Real Estate Information Archive

Home Builders Take a Holiday

The holiday we refer to is from optimism. Over the past 18 months, builder optimism has moved meaningfully higher to a recent high of 47 from a low of 9, according to the NAHB's sentiment index. This month, though, sentiment dropped to 44.

Demand for new homes remains robust, but supply issues – in labor and building-material – are hampering construction. Home builders are equally frustrated by restrictive appraisals and tight lending standards. As for lending standards, we concur. Underwriting standards remain too restrictive.

For this, we can blame uncertainty and tighter regulations. We were encouraged to hear Federal Reserve Chairman Ben Bernanke agree with our assessment. In a press conference earlier this week, Bernanke told reporters the Fed is seeing "much higher credit-quality requirements" from potential borrowers. Bernanke cited the rule where mortgages could be put back to banks as being particularly detrimental to risk taking.

There are no free lunches. When the uncertainty and cost of doing business rise, businesses – including mortgage lenders – take action to mitigate uncertainty and to recover costs. Yes, the Fed gives on the one hand by continuing to buy mortgage-backed securities at the rate of $40 billion a month. On the other hand, the pool of potential borrowers is reduced by higher lender costs and the increased risk of doing business.

So we can understand why home builders might feel down from time to time. But we did say the builders were taking a “holiday” from optimism. Given strong demand for new homes and rising construction, we don't expect them to remain down for long.

The good news is that home builders continue to break new ground at an expanding rate. Housing starts increased 0.8% in February, pushing starts up to an annualized rate of 917,000 units. The trend in permits portend increased activity heading into spring. Permits rose 4.6% to an annual pace of 946,000 units in February.

When viewed from a longer-term perspective, you can see home builders have made significant progress and have room to accommodate more progress this year.

Rising prices will continue to move the housing recovery along. Zillow reports that home values rose for a 16th-consecutive month in February. Zillow's home price index shows the average home value at $158,100. Of course, within the context of an entire country that doesn't mean much. What's meaningful is that monthly and annual price appreciation was recorded in 30 of the largest markets Zillow follows.

Rising prices, in turn, reduce negative equity. CoreLogic's research shows that 200,000 homes were lifted into positive equity during the fourth quarter of 2012. This brings the total number of homes that moved to positive from negative to 1.7 million in 2012.

Time plays a role as well: amortization and rising prices are working together to hurry the process along. In other words, time really does heal all wounds, though it hardly feels that way at the beginning of the process.

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.

Mortgage rates were down significantly this past week. In some instances, they were down over 10 basis points. For this, we can thank (blame?) the tiny country of Cyprus.

It seems odd that a tiny Mediterranean-sea country of 1.1 million inhabitants would influence interest rates in a country – the United States – with a population of 313 million. So what's going?

Today's financial institutions are closely intertwined – though lending, borrowing, trading, and market-making relationships. This raises the contagion risk, where something bad in one country can quickly spread. We saw that occur in 2008 when many of the world's largest financial institutions were at risk of collapse.

In Cyprus' case, a banking panic was initiated when the European Union insisted Cyprus implement a 6.75% tax on bank deposits less than 100,000 euros and a 9.9% tax on larger deposits. In exchange, Cyprus banks would receive a ten-billion euro bailout. The fear is that other European countries ( Italy in particular) could be forced to impose the same tax, thus resulting in a mass run on those banks.

In short, fear and uncertainty again sent investors to the haven investments of U.S. Treasury and U.S. mortgage-backed securities; hence the lower mortgage lending rates, which we don't expect to last. Fear passes quickly these days, so we suggest borrowers act quickly.

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.

Wet winters, heat-intensive summers and heavy storms are just a few natural elements that can wear down your house’s exterior paint. Protect your siding, trimming and gutters by touching up the exterior paint of your house once a year. Here's how from BrightNest.com...

1. Head outside and examine your siding. Walk around your home and look for areas where paint may be chipped, peeling or flaking. Also look for any signs of water damage, bubbling paint, or areas that have been faded by the sun. These are the areas that you need to touch up.
    
2. Once you’ve inspected your exterior siding on foot, grab a ladder and examine the upper siding and trim. Look for the same red flags in step #1. Before you climb your ladder, it’s a good idea to read about proper ladder safety.
    
