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.

Real Estate Report

July 2010

The real estate activity in The Estates for the first six months has improved for the first time in almost two years. Yes, the sales prices in some instances have moderated in comparison to previous years but two homes have sold and there are three pending sales as of the end of June. I would anticipate continued price pressure in the near future but this is an issue on the higher priced homes, over $400,000, in the greater Harrisburg real estate market. The good news is that there appears to be some stability in the lower price ranges and that will eventually work through all the price ranges. Are we going back to the 6-8% appreciation per year that we experienced? Not anywhere in the near future but there will be firming of prices and then some appreciation.

Where I see absolutely positive signs right now are interest rates being at almost historic lows. A few lenders have quoted 4.75% and 4.25% for 30 and 15 year mortgages respectively. So if you are planning to remain in your home for a while you may want to consider refinancing you current mortgage and save money – it is better to have it in your pocket rather than the banks in my opinion.  Some examples are;

Per $100,000; 30 year mortgage @6% vs 4.75% the savings is $78 per month and the same dollar amount on a 15 year mortgage @5% vs 4.25% the savings is $38 per month. Naturally every circumstance is different so before any decision is made please consult with your tax advisor.

And if you are interested in value, market activity or any real estate related item please contact me at Don@DonRoth.com or call at 717-579-2879. Have a great summer.

Happy 4^th of July to all the men and women who serve and protect.

With the change in the seasons, we are beginning to experience a change for the positive in the real estate market in the area. As I have said previously, the change is not going to be a quick fix but rather a slow improvement in the market. But in comparison to many other areas of the country, we are in much better condition and this should continue going through the rest of the year.

The number of sold homes decreased by 3% in 2010 compared to 2009, but this is much improved over the 20% decrease we experienced in 2009 compared to 2008. And the average sales price for the same period decreased by less than 1% to $179,057. Although the days on market increased to 98 days, we are now back to what I call a normal market that was common prior to 2003.

As with last year, the mortgage rate environment is still extremely favorable to buyers, although rates on a 30 year mortgage have increased slightly to 5.25% compared to 5% in 2009. It is my opinion that these rates will continue to increase gradually as we go through 2010. But be sure that lenders have plenty of money available for qualified borrowers and that again should continue throughout the year. So what should a potential home buyer do in this environment, my opinion is take advantage of the low rates and the plentiful inventory that is in the market. There are approximately 4900 residential units available for sale at this time. In conclusion, we are moving onward and upward in the area and take advantage of the positive situation while it is available.

As we begin the first week of March, we are seeing the first signs of spring; the sun for more than a few minutes a day, the robins are out and we are not waiting for the next snow storm or a high wind warning. The same can be said of the local real estate market. Although the number of homes sold in February of 2010 is down by 15%, the average sales price comparing 2009 versus 2010 is up 11%. The increase in the sales price is partly due to the depressed level of last year due to the extreme uncertainty that was caused by the meltdown in the financial markets in late 2008 and naturally continuing into 2009. The average sales price in the region as reported by the Central Penn Multi List was $167,335 and in 2010 it is $185,483, and this average sales price was relatively consistent throughout the later months of 2009. In my opinion, the sales numbers would have been stronger if it had not been for the two snow storms that slowed down not only auto travel but foot travel, ie walking in homes that were for sale. But in the last two weeks, I have seen an increase in at least more inquiries across the board up to the $350,000 asking price, with the higher priced homes still seeing low activity.

What is in store as we go into the spring? We will still experience a slow rebounding market, but in light of that there are some promising signs just as spring arrives. We still have extremely attractive interest rates on 30 year mortgages, right at 5% and the home buyer tax credit is still available for contracts written before April 30 and settling before June 30 of this year. And there is an abundance of homes for sale, in excess of 4300 across all price ranges. AND there is plenty of mortgage money available and many, many lenders willing to lend to qualified borrowers. I am constantly asked whether the tax credit will be extended and my answer is I do not think so, but it could depend on the prevailing winds in Washington, DC. I would not want to rely on a definite maybe at best. Both buyers and sellers have great opportunities in the current market because as we go through 2010, one thing is almost certain. Mortgage rates will increase, which may place a lid on the activity, although it may be modest.

True, the current real estate market is not like it was three years ago and probably will never return to those levels. But this market is much more stable than it is in many parts of the US and I do not anticipate that to change. So my advice is naturally embrace the coming of spring and possibly a slightly improving real estate market in the Central Pennsylvania area.

