Real Estate Information Archive

The payroll numbers were another disappointment last week. This is bad news. Sluggish job growth, more than anything, will derail housing. We've noted numerous times that rising interest rates aren't a big concern. That is, they're not a big concern with a caveat: Rising interest rates must be accompanied by rising job growth.

Unfortunately, this hasn't been the case. Mortgage rates are up 30% this year while job growth has stagnated.

The fact young adults between the ages 25 and 34 are still struggling is particularly discouraging. Only 74.8% of young adults are working, which is far below normal. During the 2008-2009 recession, between 73% and 74% of young adults were employed. In other words, young adults haven't made much progress – in both the job and housing markets.

This isn't to say we're concerned or have turned bearish on housing. We remain housing bulls, but we'd be a little more bullish if the economy were growing to enable more people to get into the market and to service a higher mortgage rate.

 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.

Are We Still Trending in the Right Direction?

The answer to the above question depends on what trend is being referred to.

When referring to mortgage rates, many market pundits will tell you that we've been trending in the wrong direction. After all, rates are up more than a full-percentage point since April. For the past 12-weeks, though, the rate on the 30-year loan has held steady. For the most part, it has bobbed about within a 25-basis-point range.

Rates have held in limbo, anticipating the Federal Reserve's next move. Fed officials meet next week, and credit markets expect to receive additional information on its plans for “tapering.” Opinion among Fed watchers is split: Some expect the Fed to announce a cutback on its Treasury notes and mortgage-backed securities (MBS) purchases. Others expect the Fed to continue purchasing these securities at the current rate of $85 billion a month.

Forced into a bet, we'd have to side with the Fed continuing buying Treasuries and MBS at the current rate. We say that because job growth is certainly not trending in the right direction.

Despite the unemployment rate dropping to 7.3% from 7.4%, businesses increased payrolls by only 169,000 in August. The number fell short of the consensus estimate for 175,000. The drop in unemployment was the result of lower labor participation: More people simply gave up seeking work.

Economic growth remains sluggish, as it has been for the past five years. Sluggish growth, in turn, points to the Fed maintaining its low-interest-rate policies.

That said, if we were to hedge our bet, we'd add that any tapering will be “very modest” at best. Modest tapering suggests to us that mortgage rates won't move materially higher.

As for home prices, we're seeing signs the trend is peaking.

A survey generated by John Burns Consulting shows far fewer homebuilders raised prices in August. Nearly half held steady, while 5% actually lowered prices – the largest percentage since March 2012.

We can't say we're surprised: We've seen some let-up in home-price growth in recent data from S&P/Case-Shiller, CoreLogic, and others. This suggests the days of double-digit year-over-year price gains is close to over (if not over already) in many markets.

This isn't a bad thing. We've said repeatedly that double-digit year-over-year price growth is unsustainable. A normal market is marked by 3%-to-5% annual price gains.

At the same time, slower price growth will draw more inventory into the market. More potential buyers, believing they've capture the lion's share of price appreciation, will be willing to list their homes.

So the verdict is split: Home prices are trending in the right direction. Given the current state of economic growth, mortgage rates are (or least have) trended in the wrong direction.

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.

Turning a cold basement into a cozy spot isn’t impossible! Even better, it can be done for far less than you’d pay for a full remodel.

Here’s how:  

1. Stop the Moisture

The biggest anti-cozy factor in most unfinished basements is moisture. Nobody likes that damp, wet sock smell, and you can’t put nice things down there if they’re just going to get wet. That means that before you do anything else, you need to handle the moisture issue. Sometimes this is as simple as purchasing a dehumidifier (about $200) and letting it rip.

If your moisture problems are more serious (i.e. leaks or puddles), you’ll need to employ a more aggressive basement waterproofing strategy. Note: A basic waterproofing will run you $200-$500, but if any changes need to be made to your foundation, it can cost $2,000 or more. 

2. Add Some Area Rugs

Now that your basement is moisture-free, you can cozy up that concrete floor. Area rugs are a cost-effective way to do just that. If you happen to have a few unused rugs, put them to good use  downstairs (an eclectic look totally works, so don’t be afraid to mix and match). Tip: No extra rugs? No problem. We recommend using Amazon’s handy rug finder to locate a size, pattern and price that works for you.

