Real Estate Information and Homes For Sale

Optimism Reigns, Tread Cautiously

Homebuilders haven't felt this upbeat since the waning days of 2005. We know this because the NAHB/Wells Fargo Homebuilder Sentiment Index hit 59 this month, a number last seen nearly eight years ago.

Moreover, it appears unlikely optimism will fade anytime soon: Many homebuilders are reporting higher current sales and stronger pricing. Spirits are always buttressed when buyers are willing to enter the market when prices are rising.

On the existing-home side, the logjam of tight supply appears to be loosening. Nationally, the number of existing homes for sale remains 5% lower than the number that existed this time last year. Inventory, though, was up 1.4% in June. In many local markets inventory is being drawn in by persistent price appreciation. This is no surprise: rising prices always draw more supply to market.

Rising prices have also drawn more housing scrutiny. This, too, is no surprise. The closely followed S&P/Case-Shiller Home Price Index is up 12.1% year over year. Of course, real estate markets are local markets, and in many local markets gains far exceed the national numbers ( Las Vegas and Phoenix come ready to mind).

Double-digit average annual price increases are unsustainable over the long term. Price growth within the 2%-to-5% range is the norm. Therefore, we're not surprised to see growing speculation on the prospects of another housing bubble.

On that front, we're not terribly concerned. We don't think housing is even close to approaching the bubble that developed seven years ago. Much of the strong price gains we're seeing are off a severely depressed base (again Las Vegas and Phoenix come to mind).

When the bigger picture is brought into focus, prices nationally remain reasonable.

Since the housing bubble burst in 2007, people continually question whether housing is a safe investment? This is understandable: The perception before the bubble burst was that houses were always a safe investment.

It's important to keep in mind that safety, reward, and risk aren't imbedded in an asset class – houses, stocks, bond, etc. – they're embedded in time and price. A house purchased in 2000 was safe and offered a lot of reward with little risk. By 2007, the paradigm had reversed – houses were unsafe and risk was high. As a general rule, the longer the uptrend is sustained, the more risky an asset class becomes.

We liken today's housing market to the middle innings of a baseball: There is still more action (price gains) ahead. But there is also plenty of action already behind us, which is why when housing was skimming along the bottom (at the beginning of the game), we continually pounded the table to get in the game.

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 don@donroth.com.

President Obama caused a stir this week when he said he'd like to see the private sector take over as the primary driver behind the mortgage market. The president went as far as to say he'd like to see Fannie Mae and Freddie Mac dismantled.

It's a worthwhile idea, but there are a few obstacles. For one, the government, through Fannie Mae, Freddie Mac, the FHA, and the Department of Veterans Affairs, backs 90% of all newly originated mortgages. For the most part, there really is no private mortgage market.

At the same time, the president said he'd insist on keeping the 30-year fixed-rate mortgage affordable at today's low rates. Unfortunately, the goal of the prevailing rate on the 30-year fixed-rate mortgage is incongruous with the goal of privatizing the mortgage market. We say that because private money won't lend for 30 years at today's rates without government backing.

So does this mean the end of the 30-year fixed-rate mortgage? That's unlikely. At the same time, it's also unlikely we'll see a mortgage market dominated by the private sector. In other words, it looks like business as usual into the relevant future.

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 don@donroth.com.

More of the Same, But for How Long?

For now, the cavalcade continues; that is, the cavalcade of home-price increases that began nearly two years ago.

CoreLogic's Home Price Index shows prices increased 1.9% in June compared to May, which marks the 16 th consecutive monthly increase. This latest increase lifts the index's year-over-year gain to 11.9%. For 2013, home prices are already up nearly 10%.

But not all indicators suggest the trend will continue unabated. Trulia's data show asking prices dropped 0.3% in July compared to June, which marks the first monthly decrease since this past November.

A slowdown in home-price gains wouldn't necessarily be bad. We've argued in the recent past, that double-digit yearly price increases are unsustainable. A lower rate of annual increase would be a more sustainable rate, and one more attuned to historical norms. The last thing any of us wants is another bubble market followed by a bubble burst.

We've also a seen a slowdown in the rise in the price of mortgage funding over the past month.

