments. For instance, there was a significant increase in short sales in the fourth quarter of 2011, which pushed the number up to nearly 910,000 units nationwide. That said, the long-term trend for short sales is down; fewer short sales could be a counterweight to rising REO units.

Housing formation is another attenuating factor. After 2007, household formation plummeted to 300,000 per year from its historical rate of 1.25 million. We see a lot of pent up demand. The population continues to grow, the economy continues to improve, home affordability is at a multi-decade high. The market is ripe for a spike in new household formation.

In short, we don't expect new REO properties to upset the housing recovery like the more dire pundits are predicting.

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.

Former Yankees catcher Yogi Berra is as well known for his malapropisms as for his catching ability. On the former, Berra once famously quipped, “It's tough to make predictions, especially about the future.” With that thought in mind, we'll take a shot at predicting the mortgage-rate market for early 2012.

The reflexive response is to say that rates have to remain low. After all, the Federal Reserve has openly stated that it will continue to reinvest short-term securities into long-term securities. The Fed also said that it would keep reinvesting in mortgage-backed securities. Both activities will surely raise the pressure for mortgage rates to remain low.

Now, couple the Fed's resolve to hold long-term rates low with Europe 's ongoing travails and our own sluggish economy and it would appear mortgage rates would have to remain near today's levels at least through the first quarter of 2012.

With all that said, don't overlook or underestimate the “unseen” – the unexpected event that moves markets. Everything seen favors low rates, and few pundits are expecting higher rates. Because of that fact, we think the inevitable “unseen” favors a spike up in rates over a spike down.

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 of our recurring themes over the past year has been that the laws of supply and demand are infallible: lower prices drive demand, which, in turn, lower supply and help prices recover.

The process is working before our eyes. REMAX reports that home sales prices are down 3.3 percent from a year ago (though prices have risen in recent months), and at the same time national home sales and median prices are up.

You can most clearly see this law of supply and demand at work in the hardest hit home markets. REMAX data shows that Florida has seen significant reductions in inventories as well as rising median list prices. In fact, Miami had the largest inventory reduction year-over-year at 49.3 percent, while the median list price in Fort Myers-Cape Coral, Fla. , was up 34.4 percent – the highest increase in the nation.

Some other hard hit areas, Las Vegas most noticeably, are still searching for a bottom. We suspect, though, that these areas are close to finding one (housing will not be depressed forever). Our chief complaint is that this bottom-and-recover process would likely occur at a faster pace if we could get more mortgage funds to more creditworthy customers.

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.

What a difference a month makes. In September, homebuilder mood was in the doldrums, where it has been for most of the year. In October, that mood turned noticeably positive, with the homebuilder index jumping four points to 18 – the highest posting in nearly 18 months.

There is still a long way to go before homebuilders approach the heady days of a few years ago, but at least the market is progressing. Builders began work on an annual rate of 658,000 houses in September, a 15-percent increase over August's starts and the most since April 2010. Much of the increased activity was centered on multifamily homes, which surged 51.3 percent. However, work on single-family homes also increased, 1.7 percent, to an annual rate of 425,000 units.

The National Association of Home Builders, which compiles data for the homebuilder index, warns that builders face pricing pressure from foreclosed properties. The good news is that foreclosures appear less onerous than they did a year ago. At the same time, homebuilders are adding to supply at a record low rate. In other words, the economics of home building are much more encouraging than they were earlier in the year.

The economics of the existing-home market continue to adhere to the recent past. Total inventory declined 2 percent to 3.48 million homes at the end of September, with the sales rate declining 3 percent to 4.91 million units. This came as no surprise; August's sales were exceptionally strong and a slight drop off in the sales pace was expected.

Homes that were purchased over the past two months have been financed with mortgage rates that were prevalent during the youth of the purchaser's parents. In the past couple weeks, though, rates have been trending higher and are up around a quarter percentage point from where they were a fortnight ago. That said, mortgage financing is still a very good deal.

But will mortgage financing become a better deal? Many in the industry think so. We are less sure, especially when factoring in growing price inflation. Overall producer prices are up nearly 7 percent this year, while the core rate, which excludes energy and food, is up 2.5 percent. On the consumer side, overall prices are up 3.9 percent, while core prices are up 2 percent.

The Federal Reserve is trying to hold mortgage rates low by buying longer-term Treasury and mortgage-agency debt. Problem is, the market has been pushing back in recent weeks, as evinced by the spike in 10-year U.S. Treasury note yields. Bottom line, the falling mortgage-rate trend is much less a sure thing than it was a month ago.

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.

Mortgage Market Debate It's no secret that a lot of mortgage lending is in government-backed loans. Nationally, Fannie Mae, Freddie Mac, and the FHA back nine in 10 new mortgages. The federal government is looking to pull back and see if more private investors and lenders can be lured into the market.

There are legitimate concerns with a prospective federal pull back. There is the possibility of reduced available credit, thus leading to fewer sales and lower home prices. We've already seen some reduction in volume in higher priced homes when limits on loans backed by Fannie and Freddie declined at the beginning of October.

There is also the concern that sellers will find that fewer potential buyers qualify to purchase their properties. Less liberal down payments and lower loan limits could also hamstring trade-up buyers who want to tap their home equity as a down payment for their new residence.

Here's the conundrum: If we went to return to a more market-driven lending environment, we have to attract private investment, which means rates would have to rise. Private lenders and investors require a greater return than public sources of funds. It's worth noting, though, that many private lenders are flush with money they could put to work. What's more, private lenders and investors will add diversity to the market, which it is currently lacking.

The point is, we can see the mortgage market changing. We can't say whether it will be a net positive in the short term, but we think it raises the uncertainly level enough for borrowers to seriously consider taking advantage of the mortgage market as it is today.

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.