Real Estate Information Archive

Nothing exists in a vacuum. All markets are interconnected to some degree.

Last week, we discussed stocks and housing. Which is the preferable asset? The reality is that the two are not mutually exclusive. It's not an “either/or” scenario. What's more, one can influence the other, and frequently does. Stock market losses can lead to decreased housing demand, or to increased housing demand. Housing can have the same impact on stock prices.

We saw falling home prices lead to falling stock prices in 2008. When housing values plummeted, so did stock prices. Through late 2007 to early 2009, the S&P 500 stock market index lost more than half its value. Interestingly, though, when stock values sank after the bursting of the Internet bubble in 2000, home prices, on average, rose.

Stocks have been on a strong run since early 2009. The S&P 500 has nearly tripled in price. This has no doubt produced a “wealth effect” that has helped the housing recovery. When people feel wealthier – as they do when they see the value of their investments rise – they are more willing to spend. This includes spending on housing.

That said, the stock market is on a six-year bull run. That's long as bull runs are concerned. Therefore, we would not be surprised to see a retreat in stock prices in 2015.

If stock prices retreat, could this lead to falling home prices? Or could it lead to rising home prices?

If stock prices were to retreat, we think the latter scenario – continued rising housing prices – is more likely. We say that because homes are much more reasonably priced today compared to 10 years ago. That said, it will be worthwhile to keep an eye on the stock and housing markets in 2015.

Information provided by 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.

Easing Into 2015

We like where home price are headed. That is, they are easing. They have assumed a more steady and sustainable rate of growth.

Recent price data from Black Knight supports our contention. Black Knight follows completed transactions in more than 18,500 U.S. ZIP codes. For October, prices were up 0.1%, on average. Year over year, they were up 4.5%. This is much closer to historical growth rates.

Mortgage lending rates are also easing into 2015. The 30-year fixed-rate loan is still regularly quoted below 4%, which is no surprise. The yield on the benchmark 10-year U.S. Treasury note hovers around 2.2%. This is nearly 100 basis points less than where it was a year ago. The 10-year note is showing no inclination to move higher. Mortgage rates are also showing no inclination to move higher.

Unfortunately, homes sales are easing into 2015 at too languid a pace.

In November, existing homes sales sank 6.1% to 4.93 million units at an annualized rate. The number of units sold on a monthly basis has yet to pick up pace. We are still at the same annualized rate we were at this time last year.

As for new home sales, they too, are easing into 2015. November new home sales were down 1.6% in November, to an annualized rate of 428,000 units. As with existing home sales, the sales pace is on par with where we were a year ago. 

Home sales had been showing some life going into the fourth quarter, but the readings on November have been a disappointment. We were expecting better.

That said, we still like the longer-term outlook on both housing and mortgage financing. Yes, sales are flat, but the continued gains in economic growth and employment will prove salutary. (This is a theme we've pounded on frequently over the past six months.) Gears will eventually mesh and sales will move higher.

Financing available to a wider swath of the population will help. Lending – mortgage and consumer – is heading in the right direction. Lenders are more willing to make loans, and consumers are more willing to take them. That's a sign of growing confidence in the economy.

We were one of the few voices promoting housing and mortgage lending in the dire days of 2009. We were proven correct: Housing indeed recovered.

These aren't dire days by any stretch of the imagination, though sometimes they are frustrating days. The good news is that housing is as poised as it has been in years to lead the economy forward. The funk will be broken.

Information provided by 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.

If your New Year’s resolution has been “get fit” for the last five years, it may be time to pass on the gym membership in 2014 and spend your energy going green, instead! You don’t have to grow dreadlocks or start a granola-only hippie diet to reap the benefits of a green lifestyle. Here are a five easy ways to be eco-friendly in 2015:

Make Your Own Non-Toxic Dish Soap
Store-bought dish soaps are expensive and many of them contain toxic chemicals like ammonia. In fact, the leading cause of poisonings in the home for children under the age of six is liquid dish soap. Protect your family and your wallet by home brewing your suds!

