Real Estate Information Archive

On Wednesday, the Federal Reserve released the long-awaited minutes of the latest meeting of the Fed governors. The minutes revealed what we expected they would reveal: The Fed will wrap up quantitative easing next month, so it will cease new purchases of Treasury notes and bonds and mortgage-backed securities (MBS). (The Fed will maintain its existing policy of reinvesting principal payments in MBS and rolling over existing Treasury debt.)

The minutes also revealed that the Fed intends to wait "a considerable time" before raising the influential federal funds rate (the rate banks lend to each other). The idea is that the Fed wants interest rates to remain low until “structural” issues related to the job market are rectified. In other words, the Fed would like to see more job growth in better-paying jobs before raising the federal funds rate.

If maintaining the low rates that materialized in the past month is what the Fed wanted, that's not what it got. After we learned the federal funds rates (which is at zero) is unlikely to rise until next year, the rate on the influential 10-year Treasury note rose nearly 10 basis points. Mortgage rates, unsurprisingly, also moved higher. In short, rates on the longer end of the yield curve rose. We doubt this is what the Fed was anticipating.

We're not predicting a steady rise in long-term interest rates – including mortgage rates. But it's worth keeping in mind that even if the Fed wants something, there is no guarantee it will get it. Markets are powerful and unpredictable forces. Mortgage rates might hang low for another six months, or even another year, but there are no guarantees.

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.

A Case of Cognitive Dissonance?

Home builders are feeling as perky as they have in nearly a decade. Indeed, the National Home Builders Sentiment Index posted at 59 this month. That's a number last seen in 2005 when the housing market was in full-bore mode.

Of course, real estate markets are local markets, and some home builders are feeling more perky than others. Home builders in the South, Mid-West, and West are more optimistic than the national 59 reading would lead you to believe, while builders in the Northeast are feeling less optimistic, if not dour. (The Northeast reading posted at 44.)

Home builders when aggregated are obviously anticipating a brighter future, even if the immediate past offers scant reason to break out the bubbly.

Housing starts drooped 14.4% in August to an annualized rate of 956, 000 units. The consensus estimate was for 1.03 million units. The mitigating takeaway was that most of the droop was seen in the volatile multifamily component, which fell 31.7% month over month. The more important single-family component was down a more modest 2.4%, which follows an 11.1% surge in July.

When we step back to view the big picture, we see housing starts are up 8% year over year. And if we step back even further and remove volatility by looking at the five-month moving average, we see a strong uptrend and significant improvement over the past five years.

The long-term trend in housing starts is good news for the economy in full. So many ancillary businesses are dependent on starts – home improvement companies, finance providers, commodity producers, retail merchants, and on and on. The uptrend in starts is nothing but a positive that is worth highlighting because of its importance to overall economic health.

Now, we'd like to see an uptrend established in mortgage purchase activity.

CoreLogic reports that cash sales have dropped to 33% of total home sales, down from 36.3% a year ago. To be sure, a large percentage of the drop is the result of fewer REO sales and short sales – many of which were cash transactions. Prior to the bursting of the housing bubble, 25% of sales were cash transactions. So, we expect a further reduction in cash transactions in the future. Therefore, to keep sales volume growing, mortgage financing will need to play a bigger role.

On that front, the Mortgage Bankers Association purchase index rose 5% last week. Could this be the beginning of a positive financing trend? We hope so, but we're not holding our breath. We've been disappointed too many times in the past to do that.

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 you’ve ever longed for the futuristic closet in Clueless – or just dreamed of easily locating your shoes before work – look no further than your smart phone! While we can’t promise the supercharged conveyor-belt in Cher’s closet, we can set you up with a virtual way to manage your wardrobe like a boss. That way, you’ll stay organized, keep track of what you own and always be able to find that missing saddleback shoe.

Here are five of our favorite closet-organization apps:

Stylitics
iPhone, Android (free)

If you’re interested in coordinating your closet by color, style or pattern, this app makes that easy. Stylitics basically takes the thought out of getting dressed (which can help make mornings less stressful). This app sends push notifications or “style alerts” giving you trend and weather updates. Bonus: Make sure you check out the outfit suggestion feature! Because the app keeps track of when a piece of clothing was last worn, it can actually suggests outfits for you based off how often you wear certain items.

Good Housekeeping @Home

Android, iOS (free)

If you’re looking to free up some room in your closet, this app is for you. Created by Good Housekeeping magazine, this app includes step-by-step guides to help you clear clutter and advice on staying organized.

BrightNest

iPhone, Android (free)

BrightNest is more than a site full of helpful advice and how-tos. It’s also an app where you have the ability to save, favorite and schedule tasks (like organizing your closet!). Download the free app for easy guides on topics like de-cluttering your wardrobe, storing seasonal clothes and donating unwanted items.

