The Planets Are Aligned

May 3, 2009 Leave a comment

Line 'em up!

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If you take a moment and peer up into the sky you will actually see that we are at the crossroads of a real estate buying opportunity like we haven’t seen in my lifetime.  All the factors that go into making a real estate buying decision are perfectly configured.  But like most perfect planetary alignments, clouds and precipitation sometime make it difficult to see this truly amazing sight and before you know it, the moment has passed.  The four planets that I see aligning are as follows:

1.  Mortgage Financing - If you’re like most people, you will need a mortgage to assist you in purchasing a home.  Interest rates right now are the lowest that they have been in decades (see ‘Mortgage Info’ tab).  When I first got into the real estate business over twenty-five years ago, the 30 year fixed rate was about 17% (this is not a misprint).  To put that in easier terms to understand, a principal and interest payment on a $150,000 mortgage then was $2,138 – - – now $805.  Hopefully, President Obama’s programs and endeavors will start to have some positive effects on the economic growth in this country.  When that happens and consumer spending starts to pick up, what do you think will happen to interest rates?  I was not an Economics major in college, but even I can figure out that rates will tick up because of inflationary fears.  So if you have good credit, money to work with and an income that can be verified, there has never been a better time to get a mortgage.

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Are We Really in a Housing Crisis?

April 18, 2009 Leave a comment

Is it really this bad?

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Most of our elected government officials right now are scrambling around trying to fix Humpty-Dumpty because he fell off the “Housing” wall and is supposedly shattered in a thousand pieces.  All the kings horses and all the kings men are trying to put the pieces back together again.  But what if Humpty-Dumpty doesn’t need fixing?  What if all he has is a bad cold that will run its course regardless of the medicine that is administered?  Essentially, that is what Todd Zywicki, a law professor at George Mason University, is saying.  Zywicki has done extensive research on the subject of bankruptcy and foreclosure and has appeared before Congress as an expert witness to testify on the subject.
    
In a recent article* that appeared on Forbes.com, Zywicki takes serious umbrage with the way President Obama and his administration is handling the housing situation in this country.  Obama has recently referred to the housing situation as a “crisis” that is “unraveling home ownership, the middle class and the American Dream itself.”  Zywicki’s assertion is that this just isn’t the case.  Before you unload on me and say that I’m just another conservative (I am) Republican (I am) wack-job (questionable) trying to drag down our country and the Democrats, consider this – - – I voted for him.

Zywicki’s research indicates that different parts of the country experience different sets of problems when it comes to real estate.  In other words, one size doesn’t fit all which is essentially what he argues the Obama Administration is trying to do with its housing policy.  Zywicki points to three distinct types of housing markets that exist today:

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Anecdotal Evidence of Improvement in the Real Estate Market

April 6, 2009 1 Comment

    
Inman News, a leading source of independent real estate news, information and commentary, just published findings from an online survey* they conducted recently.  The results indicate that three out of four respondents believe that the housing market in their area is improving or stabilizing and most say they have noticed the change within the last two months.

Of those that felt the market was improving, 70.6% cited ‘low interest rates’ as the number one reason for the improvement.  Interest rates on conforming, conventional mortgages are at, or near, fifty year lows as shown on my Mortgage Info page.  Following close behind this reason was ‘affordable prices’ at 67.8% and ‘good deals’ at 57.1%. (NOTE: Respondents were asked to cite all reasons that apply so totals add up to more than 100%.)

The survey also tried to gauge the attitudes of buyers and sellers.  On the homebuyer side of the equation, agents are finding that 74.7% are still very ‘cautious’ when it comes to moving forward with purchasing a home.  This percentage is extremely high and shows that purchasers are still in a wait and see mode when it comes to the market.  More than likely, they are going to want to see some more positive news out of the financial markets and continued stabilization of interest rates for them to get off the fence.

