Real Estate Information and Homes For Sale

Mortgage rates are at historical lows due to the Federal Reserve's unprecedented purchases of Treasury and mortgage-backed securities. The Fed had said previously that it would continue to buy these securities indefinitely. Now, there are signs that “indefinitely” could be closer than the Fed had previously suggested.

At the last meeting of the board of governors, there was heavy debate about how long the Fed should continue buying Treasuries and mortgage-backed securities. A few governors believe economic growth is on track. Other governors expressed concerns that the Fed's mounting debt purchases will be difficult to unwind and could roil credit markets.

The bottom line is that the Treasury and mortgage-backed securities purchases could end before the end of the year, which would be sooner than most Fed watchers had anticipated. Should the Fed cease its debt purchases, interest rates and mortgage-lending rates will surely rise.

A couple weeks ago, we said that mortgage lending would likely become a more “normalized” market. To that end, a more normalized mortgage-lending market entails a market without a Federal Reserve subsidy.

The point we want to emphasize – one we've emphasized many times – is that the risk of holding out for lower mortgage rates (or expecting current rates to be maintained) is rising, and this rising risk is something all refinance candidates and home buyers need to keep in mind.

 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.

We are still early into 2013, but the data releases so far are extending the trends established in 2012.

Consider inventory: The numbers continue to drop. According to data provider Movoto Real Estate, inventory dropped 9%, or by 9.551 homes, month over month in December. The latest monthly drop means inventory levels ended 2012 27% lower than where they began.

Falling inventory has been a mixed blessing: On the one hand, less supply has helped lift prices higher. (The paradigm of falling supply/rising demand will always do that.) On the other hand, lower inventory has truncated sales activity. It's obvious to say that we all could have been busier if there were more homes for sale.

Inventory has been squeezed for two reasons: (1) Many homeowners remain underwater, so they're in no position to sell; and (2) the rising price trend has kept properties off the market, because potential sellers believe a higher price is forthcoming.

Both these situations will rectify themselves over time: Rising prices coupled with continued mortgage amortization will lift many underwater homeowners above water. Rising prices will also reach an action point for more homeowners, where the price finally justifies putting the home on the market. In short, we expect inventory levels to rise as the year progresses.

In the meantime, there is little reason for anyone interested in buying a home not to buy. Despite steady price increases, homes remain very affordable. The NAR's Housing Affordability Index will likely have ended 2012 at a record high. 2013 is also expected to be a high-affordability year (though affordability is expected to drop as the year progresses).

In addition, rent payments and mortgage payments have reached a multi-year gap, with rent payments becoming much less attractive when compared to mortgage payments.

We thought it was interesting that the NAR mentioned in its release on housing affordability that “a more sensible lending environment that makes it easier for other financially qualified buyers to get a mortgage would allow many more households to enter the market, boosting home sales as much as 10% to 15%.”

Of course, we agree. We also think that as the economy improves, the lending environment will become more “sensible.” The downside is a more-sensible lending environment will likely lead to a higher-rate environment. In fact, 2013 has been marked by higher mortgage rates. We're not surprised given the recent surge in the 10-year U.S. Treasury note yield.

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.

No sooner had news on the “fiscal cliff” reached the market when frets and worries turned to the debt ceiling. The federal government hit its legal borrowing limit of $16.4 trillion this past week. Now pundits and professional worriers are fretting over what implications this impasse will have on financial markets and the economy.

No need to fret or worry, because perfection is impossible. Markets will always be encumbered with uncertainty. To wait for perfection is to wait in perpetuity and to never act.

In fact, the best time to act is when the outlook appears most dire and sentiment is decidedly negative. That's when the best values appear. We saw that in the residential real estate market in 2011 and early 2012. Many people who bought a home then are already sitting on a tidy gain today.

We still see value, just not as much of it. Low mortgage lending rates have been an extenuating factor, but we believe if borrowers (and refinanciers) wait much longer the value of that factor will fall should rates rise.

The point we can't emphasis enough is not to wait for perfection, because perfection doesn't (and never will) exist.

