Real Estate Information Archive

No one number can explain a market. We mention that because the headline number on housing starts points to lower new home sales. The headline number says that housing starts declined 4.8 percent in May after rising 5.4 percent in April. The pace of starts fell to 708,000 annualized units, which fell short of the market's expectation for 720,000 units.

When we read past the headline, we find the drop was attributable to the volatile multi-family component, which fell 21.3 percent. The good news is that the much larger, more important single-family component posted another monthly gain, rising 3.2 percent for the month.

The home builder sentiment index also tells us something. The number rose to a multi-year high of 29 this month. When the index is broken down into components, we find that the outlook for single-family homes is even higher: that component is up two points to a recovery high of 32. Given the dearth of new-home inventory, we expect sentiment to continue to improve as we progress through the summer months.

As for existing homes, the market might be sputtering. Existing home sales fell 1.5 percent to 4.55 million annualized units in May. Existing home sales began the year at a 4.63 million annualized rate and have had trouble building off that base.

Though sales may have stagnated, pricing hasn't. The national median price of an existing home is now at $182,600, a 7.6 percent year-over-year gain. Inventory remains stable at a 6.6-month supply at the going sales pace. This suggests to us that distressed properties continue to be much less of a problem than pundits had predicted earlier in the year.

Of course, any enthusiasm or distress aroused by a national number needs to be tempered. All markets are local, and values often differ from zip code to zip code (and even street to street). That said, the national number is an aggregate number; that means it's composed of individual local markets. The up trend in national numbers over the past year tells us more local markets are on the rise.

Mortgage lending rates, on the other hand, are not on the rise. They remain at the lowest levels on record. In fact, in many markets they posted a new low this past week. We don't see rates rising soon, either; the Federal Reserve is determined that they remain at these low levels. At the latest Fed board meeting it was decided that the Fed will continue to buy long-term U.S. Treasury notes and mortgage-backed securities by rolling money from maturing short-term notes into these securities. More demand means lower yield.

Our friends in Greece and Spain are also driving demand. Every time these countries announce another round of fiscal woe, more money leaves these countries' banks and flows into U.S. Treasury and MBS securities, thus helping to hold mortgage lending rates low at the retail level.Borrowers probably won't be penalized for procrastinating, at least into the near future. That said, markets can turn, and they can turn much quicker than many buyers and sellers realize.

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 question when driving somewhere of “are we there yet” is still being asked in the local Harrisburg PA area real estate market by many consumers. No we are not there yet but some optimism is being felt in the area. As can be seen by the graph below there is still a ways to go to bring our real estate market into what is called a balanced market, meaning across the board there is a six months supply of inventory is all price ranges. But progress is being made and the positive trend in the lower price ranges normally bodes well for the higher price ranges as we move forward.

That being said progress that we see in the market is positive. The results are as follows; the average sales price for May 2012 increased slightly when compared to April 2012 and increase by 3% when compared to May 2011. And the number of homes sold and settled in the greater Harrisburg area increased by 16% when compared to May 2011. Positives, yes, but there is a large inventory overhang in numbers of homes that are currently available for sale. Bad for sellers? Possibly. Good for buyers and my answer is yes since there are plenty of choices in all price  ranges. So there is good news and we get there but as I have been saying “we are not there yet”.

School Districts

West Shore

School             Average Sales Price 2011      Average Sales Price 2012      Days on Market

Camp Hill                    $191,114                     $174,216                                 125/104

Cumberland Valley     $265,049                     $249,669                                 118/74

West Shore                 $179,210                     $157,928                                 140/93

Mechanicsburg           $194,026                     $179,301                                 108/100

Northern York              $149,378                     $252,563                                 115/83

Carlisle                        $164,333                     $178,879                                 94/192

East Pennsboro           $167,876                     $147,880                                 98/103

East Shore

School             Average Sales Price 2011      Average Sales Price 2012      Days on Market

Central Dauphin        $204,823                     $190,660                                 95/109

Derry                           $229,523                     $272,065                                 44/107

Harrisburg                  $ 68,756                      $ 56,208                                  120/142

Lower Dauphin          $261,327                     $257,048                                 215/133

Middletown                 $110,967                     $123,818                                 88/69

Steel High                    $ 63,375                      $ 96,873                                  95/135

Susquehanna             $168,113                     $152,285                                 117/111           

With mortgage rates being so low, you may want to take a look at some of the West Shore homes you can purchase for a $800 monthly principal and interest payment. Naturally, there would be your real estate taxes and homeowners insurance and possibly some mortgage insurance but compared to renting this may be something to be considered.

