Real Estate Information and Homes For Sale

One Confounding Market

At the beginning of the year we mentioned that with stronger job growth would likely come higher interest rates. We certainly have stronger job growth. After a lull in August, job growth returned with a vengeance in September, with payrolls increasing by 248,000. This marked the seventh month of 200,000+ monthly job gains in the past eight months. The unemployment rate is now down to 5.9%.

We anticipated stronger job growth back in January, and that's been the case. So you can say that we got the equation half right. The other half – rising interest rates – we quite frankly got wrong. More jobs and more economic growth would lead to more loan demand and rising inflation expectations, and thus, higher interest rates. At the beginning of the year, 5% on the 30-year fixed-rate mortgage seamed a real possibility by the time we reached this time of the year.

But here we are in the early days of October and the rate on the 30-year loan is down to a 16-month low. Indeed, Bankrate.com's latest survey shows the national average dropped nine basis points week over week to 4.18%. Freddie Mac's survey shows the national average down to 4.12%, a seven-basis-point week-over-week decline.

The good news is that lower rates have spurred mortgage demand. The Mortgage Bankers Association data show refinance activity increased 5% last week, while purchase activity increased 2%. When the MBA reports on this week's activity (next week), we expect the percentage gains to be even higher.

So what's the skinny on mortgage rates?

They were actually trending higher through most of August. Market participants were focused on Federal Reserve language that suggested that rates (all rates) could start moving higher sooner than most market watchers anticipated.

But the most recent release of Fed meeting minutes (released this Wednesday) reveals Fed officials aren't so eager to get interest rates moving higher. The following sentence lifted from the minutes supports our contention: “The costs of downside shocks to the economy would be larger than those of upside shocks because, in current circumstances, it would be less problematic to remove accommodation quickly, if doing so becomes necessary, than to add accommodation.”

Fed officials even went as far as to stress "patience" in waiting for interest rates to rise. They are concerned with weak global economic growth and a stronger U.S. dollar. Rising geopolitical risk, such as what's occurring in Russia, the Middle East, and in Hong Kong also have the Fed on edge.

Here in our own backyard, a few structural issues remain. Though overall job growth has been robust for much of the year, the labor participation rate and unemployment rate among 25-to-54 remains a concern . There are still too many people in this important demographic who aren't working. At the same time, many of those who are working are dealing with stagnating wage growth.

So, it appears sub-5%, if not sub-4.5%, on the 30-year fixed-rate loan will be with us for some time to come.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

Here are simple tips to help you prepare your home for Fall.

1. Change your linens and move your mattress. Strip and vacuum your mattress and machine wash all of your bed linens, including your comforters, duvets, bed skirts and pillows. Then, turn your mattress front-to-back and end-to-end – flipping your mattress prolongs its life by evenly distributing the wear. For more tips, read: Maintain Your Mattress.

2. Inspect your windows. Start by cleaning your windowpanes, then your drapes or blinds, and finish with the window tracks (a vacuum with a hose attachment works best for this last job). If your windows are older, you likely have weather stripping to help seal your windows and keep cold drafts and moisture at bay. Inspect this weather stripping to see if it’s torn, damaged or needs to be replaced. Proper weather stripping can reduce your energy bills by as much as 30 percent! For a step-by-step guide to cleaning your windows, read: Inspect and Maintain Your Windows.
    
3. Inspect your exterior doors. For each exterior door, check the weather stripping that runs along the bottom and side of it for any cracks, leaks or wear. Close the door and place your hand along the bottom and sides of it. If you feel a draft coming through, you should replace your weather stripping. For extra insulation, purchase a few draft stoppers, which cost about $5 at your local hardware store.
    
4. Check your gutters. During the fall and winter, your gutters are filled with leaves, rainfall and snowmelt, so the clearer they are now, the better you’ll fare come winter. Break out a ladder (always practice proper ladder safety) and remove all dirt and debris from your gutters by hand. For a step-by-step guide, read: Gutter Cleaning.
    
5. Clean and store patio furniture. It’s always a good idea to clean your patio furniture before you store it inside for the winter. Different types of patio furniture require different cleaning techniques, so to learn how to properly clean your type of patio furniture, read: Clean Your Deck / Patio. Tip: Remove any stains from your furniture cushions before putting the chairs into storage, because if a stain sits on the fabric all winter, it’ll be more difficult to get out.
    
6. Clean light fixtures and dust ceiling fans. It doesn’t take long for dirt to create a film on your light fixtures and a layer of dust to form on the blades of your ceiling fan. To clean your glass light fixtures, denture tablets are actually one of the most effective products. To remove dust and dirt from your ceiling fans you simply need a ladder, canned air and all-purpose cleaner.

A few weeks ago, we noted the uplifting news that millennials are still very much interested in homeownership. Since then, we've run across a plethora of articles focused on millennials and housing. (Though when you search for a certain subject, you are sure to find it.)

Many of these articles position millennials as saviors. Without millennials, there is little upside left in housing, so the reasoning goes. We don't see it that way. Though we'd love to see more millennials enter the housing market as owners, they are still only a subset of the overall ownership market. What's more, their support is mostly concentrated in lower-priced homes.