Closet

iPhone (free)

Pick out an outfit or plan your vacation wardrobe without getting out of bed with this brand-new app! With Closet, you can organize your clothes into categories (like winter, spring or dry-clean only), tag pieces as favorites, track how often you wear certain pieces and even estimate a cost-per-wear of each item.  Our favorite part? You can create multiple closets in the same account, so you can keep the whole house organized!

StyleBook

iOS ($3.99)

This app is closet organizer, wardrobe planner, packing list and inspiration library rolled into one. While StyleBook boasts over 90 features, we think its most valuable feature (MVF?) is the personalized Style Stats. You can see what pieces you wear the most and least, so when it’s time to audit your closet, you’ll know what items you should toss or donate.

When pundits discuss mortgage financing, they frequently tout the money saved in interest when paying cash. But is that worth touting?

Let's say we have two home buyers: each has $100,000 and each buys a $100,000 home. One pays cash; the other puts $10,000 down and finances the remaining $90,000 with a 30-year fixed-rate mortgage at 4.25%. Both stay put, and 30 years later the 30-year mortgage is paid in full. Over the 30 years, the cash buyer obviously incurred no interest charges. The financed buyer, on the other hand, pays over $69,300 in interest over the life of the loan.

It appears the cash buyer comes out ahead, but does he?

Keep in mind that the cash buyer did not have use of the $90,000 like the financed buyer did. Let's say the financed buyer took his $90,000 and bought 5,000 shares – $18 a share – of a real estate investment trust (REIT) that pays $0.125 in dividends each month. We'll assume there is no dividend increases (which would be unlikely in the real world).

Each month, the REIT pays the financed buyer $625 in dividends. In a year, the REIT owner collects $7,500 in dividend income. Over 30 years, the REIT owner will collect $225,000 in dividend income.

In other words, opportunity costs must be factored into the equation. By financing his home with a low-rate loan, the intelligent investor/home buyer was able to use his money to buy a cash-generating investment that far exceeded his interest payments.

This example shows that opportunities and opportunity costs must always be factored into a financial equation. When this occurs, the cheaper option can frequently be shown to be the less financially profitable option.

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.

Calm Before the Storm

Summer isn't officially over, but once Labor Day passes, for all practical purposes it is for most of us.

Now that we are back to work with no sight of a respite in the immediate future, we expect market activity to pick up. It's worth noting mortgage market activity (buying and selling of mortgage-backed securities) has picked up, and rates have become a bit bouncy over the past couple days.

Trader activity has surely picked up. To wit: Stocks rallied and bonds sold off on speculation that Russia and Ukraine might hash out a ceasefire. The headline was pure manna from heaven for bond and stock traders, who were given a reason to buy stocks and sell bonds.

But once the euphoria passed, stocks sold off and bond yields rallied.

The fact is that we remain in a fundamentally low-inflation environment, which is why interest rates in general, and mortgage rates in particular, continue to trade at 2014 lows. At the same time, and somewhat paradoxically, the economy appears to be growing at a brisk pace – one that has been creating 200,000-or-more new jobs per month for most of the year. We say “paradoxically” because when economic growth and job growth take flight, so, too, do interest rates. But not this time around.

That said, we expect interest-rate volatility to pick up. We say that because the languid days of summer are over, and that means more people are watching the market and offering their opinion – either through spoken or written words or direct buying and selling.

Nevertheless, we don't think we'll see a trend toward higher interest rates to materialize this year. Mortgage rates might be more volatile, but they'll likely be more volatile within this low range.

Going forward, the Federal Reserve will remain key. We expect rates won't ratchet higher with any fortitude until the Fed decides to raise the influential federal funds rate – the rate banks lend short-term to each other. When that occurs, rates will likely begin to take flight.

But we prognosticate with one caveat: Don't discount the ability of a strong jobs report or unexpectedly stout gross domestic product numbers to get mortgage rates moving higher. What has worked in the past may not be working at the present, but that doesn't mean it won't work again in the future.

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.

These days, "hipster" or "up-and-coming" neighborhoods are basically buzzwords for a good investment, but there can be another side to the story. We asked one woman to share her tale. Her identity, the neighborhood and the city she bought in are left out of the story to respect her privacy and the privacy of the neighborhood residents. 

“You’re going to love this neighborhood. It’s really up and coming!”

You know how they say “if it’s too good to be true, it probably is?” Well, I learned that hard way when I bought a house in a neighborhood with uncertain prospects.

I did love the house, but I knew for sure I’d never set foot in that neighborhood before. That should have been my first warning sign.

From there, things just went too smoothly. I easily got the financing. I looked at a map and realized this house in the “up-and-coming neighborhood” bordered a section of town I loved and knew well. And the price was unbeatable.

So, I moved in.  What I didn’t realize at the time was that I was essentially gambling with my home equity. If the neighborhood didn’t improve, neither would the value of my home.

