Real Estate Information Archive

Are Happy Days Here Again?

For homebuilders that appears the case.

The NAHB/Wells Fargo Homebuilder Sentiment Index surged eight points to post a 52 reading for June. This is the largest gain since 2002 and pushed the index above 50, where it hasn't been since 2006. (Fifty is the demarcation between general optimism and general pessimism, which means overall homebuilder sentiment now lists toward optimism.)

One hardly need be a genius to understand why homebuilders are eagerly anticipating the future: New-home inventory remains at multi-decade lows, while prices for this inventory are rising at a brisk pace. According to homebuilder feedback, average selling prices have risen 11% this year.

Few situations will boost a seller's spirits more than to see strong pricing combined with limited inventory. That's the definition of a sellers' market.

What's more, homebuilders still have room to expand supply at a robust pace. Over the past 50 years, homebuilders have averaged 1.5 million starts (single and multifamily). This year, they are expected to start one million units; next year, they are expected to start 1.3 million units.

New-home demand has also spurred pricing gains in many markets. Prices nationally have clawed back to 2003 levels, but they still remain 28% below the July 2006 peak.

Strong price gains have conjured thoughts of another housing bubble. Double-digit price increases can't go on indefinitely. What's more, the higher an asset price rises, the harder it tends to fall.

That said, affordability is a mitigating factor, at least according to Standard & Poor's, which estimates that housing is still 8% undervalued based on the price-to-income ratio. Historically, the typical median home costs four times as much as the median annual income. It's now at a 3.7 multiple.

At the same time, the household debt service ratio remains near a 30-year low, while the homeowner mortgage obligation is at a 15-year low at 8.25% of disposable income. During the bubble years, the mortgage obligation averaged 11% of disposable income.

It's worth remembering that rising prices stimulate more supply to come to market. More supply, in turn, will slow price appreciation. That's a good thing, because double-digit price gains are unsustainable. Next year, we wouldn't be surprised to see price growth moderate to mid- to low-single digit rates, which are sustainable rates.

But what about the elephant in the room – mortgage rates?

To be sure, lending rates are up significantly over the past six weeks, but are still cheap from a historic perspective. As we noted last week, rising rates have spurred more buying and refinances. If you believe the best rates are behind us (and we do), you don't want to wait in a rising-rate environment.

 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 4th of July will be here before you know it. If you don’t have a huge amount of time to decorate with all things red, white and blue, don’t stress! You can still celebrate Independence Day in style by doing a quick patriotic project or two.  These DIY decorations are so easy that they can be done in four minutes or less.

Here are six 4th of July decorations that we salute:

1. Fireworks placemats. Take plain white or beige fabric placemats and give them some 4^th of July bang. All you need is fabric paint, a paper plate and a clean kitchen scrub brush. First, dump out a quarter-sized bit of the paint onto a paper plate. Then, dip the bristles of the scrub brush into the fabric paint and press the bristles firmly onto the fabric. Overlap colors to create your own fireworks display! Tip: To make smaller fireworks, just use a smaller brush.

2. Painted mason jars. If you already have red, white and blue spray paint in your craft room or garage, this project is for you! Simply take three mason jars and paint them. You can paint each jar a different color or turn them into a makeshift American flag. To do this, paint one blue and tape off straight lines with painters tape (to make red and white stripes) for the other two.

3. Layered centerpieces. Head out to your local supermarket and pick up three jars of sprinkles: one red, one blue and one white. Gather up a few small vases or glass containers, and pour each color of sprinkles into the vase, one color at a time. This will create a beautiful, layered centerpiece display for your table! Place a few tall candles inside for some patriotic lighting. Tip: If you don’t have time to run to the store, use white rice and dye it with food coloring.

4. Decoupage tin cans. Cover various size cans (coffee cans work great for this) in scrapbook paper. Cut out your decorative paper so it fits evenly when wrapped around the jar, and then lightly coat the tin with spray adhesive. Adhere the paper to the tins. That’s it! Add water and flowers for a quick vase, or fill each tin with eating utensils for a buffet-style display.

5. Patriotic printables. Few things are faster than clicking the print button. If you’re looking for quick 4^th of July art, you can find fun, patriotic printables online, and most are free or super cheap. We especially like this one from eighteen25. All you need to do is find one that fits your style, hit print and then frame it.