 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.

homes for sale, Harrisburg Pa Real Estate, Don Roth, market report

It appears Congress and the president have finally reached a compromise on the “fiscal cliff” – the agglomeration of tax increases and spending cuts that were set to take effect in January 2013. The good news is the housing and mortgage markets survived unscathed.

The Mortgage Forgiveness Debt Relief Act remains in force for another year. This means forgiven mortgage debt will remain untaxed. Without this extension, short sales, foreclosures, and loan modifications would have become encumbered with a tax burden. This would have been a serious blow to the recovery. These basic market-clearing mechanisms were vital to the housing recovery in 2012, and will continue to help the recovery along in 2013.

The mortgage interest deduction also remains intact, which means mortgage financing remains a very good low-cost deal. It also means mortgage financing remains a savvy leveraging strategy for purchasing an asset (residential real estate) that is rising in value; thus providing a means to increase returns on invested capital.

In other words, the housing recovery is here to stay, and the latest round of price data supports this conclusion. Trulia reports that asking-price gains accelerated throughout the past year. In the first quarter of 2012, national home prices increased 0.8% quarter over quarter; by the fourth quarter, the pace had increased to 2.3%. Year over year, national home prices were up 5.1%.

Fueling the home-price acceleration was the former left-for-dead Phoenix market, which staged a remarkable resurrection that continues to this day. Home prices in Phoenix were up 25% for the year.

We've frequently written that falling prices will eventually produce more buyer interest, which, in turn, will lead to an eventual recovery. Phoenix is proof this economic maxim works.

Las Vegas also proves the maxim. It seems like it has taken an eternity, but the Las Vegas housing market is on the mend. Home prices in Las Vegas were up 10% year over year in December, building on a price-recovery trend that begin in the second half of 2012. We noted early in 2012 that a recovery in the Las Vegas housing market would likely mean the recovery had become a country-wide phenomenon. This appears the case today.

Home prices around the country remain on the rise, and it's appearing more likely that mortgage rates will be rising too. Over the past couple weeks, rates have been inching higher. What's more, events in the debt market point to even higher rates.

We are speaking specifically of the 10-year U.S. Treasury note – a benchmark for the mortgage-backed security market and the 30-year fixed-rate mortgage. The yield on the 10-year Treasury has moved considerably higher over the past month. In fact, the yield on the 10-year Treasury today is approaching its highest point in nearly four months.

The trend in the 10-year Treasury yield is worth following, because if the job market and economy continue to improve (as we expect), then you can be sure that the yield on the 10-year Treasury note will continue to rise. Should this occur, mortgage lending rates are sure to follow.

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.

There is a great deal of talk on whether there is a recovery occurring in the real estate landscape or if it just an illusion. In many areas of the country there has been a turn around and markets and home prices are improving, some more than others but there is an improvement after the last five years of nothing but negative news. Each purchaser has their own reasons for buying a Harrisburg PA home, maybe the need for a larger or in many cases a smaller home. Other circumstances may necessitate a move, but if one of the motivating factors to moving to a new home is unbelievably low mortgage rates that are being offered by lenders...now is the time to move!

Today a 30 year fixed interest mortgage is at 3.375% which equates to a monthly principal and interest payment of $663.14 on $150,000. Compare that to 2006 – 2008 when the average rate was approximately 6.15% meaning the payment on the same amount would have been $913.84. And remember everyone wanted to buy a home during that period. Yes, circumstances have changed dramatically in the intervening time frame, but if you are looking to buy for the same amount borrowed you are “saving” $3000 per year in payments. AND most likely you are paying somewhat less for the home you are considering, so there can be a twofold benefit to you. No the real estate market, likes trees, is not going to grow to the sky but I hope this provides some perspective that there are positives in owning a Harrisburg PA home in 2013.

On the other hand, if you plan to stay in your home for a period of time why not consider refinancing at a lower rate than you have at the present time. Knowing each situation is different than the next, look into the possibility of refinancing? I had a quote on a 15 year fixed rate mortgage of 2.75% meaning the payment of the above amount of $150,000 would be $813.25 compared to a payment of $948.97 if you had a remaining term of 20 years left on your mortgage and at an original rate of 4.50%. That is $135 less per month and 5 years less of payments. And guess who saves all that money? You do.

