Harrisburg PA Mortgage Market Recap – April 2, 2014
What to Expect from Here on Out
One of our prognostications for 2014 was that there would be a considerable slowdown in home-price appreciation in more markets. Our rationale is predicated on the fact that double-digit annual price gains are simply unsustainable in perpetuity.
Perhaps our prognostication is coming to fruition.
The closely followed S&P/Case-Shiller Home Price Index showed prices were up in January in the 20 metropolitan regions it follows. On a seasonally adjusted basis, sales were up an impressive 0.8% for the month. But when we look at the unadjusted index we find prices were down 0.01%, posting a third-consecutive monthly drop.
Both measures have merit: The unadjusted numbers better captured the market drama that occurred a few years ago. With the market becoming more normalized, the seasonally adjusted numbers probably better reflect reality. It's worth noting, though, that both the adjusted and unadjusted numbers were down year over year in January. This suggests that price gains are slowing in more markets across the country.
This isn't a bad thing. Since the housing-market meltdown of 2008 and 2009, we've anticipated returning to historical norms of 2%-to-4% annual price gains. Detractors might posit that prices are still significantly below the 2005-2006 market peaks, so we should continue to welcome more double-digit annual price increases.
To be sure, they've got a point, but that era hardly reflected the norm. What's more, few of us would want to risk another bubble. Slow and steady usually wins the race.
Recent monthly home-sales data have surely been slow, and not very steady. New-home sales for February come in at 440,000 units on an annualized rate, which lagged the consensus estimate by 10,000. The positive takeaway is that inventory increased to a 5.2-months supply at the current sales pace, a 0.2% increase from January. Prices also held steady, with the median national price posting at $261,800.
Of course, new-home sales are a small part of the overall market. Our bread is buttered selling and financing existing homes. On that front, the pending home sales index took another hit – its eighth consecutive one – falling 10.2% year over year.
Nevertheless, we remain optimistic. Most of the data we report tells us where we've been, not where we're going. It's common knowledge that atypically cold, snowy weather has kept many buyers and sellers on the sideline over the past few months. We're encouraged that the overall economy grew, nonetheless. Final real gross domestic product (GDP ) growth for the fourth quarter was revised up slightly to an annualized 2.6% rate from the second estimate of 2.4%.
If we get another strong jobs report for March (which will be reported April 4) like in February, which we expect, home sales in more local markets should rise noticeably into the spring and summer selling seasons.
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.