As a reminder the First Time Home Buyer Credit is up to $8000 and the first time home buyer is defined as someone that has not owned a home in the last three years. The $6500 tax credit is aimed at people who have lived in a home for at least five consecutive out of the last eight years. There are income considerations for both credits but many potential buyers will be able to qualify for most, if not all of the credit. So if you are considering a home purchase and you combine the tax credit with the very attractive low interest rates, why wait act now before the credits are history.

Bring your horses. Elevated lot with public sewer overlooking the surrounding countryside. Very convenient to the West Shore and Carlisle. Cumberland Valley schools. Bring your own builder.

View Additional Photos

View Site Plan

Bring your horses. Elevated lot with public sewer overlooking the surrounding countryside. Very convenient to the West Shore and Carlisle. Cumberland Valley Schools. Bring your own builder.

View Additional Photos

View Site Plan

As we enter the second week of February 2010, there seems to be one subject besides real estate and that is global warming; and that debate whether there is global warming continues incessantly. Who is right or who is wrong on this issue will be determined in the future. With respect to real estate, I think that I am more right than wrong with my opinions in the past and what I see going forward, at least in the Central Pennsylvania marketplace. Comparing January 2009 with January 2010, the number of sales have decreases by 14%, and I know that does not look like a rebounding market that I have characterized in previous letters. But I will say that we experienced a similar result when comparing January 2008 and 2009, and we still were down for the year 2009, though not anywhere near the January numbers and I still anticipate that 2010 will be a positive year, although only slightly. And the January average sales price comparison is much improved over 2009 albeit down 7%.

Why didn’t we see more of an improvement or a continuation of the progress in the latter part of 2009? Three factors: 1) being that the Home Buyer Tax Credit extension didn’t occur until mid November, 2): the holiday season was upon us and in many instances buyers have traditionally slowed down their buying habits during December and January; 3) the weather, need I say anything more after 30+ inches of snow within the last five days!!

Moving forward, what is the most likely scenario that I anticipate? We will see a slow improvement in the number of home sales in the area and a slight increase in the average sales price as we go through 2010. Part of the increase will be due to the tax credit that presently has a date of April 30, 2010, in which buyers can qualify for the tax credit and with a closing date of June 30, 2010. I have been asked about an extension beyond April of this year and my response is that anything is possible in Washington, DC, but it is highly unlikely. Improvement will also come from buyers who do not want to rent any longer, sellers that want to either downsize or need a larger home and those who want to take advantage of the low mortgage interest rate that we continue to experience and we all should be aware that the low interest rate environment cannot continue forever. As I said in one of my recent posts, a 1% difference on a mortgage rate can increase your mortgage payment by almost $90.00 a month on a mortgage of $150,000. Yes, things will improve on a slow and steady pace, and when we see an overall increase in the economic climate the activity will improve even more, but do not anticipate a return to three or four years ago with substantial price appreciation because it is not going to happen.

It is my intent to give you the best of what I see in the market in order to assist you in making a real estate purchase; and please remember each sale is different even though there may be two homes that are exactly alike. Such factors as condition and buyer or seller motivation are two that come to mind. So if you are considering a purchase or a sale please contact me at Don@DonRoth.com or visit my web site www.DonRoth.com and view the search listings tab. Hope that we can say that the past week has been a global warming anomaly and we will see plenty of sunshine for a while.

Don Roth begins term as PAR president
Friday, January 29, 2010
By Kim Shindle

From left: Barb Roth, Don Roth and Jim Helsel
(Photo credit: Stuart Leask)

Donald D. Roth was installed as the 2010 president of PAR at the annual Inaugural Banquet held Tuesday evening in Harrisburg.

Roth, a REALTOR® from Harrisburg, was sworn into office by NAR Treasurer James L. Helsel Jr., also a PAR past president.

“I’m humbled, honored and excited to have this special opportunity to lead PAR in this challenging time. I will make our association a better one in the coming year,” Roth said.

Roth said association members will face many challenges in 2010 including regulatory, legislative, business and consumer expectations. He said the association has many ongoing projects it will focus on in the coming year including the Community Reinvestment Project (CORE), the statewide housing trust fund, educational requirements and cultural diversity outreach.

“The times have changed and we will continue to change to meet the changes in our industry,” he added.

Pennsylvania Rep. Sue Helm (R-Dauphin), Glen Grell (R-Cumberland) and Ron Marsico (R-Dauphin) made a special presentation to Roth on behalf of the House of Representatives during the evening’s festivities.