My realtor made a lot of claims. “A florist!” “A coffee shop!” “Health care across the street!” “A new gym!” Her insiders had told her all these things were in the works, and if I moved in now, I could be the lucky investor in a newly refurbished neighborhood.

As you may have guessed by now, this isn’t exactly how it turned out.

The six years I spent in that house were actually pretty good. I loved the layout of the house and the fact that I could see the city skyline out the kitchen windows. Eventually, I got to know a few of my neighbors and even count them as friends. There were spots in this “up-and-coming” location that I did grow to enjoy, but they were all things that were already there before I bought the house.

The awesome shops that the realtor said were “just about to go up” never went up. The gym never opened its doors. And the clinic we were told bought the land across the street never closed on the property. Oh, and the coffee… I had to bike two miles to the closest one.

So while I was up in the neighborhood, nothing was definitely coming anytime soon. When I needed to move, I realized I gambled with this home and lost. I was easily $20,000 under water and prices in my neighborhood had gone down since I moved in, despite the fact that I had spent thousands on improving the place while I was there.

Blame the recession. Blame tough financing for new construction or the city council. It doesn’t really matter. Ultimately, I blame myself. I bought the house because I thought I was investing in a neighborhood that was about to be my dream “place” in my city of choice. I bought into a dream that was never going to happen.

It’s fun to dream of living in the perfect neighborhood before anyone else. It’s even better to imagine the payday you may get from selling a home in said neighborhood. But beware of rhetoric. Most awesome neighborhoods don’t happen in a year or two. It takes decades for that kind of cultural evolution. Next time, I’m buying a house in the neighborhood I love instead of waiting for the fantasy to come true.

I’ll do the following things before signing on the bottom line. Lessons learned:

1. I wish I’d had more frank conversations with my realtor about the likelihood of these new establishments. I didn’t question the “insider information” at all. I wish I pushed my realtor a little more to find out exactly who these sources were and how likely the change would be.

2. If I were to do it again, I’d think more about the neighborhood as it is today rather than how it may be in five years. If I knew the neighborhood wouldn’t change, I probably wouldn’t have moved in. Always weight your options and ask yourself, if the neighborhood didn’t change, would you be okay with it?

This is really quite extraordinary.

We have strong job growth, accelerating economic growth, the Federal Reserve withdrawing from the Treasury debt and mortgage-backed security markets, and yet mortgage rates continue to fall. Bankrate.com's latest survey shows that the national average on the 30-year fixed-rate mortgage is as low as it has been in the past year. Freddie Mac's survey shows the 30-year loan at a similar low.

We have to confess that we've been wrong on the direction of interest rates this year. But we've been right on the variables that should have lead to higher interest rates: more job growth, more economic growth, less Federal Reserve support. When these variables are factored in, interest rates are supposed to trend higher. Turmoil in Russia and Ukraine could be serving as a counterweight, but these events alone shouldn't keep rates in check.

Low consumer-price inflation – here and in most of the developed world – is likely the overriding variable. Here in the States, we have the potential for an inflation surge, but most of the developed world doesn't. Economies are so intertwined these days that low inflation and low growth in less robust economies could very well be holding inflation in check in the United States.

As for how low mortgage rates can go? We didn't think we had snowballs chance in summer of discussing 4% on the 30-year loan deep into August. But now sub-4% on the 30-year loan is entirely plausible.

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 News Gets Only Better for Housing

Everything is coalescing nicely for a sustainable uptrend.

Last week, we reported that new-home starts and home-builder confidence continued to gain momentum. This week, new-home sales gained momentum, though it might not seem so on first blush. New-home sales for July came in at 412,000 units on an annualized rate. This was slightly below expectations, but sales for June and May were revised higher by a total of 28,000 units. The market is still trending in the right direction.

Lack of inventory has hampered new-home sales over the past year, but that should be less of an issue moving forward. Starts have ramped up, and that's reflected in more inventory. Supply of new homes increased to 205,000 units compared to 197,000 in June, which pulls up the monthly supply to six months at the current sales rate.

Moderating price appreciation will also help sales. The median price of a new home fell 3.7% to $269,800 in July. Year over year, the median price is up only 2.9%.

That year-over-year price gains are slowing is no surprise. The S&P/Case-Shiller Home Price Index has been reporting slower year-over-year gains in recent months. For the latest month, June, Case-Shiller shows the year-over-year increase for its 20-city index slowed to 8.1% versus 9.3% for May. Month over month, prices actually decreased in 13 of the cities Case-Shiller follows.

Slowing price appreciation will bring both new supply to market and increased buyer interest. The former will be less motivated to hold for a higher price; the latter will be motivated to buy into a more stable pricing market.

Existing-home sales are expected to improve in coming months. The Pending Home Sales Index posted a strong 3.3% increase in July. The monthly gain easily exceeded top-end expectation, and points to rising sales through 2014.