More important than millennials, baby boomers, gen-x, or any particular demographic is the overall health of the economy. On that front, the data we've seen on the overall economy is encouraging. The latest gross domestic product (GDP) data show growth at a robust 4.6% annualized rate. This is good news for everyone, and should serve as tight backstop to housing, which is why we see no backsliding.

To be sure, we welcome millennials, but we don't need to be rescued by them. Rising economic growth will lift all demographic groups.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

An Important Prognostication Comes to Fruition

Predicting the direction of interest rates over the past two years has been an exercise in futility. One would have had better success predicting the flight path of a butterfly than the direction of interest rates. History has certainly proved to be an unreliable guide.

We've been considerably more sapient on housing prices. At the beginning of the year, we expected the rate of price appreciation to slow in many, if not most, markets. Our rationale was predicated on the fact trees don't grow to the sky. Double-digit year-over-year price gains are simply unsustainable. Given sufficient time, momentum peters out. Four years appears sufficient enough.

As we head into the waning months of 2014, price appreciation in many markets has indeed throttled back palpably. The widely followed S&P/Case-Shiller Home Price Index again shows slowing price growth in the 20 metropolitan regions it follows. H ome prices were down 0.5% month over month in July. This marks the third-consecutive monthly decline, and is the steepest monthly decline since November 2011. Year over year, prices are still up 6.7%, but the rate of appreciation has been falling through most of 2014.

We expect the rate of decline to continue, because we are seeing stagnating prices, and even price declines, in more markets. Case-Shiller's data show that prices in 14 of its 20 metropolitan regions declined in July. As for the remaining six markets, three showed no gain, and three showed modest gains, with Las Vegas leading the field at 0.3%.

Zillow has taken to predicting future Case-Shiller index releases, and, like us, Zillow sees the rate of price appreciation further abating. Zillow sees modest month-over-month growth of 0.1% for August, which will drag the year-over-year tally down 5.7%.

Of course, all real estate markets are local markets, and a national average very likely has no direct correlation to our neck of the woods. That said, the national number is composed of local numbers. When more local numbers trend in the same direction, the national number will follow.

Slowing home-price appreciation will slow the rate that negative equity turns to positive equity. On the other side of the coin, slowing price appreciation should help home sales, which have still yet to establish momentum. Unfortunately, momentum is unlikely to be established in the immediate future. The Pending Home Sales Index fell 1.0% to 104.7 in August from 105.8 in July, and is now 2.2% below August 2013.

New lower mortgage rates could provide relief. Rates have been trending down for the past two weeks, which corresponds with the recent stock-market sell-off. The S&P 500 Index is down roughly 4% since hitting an all-time high on Sept. 19. Much of the money flowing out of stocks has flowed into bonds, which is lifting bond prices, and lowering interest rates – including mortgage rates. We would not be surprised to see this trend continue over the next couple weeks.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

On average, gutters accumulate anywhere from 40-250 pounds of debris per year! This buildup can create all kinds of problems for your home such as foundation erosion, mosquito infestations and damage to your roof and gutter system, which can cost thousands of dollars to replace.

Safety Note: Gutter maintenance generally means using a ladder. Please use ladder safety precautions at all times.

1. Remove all debris from your gutters. Get every leaf and twig with a gloved hand. Go section-by-section, dump the debris you can reach in a bucket, and then move the ladder down (very carefully).
    
2. Check for damages. After removing debris, check for corrosion and any holes or dents. Tip: If you find small holes, place a piece of painter’s tape by the hole so you can easily find it when you’re ready to repair. If you’ve found small holes in your gutter, you can seal them with clear silicone sealant.
    
3. Test the drainage. Gently run water through your gutter with a garden hose to ensure your gutter is draining correctly. If water is standing still, increase the grade of your gutter to create and maintain a proper drain slope. To do this, simply bend the hangers. The gutter should slope at least 1/4-inch for every 5-10-feet of gutter.
    
4. Check for sagging. A sagging gutter is a useless gutter. Rainwater will get trapped in the sagging portion and become stagnant mess (a love nest for mosquitoes). If the gutters are sagging, it’s likely because the nails holding the gutters have loosened. Try to hammer them back into place. If the nails won't hold, replace them with screws.
    
5. Unclog your downspouts. If the downspout is clogged, work to loosen the debris from the bottom up to avoid further clogging the downspout. Turn your water hose on high and run it up the spout from the bottom. If this doesn’t work, try a plumber’s snake (again, from the bottom to the top). If all else fails, remove the downspout and tackle the clog by hand.

Interest rates are confounding to predict. Of course, the Federal Reserve is a lead influence, which is why market participants spend so much time parsing its every word. That said, most of the Fed's influence is focused on the short-end of the yield curve. By way of extrapolation, market participants then estimate longer yields. For example, if the current one-year yield is 1% and the market believes the Fed will lift that yield to 2% next year, the 2-year yield today should be 1.5% (1% plus 2% divided by two).