Make All-Natural Air Fresheners
If you’re using store-bought aerosol fresheners to cover up nasty smells, you may also be spreading two toxic chemicals around your house: benzene and formaldehyde.  Both of these chemicals are harmful to humans and animals, and can cause problems such as eye irritation, respiratory trouble and – at higher exposure levels – more serious conditions like cancer. Fortunately, all you need are a few kitchen staples to replace those aerosol cans.

Reduce Waste
Waste means more than the bag of trash sitting by the back door. By paying attention to water and energy usage, you’ll do a solid for the environment and for your wallet.

Reuse and Recycle
You probably know that recycling is an easy way to go green, but did you know that it can help you save some money, too? These five tricks will help you conserve cash and help the environment along the way, so it’s a win/win. 

Switch To CFLs
They’re bright, stylish and will save you money! Yes, CFLs have a slightly higher purchase price, but they only use one-fifth of the power and last up to ten times longer than your current light bulbs. Plus, these new bulbs give you design options that don’t exist with standard light bulbs.

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.

Actually, Things Aren't All That Loose

Last week, we mentioned that Fannie Mae and Freddie Mac introduced a new program to buy mortgage loans with down payments as low as 3%. For borrowers to qualify for 3% down they'd need a FICO score of at least 620. They'd also have to prove their income, assets and job status, and purchase private mortgage insurance. Of course, this is all within the norm.

Fannie and Freddie's new mortgage program inspired a spurt of head shaking and finger wagging from media outlets : Could low down payments lead to another housing boom and bust? Could another mortgage bubble form?

We don't see booms and busts or bubbles in our future. For one, housing sales and purchase mortgage financing is still muted from a historical perspective. Lending standards are still high, and you can argue still too high. (Fed Chair Yellen stated that she was surprised that the housing recovery has not been more robust and indicated that it is because of tight credit markets.) This is reflected in the dearth of first-time home buyers. The NAR reports that first-time home buyers account for just 33% of all home purchases. That's the lowest level in 27 years.

Given the strength in employment and the economy, there is no reason for lenders not to reach out on the risk curve. There is also no reason for regulators to dissuade lenders from not extending credit to riskier buyers – if intelligently done.

Most of us vividly remember what occurred in 2008 and 2009, so everyone is sensitive to market disconnects. Are lending standards too loose? Not by a long shot. The benefits of easing credit standards far outweigh the risk of another bubble at this point in the recovery.

Information provided by 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.

Sentiment Up, Starts Flat, Rates Fall

Home builders remain upbeat. The National Association of Home Builders Sentiment Index posted at 57 for December. This is a point lower than the 58 reading posted in November, but is still the sixth-consecutive reading above 50. (A posting above 50 indicates more optimism and less pessimism.)

Home builders appear to be viewing the market farther afield. For the here and now, the data are not particularly encouraging. Housing starts posted at 1.028 million units on an annualized rate for November. This is in line with expectations, but the pace of starts is off 7% compared to this time last year.

Strength in starts was found in the volatile multi-family component, which was up 6.7%. Unfortunately, the more-important single-family component was down 5.4%. Looking to the future, housing permits were down 5.2%.

In recent months, housing numbers have oscillated perceptibly. October was relatively good but November was not. When we take a longer-term perspective – over the past six months – we see housing growth that has been flat to moderately positive.

Given where mortgage rates have trended lately, we could see housing activity begin to trend more positively. Rates have been dropping for the past six weeks, and are now down to levels last seen 18 months. Bankrate's survey, which tends to lean toward the high side, showed the 30-year fixed-rate mortgage averaged 3.94% over the past week. Freddie Mac's survey showed the 30-year loan averaged 3.8%.

Moreover, it doesn't appear rates will be heading for higher ground in the near future. In the minutes from the latest meeting of Federal Reserve governors, Chair Janet Yellen indicated that language switch to "patience" from "considerable time" on the federal funds rates does not indicate a change in Fed policy.