Rates, though higher than they were six months ago, have stabilized. What's more, it appears consumers are becoming acclimated to the new higher-rate reality. A recent survey by Fannie Mae finds that 60% of respondents believe interest rates will increase over the next 12 months. At the same time, three out of four of these respondents believe now is a good time to buy a home. The prospect of buying an appreciating asset appears to trump the higher cost of financing that asset.

But are the respondents expectations properly calibrated?

After the latest employment report, we are less sure of interest rates rising.

The employment report, issued the past Friday, points to sluggish job growth. In July, businesses increased payrolls by only 162,000, roughly 20,000 below most economists' expectations. To be sure, the unemployment rate dropped to 7.4% from 7.6%, but this was attributed to a lower labor-participation rate, which fell to a 35-year low.

The current trend in labor participation runs counter to recent history. After a recession, the labor force usually grows. But this post-recession period has been an anomaly. We are four years into a recovery, yet labor-force growth, as well as job growth, remains stubbornly stagnant.

Many economists believe disappointing job numbers won't dissuade the Federal Reserve from throttling back on quantitative easing. In fact, a few economists speculate the Fed could throttle back as soon as next month. At a minimum, that means mortgages won't drop any further.

We're not convinced, and we don't think most market participants are either. Mortgage rates have held steady for the past six weeks, as has the yield on the benchmark 10-year U.S. Treasury note. Given stubborn economic weakness, we expect quantitative easing to continue through the remainder of 2013.

Moreover, quantitative could even extend deep into 2014, depending on who takes the reigns of the Federal Reserve next year after Chairman Ben Bernanke steps down. Of the frontrunners, one in particular, Janet Yellen, appears keen to keep the Fed's current monetary policies going for a while longer.

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 don@donroth.com.

House hunting is a little bit like going on a whole bunch of first dates. In both situations, you’re on the lookout for deal breakers, like a creepy attitude (bad neighborhood), nasty breath (moldy basement) and no personality (“blah” décor). But just like the dating game, first impressions can be a deceiving, and not every cliché “house problem” is dump-worthy.

Here are five flaws you may find during a house hunt that aren’t necessarily deal breakers:

Wall-to-Wall Carpet

You don’t often hear people say that they “love” wall-to-wall carpet, but people’s tolerance for the look varies. If you really can’t stand the shag – but you’ve found a home that’s perfect otherwise – give it a chance! Beneath that carpet is probably a beautiful floor with endless possibilities. The cost to tear up and replace carpet with an inexpensive alternative (like vinyl) is generally $15-$20 per square yard, so this foible can be fixed without breaking the bank.

Popcorn Ceiling

This rough acoustic surface (also called “cottage cheese” ceiling) is basically the polar opposite of modern chic. But that doesn’t mean your dreams of a sleek décor scheme can’t come true! Removing popcorn ceiling yourself is labor intensive, but very doable. Or, you can hire someone to do it for you – it generally costs $1.30-$2.60 per square foot to remove. Note: If the house you’re looking at was built before 1979, popcorn ceiling removal is more complicated (and expensive) due to the risk of asbestos.

An Old Roof

A house with a roof more than 10 years old tends to trigger alarm bells. After all, old roofs can quickly turn into leaking roofs. But remember: old doesn’t mean broken, and the age of the roof should reduce the asking price of the house. Important: If you purchase an old-roofed house, it is important to budget for an eventual replacement, which can cost anywhere from $2,000 to $10,000. Different roof surfaces have very different life expectancies, so do some research about your roof and plan accordingly.

A Slightly-Too-High Price Point

If you’ve found your dream home, but it costs about $5,000 more than you planned to pay, don’t walk away immediately. Five grand is nothing to sneeze at, but when you compare it to the total value of your home, it’s less significant. Plus, there are two possible ways to earn back this amount of cash:

1. See if there are any homeowner tax incentives for which you’ll qualify.

2. Ask your real estate agent if they’d be willing to take a small cut in their commission given the higher price (it’s in their best interest to get a deal done, so they may be receptive to this).