If life were only so straightforward. It's not. Money supply, wealth position, and expected inflation also play important roles. If the money supply increases and wealth and inflation expectations remain the same, interest rates should fall. With everything else held constant, more money can be allocated to financial assets, thus raising their prices and lowering their yields. On the flip-side, if money supply decreases and wealth and inflation expectations remain the same, interest rates should rise. With everything else held constant, less money means less money flowing into capital markets. Financial asset prices fall and yields rise.

So where does this leave us? We think wealth will at least remain constant. Inflation will likely remain muted. As for the money supply, it will likely decrease beginning next year due to the Fed withdrawing from quantitative easing and raising short-term rates. Based on this outlook, interest rates should rise in 2015.

Admittedly, we've been down this road before. We thought this scenario would play out this year. It hasn't, but it has to one day.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

A Mixed Bag, But It's One We'll Take

Is it two steps forward, one step back; or one step forward, one step back? Sometimes it's difficult to tell.

When it comes to existing home sales, one step forward, one-and-a-half steps back might be the better descriptor. Sales of existing homes drifted down 1.8%, to 5.05 million units, on an annualized basis in August. Year over year, sales are down 5.3%. Supply has again been fingered as the culprit for the sales-volume dearth. Supply for the month fell by 40,000 units, which drops total inventory to 2.31 million units.

The good news is that pricing continues to reflect reality. Existing-home prices have been relatively flat for the past six months. Year over year, the median price of an existing home is up 4.8% to $219,800. This is no surprise. We've seen price appreciation moderate through most of 2014. We expect that trend to continue into 2015.

When we vet new-home sales, the trend is definitely two steps forward, one step back. New home sales surged 18%, to 504,000 units, on an annualized basis in August. Pricing appears to be more favorable to buyers. The median price of a new home dropped 1.6% for the month to $275,600. Year over year, the median price is up 8%, but that rate of increase is slowing and will likely continue to do so. At the current sales pace, inventory has dropped to 4.6 months. This points to home-builder activity picking up through the end of the year. That's good news for the overall economy.

There's more good news specific to housing.

CoreLogic reports that nearly 950,000 homes were lifted into positive equity in the second quarter of 2014. Nationwide, home equity has increased by $1 trillion year over year. To be sure, we still have more room to improve. CoreLogic estimates that approximately 5.3 million homes, or 10.7% of all residential properties with a mortgage, were still in negative equity as of the second quarter. But that's a significant improvement over the 7.2 million homes in negative equity a year ago. We expect the equity trend to remain positive deep into 2015.

We see more positive news in a recent survey conducted by The Demand Institute, a nonprofit think tank. Demand's survey reveals what we've known all along: Millennials might be transforming the workplace, but at home they are very much like their parents and grandparents. They want to get married and have a family, and many of them want to raise that family in the suburbs – the domain of the single-family home.

We never bought into the notion that the United States is becoming a nation of renters. Many surveys we've read over the past year have confirmed our bias. The Demand Institute's survey is simply another arrow for our quiver.

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

Fifty-three percent of residential fires involve electrical wiring, which is intricately hidden behind the faceplates on your light switches. Flying sparks are obvious, but lots of other electrical danger signs are more subtle. Keeping an eye out for these five warning signs can mean the difference between fire prevention and a fiery disaster.

1. Loose ends on extension cords. If your extension cord has loose ends, or you’ve bandaged an extension cord with electrical tape, it’s time to replace it. Damaged cords may have exposed live wires that lead to shock and fire hazards.
2. Tripping GFI outlets. A ground fault circuit interrupter (GFI) is an outlet typically located in kitchens and bathrooms – often within six feet of a water source – that prevents people from being electrocuted. These outlets immediately stop the flow of electricity (and “trip”) when they sense the slightest change in the current. If your GFI starts tripping repeatedly, you probably have an electrical problem or a worn-out GFI outlet receptacle. Contact an electrician to inspect the problem. To learn more about GFIs, read: Test Your Ground Fault Interrupter.
3. Wobbly ceiling fans. If your ceiling fan isn’t rotating evenly, your device either isn’t correctly mounted to the electrical box, your blades are unbalanced or your blades are warped. We recommend always calling an electrician to fix damaged wires and electrical boxes.
4. Inappropriate bulb wattage. Using a bulb that has a higher wattage than recommended is a fire hazard and may overheat the light fixture. If you’re dealing with a fixture with multiple bulbs or a strand of lights, check all of the bulbs individually and replace them as needed. Be consistent with the bulbs’ wattage in this situation.
5. Warm faceplates. If your faceplate is warm to the touch, you probably have an oversized electrical load operating on that unit. Monitor any warm faceplate you find. If the problem persists, or the faceplate becomes hot to the touch, call an electrician. Note: The exception to this rule is a dimmer switch. Unless it’s too hot to touch, it’s okay.

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

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

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

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

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.

A Case of Cognitive Dissonance?

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

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

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

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

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

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

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

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

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

Information provided by Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at don@donroth.com.