3. Throw Down Some Pillows

When in doubt, add throw pillows. Even a second-string sofa with feel cozy if it’s covered with soft cushions. We recommend choosing ones that are pretty big for some extra comfort. These 20x20 Isabella Ikat pillows might do the trick, or maybe these 24” Knit Fringed pillows are more your style? Tip: If you like the bohemian look, try arranging on a bunch of throw pillows on your new, awesome rug.

4. Add Tasteful Lighting

Nothing kills the mood faster than a bunch of naked bulbs hanging from the ceiling. Make them irrelevant by adding lamps, string lights or both. You can find a lot of nice floor lamps for less than $50, like this IKEA lamp for $20.

5. Hide Unsightly Spots

It’s going to be hard to make that water heater in the corner look chic, but it’ll be easy to hide that ugly beast. Simply hang up a colorful sheet or even a shower curtain in front of it! If you want to help separate out different areas of your basement in a tasteful fashion, try a room divider. Wine crates, bookshelves and window frames all make good, cheap room dividers.

6. Paint the Ceiling

Those pipes, joists and air ducts definitely take away from your cozy basement vibe. But if you paint everything a dark color – like a charcoal gray – you can go a long way towards disguising all the stuff going on up there. Plus, it’s a lot cheaper than covering your ceiling with drywall ($4,000 or more). Note: Doing this yourself is very labor intensive, since a lot of the painting may need to be done by hand. There may also be some special considerations for electrical wiring or heating pipes. Unless you’re an experience painter (or are up for a challenge) we recommend hiring a professional for this.

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.

The quick answer is that war is good for nothing, at least according to the 1969 Edwin Starr song. We won't argue that there are many “bads” associated with war and that the associated costs – both monetarily and in personal suffering – are very high.

But if the United States does go to war with (or simply strikes at) Syria, there is one upside – interest rates will very likely fall further. We say this because more investors will seek havens in U.S. Treasury notes and bonds and mortgage-backed securities. Demand for these securities will keep mortgage rates from rising, and will likely force them lower.

We're not saying we relish the thought of another military conflict, but it's important to deal in market reality. And the reality is that borrowers will likely see a reprieve in mortgage rates over the next week or two. But how long the reprieve lasts is anyone's guess. Therefore, we don't suggest waiting long to act.

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.

Slow, But Steady

Thanks to the long Labor Day weekend, the flow of housing and mortgage news was reduced to a trickle this week. That said, there were still a few news items worthy of mention.

Mortgage rates were one such item. They continued to ease this week, with the 30-year fixed-rate mortgage down roughly 10 basis points. This marked the second-consecutive week of noticeably lower rates, which, in turn, stimulated refinance activity.

It's no secret that refinances have plummeted this summer on rising interest rates. Should rates hold steady or continue to ease (no sure thing), we'd expect refinances to gain further ground. Our optimism is based on rising home-equity values, which are pulling more mortgage-indebted owners above water, thus enabling them to refinance their higher-rate loans.

Mortgage rates have easily dominated financial headlines over the past few months. Many market watchers have wondered aloud if rising rates will slowdown, if not derail, the housing recovery? (We wonder if we should still be calling it a recovery at this point?)

To be sure, there is reason for concern: Real estate firm Redfin reported in its Real-Time Homebuyer Survey that 63% of its respondents say rising rates are making it more difficult to buy a home.

We don't doubt that's true. But we think the main issue is still sluggish economic growth. We've frequently mentioned that rising interest rates wouldn't necessarily be bad if accompanied with higher economic growth (and job growth, in particular). If we go back a decade ago – when lending rates were 150-to-200 basis points higher than they are today – buying and financing activity was brisk. Not coincidentally, economic growth was also brisk.

Unfortunately, today we've got higher interest rates and economic growth still hasn't fully kicked in. This is another reason we remain unconvinced that Federal Reserve tapering of Treasury notes and bonds and mortgage-backed securities is imminent. Our skepticism suggests to us that mortgage rates are unlikely to move materially higher in the near term.

Another topic we've frequently hashed over is market composition. Specifically, the need for the housing market to be driven more by owner-occupied buyers instead of investor/landlords.

We have nothing against investors or landlords, but a normalized healthy housing market is driven by the owner-occupied buyer. We say that because communities composed mostly of owner-occupied buyers tend to be more stable and better maintained than communities of renters.

