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Young and Apparently More Restless

Thursday, July 24, 2014
by Don Roth

A couple weeks ago, we lamented the dearth of young adults venturing out on their own. Indeed, Pew Research , a think tank, reports that nearly one in four young adults (age 25-to-34) still live with their parents, more than double the 11% who lived with their parents in 1980. We reasoned that many of these young adults have either poor job prospects or are weighted down by onerous student-loan debt.

home buyerPerhaps we over-reacted a bit. Now, it appears more of these young adults are willing to become actual adults by moving out on their own. What's more, many of them are buying a home. Trulia reports that the number of young adults age 18-to-34 who became homeowners rose 0.9% in 2013. Trulia's data contrast with Census Bureau data that show ownership fell by 0.1%.

More millennials entering the market would be the start of an important housing trend. Better yet, it would be the start of a trend with considerable staying power.

A large percentage of young adults out of the housing market is a source of large pent-up demand, which could lift overall demand for years to come. As more millennials enter the market, they will have a ripple effect that will lead to more demand for more expansive homes. As millennials become more established in their jobs, they'll naturally seek to trade up.

Living with mom and dad is comfortable, but unhealthy as an adult. Eventually everyone has to make a break. This basic fact of life bodes well for housing over the long term.

Information provided by 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.

Home Builders Display Perseverance!

Tuesday, August 23, 2011
by Don Roth

Perseverance is a virtue, and the nation's home builders are displaying plenty of perseverance, even if they are not necessarily displaying it happily. The home builders' housing index remained unchanged in August, at a depressed level of 15. Components for present sales and buyer traffic inched higher, but home builders still aren't expecting any noticeable improvement in sales over the next six months.

The market for new-home sales might not be improving, but it doesn't appear to be worsening either. Housing starts dipped slightly in July, but continue to hover around 600,000 units per year, which is actually a higher level than what was seen six months ago. Unfortunately, the new-home market will likely remain anemic until we see a significant uptick in employment numbers.

Weak job growth is also taking a toll on existing home sales. July sales failed to live up to expectations, falling 3.5 percent to a 4.67 million annual rate. The good news is that prices remain stable nationally, with the median price holding near $174,000 and the average price holding at $224,000. Month-over-month, the price trend has been positive, though it is still slightly down year-over-year.

Price trends in producer and consumer goods, on the other hand, have been decidedly up. Consumer prices, in particular, have been moving perceptively higher. Consumer prices were up 0.5 percent in July and are up 3.6 percent year-over-year. This exceeds the Federal Reserve's 2 percent annual price-inflation target.

Many economists have raised concerns of a growing inflation threat. Credit markets, on the other hand, are showing no concerns. In fact, over the past week, the 10-year Treasury note – the baseline investment for 30-year fixed-rate mortgage loans – is down over 25 basis points and is yielding below 2.10 percent, an all-time low.

Prime 30-year fixed-rate mortgages are usually priced 2.25 to 2.5 percentage points above the 10-year Treasury yield. Not surprisingly, interest rates on these loans are also approaching an all-time low. This tells us that the state of the economy, not inflation, is the overriding concern of credit investors.

Can mortgage rates go lower still? Yes, they can, but will they do so is another matter. Timing markets is impossible, which is why we advise borrowers to lock if they are happy with their rate and payment schedule. We then advise them to cease following mortgage rates. After all, there is no sense in self-inflicting frustration when you are perfectly happy with the deal you received.

Greater Harrisburg, PA Real Estate Report

Tuesday, June 17, 2008
by Don Roth

The real estate market is really bad and no one is able to sell their house. Sellers are losing money on their homes or every home that is selling is a foreclosure, and those homes are depressing the values of the homes around it. How many times have we seen something similar in the paper or on the nightly news?

Well the market in Central Pennsylvania from Carlisle to Hershey and in Dauphin, Cumberland, Perry and northern York Counties has changed, but the news isn’t all bad. Yes, the number of sold homes has decreased in 2008 compared to 2007 and 2006. The number of sold homes has decreased by about 30% during the mid-May to mid-June 2008 time period and the average sales price had declined $203 per home, but the AVERAGE SALES PRICE in 2008 is HIGHER by about $3000 compared to the same period of 2006. And although sales are down right now, this trend will reverse itself in time. Yet when we see the numbers of 20% decrease or more of valuations in states like California, Arizona, Nevada and Florida, the above numbers give us the realization that local Central Pennsylvania market will rebound on firm footing. “It’s a ‘back-to-basics’ market,” says PAR consulting economist Austin Jaffe, Ph.D., chair of the Department of Insurance and Real Estate at the Smeal College of Business at Penn State University. “The era of easy money and exotic mortgages never took hold among homebuyers in the Commonwealth, so prices in Pennsylvania never increased as much or as quickly in other markets. There’s no reason to expect that prices will fall as much or as rapidly here.” “This is the beginning of a new period in the housing market - or a new ‘old’ period where consumers buy homes to live in and use as long-term investments, not as a get-rich-quick scheme,” adds Jaffe.

This real estate market, as far back as I can remember, never followed the substantial increases that some national markets experienced and therefore never experienced the falling of the cliff syndrome when these or similar markets corrected. Whether you live in Derry Township, the city of Harrisburg, Hampden Township or Lower Paxton Township, you will see a rebound in activity and an increased valuation for your homes in the future. I have been asked by many and they say that they want to move up to a larger home, but the value of their home may have decreased. That may be true. However, before they could purchase the next home, they had to sell their existing home but they still had to find a buyer. Now despite what you hear that there is no available credit for home buyers – FALSE – the lenders along with some of the governmental agencies have or are working on new programs to assist buyers in arranging financing packages for buyers to purchase homes. The credit standards are higher than in past years, but there is money available for you and your family – so take advantage and don’t let the negativity of the press prevent you from buying your next home. You and I cannot stop the constant beat of the national market, but I will on a regular basis give you the real news in our local market.

If you have any real estate related questions, or if you are considering buying or selling a home, do not hesitate to contact me. I can be reached at 717-579-2879 or via email at don@donroth.com or view the information at www.DonRoth.com.

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