Real Estate Information Archive

For the past year, we've been reporting on home prices generally moving in one direction – up. This is certainly preferable to the years leading up to early 2012, when we were reporting on prices generally moving in one direction – down.

As for the current price trend, the S&P/Case-Shiller Home Price Index shows prices continued to move higher in January. What's more, prices moved higher at an accelerating rate. All 20 cities the index covers posted price gains for the second-straight month. Year over year, prices were up nearly 10% – the largest annual increase in seven years.

Data from Lender Processing Services also support a sustained price trend. Its data, which focuses on non-distressed transactions in 15,500 zip codes, show the average home price increased 0.3% to $208,000 in January. Year over year, the average price is up 6.7%.

New homes are leading the price charge. Data from the U.S. Census Bureau show the median sales price of a new home soared to $246,800 in February, a 9% increase over the median price of $226,400 in January.

We're not surprised new home prices are surging. Demand is improving, thanks in part to more homeowners moving into a positive equity position. At the same time, there's a dearth of new homes on the market. The downside is that lack of inventory is hurting sales growth. The annualized sales rate of 411,000 new homes in February is 4.6% lower than the 431,000-home sales rate in January.

Inventory has improved, but not by much. New homes for sale increased to 152,000 units in February from 150,000 units in January. The combination of a dip in sales and a rise in supply put inventory at 4.4 months in February compared to 4.2 months in January. We expect low inventory will continue to restrict sales growth over the next couple months.

Sales of existing homes are also likely to remain restricted. Limited buyer choices have constrained contract signings. The NAR's Pending Home Sales Index dipped 0.4% in February. The index points to low-to-flat sales growth as we head into the spring selling season.

The upside to stagnating sales and increased demand is continued price gains. Rising prices will lift more homeowners into positive equity, which in turn, will motive more homeowners interested in moving to list their properties.

Rising prices will lead to more supply. We mentioned many times during the grips of the hard sell-off of 2008 and 2009 that prices would fall only so far before buyers would rush in to soak up the excess supply. Rising prices will have a similar salutary effect, only in reverse – rising prices, rising supply.

As for mortgage rates, we expect the trend to remain flat at the new lower level. The banking crisis in Cyprus sent money to U.S. Treasury notes and mortgage-backed securities, which helped reverse the rising-rate trend. We expect rates to hold these levels for at least a couple weeks. We say that because the influential 10-year Treasury note is again yielding below 1.9% (two weeks ago, it was yielding over 2%). The low yield should hold, because once the crisis in Cyprus passes, it's looking more likely a developing banking crisis in Spain will take its place.

 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 Report

If there is one subject that is constantly discussed, it is the state of the real estate market in the Greater Harrisburg area. I am always asked are homes selling and what sales range is the strongest. The short answer is that homes continue to sell in our market, but they are taking a little longer to sell than what we have experienced is the past few years and that trend probably will continue into the first half of 2011. Homes priced in the low to mid $100,000s are selling the best, if you will but we must remember there are traditionally more homes in this range than any other price range. But homes in all price ranges continue to sell in our market. We must remember that some of the unfortunate news that we hear about in some areas of the country are not being experienced by this market to the degree that other areas have experienced. Yes there has been a slowdown in sales and increases in foreclosures and short sales in this market and that trend will again continue in the near future.

Is there good news in the Harrisburg real estate market? Absolutely, mortgage rates, although they have increased recently, are still below 5% and most likely will increase slightly in the months ahead. Additionally, the average home sales price has held up remarkably well and in my opinion that will continue. And lastly if you are looking to purchase a home there is a great selection of homes to choose from in all price ranges. We will most likely never see the frenzy that we saw a few years back, but I have been in this business for over 19 years and we will see the normalcy of the early 2000s and we will experience excellent home sales numbers with appreciating, not depreciation average home sale prices. No the glass is not half full yet but we are getting closer. May you have a Happy and Prosperous 2011.

If you have any real estate questions please contact me at Don@DonRoth.com and if you would like to see the list of available homes for sale visit my web site www.DonRoth.com and click on the search listings tab and search away.

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Have the real estate prices in the Greater Harrisburg market begun to stabilize? The answer right now looks that we, as I have been saying, are getting close; but my only concern is that we need one or two more months of validation. When comparing the number of homes sold in June 2009 vs June 2010, there was a 3% increase in the numbers and a 7% increase in the average sales price to $200,419. The average sales price did increase from previous months average that had been in the $180’s, so we just want to be sure that this is not an anomaly.

There are three primary reasons that one may say caused the gain; 1) the effects and benefit of the Home Buyer Tax Credit; 2) there are perceived values in the market and; 3) mortgage interest rates remain extremely low, such as 4.75% for a thirty year fixed rate mortgage. But something else occurred, the higher end (homes that sold in excess of $300,000) of the market improved substantially and the number of homes over $400,000 had a more dramatic increase on a year over year basis, consisting of 14% of the number of sales in 2010. So one month does not make a trend, but there are positives that are beginning to appear. I will keep updating the movement of the market and if you have any specific real estate questions, please contact me at Don@DonRoth.com. Enjoy your summer.

When reviewing the yearly comparisons between years for different school districts, there is usually a relatively small number of homes sold and when you have a few higher priced home sell, the month to month variance can be greatly exaggerated, up or down. Again, if you have any questions, please contact me at your convenience.

The housing statistics for the suburban Harrisburg, Pennsylvania are in and the results show that there is still some decline in real estate sales in the area. The number of homes sold in 2009 declined by 20% compared to the same period in 2008, and the area saw a decrease in the average sales price of 7% in the same period. The sales results cover all of Dauphin (except Harrisburg), Cumberland and Perry Counties and portions of Lancaster, Lebanon and York Counties. These results continue the trend the area experienced for the last half of 2008.

But there is good news on the horizon since the number of pending sales (sold although not yet settled) increased from December 2008 to the end of January 2009 by approximately 9%. And many of us are seeing increased buyer activity and additional properly priced homes come onto the market. In addition, there is some positive news out of Washington to assist both home buyers and sellers for 2009. In November 2008, The National Association of Realtors® put forth a recommendation that the $7500 tax credit for first time home buyers be expanded to all home buyers and that the tax credit be replaced with just a plain credit, meaning that there would not be any repayment vehicle attached for any buyer. This idea has taken form in Washington and it has a good chance of becoming part of the President’s Stimulus Package working its way through Congress. And there also appears that Congress may look favorably on crafting a mortgage program where mortgage rates could go as low as 4 or 4 1/2% this year.

So when looking into the future I see better times ahead for both home buyers and home sellers. It will not happen overnight but the landscape is looking much brighter for people that are looking into real estate. STAY TUNED.

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

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.