No Central AC

Hear us out! If you’re house hunting in the middle of July, the idea of a sans-AC existence can seem like purchasing a lot on the seventh circle of hell. But a few window units (or some well-placed fan action) can cool off a lot more effectively than you think. Plus, installing a central AC unit can be done for as little as $2,000, which isn’t that bad if the lack of AC took a chunk out of the initial price. 

Information provided by BrightNest.com.

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 don@donroth.com.

The language from the Federal Reserve can be frustratingly ambiguous. The minutes of the latest Fed governors meeting, released this past Wednesday, state that “economic activity expanded at a modest pace during the first half of the year,” which indicates the economy still isn't growing at a pace the Fed would like to see. At the same time, the Fed has hinted that it could begin tapering quantitative easing within the next month or two.

It can all be a bit confusing.

The key variable in the equation, and we've said this repeatedly, is job growth. Accelerating job growth means accelerating economic growth, and then, for sure, the Fed will begin to taper and mortgage rates will rise. But if job growth continues to come in at, or below, current expectations, we'll likely see the unemployment rate hold current levels, which is unacceptable to the Fed.

Our best guess is that the current mortgage-rate range will hold through summer. If we don't see a material change in the unemployment rate by the end of the third quarter, we'd expect the Fed's commitment to quantitative easing to push into 2014, which means mortgage rates would hold the current range through 2013.

  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 don@donroth.com.

Are Mortgage Rates the Real Issue?

Housing activity has slowed noticeably over the past couple months. Sales of new and existing homes have stagnated, while new residential construction has been volatile. Most market watchers say higher mortgage rates are to blame.

To be sure, higher mortgage rates raise the monthly cost of financing and owning a home, but rising home prices are also a contributing factor to overall costs.

On the latter, most data sources point to a sustained rise in home prices. The latest data release from S&P/Case-Shiller confirms the trend. Case-Shiller's home price index show that prices rose in 18 of the 20 cities it follows ( Minneapolis and Cleveland were slight laggards). Overall, home prices rose 1% in May compared to April. This latest increase lifts the year-over-year gain to 12.1%.

The laws of supply and demand state that when prices rise demand falls. But at the same time, rising prices draw more supply into the market. As we know, lack of supply has restrained sales growth over the past year. The good news is that we have seen supply in existing homes for sale increase over the past few months. Rising home prices are, no doubt, a contributing factor.

Going forward we see home-price gains moderating. This should help draw more homes into supply. We say that because more potential sellers will no longer be compelled to wait if they believe the price trend is moderating, or even stagnating. When you become more unsure of the future, you tend to act now; you don't wait.

We view moderating price gains as a positive. Indeed, low single-digit annual price gains would be more indicative of a normalized housing market. Double-digit year-over-year price gains aren't the norm, nor are they sustainable.

We remain somewhat skeptical, though, that recent mortgage-rate increases and tight supply are the main culprits behind the recent slowdown. Economic growth, or rather the lack of growth, could very well be the real culprit.

The fact is that economic growth remains sluggish. In the second-quarter of 2013, gross domestic product (GDP) grew at a 1.7% annualized rate (normal growth is around 3%).

Because the economy isn't quite firing on all cylinders, we doubt that we will see any dramatic moves in mortgage rates.

Job growth will be key. If we see sustained job growth over the next couple months, this will be indicative of stronger economic growth in the third quarter. If that occurs, rates will move higher, but we still don't think they'll move materially higher.

We don't expect to see 5% on the 30-year fixed-rate loan until the Federal Reserve unequivocally indicates it will cut back on quantitative easing, and that remains the great unknown.

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 don@donroth.com.

Every six minutes, a child ends up in the emergency room because of a stair-related injury. And these visits aren’t just about scraped knees – three out of four of those kids suffer head and neck injuries! To protect your family, take fifteen minutes to check the safety of your stairs.

New homes are by no means immune to danger, but older homes are more likely to have problems. If your home is more than ten years old, it’s important that you check your stairs at least once a year to make sure they stay safe.