Last week we delved into the Federal Reserve and “tapering.” Specifically, we explained why we thought the Fed was unlikely to materially reduce its purchases of mortgage-backed securities (MBS) this year.

Mortgage rates have risen on the precept that the Fed was indeed shifting its policy toward purchasing fewer MBS. Lower Fed demand for MBS, would, in turn, lead to higher yields in order to increase more private-buyer demand. Last week we mentioned that reduced MBS supply may have played a role in reduced Fed purchases.

We can add a couple more reasons why think the Fed's appetite for MBS hasn't diminished: For one, employment and wage growth is still anemic. The Fed has hinted that it won't materially alter quantitative easing (buying MBS and U.S. Treasuries) until the unemployment rate drops to 6.5%; it's currently at 7.6%. In addition, manufacturing has weakened in recent months, which suggests economic growth also has room for improvement.

We'll have more insight into the Fed's “ tapering ” leanings this coming Wednesday after the board of governors meeting and the subsequent press conference. We expect that the Fed won't announce any material changes to its policies. Therefore, we don't expect mortgage rates to move materially higher. You'll note in the above Bankrate.com graph, rates have been plateauing.

With that said, we don't expect rates to move materially lower either, so the risk of waiting remains.

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 lending rates were once again the lead story in housing, as well as in many media outlets.

In many markets, rates are up 60 basis points or more over the past six weeks. This means potential borrowers and new home buyers are facing financing rates unseen since April 2012.

Interestingly, rising rates actually had a stimulative effect on mortgage activity last week, according to Mortgage Bankers Association data. The MBA's latest activity report shows that both refinances and purchases were up 5%. For most of the past month, refinance activity was declining at a double-digit weekly rate, while purchase activity was mostly flat lining.

We're not surprised to see an uptick in purchase activity; expectations govern behavior. If potential borrowers believe higher rates are in the future, they'll act today to beat the increase. If they are fence sitting, their expectations of lower rates will keep them there, but a change in expectations (exceptions of higher rates, to be specific) will prompt them into action.

We admit to being slightly surprised (and pleasantly so) at the reversal in refinance activity. With mortgage rates holding so low for so long, it's easy to take for granted that everyone who could take advantage of a refinance has. That's obviously not the case. And even though financing rates are higher for refinances, expectations still play a role.

The good news is that more homeowners are in a position to refinance. CoreLogic reports that the number of underwater homeowners has dropped below 10 million for the first time in more than three years. That's a significant improvement over the 12.1 million who were underwater at the end of 2011.

Of course, these homeowners have been floated by the relentless increase in home prices that's occurred over the past year. CoreLogic's data show prices up nationally 12% year over year in April. Moreover, the numbers from most housing-data providers corroborate CoreLogic's numbers.

Despite higher rates, we expect refinance and purchase activity to remain robust. We also expect housing activity to rise: Higher prices will draw more inventory into the market. Above-water homeowners (and even submerged owners who don't have to bring money to the table) are more willing to list their home. As we know, lack of inventory has restrained sales growth over most of 2013.

We've frequently stated that today's higher lending rates aren't necessarily to be feared, especially when placed within an historical context: It wasn't all that long ago when a 6% 30-year fixed-rate loan was considered a bargain.

 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.

If you think of your appliances as one-trick ponies, you’re selling them short! Many of them have secondary talents that, sadly, go untapped. It’s kind of like only seeing Beyoncé sing while standing still, which prevents you from experiencing her other-worldly dance skills (can you say tragedy?).

If you’re open to a little outside-the-box domestic thinking, it’s easy to unlock your appliances’ hidden potential! Here are five ways you can move beyond their user manuals.

1. Make potpourri in the coffee grinder. Your coffee grinder can, in fact, grind more than coffee. Create your own potpourri by mincing up pieces of dried flowers, lavender and orange or lemon peels (or cinnamon sticks). You don’t have to stick with these ingredients – we encourage experimenting with other spices and scents to create your own signature potpourri blend.

2. Remove crayon marks with a blow dryer. Should your toddler (or artistically rebellious teenager) create a crayon mural on the wall, take a deep breath and just reach for the blow dryer. On the hottest setting, the air will be warm enough to melt the crayon. Then, wash the crayon away using a sponge and mild dish soap. Crayola crisis averted!

3. Disinfect sponges in the microwave. This alternate use rivals 90-second popcorn and Pop-Tarts on the awesomeness scale. Along with cooking delicious treats, your microwave is also a master germ-killer. Use it to sterilize and deodorize your sponge by wetting it and microwaving on the highest setting for two minutes to kill bacteria. Carefully remove the sponge and then let it cool before using it again. 