3. Clean any areas where you notice damage. To do this, grab a paint scraper and remove paint that isn’t tightly adhered to the siding or trim. Don’t be afraid of removing too much – if the paint is coming off easily with the scraper, it isn’t protecting your house from water damage and other elements anymore.
    
4. When you’re done with the scraper, use your wire brush to remove any remaining paint flakes. If your siding still has some dirt and grime on it, clean it with an old rag and warm water. You want the surface to be as clean as possible before you do any touch ups.
    
5. If you have the original paint you painted your house with, that’s great! However, there’s a chance your siding may have faded so the colors will no longer match. Scrape off a quarter sized chip of paint with your paint scraper and take it in to your local home improvement store to get it matched. You’ll also need a good exterior primer. Before you begin painting, make sure your siding is thoroughly dry.
    
6. Apply a layer of primer. Read the instructions on the label before you begin and follow them exactly. Let the primer dry completely before you apply the touch-up paint.
    
7. Touch up any of the affected areas. Use the same paint applicator that you originally used to paint the exterior of your home. If you’re not sure what tool was used, consult your local home improvement store when you’re purchasing the paint and primer and see what applicator they recommend.
    
8. When applying your touch-up paint, make sure you spread a little bit of new paint around the area that is being re-touched so that it blends with the rest of the exterior (commonly called diffusing). This is usually best done with a brush.
    
9. Let your paint fully dry. If the color is too light, try applying a second or even third coat.

At 2.07 million units, housing inventory is at its sixth-lowest level in 30 years, according to Capital Economics. Low inventory has helped with rising home prices. And even though prices have been rising, affordability remains high.

The NAR's Housing Affordability Index measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home based on the most recent monthly price and income data.

We've read many predictions that high affordability will persist indefinitely. LPS Applied Analytics, for one, believes home values could rise an additional 35% before affordability becomes an issue.

We're a little more circumspect. Bank of America recently revised its expectations for home prices, expecting prices at the national level to rise 8% in 2013. A few months ago, Bank of America was forecasting a 4.7% increase.

Given rising interest in single-family homes, we don't think Bank of America's expectations are unreasonable. Home prices could very well rise 8%, but it's highly unlikely personal income will rise at the same rate. At the same time, mortgage rates will also rise with more job creation, which will make mortgages more expensive.

The point we want to emphasis is that, yes, homes are still very affordable, but there is no guarantee they will remain so. In fact, it's financially risky to expect the market that exists today – in both houses and mortgages – to exist 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.

We've been warning over the past few months that accelerating job growth would lead to higher mortgage rates. That's exactly what's occurred.

Last Friday, the Commerce Department released its employment report, which showed 236,000 new jobs were created, topping most economists' estimates. The surge in job creation dropped the unemployment rate to 7.7% from 7.9%.

The rate of job growth frequently reflects the rate of economic growth. When economic growth accelerates, so does the demand for loanable funds. Interest rates, in turn, rise. But they rise not only because of increased demand, they rise also because economic growth stimulates inflation – a key component in interest rates.

We weren't surprised, then, to see the spike in mortgage rates – particularly in the 30-year fixed-rate loan – that occurred this past week after the release of the employment data.

Many lenders are concerned that rising rates will take the steam out of the housing recovery. We are more sanguine. As long as rising interest rates are accompanied by rising job growth, the impact will be minimal. Low rates have done their job, and employment and economic growth are the most important factors to maintaining the housing recovery at this point.

Rising rates will slow refinances, but we expect purchase activity to pick up the slack. More people working, and more people working at better-paying jobs, means more people will qualify for a loan. Just as important, they'll qualify for a higher-rate loan that they can still comfortably service.

In short, we don't see rising rates as an impending disaster.

The robust interest by investors in single-family homes will also help keep the housing market moving on a northeast trajectory. Low purchase prices and the potential for capital gains have pulled many real estate-minded investors into the market. We've mentioned in the past how large institutional investors have acquired large swaths of single-family homes.

That said, most people still prefer to own than to rent. Surveys compiled by the National Association of Home Builders (as well as other groups) find that most people overwhelming want to own a home. This shouldn't come as a surprise; neighborhoods of owners tend to be more stable and better-maintained than neighborhoods of renters.

