Real Estate Information Archive

The actions by the Federal Reserve this week have benefitted current homeowners and buyers that are looking to purchase a new home. Normally, the action by the Fed does not impact residential mortgage rates since a majority of those rates are established by the open market and private investors. This time the mortgage rates have dropped significantly in the Greater Harrisburg market, and in some cases 30 year fixed rates are now below 5% and with NO POINTS. What does that mean to the a current homeowner? The difference between a 5% and 6% mortgage of $100,000 is $63.00 less per month or $756.00 a year and naturally if your balance is more than $100,000, the savings are greater to you. And if you have been considering the purchase of a home and selling yours, the savings can be just as great on that purchase.

Why have the mortgage rates dropped so far? Well, the impact of the economic slowdown has not spared Central Pennsylvania, but the impact has not been as severe as in many areas of the country, but there has been a slowdown. Home sales in numbers in the Harrisburg suburbs of Dauphin and Cumberland counties for the month of November 2008 compared to November 2007 are down by 25% and the average sales price is lower by 5% over the same comparative period of time. Not good but nowhere near the figures of some regions of the country.

But I am optimistic going forward and you ask WHY? The Greater Harrisburg real estate market for the last 30 years has not seen the wild fluctuations in value, up or down, that many localities have experienced, with the exception of 2005. And I anticipate that we will return to normal valuation ranges very shortly – within six months. How does that impact you as a buyer or seller? Pricing in the market has slowed so there are deals to be had, and I do not anticipate the interest rate environment to increase within that time frame at a minimum so you are going to have extremely attractive interest rates, which in turn has a very positive impact on monthly housing costs. No one was able to time the market and intentionally find the bottom of a market, real estate costs or interest rates, so be on the lookout for value. If you need any real estate or interest rate information, please contact me. Have a happy Holiday season and a prosperous New Year.

First, as we approach Thanksgiving, I want to wish the happiest of times to you, your families and your friends. We have been through some interesting times in the last year and it appears that this trend will continue for the foreseeable future. Let us count our blessings and look for a brighter tomorrow.

I am sure many people saw the news that the Federal Reserve enacted a second large multibillion dollar initiative in hopes of stimulating the housing market for both buyers and sellers in this challenging market. What does that do immediately for you? Well, the initial reaction was to reduce current 30 year mortgage rates down by about .75% or a savings of $72 a month on a $150,000 mortgage or a yearly saving of $864 a year. Not a lot but better in your pocket than the lenders.

If you are considering the purchase of a home, this may be the market of opportunity for you now and for the next few months. While no one can accurately predict the bottom of a market, many will be upset that they waited too long to buy a home. If you are a current owner, you may say that your home isn't worth as much as last year and that may be true. However, if you are considering moving up the home, what you are looking for isn't worth as much as it was last year. There are many opportunities that will be available and if you are considering a move, you should begin your planning now so you are adequately prepared. Just remember the Greater Harrisburg, Carlisle and Hershey real estate markets have been one of the most stable market in the nation - put that to your advantage.

Arthur asked the above question on Trulia Voices with reference to a home that is listed for sale AS IS in Camp Hill, PA. And my response was as follows:

Thank you for your inquiry. There are many reasons, as already stated, why a seller may not want to make the necessary repairs to a home that has been listed for sale. An additional reason may be indifference because with the market as it is right now, some sellers do not have the inclination or the "emotional attachment" to a home so they just place a home on the market and hope it sells. My recommendation is to engage a REALTOR® to represent your interests if you decide to move forward. Why? Because depending on the circumstances, you will need someone to navigate through the total process to insure that if you decide to purchase the home, you can get the appropriate loan to close on the deal, but more importantly, that you get to the closing table.

Thanks, Don.

And if you have any additional questions, please contact me at Don@DonRoth.com.

Sara posted the following question on Trulia.com and I responded to the question and I hope this is helpful to both buyers and sellers.

Is a finished basement (400 sq ft) part of a 2000 sq ft home or is it separate like a garage?

Sara. The valuation for a finished basement will be different than the main portion of the home and it will be higher than the value you would see for a garage. To give you an exact ratio in values between the main house and the basement is difficult since the quality of the finished basement may be less than the rest of the house. I work for a builder and we have discussed this many times and depending on the quality of the finishing you could put a value of anywhere from $30 a square foot to $60 or $70 a foot and maybe even more from my experience. But probably more important than what my experience shows, I do not know of any appraiser that will put the same valuation on a finished basement when compared to the main portion of the home, it is less. I hope this assists you in your decision. Thanks, Don.

Website: www.donroth.com

Central Pennsylvania 2008 Third Quarter Real Estate Report

As we are experiencing Indian Summer, we in Central Pennsylvania are seeing the extremes in the stock markets. With all the turmoil occurring in all areas, especially financials, many of us are wondering are we ever going to return to the prosperous times of just two years ago. In my opinion, things will get better but the timing is the uncertain element that we face.

Many people are blaming the banks, investment banks and the government for the financial mess we are facing and I cannot argue with these opinions. Many homeowners are facing serious consequences throughout the country because of job loss, buying at the peak of a specific real estate market or other similar issues. We in the greater Harrisburg area have not completely escaped this real estate market correction, but we have fared much, much better than a lot of the country has.

With that in mind, here is some good news for homeowners in the area. Yes, the number of home sold as reported by the Central Penn Multi List decreased by almost 12% in the third quarter of 2008 compared the same period in 2007. And the average sales price of $194,074 in the same period for 2008 decreased by only 1.5% compared to 2007, but the average compared to the third quarter of 2006 has increased by almost $8000 and, according to the Central Penn report, 2006 had the most homes ever sold in our area. And the time an average home takes to be placed under contract has increased slightly to 70 days, which is a far cry from historical data of 90 to 110 days.