4. Cook salmon in the dishwasher. Before you wrinkle your nose at this idea, remember: the dish water will not touch your food! Be a dinner party magician by preparing a seafood feast in the same device that will clean it up later. Salmon is an especially foolproof option because it’s a “forgiving” fish (i.e. hard to really mess up). Just make sure you wrap the salmon securely in foil and use the dishwasher’s “normal” cycle. The water’s high temperature will poach the fish. Tip: Keep your fish on the top rack for best results. For detailed instructions, visit Wine X Magazine.

5. Warm plates in the toaster oven. Serving a home-cooked meal on a toasty plate is a small touch that can make a big difference at a dinner party. Conventional ovens usually don’t go below 200 degrees (too hot!), but you can rely on Mr. Toaster Oven to achieve this masterful party trick. Place two plates inside the oven for five minutes at 170 degrees for culinary cachet. 

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.

Institutional-investor money flowing into the single-family rental market has been a recurring theme in these pages over the past couple months. Perhaps it's no coincidence that we've run across more articles on this topic.

In recent weeks, we've noted that Blackstone has spent $4.5 billion buying 26,000 single-family homes, and that American Homes 4 Rent recently bought 10,000 single-family homes to rent. What's more, American Homes plans to go public, having filed a $1.25 billion initial public offering (IPO). (It's worth noting that Colony American Homes, a REIT managed by Colony Capital focused on leasing single-family homes, postponed an IPO, citing poor market conditions.)

Single-family home rentals have traditionally been the domain of small partnerships and individual investors. Today, billionaires, hedge funds, REITs, and private equity have gotten into the act. This has raised a few concerns, especially in markets like Phoenix that have snapped back hard from the depths of the 2009-2010 sell-off. Institutional-investor money has helped re-inflate home prices in many markets.

The point we want to emphasize is that market composition matters, and that we should always be aware of who and what composes our particular market.

 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.

It's usually a good idea to mix things up week to week; variety helps to hold one's interest. At times, though, the trend – when it's the lead story – simply can't be ignored.

Mortgage rates are the lead story, and they are the lead story because of the trend, which has been up, and up significantly.

When rates rise, they rise for everyone, even if not in equal proportion. That said, rates are at a 14-month high in many markets.

Last week, we offered an explanation for rising rates: “tapering” – the Federal Reserve reducing its monthly purchases of mortgage-backed securities (MBS) and U.S. Treasury notes and bonds. (Not coincidentally, the yield on the 10-year Treasury note, a proxy for the 30-year fixed-rate loan, is also at a 14-month high.) Lower demand on the Fed's part means the yield on these securities must rise to attract private buyers.

In addition, economic growth and job growth have picked up momentum, which also pressures rates to rise.

At this point, we don't expect to see a hard pull back in lending rates. But as we noted last week, the perception that the Fed is “tapering” might be overdone, so we wouldn't be surprised to see rates ease; just don't expect to see a return to the ultra-low rates that prevailed back in November.

The spike in mortgage rates has taken the steam out of refinance activity, and that's to put it mildly. Refinances have suffered four weeks of weekly doubled-digit declines. The latest reported weekly decline, based on MBA data, shows refinance applications were down 15%.

The sharp decline in refinances has caused some consternation, but it shouldn't be unexpected: Much like activity was pulled forward with federal housing tax credits a few years ago, refinance activity was pulled forward by the Federal Reserve's lowering of mortgage rates. The hard economic fact is that rates can go only so low; once the low is reached, refinances will slow.

Purchase activity, in contrast, is more resilient. Purchase applications were down only 2%. We weren't surprise to read a Bloomberg.com article that noted that rising rates were prompting buyers to scurry into action. We've frequently mentioned that rising rates (as long as they are accompanied with economic growth) would prompt more people to act. This appears to be occurring. Unfortunately, action for many is being thwarted by a dearth of housing inventory.

The bottom line is that we've been warning for most of 2013 that the risk in this market is in the waiting. Our opinion remains unchanged.

 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.

Five years ago Bea Johnson and her husband and two sons were looking for a home closer to the restaurants, shops and school in their coastal California town. 

During the year they spent house hunting, the family of four moved into a small apartment, took only the possessions that were absolutely necessary and left the rest in storage.