Realizing that all circumstances may be different and the rates may be slightly higher or lower, I think you owe it to yourself to check what is available and put the money in your pocket. If you would like to discuss this further, need the name of a lender or just find out valuations in preparation for 2013 please contact me at Don@DonRoth.com or 717-579-2879.

May you have a happy and prosperous New Year!

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.

It appears we were fairly accurate in our predictions for 2012. This time last year we predicted that home sales volumes would continue to improve. We said the same for pricing. We even expected prices in the sand & shore states to lead the rebound. That's been the case (even Las Vegas is rebounding).

One reason we thought 2012 would be a strong year for housing is shadow inventory would be less of an issue than many pundits were ominously projecting. Our rationale was simple: What's known doesn't roil markets; it's the unknown that roils markets. The problems associated with shadow inventory are well-known and well-vetted. Markets are masters at dealing with what's known.

Now, we said “fairly” accurate, not completely accurate. Our prediction on mortgage rates was wrong. We expected higher lending rates in December 2012 compared to December 2011. That wasn't the case. In our defense, we didn't expect the Federal Reserve to intervene in the mortgage market to the extent it has.

For 2013, we are doubling down: Existing-home and new-home sales will continue to improve, as will overall pricing. Home starts will also pick up pace throughout the year. As for shadow inventory, it will become even less of an issue than it is today.

We're also doubling down on mortgage rates. We see higher rates this time next year. We say that because the Federal Reserve's interventionist policies are becoming less effective. After the Fed announced it would double its purchases of longer-term notes and bonds, the yield on the 10-year Treasury actually increased 20 basis points. This suggests to us markets are becoming more concerned with inflation.

So that's our call for 2013. Have a safe and happy New Year.

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.

Last week, we sang hosannas for home builders and new-home sales. This week, existing home-sales get their turn.

We praise existing homes because sales have taken a significant turn for the better. Late last week, existing-home sales posted at an annualized rate of 5.04 million units for November – a 5.9% increase over October. The pace of existing-home sales has risen to the point they are on par with the federal-tax-credit days in the spring of 2010.

The good news is the market is much healthier today compared to 2010. Back then, we were skeptical that tax credits would sustain existing home sales. Our view was that the credits were simply pulling sales in from future demand, while aggregate demand remained low.

This time is different. We expect sales to continue to trend higher. The housing market is more robust today than it was in 2010. For one, distress properties are becoming less of a factor. For November, distressed properties accounted for 22% of existing-home sales, down from 24% in October. What's more, that percentage has been trending down for much of 2012.

Supply has been an issue, and a mixed blessing. Current inventory of existing homes is at a multi-year low of 4.8 months. The number of existing homes on the market, 2.03 million, is retarding sales-volume growth. On the other hand, low supply is helping prices. The national medium price of an existing home is up to $180,600, a 10.1% increase over the median price this time last year.

All in all, the latest data show that housing – new and existing – is increasingly taking leadership for economic growth. In other words, the world is finely returning to some sense of normalcy.

Normalcy might not be the word we'd use to describe mortgage lending. Yes, rates continue to skim along multi-decade lows; that is, when they are not setting new multi-decade lows.

But this is an unusual lending market. Rates are low, but risk aversion remains high (particularly among regulators). The Federal Reserve is doing everything within its power – by purchasing mortgage-backed securities and long-term Treasury notes – to hold interest rates low. This is an unprecedented move by the Fed.

To be sure, the Fed's efforts have worked, but it's worth keeping in mind that the events of today are an aberration. A more normal lending environment would consist of higher-rate 30-year mortgages. From an investor's standpoint, the rate today barely compensates for inflation and doesn't compensate for risk and the time value of money.

The point we want to emphasis is that the housing market has returned to normal; we think that it's a matter of time (which isn't too far into the future) when mortgage lending returns to normal too.

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.

We are obviously the beneficiaries of the Federal Reserve's push for lower mortgage lending rates, but its unprecedented foray into mortgage lending isn't without risk.

The Fed's debt purchases have ballooned its balance sheet to $2.87 trillion in debt assets from $869 billion a few years ago. Because of the Fed's commitment to purchase $85 billion in additional debt each month, its balance sheet will expand to $4 trillion by the end of 2013.