Why am I using $800 as a monthly payment? Very simple and that is if you consider the adds for apartments in the area that appears to a common dollar amount for rental. So if you are interested please contact me at Don@DonRoth.com and let’s begin your house hunting and stop paying your landlord’s mortgage payment and make you own equity investment.

At today’s rate of 3.625%, you could afford a mortgage of $175,336 and your mortgage principal and interest payment would be $800 per month. One last thing YES mortgage lenders ARE approving mortgages on West Shore homes.

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.

To be honest, we can't say any investment is the perfect investment (then again, no one can). Personal circumstances and goals determine what investment is most appropriate to any individual investor.

Nevertheless, there is a heckuva lot to like about residential real estate these days: prices rising off a bottom, low financing rates, rising rental rates, shrinking inventory. This is almost the opposite of what the market was like six years ago. Back then, most everyone would have been better off selling rather than buying, as hindsight has clearly proven. 

Of course, there are no guarantees when it comes to investing or price appreciation, but for investors or occupiers who plan to own their property for at least five years, we see little downside risk and a lot of upside potential at this stage in the market.

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.

Let's call it “the crisis that never was.” We are referring to the mother lode of foreclosures and distressed properties – the shadow inventory – that so many pundits predicted would swamp the real estate market in 2012 and return home prices to a downward trajectory.

That's hardly been the case. RealtyTrac reports that servicers started a few more foreclosures in May than in April, but filings were still 4 percent lower than in May 2011. RealtyTrac goes on to tell us that foreclosure activity has decreased 20-straight months based on year-over-year comparisons.

Yes, foreclosures are still elevated compared to five years ago, but the market continues to handle them in a rational and orderly manner. Short sales have been an attenuating variable. Banks realize they can make more money treating delinquent mortgages with short sales than repossessions. Better pricing is the key variable to making a short sale the superior option. Why take on a home you have to maintain, manage, and market when improved pricing will naturally draw in buyers?

The dearth of inventory (which we discussed last week) is the principal contributor to rising prices. Realtor.com reports that the national inventory of for-sale residential properties is down over 20 percent year-over-year, dropping in 144 of the 146 markets it covers. Over the same period, the median age of inventory has dropped nearly 10 percent, while the median list price has risen over 3 percent.

The recent spike in mortgage purchase applications points to even more inventory contraction and/or higher prices as we head into the summer months. After holding in lackluster territory for much of the spring season, weekly mortgage applications took a huge 13-percent jump, signaling that the summer-selling season might be more brisk than many analysts had expected.

What's more, the composition of those buying into the reduced inventory also points to a healthier market. The more owner-occupied buyers who jump into the pool, the better. The data show that many more owner-occupied buyers have jumped into the pool in recent months.

Buyers of all stripes continue to benefit from an ultra-low lending rate environment. In past issues, we've discussed at length the benefits of financing real estate in a low-rate, low-price environment. In short, the opportunity costs of cash buying is high when mortgage lending rates are low (and vice versa), because the money allocated to the house could have been allocated to other cash-generating investments.

That opportunity cost got a little higher this past week, with rates on most lending products dropping a couple basis points. We don't expect them to move meaningfully higher over the next few weeks. Greece and Spain are still a mess, and now it appears Italy is set to join the fray. That means investors remain risk averse, which means more money flowing into haven securities, including the influential 10-year U.S. Treasury note.

That said, it's important to keep in mind that we have a supply-and-demand issue at work. Demand for mortgage products have spiked in recent weeks, which means processing times could rise. Therefore, it's still prudent for borrowers to get their applications in ASAP. The benefit of waiting for a lending rate five or 10 basis points lower than today's market rate can easily be offset by a home whose price rises or is snapped up by another buyer.

