I apologize that it has been awhile since my last post. I will keep this one short and sweet. As you may have noticed in my recent posts, the mortgage side of the business is taking center stage. Unfortunately, that is a trend that will continue, for better or worse. I just wanted to bring two items to everybody's attention:
1. The days of 30 day house closings are fading into the sunset. Long underwriting times, slow appraiser response, and increasing lender requirements is making it practically impossible and unrealistic to settle a home sale in 30 days. Even if your agent says they can do it, ask for a 45 day or 60 day settlement. You'll be glad you did. Too many things are out of our control anymore and only a fool will promise something that is largely out of their hands to deliver.
2. PHFA can give you an interest free loan if you are a first time homebuyer. That loan is to be repaid when you receive your tax credit or by June of 2010 otherwise it will convert to an interest bearing loan. This is a great program for those that want and are otherwise able to purchase but just lack some upfront cash. Keep in mind, it is a process but well worth it. As the first time homebuyer segment of the market has heated up and sellers are less willing to provide the seller help that many buyers need, this is a valuable tool in purchasing that first house. Check it out!
I hope everybody has a great and safe 4th of July Holiday!
I had another settlement today where a small glitch was overlooked by the buyers. They were financing their home purchase through Orrstown Bank-a small local bank-a rare and almost extinct animal these days. Anyway, the loan officer said "no problem", I can have the documents redone and everyone can sign in the morning and the title company would have the mortgage by tomorrow at noon. I almost fell off my seat but my jaw had dropped low enough to keep me sitting straight. If it would have been one of the big boys like citibank or bank of america or M&T-FORGET IT!!! It would have to go back to underwriting to some schmuck underwriter in Oklahoma who doesn't know the first thing about central PA let alone the buyers and we would be settling in 3 more weeks if we're lucky(our taxpayer bailout money in action). I had to chase down the loan officer and express to him my amazement and respect for the personal touch his bank provides. This is an extinct behavior in today's mortgage and banking world. Personal touch is increasingly becoming taboo as to not "infect" the transaction. Through this fog a beacon of hope shines in the form of small local banks that remember that they are lending to people and helping them achieve their dreams. To you I tip my hat and to the big boys-well-kiss my *#?!
I know it has been a while since my last post but it has been busy around the capital region. I just wanted to provide a quick update on the local housing market. The first time homebuyer credit is definitely motivating people to buy their first home. The entry level market in our area is on FIRE!!! With that said, the golden opportunities are no more. For those of you who heeded my calls to action this past winter-congratulations! You got the best deals combined with the best rates for a grand slam deal. For those looking now, the leverage has shifted to the sellers (at least in the entry level range). Be prepared to go with full price offers are pretty close. If you need seller help, good luck. Depending on the desirability of the property, you might still get it. For those of you who have the low-ball mentality, GIVE IT UP or forget about buying. If it's a good house, and it's priced right, and it's under $150,000, it's either going to sell quickly or your offer will be rejected. So, don't waste everybody's time with low offers unless you have cash (cash is king more than ever). Banks are not making it easier either. They are slowly digging themselves out of the mess they created and have developed a sense of elitism. They feel that they know everybody's job better than they do. They adjust appraisals if they want, they change their in-house FHA standards regardless of government standards, they will change programs anytime they wish, and if another bank bought the bank that is underwriting your home purchase-you better hope they have similar or looser standards because they will throw you to the curb and not look back. As far as I'm concerned, the government should have let the greedy bastards die. Despite all the sensitive marketing, remember this important piece of information: BANKS ARE NOT YOUR FRIEND. Their business is to make money off your money and make money off your purchases. The credit card legislation was a tremendous step forward to putting the clamps on predatory lending institutions but there is still much that needs to be done. Many argue that the government shouldn't get involved. I would disagree. History shows that even in a free market economy, too much freedom results in abuse and lack of competition which eventually hurts the consumer.
Well, there are no surprises in the first quarter real estate statistics. For the most part, inventory is up, sales are down, prices are down, and days on market are up. It sounds pretty grim but compared to many other markets, it's not too bad. It's inevitable that the current state of the economy will impact our local market. Add to that lenders' reluctance to lend, and you get the picture. If it's any consolation, this downturn was going to happen, it was a matter of when and how bad. At least it's on it's way to being a part of the past. Overall, it's not too bad. If you just bought your home in the last couple years and have to sell now-SORRY. You might have to take a little less for your home than you paid. Unfortunately, you bought at the peak and are selling at the valley. If you bought many years ago, than you are ok. If you look at the 10 year trend, we still show appreciation locally. That's more than many regions can say-ask Florida residents. I know it's hard to imagine but the future is looking a little brighter :) Below are some key numbers for your review. If you have any questions don't hesitate to email-ENJOY!