In other words, the Fed has no intentions to raise interest rates in the near future. Many market watchers don't think anything will change on the rate front until the second half of 2015. Inflation remains low, and is unlikely to move higher given the drop in energy prices. And despite a strengthening economy, there are still enough lagging sectors to keep rates low.

Our New Year's predictions on home prices, the economy, and job growth have turned out as we expected. As for mortgage rates, we were off base. This time last year we were expecting 5% on the 30-year loan by this time. As things stand now, we see nothing to move rates higher any time soon.

Information provided by 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.

2014 has seen significant improvement in housing. We think there is plenty of room for housing to move higher when the market is viewed from a historical perspective.

Private real estate investment, for one, is still at levels that existed a decade ago. The same is true of household real estate value as a percent of GDP and mortgage debt as percent of GDP. The market is running sub-optimally. That means there is still plenty of upside to capture.

It's also worth remembering that we are a growing country. There are more people than a decade ago. Our population increases year over year. Millenials in particular are a fertile source of pent-up housing demand. Contrary to many accounts , young people still want to buy a home. With the job outlook continually improving, many more of them will.

What's more, a rising tide will lift all ships. We expect to see more activity in all segments of the market. We expect not only to see more people enter the market, but we expect to see more buying and selling within the different price segments.

In short, we look forward to 2015, and we would not be surprised if it turns out to be one of the best years for sales and lending that we've seen in over a decade.

Information provided by 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.

The Strong Get Stronger

The jobs keep coming. Better yet, they keep coming at a faster pace.

Job growth was much stronger than nearly everyone expected in November. Payrolls for the month jumped 321,000 . At the same time, job numbers for October and September were revised up by 44,000. More of us are not only working, but we are earning more doing so. Average hourly earnings spiked 0.4% in November after edging up 0.1% in October.

At the beginning of the year, we said 200,000-or-more monthly job growth was key to a sustained recover. Job growth for the year has exceeded our expectations. All but one month reported over 200,000 in new jobs, while two months posted over 300,000 new jobs.

Job growth and economic growth go hand-in-hand. On the latter, many economists have ratcheted up their gross domestic product (GDP) growth expectations.

The U.S. Commerce Department believes final GDP growth will post at 4.6% at an annual rate for the third quarter, up from 3.6%. The economists at JPMorgan Chase see GDP growth posting at 4.4%, up from 4.3%. Barclays upped its final estimate to 4.2% from 4.1%. Annualized GDP growth above 4% is considered strong.

The growth we're seeing in the waning months of 2014 certainly gives us reason to anticipate 2015. Indeed, we expect 2015 to be a breakout year for housing. In addition to continued economic growth, home prices will continue to rise, though at a rate that will likely revert to historical norms. This is good news because it means market expectations will be better calibrated with market reality.

When it comes to lending reality, we're seeing a sustained pick up in purchase-mortgage activity. Last week, the Mortgage Bankers Association's weekly survey showed purchase applications were up again. Over the past two months, purchase applications have trended generally higher.

We expect purchase activity to continue to trend positively. With growth comes more willingness to lend. Lenders and regulations naturally become more willing to reach further out on the risk curve, thus creating a larger pool of potential buyers. (To wit: Fannie Mae and Freddie Mac recently introduced new programs that allow borrowers to put only 3% down for a mortgage.)

This market is extraordinary in that we have strong economic growth coupled with low interest rates. Despite last week's strong jobs report, mortgage rates have actually drifted lower. The 30-year fixed-rate mortgage is still regularly quoted below 4%.

With that said, we shouldn't expect mortgage rates to remain at these levels if growth continues to steam ahead at the current rate. One day the Federal Reserve will move to lift interest rates. Growth sustained at the current rate means that day will come sooner than later.

Information provided by 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.

If your idea of decking the halls includes a live evergreen heavy with lights and tinsel, you’re not alone. In fact, over 29 million households are getting a real tree this year to adorn their living rooms and twinkle through their front windows. Keep your perfect tannenbaum alive (with its needles intact) by following these easy steps:

Inspect the Needles
When you’re at the nursery picking out your tree, inspect the needles – they should feel flexible, not dry and brittle.

