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Still the Cheaper Option

Monday, March 17, 2014
by Don Roth

Ownership is the way to go in many local markets. Trulia's Winter 2014 Rent vs. Buy Report shows that home ownership is 38% cheaper than renting on a national basis. The advantage also holds in most local markets. In the 100 largest metro markets, ownership trumps renting, according to Trulia.

We don't believe the 38% advantage will persist into 2015. The advantage will have been whittled away by higher lending rates and higher home prices. Both will be spurred along by job growth, which, in turn, will lead to more household formation – specifically formation in home ownership. In other words, we see more demand.

We've discussed in the past how the home-rental market has changed, with large institutional money pouring into to purchase single-family homes to rent. We've been somewhat skeptical of the business model. Single-family homes don't offer the economy of scale that a building of rentals does. Fixing a plumbing problem in two homes 10 miles apart is different from fixing a plumbing problem in two units 10 yards apart.

In other words, we see a move to more occupied ownership. This is a good thing and a virtuous circle: As more people own a home more people will be inspired to own one too. After all, most of us prefer to live in a neighborhood of owners. We prefer to own.

This is a point worth emphasizing to our clients, as is the point that they can become a part of the virtuous circle at a 38% discount to renting.

 Courtesy of Jessica Regan.

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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.

Central Pennsylvania Real Estate Sales Report January 2010

Thursday, February 18, 2010
by Don Roth

As we enter the second week of February 2010, there seems to be one subject besides real estate and that is global warming; and that debate whether there is global warming continues incessantly. Who is right or who is wrong on this issue will be determined in the future. With respect to real estate, I think that I am more right than wrong with my opinions in the past and what I see going forward, at least in the Central Pennsylvania marketplace. Comparing January 2009 with January 2010, the number of sales have decreases by 14%, and I know that does not look like a rebounding market that I have characterized in previous letters. But I will say that we experienced a similar result when comparing January 2008 and 2009, and we still were down for the year 2009, though not anywhere near the January numbers and I still anticipate that 2010 will be a positive year, although only slightly. And the January average sales price comparison is much improved over 2009 albeit down 7%.

Why didn’t we see more of an improvement or a continuation of the progress in the latter part of 2009? Three factors: 1) being that the Home Buyer Tax Credit extension didn’t occur until mid November, 2): the holiday season was upon us and in many instances buyers have traditionally slowed down their buying habits during December and January; 3) the weather, need I say anything more after 30+ inches of snow within the last five days!!

Moving forward, what is the most likely scenario that I anticipate? We will see a slow improvement in the number of home sales in the area and a slight increase in the average sales price as we go through 2010. Part of the increase will be due to the tax credit that presently has a date of April 30, 2010, in which buyers can qualify for the tax credit and with a closing date of June 30, 2010. I have been asked about an extension beyond April of this year and my response is that anything is possible in Washington, DC, but it is highly unlikely. Improvement will also come from buyers who do not want to rent any longer, sellers that want to either downsize or need a larger home and those who want to take advantage of the low mortgage interest rate that we continue to experience and we all should be aware that the low interest rate environment cannot continue forever. As I said in one of my recent posts, a 1% difference on a mortgage rate can increase your mortgage payment by almost $90.00 a month on a mortgage of $150,000. Yes, things will improve on a slow and steady pace, and when we see an overall increase in the economic climate the activity will improve even more, but do not anticipate a return to three or four years ago with substantial price appreciation because it is not going to happen.

It is my intent to give you the best of what I see in the market in order to assist you in making a real estate purchase; and please remember each sale is different even though there may be two homes that are exactly alike. Such factors as condition and buyer or seller motivation are two that come to mind. So if you are considering a purchase or a sale please contact me at Don@DonRoth.com or visit my web site www.DonRoth.com and view the search listings tab. Hope that we can say that the past week has been a global warming anomaly and we will see plenty of sunshine for a while.

 

Average Sales Price
West Shore
School District
January 2009
January 2010
Days on Market
Camp Hill
$165,380
$226,076
102/112
Cumberland Valley
$258,097
$237,721
41/84
West Shore
$236,594
$203,394
51/92
Northern
$229,067
$214,400
60/70
Mechanicsburg
$167,676
$164,616
91/59
East Shore
Central Dauphin
$200,006
$171,217
82/54
Derry Township
$247,634
$227,400
35/37
Harrisburg
$ 59,094
$  60,815
96/82
Lower Dauphin
$211,838
$281,350
53/97
Middletown
$110,900
$127,400
95/145
Steel High
$ 60,950
$ 64,555
92/63
Susquehanna Township
$173,391
$186,227
84/107

2009 First Quarter Central Pennsylvania Real Estate Report

Monday, April 6, 2009
by Don Roth

The first quarter of 2009 showed some stability in the real estate market when compared to the similar period in 2008. Although the number of transactions are down by 20% and the average sales price declined by 3%, these numbers are an improvement with respect to the declines that we experienced in the last quarter of 2008. The average sales price overall declined from $184,860 to $178,519 and the average sales price in March 2009 declined from $187,896 to $183,638. The average days on market increased slightly in both periods and it is returning to what I would call more normal times of the late 1990’s and the early 2000’s.

One of the most striking changes is the percentage of loans being initiated by FHA and VA. This percentage increased from 35% in 2009 from only 14% in 2008. This is a good indication since both entities have stepped up to the plate when conventional lending sources were not available, and this trend will continue for a while longer.

But there is some very good news in the market today. 30 year conventional first mortgage rates are still near 5% and, at least in the short term, that should be the going rate. Also, lenders are really attempting to assist buyers in this market to find a mortgage program that fits the borrowers’ requirements. And although the above quarterly sales numbers to many look bleak, the number of pending sales has increased by about 20% since the end of 2008. And although we haven’t completely turned the corner, it is my opinion that we are beginning to see that both buyers have a vehicle to purchase a home at very attractive interest rates and sellers are going to experience more potential buyers for their homes going forward this year.

Below is information on selected municipalities in the region and is reflective of only residential properties and does not include land, investment or commercial properties.

Average Sales Price/ First Quarter
West Shore
Municipality
2008
2009
Days on Market
Camp Hill
$217,223
$197,091
76/93
Mechanicsburg
$162,568
$145,958
51/67
Shiremanstown
$144,933
$150,000
59/47
Lemoyne
$156,983
$112,469
36/32
East Pennsboro
$200,724
$171,440
54/58
Hampden Township
$278,272
$247,573
78/98
Silver Spring Township
$255,771
$258,366
77/67
Upper Allen Township
$266,410
$203,963
76/85
Lower Allen Township
$174,730
$206,434
44/73
Fairview Township
$258,348
$270,124
82/71
East Shore
 
 
Lower Paxton Township
$226,358
$235,288
61/88
Derry Township
$250,125
$216,241
58/75
South Hanover Township
$189,774
$304,936
104/86
Susquehanna Township
$166,728
$162,876
57/89
Swatara Township
$166,896
$147,536
80/64
Paxtang
$140,500
$119,475
77/86
Hummelstown
$161,540
$136,543
57/102
East Hanover Township
$149,000
$265,250
50/75
West Hanover Township
$238,728
$213,928
95/119

 

Information received from the Central Penn Multi List and deemed to be correct. The information on the sales has been selected from Dauphin, Cumberland and Perry Counties and portions of Lancaster, Lebanon and York Counties.

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