What's more, even though we expect rates to remain low, rates can (and have) turned on a dime.

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.

High supply leads to lower prices; low supply leads to higher prices. CoreLogic reports that housing inventory is at its lowest level in more than five years; therefore, we shouldn't be surprised prices are on the rise.

In short, sellers are holding back, and for good reason: they expect to get an even higher price in the future. This is the opposite of what we were seeing a couple years ago. Back then, the expectation was that home prices would continue to fall. When a seller thinks he will get only a lower price, he will move to sell immediately. On the other side, a buyer who thinks he will get a lower price will wait to buy. These expectations produced falling prices and rising inventory that so hampered the recovery.

Today, we are seeing more of the opposite: More buyers are motivated to buy because they expect higher prices, while more sellers are motivated to withhold their homes because they expect higher prices. These dual actions are why prices are rising and inventory is falling in many markets.

The current trend is certainly preferable to the former trend. As the current trend continues to develop, it becomes even more risky to procrastinate buying, because a higher purchase price can easily offset a low lending rate.

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.

Last week we delved into the plethora of positive home-price data that has emerged in recent months. This week, we are glad to say, we add to the tally.

CoreLogic reports that national home prices increased 1.1 percent year over year in April, to mark a second year-over-year increase. Looking at month-over-month data, we find that prices increased 2.2 percent. When distressed sales are removed, the month-over-month price increase jumps to 2.6 percent.

Of course, all real estate is heterogeneous. When we look at more localized markets, we find the greatest price improvements continue to materialize in the bigger bust states: CoreLogic reports prices are up 8.8 percent in Arizona, 5.5 percent in Florida, and 5.4 percent in Utah.

On the other side, we find pockets of depreciation are moving east, with Delaware posting a 11.9-percent price decrease and Rhode Island a 6.2-percent decrease. The silver lining is that the largest price decreases are occurring in two of the country's smallest states – Rhode Island and Delaware. So geographically speaking, large price decreases appear contained within smaller locales.

We are encouraged by the fact that price appreciation is spreading to higher-end markets. Over the past year, price appreciation was the result of strong demand for lower priced homes – those selling below $140,000. Asset valuation firm Clear Capital reports price appreciation is spreading to mid- and top-tier segments in many markets. We're seeing a more diverse market – one that's shifting more toward owner-occupied buyers and away from investors.

Now, we'd like to see a more diverse mortgage lending market, but in the meantime we continue to see a historically low lending-rate market. This past week we saw the yield on the 10-year U.S. Treasury note hit an all-time low of 1.46 percent. Thirty-year mortgage-backed securities issued by Fannie Mae yield less than 3 percent. Not surprisingly, the prime 30-year fixed-rate mortgage remains well below 4 percent in most markets. So why do such low rates persist? 

Well, there is growing concern U.S. economic growth is stalling. Only 69,000 jobs were created in May, far below the 150,000 jobs most market analysts were expecting. Lower job growth correlates with a slowing economy, which, in turn, correlates with lower loan growth and lower lending rates.

Events unfolding in Europe might be the more influential cause, though. It seems Greece's probability of bankruptcy and ejection from the European Union rises by the day. What's more, Spain's economy continues to tank, with economic growth at nil and unemployment at well over 20 percent. Both countries are experiencing bank runs, but not in the traditional sense of long lines of people queuing up to pull out money. A bank run today can occur with a simple mouse click.

Much of the money flowing out of the Mediterranean is flowing into dollar-denominated assets, such as U.S. Treasury securities. The increased flow of money into these securities drives down yields and helps drive down mortgage lending rates.

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 lending rates are an obvious variable in determining the affordability level of a home, and, yes, these rates are very low. But it's also important buyers consider an even more obvious variable – the home price itself. 

On that front, the data clearly point to stable and rising home prices. Recent pricing stories sourcing Trulia, CoreLogic, Zillow, and the NAR show stable and rising prices in more local markets that spread across a wider geographical swath of the United States.