“After living with just the necessities, we realized that we had much more time to spend with our family when we weren’t spending it caring for a large house and lots of belongings,” says Johnson.

Then, when they did decide on a house, they chose one half the size of their previous home and simplified by selling most of their old stuff.

Around that time, Johnson and her husband began investigating environmental issues. “We read books, watched documentaries, and what we learned worried us and made us sad for our kids’ futures,” she says. “So we decided to do something about it. My husband quit his job to start a sustainability consulting company, and I tackled greening our house.”

It was then that Johnson devised a system to reduce the family’s garbage—she calls it the Zero Waste Home. She started by swapping everything disposable in their home (paper towels, water bottles, grocery bags) for reusables.

Today, she says, her family’s yearly waste can fit in a quart-size jar.

She spoke with LearnVest about how to get started, her zero-waste strategies and the one sustainable habit she’s just not down with.

Information from 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.

During the depths of the housing sell off, when the market was mired in misery, we were one of the few voices of hope. Back then, we were convinced the market would recover and that the prices that prevailed offered exceptional opportunity. Fortunately, we were right on both accounts.

We're still bullish on housing; plenty of opportunities still abound. That said, not all markets offer the same opportunities: some markets are good values, others less so.

We know that many Realtors and agents are active in housing on their own behalf. Renting, rehabbing, and flipping are natural outgrowths of selling. After all, it's rationally worthwhile to take advantage of unique insight and information.

It's also worthwhile to know who's in the market. We've noted in past issues the influx of institutional investor money that has entered residential rental real estate. The large hedge fund Blackstone alone has spent $4.5 billion to buy over 26,000 single-family homes to rent.

The large influx of money has driven up home prices in some markets to the point where value is tenuous, which has prompted some money to leave. Bruce Rose, CEO of Carrington Holding Co., was among the first investors to put institutional money into single-family rentals, but now he's reversing course because rising prices have lowered returns to the point where the risk is no longer justified in the markets where he operates.

The point we want to emphasis is that value matters (it always has), and that a growing number of markets today offer fewer values compared to what was offered in the recent past.

 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 have been on a tear lately, and by that we mean they've been rising at a precipitous pace. The rise in the 30-year lending rate has been particularly steep.

Many markets are seeing the highest lending rates of 2013. Other markets are seeing the highest rates over the past 12 months. So what's going on; why the dramatic increase?

Most market commentators point to the Federal Reserve, and when they point to the Fed they frequently invoke the word “tapering,” which refers to the Fed withdrawing from the mortgage-backed securities (MBS) market. Over the past couple months, the Fed's MBS purchases have declined modestly. At the same time, a growing cadre (though still a small minority) of Federal Reserve bank presidents have expressed the need for the Fed to cease purchasing MBS.

The market's reaction has been to sell fixed-income investments, which has caused yields to rise, including the yields of MBS. Because mortgages are the source assets in MBS, it's only natural that mortgage rates have also risen.

Rising rates have taken some steam out of the refinance market. After two sharp weekly declines, refinance applications fell another 12% nationally last week, according to the Mortgage Bankers Association. Refinance activity is the lowest it has been all year.

Purchase application activity has shown more resilience. After falling moderately in the prior two weeks, purchase applications rose 3% in the latest reported week. The fact that purchase activity hasn't been muted by rising rates is reflective of strong housing demand and a strengthening economy.

In the days before the Federal Reserve was active in the mortgage market, rising rates would spark an increase in activity for fear of rates moving higher still. Today, many market watchers expect a rate increase to be followed by a pullback, believing the Fed will again intervene to reverse a rising trend.

Those who head for the sidelines when rates rise might be on to something. To be sure, we believe that higher rates are in our future, but not necessarily in our immediate future. In other words, the thesis behind “tapering” could be overdone; it's not that the Fed is withdrawing from the MBS market, it's that there were simply fewer MBS for the Fed to buy.

We say that because we experienced a lull in mortgage loan originations in March; fewer mortgages means fewer MBS the Fed could buy. But in April, we saw a burst of refinances. Many of these loans will have closed in May, which will lead to more MBS coming to market, and more MBS the Fed could buy.

In short, we're not sold on “tapering” as the Fed's new de facto monetary policy. We need to see a couple months of evidence before jumping on the bandwagon. So don't be surprised if lending rates reverse course and revert to lower ground in coming weeks.

 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.