Outgoing PAR President Gregory Herb thanked members for the opportunity to serve as president. He reminded them, “Never has your PAR membership been more valuable than it is today.”

About Kim:
Kim Shindle is the Communications Specialist at the Pennsylvania Association of REALTORS®.

Don Roth to serve as PAR president
Tuesday, January 12, 2010
By Kim Shindle

“Changing with the Times” will be the mission of Donald D. Roth as he becomes the 87th president of the PA Association of REALTORS®. His theme will direct the association’s focus to the new issues facing REALTORS®.

Don Roth, PAR Presudent

“Our industry is going through an evolution. We’ve seen boom times and now we’re going through a substantial correction,” Roth said. “PAR has to be responsive to its members. We’re a source of information and we want to continue to provide tools for our members to better serve their clients.”

Roth spent 20 years in the financial industry before becoming a REALTOR® nearly 20 years ago. A REALTOR® with Prudential Homesale Services Groups, he primarily works in the residential market in the greater Harrisburg area.

While Pennsylvania has weathered the difficult economic climate and remained fairly stable, the market has seen a slight increase toward the end of 2009, Roth said. “We’ve seen some improvement in the market since September. More homes are being sold, although most of them are in the lower price range,” he added.

Roth said PAR task forces will continue to work on issues like climate change, educational requirements and appraisal management companies. In addition, a new task force will be appointed to help outline the goals of the new Community Reinvestment Project (CORE), a new PAR cooperative program.

Legislative issues that could affect the real estate industry in the upcoming year will continue to be assessed, Roth said. “Issues like the real estate transfer tax (RTT), reassessments, zoning, point-of-sale requirements all affect how we do business. We want to be at the table to make recommendations to the legislative bodies,” he added.

Roth will be sworn in on Tuesday, Jan. 26 at PAR’s Winter Business Meetings in Harrisburg.

About Kim:
Kim Shindle is the Communications Specialist at the Pennsylvania Association of REALTORS®.

Happy New Year to all. As I report on the real estate market in the region, I think most of us know that to say that it was a challenging year would be an understatement. In many of the areas throughout the U.S., the real estate market continues to be under siege. In Pennsylvania and especially the Greater Harrisburg area, we have fared much better, and there are signs that stabilization and improvements in the market are becoming a reality. When comparing 2009 to 2008, we saw the number of homes sold decrease by 44 sales, which is a very minor percentage in the real estate market. Yes, the average sales price of homes declined by approximately 5% when compared to 2008, but the month to month decline in sales prices was most significant in the earlier months of 2009.

Why do I anticipate an improvement for 2010? Well, one reason is that interest rates are still very attractive, although there is every indication that mortgage interest rates will climb higher as we go through 2010. The impact on mortgage payments is evidenced below for a $150,000 mortgage amortized over 30 years.

Pretty substantial increase in the cost of a mortgage, isn’t it? We can say it is only a 1% increase in rates, but is actually a 20% increase in the cost of your housing payment. Something to keep in mind is that a rate increase has the effect of reducing the price of a home a buyer could afford. But there is still more positive news for the real estate market. First of all, the first time home buyers credit of up to $8000 is still available for contracts written by April 30, 2010 and closed by June 30, 2010. Also, the other home buyer credit of $6500 is also available under the same time guidelines (more about that in a separate article). Second, there is plenty of quality, well priced homes available for sale, and in my opinion, the asking prices for homes to a great extent is more in line with the market expectations at this time. Maybe I see the glass half full, but I do expect more positive real estate news being disseminated in the coming months; at least in our area.

As we can see, the average sales price in some areas differ from year to year. Although I did not drill through the numbers, my opinion is that there have not been as many expensive homes that have sold. With the availability of the tax credit in 2009, many buyers took advantage of that, and in many cases, we had a higher number of those homes selling in 2009. Also, we did not escape the foreclosure and short sale experience in the area, but the impact was substantially smaller than in other areas of the country. No one likes to see those types of transaction, but unfortunately that is the world we live in right now and those transactions will have some impact on our market going forward.

Lastly, VA and FHA loans are having a bigger impact on the market, partially due to the credit crisis and also because of the changing lending environment we are experiencing. The percentage of those loans went from 22% in 2008 to 36% in 2009. These are still quality loan products and they do not have the negative connotation from previous years. If you would like more specific information on any area, please contact me at 717-579-2879 or email at Don@DonRoth.com. And if you would like to search available homes for sale please go to www.DonRoth.com and click on the search button. Again, wishing you all a Happy and Prosperous New Year.