We're not disparaging investors (or renters). In fact, they are doing the market a service. But over time, we expect more of these rental properties to transition to owner-occupied properties – and that's a good thing.

 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 you living in a baking-soda-less household? Not cool. Baking soda has been rocking the cleaning world since before the Pyramids were built – so it’s got some serious street cred. For example, did you know it can un-funk vintage furniture, polish your silverware and absorb nasty smells? If you don’t have any baking soda handy, here are five reasons you should change that right this instant:

1. Odor domination. You’ve probably heard that placing baking soda in your fridge combats strong smells, but that’s not the only funk it can handle! Sprinkle baking soda in the toilet before you go out of town, pour it down the drain to de-stink a smelly garbage disposal or even add some to your fabric sofa cushions to get rid of pungent smells.

2. Fire prevention. If you’re cooking greasy food on the stove, a box of baking soda could save your life (or maybe just your curtains). If grease spills onto your burners and catches fire, pouring baking soda on the flames will squelch them before things get out of control! Never use water to extinguish a grease fire. To be extra safe, always keep a fire extinguisher in your kitchen to deal with serious problems.

3. Stain destruction. Baking soda is a stain’s worst nightmare. Rub this cleaning agent into wine, vomit, coffee or pet stains to remove the problem. You can clean any surface with baking soda – including kitchen and bathroom counters – by sprinkling baking soda on a damp cloth and scrubbing.

4. Pest prevention. Do you have a problem with cockroaches in your home? Baking soda to the rescue! Yes, this product can even help repel cockroaches. Mix together 1/3 cup of baking soda and 1/3 cup of sugar. If you have extra, you can store it in a sealed jar, just make sure you label it! Fill small dishes (the caps of gallon milk jugs work well) with the solution and place them under the sink or wherever you suspect a problem.

5. All-natural awesomeness. In case you haven’t caught on yet, baking soda is kind of the Ryan Gosling (read: the best) of green cleaning products. Using baking soda is just as effective as store-bought options, but you’ll avoid the dangerous chemicals that are found in many household cleaners. Tip: If you’ve fallen head-over-heels for baking soda like we have, consider buying it in bulk to save even more money. Baking soda doesn’t spoil, so storing it for a long time won’t diminish its cleaning power.

Information brought to you be 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.

I read a recent article in the Wall Street Journal titled “How to Fix a Credit Report Error Before It Bites Back” and being in the real estate business for many years it had a number of good points that are useful to all of us and especially if you are looking to purchase a Harrisburg PA home. We all have heard and seen the trials and tribulations when a bad credit score derails a purchase or if approved the interest rate is higher than the going rate for most borrowers.

What are the causes and what are the remedies? Naturally, late payments are definitely going to have a negative impact on your credit score and your ability to make a purchase. AND yes sometimes there are reporting errors by a creditor for a number of reasons, including reporting a delinquency that is not yours because there is one or more John Jones that lives in your area. And I am sure there are many people who can give me examples of bad reporting. BUT you do have some recourse in these examples such as disputing the claim and/or providing proof of payment – that is the best way to counter the negative by keeping good records.

Also, it is up to you to monitor your credit report and the best (and it is free) way is to go to AnnualCreditReport.com and you can receive a report once a year at no cost to you. That is an excellent way to insure that the Credit Bureau has all the correct information. Yes, there are offers, at a cost, to give you the same information but free is for me and I hope for you also. Soon I will provide info on Credit Repair concepts and hopefully help you in that arena.

If you are looking for information on who you can talk to about credit, please let me know, and especially, if you are considering purchasing Harrisburg PA real estate. Please also visit my web site, DonRoth.com, to have access to all of the properties that are for sale in the Harrisburg area.

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.

We mentioned the drop in mortgage rates. The drop was meaningful, with rates falling by as much as 10 basis points on some mortgage products.

So what was the impetus for the rate reduction?

Uncertainty was the most-repeated explanation. You may have read about the election chaos in Italy, which appeared to send institutional money to the havens of U.S. Treasury and agency mortgage-backed securities. The rush of money to these securities, in turn, lowered their yield and thus lowered the rate on many mortgage products.

