Is it still meaningful to report on the upward trend in home prices? We have to answer “yes,” because there's still a lot of time to make up, considering all the negative reporting that occurred over the past four years.

With that in mind, we're happy to report that prices continue to trend higher. The latest data from Zillow show home prices rose 2.1 percent year-over-year for the second quarter of 2012 to post the first year-over-year increase since 2007. When measuring quarter-to-quarter movement, price gains were the highest they've been since 2005.

Supply, or rather the lack thereof, is helping to drive home prices higher in many parts of the country. The Wall Street Journal's quarterly survey of housing-market conditions in 28 metropolitan regions shows that inventories of unsold homes have fallen in every market and are down by more than 20 percent in two-thirds of those markets.

Reduced inventory is driving prices higher. Unfortunately, it's also driving sales volume lower. Closings on existing homes fell in June, and contract signings for the month point to fewer closings in July and August.

Sales of new homes also fell in June, but they fell on strong upward revisions to May's and April's data. June's annual sales rate of 350,000 units was 20,000 shy of the consensus estimate, but the sting of the disappointment was offset by a 13,000 upward revision to May's sales tally, which lifted the total to 382,000 units for that month. Further offsetting June's disappointing reading was a 15,000 unit upward revision to April's sales figures.

The dip in new-home sales didn't impact supply, which remains at 4.9 months at the current sales pace. In fact, completed new homes for sale, at 41,000, remains the lowest on record. In other words, inventory remains tight, and that in and of itself is limiting new-home sales. Not surprisingly, tight supply has also been lifting new-home prices over much of 2012. The national median price for a new home now stands at $232,600.

We find it interesting that so many pundits lamented the possible destabilizing impact of shadow inventory swamping the market, yet today many of these same pundits are lamenting that more of that inventory remains on the sidelines. Sometimes you just can't win.

There is a good reason we're seeing a dearth of new inventory coming to market – expectations. If you expect higher prices in the future, you'll be reluctant to list your property today. We see expectations of rising prices taking hold in more markets. For this reason, we don't see home prices backtracking any time soon; it's also a big reason for prices to continue moving higher.

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