We see nothing but better days ahead.

Next Friday, another monthly jobs report will be issued. So far the economy has racked up six-consecutive months of 200,00+ monthly payroll increases. We expected a seventh month when the report for August is released. The consensus estimate is for 223,000 new jobs for the month. We would not be surprised to see more.

Job creation should continue at a brisk pace because the economy is almost certainly on the mend. Gross Domestic Product (GDP) growth was revised this week to 4.2% for the second quarter, up from the original estimate of 4.0%. All signs point to GDP growth maintaining this pace through the third and fourth quarters.

Now all we need is purchase-mortgage activity to trend higher. Perhaps a trend is in the works: Purchase activity was up 3% for the Aug. 22 week.

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.

First things first: We LUV pets. But, it’s not really a secret that owning one can be expensive. Monthly bags of food, unexpected vet bills, new toys and boarding costs add up quickly – but that’s only part of the price of pet ownership.

It turns out the estimated value of your home can plummet (potentially to the tune of $30,000!) when a potential buyer finds out the home was shared with a pet.

Why? Sometimes, pets stink. And they scratch. And they pee on stuff.

Here are three pet-related issues to watch out for if you want to retain your home’s pre-pet value:

Scratches, Scratches Everywhere

Scratches from pets aren’t limited to hardwood floors – although they should definitely get some attention.  Other commonly scratched spots include doors, windowsills, window screens, wall molding, cabinets, porches … and pretty much anything else your pet can get their claws on.

Even a well-trained pet gets bored, and boredom leads to scratching, which leads to reduced home values. To fight the problem before it starts, make sure your pet gets plenty of exercise and has toys and treats to occupy their time while you’re away. We recommend checking out BarkBox for a constant supply of new, awesome toys.

Or, if your pet really needs some extra supervision, look into a doggie daycare or pet-sitter while you’re away. The upfront cost of daycare (about $25 a day) isn’t exactly cheap, but it can help you recoup serious cash when you’re ready to sell your home. 

Lingering Odors

This is a biggy. An accident here, a litter box there, and your home never smells the same. And one whiff of a bad odor is really difficult to recover from when trying to sell your home.

You know how they say love is blind? Pet smells work like that, too. The issue here is that many homeowners get used to the smells associated with having a live-in pet, so it’s commonly overlooked. Don’t do that! Instead, take the time to deep clean any mess that happens and use these stink-fighting tricks when an appraiser or potential buyer is visiting your home. Tip: Ask an honest friend to rate your home’s stink from 0 – 10. If it’s anything over a 3, you may want to consider hiring a professional to handle the smell.

Ugly Yard = Bad First Impression

Let’s be straightforward: Poop and pee kills grass. Dogs love to dig holes, and to some animals, plants look delicious. All of these issues can make a once well-manicured lawn look messy. When you’re selling your home, curb appeal can make or break a deal, so pay attention to your lawn. Fix issues like dead grass from a favorite pee spot immediately. We’re not saying Lassie shouldn’t enjoy your lawn! Just clean up after her and keep the digging to a minimum.

From important checkups of major systems to repairing your front door, sometimes it can feel like your to-do list is more of a cash drain than anything else. Give your wallet a break and try these free ways to improve and maintain your home.

1. Inspect important areas of your home. Regularly inspecting parts of your home that are prone to damage or infestation is one of the easiest ways to prevent expensive repairs. If it’s been awhile, start with your attic and your basement.

2. Relocate a spare dresser. Is there a dresser in your guest bedroom that’s never been used? Move it into your kitchen or dining room! Spare dressers are perfect for storing things like plates and cookware, plus it’s a great opportunity to freshen up a room.
3. Block drafts. A leaky door might not seem like a big deal, but drafts can consume up to 30 percent of your home’s energy usage. For a quick, no-cost solution, roll up an old bath towel and place it at the base of drafty doors or windows. (For a more permanent fix, reach into your wallet and purchase a $4 tube of caulk.)
    
4. Go minimalist. Nothing costs less than getting rid of stuff. If you’re feeling industrious, you could even try to sell unused items on Ebay or at an old-fashioned garage sale. If you’re not sure where to start, brush up on the minimalist lifestyle with these tips: Save Money and Space: Furniture You Don’t Really Need.
    
5. Clean your dryer ducts. This is an important, free task that a lot of people forget! Dryer lint can ignite if it’s allowed to build up in the exhaust duct. Clean your dryer ducts twice a year to prevent this fire hazard.
    
6. Test for hard water. It’s harmless to drink, but hard water (which contains high levels of minerals like calcium and magnesium) can damage your boiler and clog your pipes. Those issues can be expensive to repair – like, $10,000 expensive – but testing for hard water is free! All you need is a plastic water bottle and a little bit of dish soap.