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An Open Letter to All Lancastrians

March 25, 2009 Leave a comment

  
This coming May, the long-awaited Lancaster County Convention Center and 300 room Marriott Hotel will open their respective doors for business in downtown Lancaster.  Lancaster Online was given an exclusive tour of the facilities under construction recently that showed a virtual beehive of construction activity.

 
more about “Lancaster County Convention Center“, posted with vodpod

This massive endeavor has drawn equal parts praise and criticism since it was first proposed many years ago.  In fact, if you have kept up with the project as I have, you realize that the “Letters to the Editor” section in the Lancaster Newspapers explodes with comments the entire week after an article runs in the newspaper.  Opponents of the project have railed against the controversial initial studies that they claim were slanted and biased in addition to who was actually footing the bill for it while proponents of the project expounded on the economic benefits that they claim would follow once it was built.  In reality, just like any other divisive issue, the truth probably lies somewhere in between.

Well folks – - – the merry-go-round is about to stop!  It’s here whether you like it or not.  It’s time to unite.  Come the end of May, hop in your car or hit the shoeleather express and visit the facilities.  Walk the halls and admire the craftsmanship; have lunch in the restaurant; meet a friend for drinks at the bar; or just sit in a chair and look out over Penn Square.  Take the time to welcome the employees to their new home – - in Lancaster!

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Home Prices Show Upward Movement

March 25, 2009 Leave a comment

  
In a news release published today by the Federal Housing Finance Agency (FHFA), they find that house prices across the U.S. ticked up 1.7% between December 2008 and January 2009.  The FHFA monthly index is calculated using purchase prices of houses backing mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac.  For the nine Census Divisions, seasonally adjusted monthly price changes from December to January ranged from -.9% in the Pacific Division to +3.9% in the East North Central Division.  Pennsylvania is located in the Middle Atlantic division which showed prices moving up 1.5%.

As indicated in a recent post (The Distant Drums),  there are signs of some positive things happening in the real estate industry.  In Lancaster County, sales jumped 10% from January ’09 to February ’09.  In addition, interest rates dipped below 5% for thirty year fixed rate mortgages this past week.  Does this mean we’re out of the woods?  Probably not.  But we’re certainly moving in the right direction.  I anticipate over the next couple of months we’ll be hit with some mixed signals.  To borrow a metaphor used quite often during March Madness, a team is usually not as bad as a fifteen point loss indicates and not as good as a fifteen point win would suggest.  The key to thriving in the real estate game is to remain calm and think clearly while all around are losing their heads.

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Federal Housing Finance Agency Shows Real Estate in Lancaster, PA a Good Investment

March 2, 2009 1 Comment

 

You go Lancaster!!!!

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Let’s here it for Lancaster County!  We’re taking names and kickin’ some butt.  YaaaHooo!

The Federal Housing Finance Agency (FHFA) just released their “All-Transactions Home-Price Index” which compares the fourth quarter of 2007 with the fourth quarter of 2008 and it shows that Lancaster County, Pennsylvania is faring better than most other real estate markets nationally.  While the national appreciation rate dropped 4.5% for that period, Lancaster showed an increase of 1.6%.  Their study is based upon purchase prices and refinancing appraisal amounts for the last quarter.

Before I get too caught up in myself, let’s take a step back and look at national home price surveys in general.  It seems like every every government agency, financial institution, REALTOR® organization and corner coffeehouse has their own version of what real estate prices are doing.  Let’s face it, if you crunch the numbers long enough and add a touch of this and a pinch of that, you can make statistics back-up anything you’re selling.  In fact, my analysis of the the local data supplied by the Keystone MLS for the month of December actually showed Lancaster County’s prices taking a dip.   But that’s not the point.  Regardless of what formula or methodology is utilized by any of these entities, they are all basically showing the same thing: when you compare Lancaster County versus other areas of the state and country, we’re more than holding our own.

So the next time you hear a news report or read a newspaper about how home prices in Las Vegas are plummeting by the hour; remember, the old adage definitely applies, “All real estate is local.”

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