Even the S&P/Case-Shiller home price index, a lagging but consistently pessimistic index, points to rising home prices. The index recently posted its first back-to-back monthly gain since the spring of 2010. Not surprisingly, the index confirmed the price rebounds we already know are occurring in Phoenix, Miami, Tampa, Minneapolis, and Dallas.

The point we want to emphasis is not to overlook the obvious. Sure, buyers may be able to save a few basis points on lending costs in coming months, but that could easily be offset (and more than offset) by rising home prices.

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 data flow usually slows to a trickle during a holiday-shortened work week. That was case this past week, thanks to the extended Memorial Day weekend.

That said, the flow didn't completely dry up; there were still some notable releases worth mentioning. The pending home sales index was one, and not for particularly encouraging reasons. The index posted a surprising 5.5-percent decline in April after stringing together three months of strong gains. 

There were a couple extenuating factors at work in the index. It's possible that the jump in signed contracts we had seen in the first quarter was a reaction to the FHA's February announcement that it was increasing up-front and annual mortgage insurance premiums. Changes in government lending rules will always influence consumer behavior. In this instance, activity was likely brought forward more than it otherwise would have been without the FHA's lending-premium increases.

Inventory was also mentioned as a contributing factor for fewer homes being taken under contract. Lawrence Yun, chief economist for the NAR, mentioned that a dearth of inventory is limiting the number of transactions. In other words, demand is there, but supply isn't.

Lack-of-inventory is an interesting theme, and one we've been seeing with increasing frequency. It's paradoxical when you you think about it: Over the past year, there has been no shortage of stories detailing the dire consequences of excessive distressed property inventory. Now, we find that this inventory isn't hitting the market quickly enough. It appears demand has surged, but supply has lagged.

Interestingly, it's not just investors seeking distressed properties as potential rentals that's driving demand. Owner-occupied interest is also growing. Realtor.com reports that home-buyer interest in foreclosures has more than doubled over the past two-and-a-half years. Today, more than 64 percent of home buyers say they are interested in foreclosed property.

This unexpected increase in distressed-property demand begs the question: What should we worry about going forward – too many foreclosed properties or too few? Neither, might be the most rational answer.

We apparently don't have to worry about mortgage rates rising in the near future. The yield on the 10-year U.S. Treasury note is down to a remarkably low 1.6 percent – its lowest yield ever. Mortgage-backed bonds and mortgage lending rates take their cue from the 10-year Treasury note, so it was no surprise to see mortgage lending rates hit another all-time low (albeit by only a few basis points) this past week.

So why do interest rates continue to hit record lows?

Investors have become more risk averse because of concerns of slowing U.S. economic growth and the potential fallout of a collapse of EU members Greece and Spain; therefore, many investors are moving money out of stocks and into high-quality bonds. Over the past month alone, the Dow Jones Industrial Average has dropped nearly a thousand points; that itself is evidence money is leaving the stock market. Much of that money has moved into bonds.

Record low lending rates will likely stick with us through the summer selling season, but we don't think that's necessarily good. At this point, the prospect of rising rates would likely motivate more people to buy or refinance than the prospect of falling rates.

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 financial term “catching a falling knife” refers to buying into a market where prices are falling and then continue to fall after buying. There is a reproaching quality to the term, similar to someone wagging a finger and shaking a head.

A recent Reuters article had that reproaching quality. The article pointed out that more than one million Americans who had taken out a mortgage in the past two years are now underwater: The implicit lesson being, according to Reuters, that they should have waited and that they should have put more money down.

The reality is that it's impossible to call a market bottom, but in the long term it's nearly always better to buy into a market after a precipitous drop than after a precipitous rise. In other words, whoever bought or refinanced a house over the past two year has made a smart decision that will work out to his or her advantage over the next five years. 

The good thing about real estate is that it's nearly always a long-term investment. Better yet, it's a long-term investment that doesn't continually bombard and upset owners with price updates. That means Reuters attempt to alarm likely fell on deaf ears, and that, too, is a good thing.

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.