At the same time, it's been reported that many investors are nervous over the impending “sequester”, where unless Congress acts, $85 billion in spending cuts will take effect automatically. These nervous investors are also purported to have sought refuge in the same securities as the investors nervous over the Italian elections.

To be sure, investors might be nervous about Italy and how Congress will compromise on the sequester, but it's becoming more apparent that financial markets are tiring of fear and crisis. More investors today are simply responding to the political crisis du jour with a shrug.

More investor indifference suggests that today's low mortgage rates might be a temporary gift. And if not, there is still little incentive for mortgage rates to fall much lower. Therefore, we think it would prudent for borrowers to take the gift as it is now presented instead of holding out for a better one.

  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.

Many mortgage watchers expect mortgage rates to maintain today's lows indefinitely. After all, the Federal Reserve has stated it will continue to buy $40 billion in mortgage-backed securities and $45 billion of longer-term Treasury securities each month (known as quantitative easing) for as long as it takes for the unemployment rate to fall to 6.5%.

But that commitment might be less firm than initially believed. The Fed recently clarified that its unemployment target isn't necessarily a specific number. In addition, a growing number of Fed governors are concerned over market risks associated with the Fed's asset purchases, which could lead the Fed to taper or end quantitative easing sooner than some economists expect.

These factors (along with a few others) have prompted Goldman Sachs to raise its yield expectation for the 10-year Treasury note – a good proxy for 30-year fixed rate mortgages – to the 2.25%-to-2.5% range this year.

Historically, the 30-year loan rate has averaged roughly two percentage points more than the 10-year Treasury note yield. The note currently yields around 2%. In other words, it's quite possible we could be looking at lending rates half-a-percentage point higher than today's rates by year's end.

 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.

Pessimism has always been the default intellectual position. The more dire the prognostication, the higher the regard the prognosticator is held.

This thought comes to mind because a rising tide of commentary is questioning the sustainability of the housing recovery. These Doubting Thomases feel emboldened by a recent spat of housing data that wasn't quite up to snuff.

Housing starts, for one, failed to meet expectations. The annual pace of starts dropped 8.5% in January to 890,000 units, falling short of the consensus estimate for 918,000 units. The shortfall was attributable to a 24.1% decline in the multi-family component (which is volatile anyway).

Slower new-home traffic also raised concerns, though weather and the lingering impact of Hurricane Sandy were contributing factors. The good news is that home builders don't appear to be especially put off; permits advanced 1.8% in January to an annual pace of 925,000 million units.

The trend in existing-home sales continues to frustrate many industry watchers, because the trend still hasn't gained traction. That said, existing-home sales did rise slightly in January, by 0.4%, to an annual rate of 4.92 million units.

We are all aware that inventory is the issue. The supply of for-sale homes is down to 4.2 months based on the current sales pace, which is a considerable reduction from 4.5 months and 4.8 months in the two prior months. Inventory is as low as it has been since the bubble days in the early 2000s.

Of course, we're not suggesting another bubble looms (though we have heard rumblings to that effect). We say that because we see markets in distressed and non-distressed properties becoming normalized. In the fourth quarter of 2012, the average foreclosure discount, a comparison between a foreclosed home's market value and its sales price, dropped to 12% compared to 25% during the depths of the recession.

The new phenomenon of large institutional investors entering the market is another attenuating factor. As we mentioned last week, institutional investors are purchasing large swaths of distressed properties and rehabilitating them for rentals. Their actions, combined with those of individual investors and owner-occupied buyers, will ensure an orderly reduction of distress-property inventory and a firming of housing prices.

But could rising mortgage rates derail the recovery?

We think it's highly unlikely. Job growth, consumer outlook, and borrower accessibility to funds are the key drivers these days, not rates. To be sure, mortgage rates are at a five-month high, but they are still very inexpensive from a historical perspective.

That said, some mortgage products are set to become a little less inexpensive, even if rates stand pat.

Borrowers considering an FHA loan need to keep two deadlines in mind: On April 1, the FHA will increase its annual mortgage insurance premium by 0.1% to 1.35% of the balance of the loan. To avoid the higher fee, borrowers must apply by March 29.

The FHA has raised its insurance rates five times in as many years; we don't expect this latest increase to be the last.

 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.