1. In the house. Most stair-related injuries (for kids and adults) occur on the home’s main set of stairs. Check the following things on your staircase:

   Clutter. If your family commonly sets things on the stairs to bring them up and down, it’s time to break that habit. Small items on the stairs are dangerous, especially if a young one is racing to the dinner table! Instead, place a basket near – but not on – your stairs and put items destined for another floor in the basket.
   Stair treads. Check the length of your stair treads. Are they deep enough for the whole foot of the largest-footed person in your home? If not, they’re a potential fall hazard.
   Balusters. If you have small children in your home, this is especially important. Use the “tennis ball test” to make sure your stair balusters (also called spindles and stair sticks) are safe. If a tennis ball can fit between the balusters, a small child can also fall through that space!
   Light switches. Does your home have a light switch on the top and bottom of the stairs? If not, a late-night tumble could happen. In the United States, building codes require light switches in both places if the staircase has six stair treads or more. But some older homes may not be equipped with both switches.
   Handrail. Give the stair’s handrail a hard tug. Does it move at all? If so, it should probably be tightened up.
   Uniformity. Stand at the top of your flight of stairs and look down. Do all the stair’s edges – including the very top landing – line up? If any stair is mis-aligned, it’s a fall hazard. Note: This is a relatively common problem in new homes.

2. On the porch or deck. Many porches don’t have enough steps to require a handrail, but we recommend installing one regardless. Think of it like safety insurance for every person that walks onto your porch or deck. Bonus: A stylish handrail can increase curb appeal!
3. In the garage. One third of all garage-related ER visits are from stair slips and falls. If your garage has stairs (even short ones) do all of the stair checks you’d do for indoor stairs. Also, make sure they’re easy to see, even at night. Add reflective tape to the edge of each step.

One of the more recurring laments over the past few years has centered on tight, rigid lending. We've all known someone who should have received financing, but didn't because lenders were too risk averse.

One upside of an improving market is a willingness to accept more risk, and we are seeing more risk acceptance in the mortgage market. Down payment requirements are easing, while fewer borrowers are being turned down on credit scores alone.

Piggyback loans have also resurfaced, as have stated-income loans. On the latter, far too many self-employed people have been excluded from the mortgage market. Fortunately, that's changing, which means more people are added to the pool of home sellers and buyers. More participants lead to more robust and more stable markets.

Even subprime loans are coming back to serve a market of borrowers who have healthy incomes but who suffered a short sale or credit hit when the market imploded in 2008 and 2009.

To be sure, we all want a more accommodating mortgage-lending market. The good news is we are making progress in that direction.

 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 don@donroth.com.

More of the Same With Mortgage Rates

For the past couple weeks, we've been speculating that mortgage rates have likely plateaued and were unlikely to push much higher. Our rationale was similar to that of many market participants: The threat of the Federal Reserve tapering from quantitative easing (money pumping and low interest rates) was overstated.

A meaningful spike or dip in rates could be in waiting next Friday with the release of the July employment report. Job growth significantly higher than the consensus estimate could lead to a rate spike; disappointing job growth will likely drop rates (though nowhere near to the March lows).

Job growth, a benefit of economic growth, means housing will continue to improve, even if interest rates rise. Job growth (and to a lesser extent wage growth) is key: More people working means more people who can afford a home and financing costs.

For now, though, housing looks good. We say that even though sales of existing homes came in below expectations for June. The good news is market composition is healthier. Only 15% of sales were related to distressed properties – the lowest reading since the number was tracked in 2008. At the same time, the market is shifting more toward owner-occupied buyers and away from investors, who comprised only 17% of purchases for June.

Prices also continue to trend higher. The national median price for an existing home rose a strong 5.5%, lifting the national number to $214,200. Rising prices, in turn, will further lift inventory, which remains tight and is limiting sales in many local markets.

As for new homes, they're moving in the opposite direction: sales are up, but prices are down.

New home sales, at 497,000 units on an annualized rate, handily beat the consensus estimate for 481,000 units. The pace of new-home sales is on a strong two-year run, and is approaching levels unseen since 2008. We were equally encouraged to see that sales maintained their strength in May and June despite the spike in mortgage rates.

It's possible that new home sales maintained their momentum on price discounting. For June, the national median price of a new home was down 5% to $249,700. Year over year, though, the price trend remains up, with year-over-years gains approaching 10%. Given that supply remains tight, at 3.9 months supply at the current sales rate, homebuilders should be able to maintain pricing power into the foreseeable future. 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 don@donroth.com.