Trim Your Tree
Before you put your tree in its stand, cut off the bottom inch of the trunk to provide a fresh surface for water uptake.

Water the Tree
As soon as possible, get the tree in water. The base of the tree should never dry out, so make sure your water bowl doesn't become empty! A basic rule of thumb is that a typical tree will absorb a quart of water each day for every inch of trunk diameter.

Give 'Em Something Sweet
This is up for debate, but some people swear by adding sugar, aspirin or corn syrup to their tree’s water. While there is no scientific data backing these substances, we say don’t knock it ‘til you try it. If sugar has worked for you in the past, keep on adding the sweet stuff!

Block the Sun
Keep your tree away from direct sunlight, heaters and fans because these things will speed up the drying-out process.

Keep It Humid
If you have a humidifier in your house, put it in the tree-room. It will help keep the needles fresher long, as well as reduce the risk of fire.

If all of this seems like too much work, opt for a potted tree instead. You can find them at your local nursery. Bonus: Instead of slowly dying in your living room, potted trees can be donated to the parks department or replanted in your yard come January!

Information courtesy of BrightNest.com.

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.

WHY DO THIS?

Taking steps to conserve energy can cut your electricity bill by as much as $600 a year. Don't believe it? Up to 30 percent of a home's energy usage can be lost by drafts alone! Do a home energy audit to pinpoint the best ways to reduce your utility bills this winter.

How To:

1. Stop drafts. Fix the drafts under your doors and windows. For a quick fix, place a rolled bath towel under drafty doors and on windowsills. You can also purchase a door draft stopper for around $5.

2. Reverse your fans. Many ceiling units come with a switch to reverse the directions of the blades. Switching your blades to clockwise will help circulate warm air pooled near the ceiling back into the living space. This small change can cut your heating cost as much as 10 percent.

3. Turn down your water heater. Set your hot water heater to 120 degrees F. Water heaters are usually unnecessarily set to 140 degrees F by installers. Lowering the temperature would reduce your water heating costs by anywhere from 6 to 10 percent.

4. Lower the heat when you leave. Don’t forget to turn down your heat when you're not home! For every degree you lower the thermostat during heating season, you'll save between 1 and 3 percent on your utility bills. If you’re the forgetful type, consider investing in a programmable thermostat! They are widely available for as little as $50. Note: If you have a heat pump system, it's best to leave your thermostat at a set temperature. Moving the thermostat temperature up one degree can actually cause the system to waste more energy.

5. Install window plastic. You can find window plastic at your local hardware store and if it’s properly installed, it’s essentially invisible. The plastic will help to add a buffer against drafts and improve your home’s ability to hold heat.

Information courtesy of BrightNest.com.

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 economy continues to hum along. What's more, it continues to hum along at a higher pitch than most economists had expected. Gross Domestic Product (GDP) – the value of all goods and services – was revised up to an annual growth rate of 3.9% in the third quarter. The consensus estimate called for GDP to be revised to show 3.2% growth.

Within the GDP data, the trends in private investment were particularly encouraging. Both nonresidential fixed investment and residential fixed investment ratcheted higher. This is good news because more investment today leads to more consumer spending tomorrow.

We're not particularly surprised that economic growth is picking up. After all, the economy has been producing new jobs at the rate of 200,000+ per month for most of 2014.

On the other hand, interest rates are a surprise. When economic growth ratchets higher, so, too, do interest rates. This time around is different, though. Interest rates continue to remain subdued. The 10-year U.S. Treasury note continues to hover around 2.3%. This is the low-end of the range that has prevailed through 2014. At the same time, mortgage rates remain low. The 30-year fixed-rate mortgage continues to vibrate around 4%.

We have rising GDP growth coupled with low interest rates. What's more, growth should continue to rise, while rates should remain low. We say that because consumer-price inflation remains very subdued.

So, we have the best of both worlds – strong growth and low lending rates. This unique paradigm suggests housing should get off to a strong start in 2015.

Information provided by 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.