1ST QTR. REGION STATSNumber of Properties Sold: DOWN 15% from 2008
Average Sold Price: DOWN 2%
Average Days on Market: UP 18%
Number of Active Properties: UP 6%
Number of Properties Under Contract: DOWN 5%
Number of New Listings in 1st Qtr: DOWN 10%
STATS BY PRICE RANGE
| Price Range | Avg. Days on Market | Units Sold |
| 199,999 or less | UP 84% to 81 | DOWN 14% to 868 |
| 200,000 to 299,999 | UP 15% TO 107 | DOWN 19% TO 241 |
| 300,000 to 399,999 | DOWN 11% TO 84 | DOWN 27% TO 75 |
| 400,000 and up | DOWN 14% TO 95 | DOWN 20% TO 48 |
STATS BY COUNTY
| County | Avg. Days on Mkt. | Units Sold | Avg. Price |
| Cumberland | 87 | 427 | $200,401 |
| Dauphin | 85 | 447 | $151,197 |
| Perry | 81 | 63 | $156,486 |
A little word of warning to home buyers everywhere: don't use M&T for financing your home purchase! Every transaction these days has more risk than before when it comes to the financing being approved. However, when a lender screws up a slam dunk deal over and over again, there is room for alarm. After multiple delays and mistakes on behalf of the lender, the home purchase is on the brink of collapse. A typical home purchase transaction, even today, takes approx. 30-40 days. This underwriting nightmare is on day 60 and no end in sight. I guess they are too busy living large on all the money they received from the taxpayers to do their jobs and do it properly. So, if your mortgage broker says that he/she is going to use M&T to finance your home-RUN-because it's as safe as Osama Bin Laden babysitting your kids!
Ok. I am going to use my blog for a small shameless plug. I just finished my new website for the restaurant/hospitality side of our business. You can view it at
www.parestaurantbrokers.com or just click on the title of this post. If you are thinking of buying a restaurant or selling your restaurant in Pennsylvania, than
this site is a great start. Also, don't forget about
www.harrisburbs.net, my residential real estate site. It has tons of resources for home buyers and sellers in Central Pennsylvania. Of course, you are always welcome to contact me for residential or commercial real estate assistance.
I hear it all the time-"has the market hit bottom yet?" While there is no definitive answer and anybody that thinks they knows is delusional, there are signs that certain segments of the market have bottomed. California has shown signs of resale property movement and Florida seems to have come to grips with their market and banks are willing to take a loss and liquidate properties rather than maintain inventory. Locally, while we did show a decline in home sales this past year, our inventory has actually decreased which is a sign that things may have hit bottom. I think prices have reached realistic levels and home sellers are accepting that more than in the past year. The more "affordable" segment of our market (below $200k) is moving rather briskly again. During the worst of it, even that segment was sputtering. The high end market is struggling still but that will be the last segment to recover. Believe me, I am not a bright and shiny optimist. That's not what I get paid to be but I do think that the worst is behind us and that 2009 is on track to be a "fair" year. What's in store for 2010? We'll see how good this stimulus package is.
I know it is difficult for many people to come up with many things to be thankful for this year. However, adversity is a part of life, no matter what the scale. King Solomon (probably the richest man who ever lived) writes in Proverbs 28:1-"The wicked flee when no man pursues him, but the righteous are as bold as a lion." In today's words-"Don't be chicken! Face adversity head-on to overcome it!" I was reminded of this sentence in Proverbs after speaking with a successful businesswoman today. She informed me that many of the rich and powerful began creating their empires during the Great Depression Era. They did so because they did not flee but stood bold as a lion! Better days are on the horizon but don't overlook the opportunities at your feet today. There are many opportunities out there but you must wipe your thoughts clear of the media's doom and gloom smoke screen to see them. Remember, perseverance is critical to success and fulfillment but it cannot be developed without adversity. I want to wish everyone a Very Happy and Safe Thanksgiving! As for me, I'm Thankful for my family, waking up every morning, God, my career, turkey, and adversity. What are you Thankful for?
It occurred to me this past weekend that we have hit the low point of our market (hopefully). We have largely been unaffected by national trends until the mortgage market went down like the titanic. I figure out how to get it done for my clients, so I have dodged the slow-down bullet so far but I see the signs around me. Every home I show triggers instant phone calls from listing agents telling me how motivated the sellers are. I talk to agents who don't remember their last closing. One even told me that this market is worse than the "Carter years". The government is scrambling to find a solution because just throwing money at the problem doesn't seem to be working. How about throwing money at the solution instead of the problem. What's the solution? FIRST-TIME HOMEBUYERS! They don't have a home to sell, they have the same effect on the market as printing fresh money, and they can absorb the excess inventory like a sponge. Yet, have we seen any REAL first-time homebuyer assistance? Nope. That would be too simple and inexpensive.
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