The Fed's expanded balance sheet is cause for concern. The larger the balance sheet, the riskier the Fed's exit strategy becomes. The prospect of rising interest rates means the Fed risks significant losses (because of the inverse relationship we discuss above). What's more, should the Fed attempt to wind down its portfolio of debt too rapidly, it will roil the Treasury and mortgage-debt markets, thus sending mortgage lending rates higher.

We want to reiterate what we've been reiterating for the past few months: Housing prices are on the rise, while mortgage lending rates remain near historical lows. Housing prices will continue to rise, but there is no guarantee mortgage rates will continue to fall. In short, the benefits of waiting to borrow and buy simply aren't commensurate with the risk of waiting.

 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.

Housing has been subdued the past couple weeks and will likely remain subdued through the remainder of the year. The good news is what's been reported on housing has been mostly positive.

The trend continues this week. The Mortgage Bankers Association reports that purchase applications continue to trend higher, rising 1.0% in the December 7 week. This marks the fifth-consecutive volume increase and is a positive indicator for home sales as we head into the new year.

News on the mortgage market has picked up where housing has left off. Federal Reserve Chairman Ben Bernanke announced on Wednesday that the Fed will not only continue purchasing $40 billion in mortgage-backed securities (MBSs) each month, it will also purchase an additional $45 billion in long-term U.S. Treasury securities. Both securities will be pay for with newly minted money.

The Fed's goal is to lower already low mortgage lending rates. The theory is that even lower lending rates will accelerate the housing recovery, thus accelerating the economic recovery. An accelerating economic recovery, in turn, will spur additional job growth. For this reason, the Fed said it will continue to keep interest rates low until the unemployment rate drops to 6.5%. (The unemployment rate is currently 7.7%.)

The Fed's strategy, which creates higher demand for MBSs and U.S. Treasury securities, helps hold mortgage lending rates low. The relationship is inverse: when demand rises for these securities, their price rises and their yield falls.

The graph below illustrates the relationship between a $1,000 10-year note with an initial coupon payment of 6%, which means the note pays $60 in interest annually. When the market rate falls after the note is issued, the note's price rises. A higher price produces a yield that calibrates the lower market rate of interest with the coupon rate.

Mortgage lending rates are tethered to yields on MBSs, which are tethered to U.S. Treasury security yields. In short, by purchasing both Treasury securities and MBSs, the Fed helps keep mortgage lending rates low.

That said, a strange thing happened after the Fed announced it wanted to lower mortgage lending rates even further: The yield on the 10-year Treasury note actually increased (and has been increasing since last week). The 10-year note is a benchmark for the 30-year fixed-rate mortgage.

So what's going on?

The Fed isn't the only player in the mortgage market; the Fed isn't omnipotent. Outside market forces are also an important variable. The risk of price inflation rises with the Fed pumping more money into the financial system. In fact, the Fed itself raised its annual price-inflation target to 2.5% from 2.0%. If price inflation rises, mortgage lending rates will be pressured to follow.

The point we want to emphasis is not to take for granted that mortgage lending rates will fall meaningfully lower. The Fed is implementing a strategy, not offering a guarantee.

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 than a few housing-market observers are concerned the fiscal cliff – the impending array of tax increases and spending cuts due January 1 – could derail the housing recovery. These concerns aren't unfounded.

If nothing is done between now and the end of the year, income tax rates will rise, and not just for the rich. The lowest marginal income tax rate, at 10%, will increase 50%, to 15%. Everyone in every tax bracket will have fewer dollars to spend and invest. Tightened personal budgets could force many marginal home buyers out of the market.

The greater concern, at least from an immediate perspective, is the expiration of the Mortgage Debt Relief Act of 2007. The act allows borrowers to exclude certain canceled debt on their principal residence as income. If the act isn't extended, many short sellers could be hit with a big tax bill for forgiven debt. This would be a serious impediment to the short-sale market, which has contributed mightily to the housing recovery.

The good news is that it appears likely the Mortgage Debt Relief Act will be extended. The bad news is that we continue to barrel toward the fiscal cliff, with no resolution in sight. The remaining weeks heading into January will be interesting, to say the least, and could be very impacting on the housing and mortgage markets.

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.