A new research paper from the University of North Carolina at Chapel Hill underscores our contention. In particular, the paper focuses on the adverse effects of “renter's disconnect,” which includes less property upkeep, fewer property improvements, and more aloofness with neighbors. None of these are conducive to rising property values.

The good news is we're seeing a return to a more normalized market: Despite talk of the United States becoming a nation of renters, surveys from Fannie Mae, Freddie Mac, and other sources point to a populace that overwhelming wants to own. That's good news that ensures housing will remain an important economic driver for years to come.

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.

Next time someone close to you buys a house, stand out from the “standard bottle-of-wine” crowd with one of these useful gifts. They’ll guarantee you barbecue invites for life.

Their favorite magazine (in subscription form). Some may call print magazines old school, but who doesn’t secretly appreciate any real, not-a-bill mail? Give your friends a positive reason to check their new mailbox with a magazine subscription. If you aren’t sure what they’d like, a home-related ‘zine is always a safe bet as a housewarming gift. Think Dwell or Better Homes and Gardens.

A “favorite things” jar. Wine and flowers are great, but sometimes all a new homeowner needs is a good cleaning product. Give them the gift of your favorite things – like cleaning products that you swear by – in a large jar like Julie at Coordinately Yours. They’ll be able to use the jar for decoration and organization and use the jar’s contents around the house. Bonus: This gift comes across as really personal and is usually a bargain (depending on the price of the “favorite” items you gift).

Address stamp. Even if the internet is your friend’s most frequent form of communication, they’ll have to address a letter or package eventually. Why not help them do it in style? Give them a stamp of their new address, so they’ll be ready to write their housewarming gift thank you cards. There are a ton of unique options on Etsy, so you can choose one that fits your homebuyer’s personality.

Handy toolkit. If this new home is a first home, chances are your friends don’t have the necessary tools to tackle every little issue. Step up to the plate and be the home-disaster hero by gifting a tool kit. We like this one from Stanley because it has just about everything under the sun (65 pieces!). Tip: If your friend or family member could use some help figuring out where they should use their tools, give them the BrightNest New Homeowner Guide, too.

Counter-top compost bin. Compost bins are better than a flower bouquet for three reasons: you want the contents to be dead, you can reuse everything inside and they help Mother Earth. A countertop compost bin works just as well as its backyard brethren and is an affordable gift at about $25 a pop.  If your friend is new to the compost scene, give them this list of 10 items to avoid composting and send them on their eco-friendly way.

Information courtesy of 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.

The word “taper” seems to be on everyone's lips these day. As we note above, the Federal Reserve holds the key to higher interest rates. Most market watchers are simply waiting for the Fed to cut back (or “taper”) its purchases of Treasury notes and bonds and mortgage-backed securities. The consensus belief is that when tapering begins, rates will rise.

That could be true. But then again, market's are anticipating entities. It's also possible that any interest-rate increases won't be very pronounced, because once tapering begins, its effects will already be built into lending rates.

The same market watchers are also speculating on how the Fed will tape: will it taper purchases of both Treasuries and mortgage-backed securities, or only taper Treasuries? If it tapers only Treasuries, it's possible that mortgage rates won't be effected, at least that's the prognosis we've heard.

We're not so sure that how tampering materializes matters, because Treasuries are benchmark instruments. The 10-year Treasury note, in particular, is very influential on the 30-year fixed-rate mortgage. As one goes, the other follows in lock-step.

The point we want to emphasis is that regardless of how the Fed tapers it will impact the mortgage market. Unfortunately, we simply don't know the magnitude of the impact.

   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.

The End of Rising Home Prices?

When recent data is vetted, the answer appears “no.” Home prices will continue to rise.

The latest data from S&P/Case-Shiller show prices increased 0.9% month over month in its 20-city index in June. Year over year, Case-Shiller shows prices are up 12%. Meanwhile, data from Lender Processing Services show home prices were up 1.2% for June, which translates to an 8.4% year-over-year gain.

We frequently refer to price data from a number of providers, and you might have noticed that the numbers are never the same. We'll use Phoenix as an example. The latest data from the major data sources show year-over-year home-price gains for Phoenix, but the numbers differ.