What does that mean to the people that are looking to buy or sell a home? First and probably foremost, there is mortgage money available for buyers contemplating a purchase of a home. Yes the credit standards must have increased slightly – you may need a slightly higher credit score – but when I asked a lender last week what happens when a buyer has good credit score and money to put down on a home, she said when do they need the mortgage money. Why in this area is money available? Investors look at Central Pennsylvania as a stable area that has not be affected by the severe highs and lows of the real estate markets experienced in states such as California, Nevada, Arizona and Florida. And yes, there has been an increase in foreclosures in our market but fortunately these foreclosures have not negatively impacted the value of whole communities. And there are more homes available for sale than there has been but homes are still selling in these times. How you ask? Home buyers are looking for value, not to steal a home, and sellers are looking for a return on their investment and in some instances these two goals have not hit the equilibrium point but I don’t think we are too far from there today. So there are going to be challenging times going forward, but we will recover in the future and real estate still be a great investment. Maybe I am pie in the sky – I don’t think so and I am waiting for the time when buyers and sellers are happy that they have the opportunity to buy and sell real estate.

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.

The real estate market in the area continues to evolve, and although the number of homes sold for the month of August 2008 decreased when compared to August 2007, some interesting numbers begin to appear. First, the average sales price in the market actually increased in August 2008 over the same period in 2007 by approximately $6000 per home. Yes, the number of homes sold, as reported by the Central Penn Multi List, decreased from 1029 homes in 2007 to 750 homes in 2008, but the average sales price increased by 3% year over year. Does that mean that the market turmoil is over? Not yet, but this is positive news in the sea of bad news that has been reported in the national press for the last year.

With the market still attempting to find equilibrium, some other statistics are important to recognize. First, the type of financing that is being used has shifted somewhat from being dominated by conventional financing to buyers using FHA and VA loans to purchase a home (In 2007, these loans made up 9% of the financing and in 2008 that increased to 24% of the loans). Second, the average days on market for the period increased from 53 days to 70 days.

So, as a seller how does that impact you? There are more homes competing for buyers right now in practically every price range, so pricing is extremely important. Some people have said to me that their home is worth less this year than last and that may be true. But if you are moving up, the same may be true for the home you may be looking to purchase right now, so take advantage of the buying opportunity now and put the appreciation in your pocket now. And if you want to see if there are good values in the market, please give me a call.

The Central Pennsylvania Food Bank has just launched a new web site www.Hungerbites.org. The site is to bring the public's attention to the upcoming Hunger Action month in September and this campaign is an effort to continue to increase the community involvement within the 27 counties throughout Central Pennsylvania that the food bank provides the basic necessities for many families. The intent is to engage the public to participate food drives and the many volunteer activities scheduled in September and also to increase the participation of individuals and the corporate community especially with all the great volunteer events that are scheduled.

The Central Pennsylvania Food Bank began operations in 1982 and now provides some type of assistance to over 500 different orginizations in Central Pennsylvania. I can personally say as a Board Member since 2006 I can see what a difference the food bank has made in many lives. The intent of the Hungerbites sites is to show the public what can be accomplished when there is an organized effort to assist people in need. Please join us at Kipona over labor Day weekend at Soldiers Grove to make this a great beginning to Hunger Action Month. For more information on how you can help or donate food you may also visit www.Centralpafoodbank.org.

FOR IMMEDIATE RELEASE

DATE: 7/26/08

CONTACT: Don Roth

PHONE: 717-579-2879

Harrisburg Area REALTOR® Attend National Conference With Top Real Estate Minds in the Country

ORLANDO, FL—Don Roth of Prudential Homesale Services Group in Harrisburg recently returned from attending the top educational opportunity offered in the real estate industry—the STAR POWER® Annual Conference.

Presented by internationally acclaimed educator and trainer Howard Brinton, this Conference brought together over 1,500 of the most progressive, forward-thinking professionals in real estate today to share their methods of success. The faculty consisted of 170 of the continent’s top-producing real estate professionals, all ranking in the top 1% of all REALTORS® in North America.

Don, a STAR POWER® Club member for 8 years, had this to say about the experience: “This Conference and the STAR POWER® Systems have armed me with the best tools available to provide the highest quality of service to my clients. In addition, I continue to build a tremendous network for referring my clients to the best agents all over the country when they’re considering a move or looking to buy a second home. I also received invaluable insight on the benefit of operating from a business philosophy and incorporating the latest technology to keep me on the cutting edge.”

As a part of the Conference, Don received information for consumers about the top six mistakes that sellers can make when selling a home, as well as criteria for evaluating and hiring a real estate professional. As a public service, Don has decided to make these two reports available to Harrisburg residents at no charge. Anyone wanting this information can call Don at 717-657-8700 or 717-579-2879 or e-mail their request to Don@DonRoth.com.

The Congress has passed H.R. 3221, and the bill is on the way to the President for his signature. Although there are many aspects of the Bill, the major piece of this legislation that I want all potential home buyers to be aware of right now is that there is up to a $7500 tax creit now available to first time home buyers on homes purchased beteween April 8, 2008 and June 30, 2009. The credit is available to joint borrwers that have an adjusted income of $150,000 or less and to single buyers that have an adjusted income of $75,000 or less. More is to come, but this is great news since in many areas the market has adjusted somewhat making many homes more affordable. Take advantage of this great opportunity along with competitive interest rates and buy your home. More information will be available shortly and you can view the information at www.DonRoth.com.