S&P/Case-Shiller           FHFA                CoreLogic         LPS                  FNC                  Zillow

19.8%                           21.2%               17.1%               16.6%               27.5%               22.0%

Time frame, geography measures, and data-gathering methodology are responsible for the differences: CoreLogic uses a three-month moving average. Case-Shiller's definition of a metropolitan is generally broader than the other data service providers' definition. Zillow excludes foreclosure resales, whereas LPS “reflects” price discounts for REO and short sales. FNC attempts to capture the “characteristics” of a home sale in its home price index.

The good news is that prices are up all the way around, no matter how they're measured.

That said, Case-Shiller's latest release did reveal incidences of slowing price appreciation. We're not terribly surprised; we've been saying double-digit annual price increases are unsustainable for the long haul. We wouldn't be surprised to see year-over-year home-price growth dip into the single digits by the end of the year.

That said, we don't believe home-price appreciation will be hindered by rising mortgage rates – as long as the economy improves. On that front, gross domestic product (GDP) growth was revised upward to a 2.5% annual rate for the second quarter. This is good news that points to stronger-than-expected growth for the third quarter. Strong GDP growth, in turn, frequently leads to stronger job growth.

Strong GDP growth will also lead to rising mortgage rates, which actually retreated this past week. Last week, we mentioned that the Federal Reserve is the primary driver of interest rates these day. This isn't to say that other factors don't matter. This past week, talk of a U.S. military strike against Syria was ramped up. In response, many investors scurried for the havens of Treasuries and mortgage-backed securities, thus sending their yield lower.

We don't believe concerns over Syria will be long lasting. Therefore, the reduction in lending rates is likely a temporary reprieve that potential borrowers should exploit.

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.

Having “hard water” means that your water supply contains high levels of minerals like calcium and magnesium. While hard water is generally harmless to drink, it can damage your boiler and clog your pipes, which are expensive to repair or replace (a new boiler can cost as much as $10,000!). To prevent these problems, it’s important to identify and remove hard water by installing a water softener. Use these steps to test for hard water.

1. Fill your plastic bottle with about 10 ounces of water from your kitchen sink. Add about a teaspoon of liquid dish soap, close the plastic bottle and give it a good shake. If the soap foams up naturally, you probably don’t have hard water and can end your test at this point. If it doesn’t foam, but instead forms a milky film at the top of the bottle, hard water could be an issue and you need to continue the test.

2. If you have public water, contact your local water utility and ask them for a recent hard water reading. If you have a private well, you’ll need to test your water yourself. Contact your local department of health and ask them which labs in your area can test your water. You can usually send a sample of your water to them and have it tested for free. It’s generally best to avoid home tests, which can be inaccurate and unreliable.
    
3. Check your results. Hard water is generally measured in grains per gallon (GPG) of dissolved minerals. If your water has more than 4 GPG, your hard water levels are considered high.
    
4. If your GPG is 4 or higher, it’s a good idea to install a water softener to reduce your levels. A water softener can cost anywhere from $100-$3,000 depending on the model, method of softening and water volume requirements of your house. It’s also a good idea to have your water softener professionally installed, which can cost $100-$600.

Until the recent past, interest rates were driven by the economy: recession or expansion, job growth, inflation, risk aversion, productivity, etc. These factors would converge to form an interest rate that best reflected consumers and investors expectations.

It's different today. The Federal Reserve is the overriding factor in lending markets. Everyone is trying to game the Fed's next move on quantitative easing. Specifically, everyone is attempting to forecast when the Fed will begin tapering its purchases of Treasury notes and bonds and mortgage-backed securities. The Fed's purchases – its demand – for these instruments is largely responsible for the low lending rates we've enjoyed over the past few years.

The chief reason mortgage rates moved so high so quickly in past months is that many market watchers expected the Fed to begin tapering next month. Markets, after all, are anticipating entities (they act on expectations), so mortgage rates naturally move higher on the prospect of higher rates.

Based on the minutes of the last meeting of Fed governors, the Fed is unlikely to begin tapering as early as September. Inflation remains low and job growth remains sluggish. We don't expect either to pick up soon, which is why we think tapering could be delayed until later in 2013, and possibly into 2014.

But as long as market participants are anticipating higher interest rates, there is a good chance rates will continue to rise. (Paradoxically, when the Fed actually begins tapering – when expectations become reality – rates could actually fall.)

Needless to say, this is confounding market, but it's still one in which we think it's more prudent to act today than to wait and anticipate tomorrow.

  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.