Everyone is asking around Lancaster County and Central Pennsylvania – what’s going to happen with home prices, and when will we see the “good times” for sellers? It all comes down to, would you believe it, economics…

Supply and demand. Demand and supply.

Let’s pretend the home market is at a certain level of activity – prices and supply of homes for sale. Now, something happens to change the level of buyer activity (rates dropping for mortgages, silly tax credits, etc) and homes begin to sell. Now, buyers become a bit frantic and sellers (and realtors) sense this and price start rising. Multiple offers, same-day sales, overall a sense of craziness. Sound familiar? That was 2003 -2007 in a nutshell.

Now, something happens to the market (say, a crash?) that puts a damper on buyer activity. All of a sudden there are “too many” homes on the market and the prices are still trying to go up, but the buyers are not playing that game (neither are the appraisers for the banks, BTW). As the number of signs in yards grows, the sellers are the ones who get frantic.

Finally, sellers give up and start lowering their prices to get the home sold and move on. Or, they default for whatever reason and the distressed property sells for a cut rate. Now the “race to the bottom” of the real estate cycle has begun.

Lancaster PA home sales are in this last phase now. Where is the bottom? No one can say for sure but I predict prices will have to fall another 10% to get close to a “reset” point in the market here (prices have already fallen about 8-10% on average). Obviously, good economic news and job creation through small business expansions will be a huge factor in resetting the market.

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(c) 2011 Jeff Geoghan

The short sale train keeps rolling along – lots of short sales in Lancaster PA and the Lancaster County real estate market, just like yours I imagine. Here are a few tips on buying a short sale:

1 – The price should be very negotiable, since the seller isn’t trying to pay off the entire mortgage balance. Banks are accepting any reasonable offer in general these days.

2 – Realize that the seller’s mortgage lender will need to agree to the terms (in addition to the both of you). This may take a few days extra and they may balk at extra-low prices.

3 – Watch for “pre-approved” short sales. In this situation the seller has already submitted their short sale package and the lender has approved accepting a short sale. In Lancaster PA we are seeing more and more of these… any listing agent worth their salt will trumpet this fact on their MLS listing, etc. Pre-approved short sales will take days to weeks, rather than weeks to months.

4 – Expect to wait for everything – although banks are getting quicker about it, processing short sales is still a tedious process that can drive everybody crazy. Be ready to be patient.

5 – Don’t expect lots of repairs – sellers in short sale are by definition not financially able to effect repairs, and banks simply won’t do them. It will almost be an “as is” sale.

These are a few pointers on buying a short sale in Lancaster or wherever you are. Any questions – love to hear them at jeff@yourlancasterhome.com.

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Choose Jeff Geoghan for your next home sale or purchase in Lancaster PA! Thanks.

(c) 2011 Jeff Geoghan

While in virtually every category 2011 is looking worse than last year, interestingly the numbers look almost exactly like 2009.  Sold homes were not too far off last year at 4%, but pending sales fell 11% and that I’m not happy about.

New listings fell by almost 20% but the amount of inventory carrying over from December plus fewer homes going under agreement kept the total inventory almost exactly the same as first quarter 2010, from 3,930 to 3,943 respectively.

Pending and sold home numbers mirror 2009, interestingly

Home prices in Lancaster (median, which irons out any super high or low-priced properties) fell by 5%.  I’m not complaining… could have been a lot worse.

Average Days on Market (DOM) climbed 17% over last year, which is also not a surprise to sellers.

Takeaways?   PRICE, PRICE, PRICE.   Get those list prices down and the property will sell.  Get ready to rumble with tougher buyers than ever, too.

Today I sat down with Steve Richardson of our local title company, Guardian Transfer, to talk about why the title process is so important in Lancaster real estate and beyond. Few, if any home buyers take the time to read their title commitment carefully and real headaches (or worse) can result.

The title process involves a lot of research on the property to be transferred, and Steve has seen any number of problems come up after settlement, when a new owner realizes that they do/don’t have easements or right-of-ways, the dimensions of the lot were totally different from what they thought they bought, other entities had a claim to all or part of their lot (and so on…). Steve takes a fe minutes to review the title commitment document and how it impacts the sale.

Schedule A of the commitment details the parties involved in the sale – all the parties. If there are “misunderstandings” about who is actually selling the property, they will come out here.

Schedule B of the title commitement details covenants and restrictions that apply to the property, from sources such as the development, associations, utlities and other entities including neighbors and who knows who else.

Schedule C of the commitment has the infamous “legal description” that nobody tries to read. However, it’s not uncommon for buyers to read it and suddenly realize that the boundaries are nothing like they thought they were buying, or that the description is totally wrong or indecipherable (referencing rocks, trees etc).

The Escrow period is the critical time for home buyers and agents to make sure the property they agreed to buy is indeed what is transferred on closing day…no surprises.

If you have title or closing questions for Steve (PA only, please) you can reach him at srichardson@guardianclosings.com. As always you can email me at jeff@yourlancasterhome.com with questions or to start your home search.

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(c) 2011 Jeff Geoghan

One of the things that may bite you as a homebuyer is missing a deadline set in the contract, and one of the most troublesome deadlines is the inspection contingency deadline. Most buyers don’t realize the urgency of getting everything done in time to meet that deadline, and the loss of rights that results when it’s missed.

In Pennsylvania, real estate contracts stipulate a time period for the buyer to do their “due diligence” and inform the seller of any issues that need to be addressed arising from those inspections. Just about every type of inspection is provided for in this contract clause, and the default deadline is 10 days (although the buyer can change that to any time frame – typically changed to 15 or maybe 20 days). Many times the settlement period is too short to allow many more days than 10 to be inserted here. Keep in mind that the addendum may ask for a combination of:

1) Actual repairs made to the property
2) Seller credit to the buyer at settlement ($)
3) Reduction in the purchase price

If monetary concessions are asked for, then the estimates by contractors become very important as the basis for the money in question.

Now, the buyer has to get EVERYTHING done within that 10 days – choose inspectors, schedule the visits, get the write-ups, synthesize the findings into an addendum to the contract, get that addendum into the hands of the seller. Believe me, this can make for some hectic days (especially if the contingency period covers a couple of weekends, when contractors like to take off).

My advice is to know the inspectors/contractors upfront, start thinking about what things you want looked at very early on, and plan for time to meet at the house and with your buyer agent a couple of times during the first 10 days.

Now, once the buyer has marshalled their addendum they submit it to the seller, hopefully within the 10 (or 15, etc) days. According to the contract for real estate in PA, the seller has until 5 days from the end of the time period to respond. So if for example (in a 10 day contingency) the buyer submits his estimate on day 8, the seller still has until the 15th day to respond. But, once the seller responds to the addendum the buyer has 2 DAYS only to accept or counter the terms. Basically, things wrap up real quick and the buyer needs to know what they will and won’t accept at the end of the day…

So, inspection contingency periods are very, very important and the home buyer and agent need to be on top of it as much as possible, and plan ahead. And whatever you do, don’t blow your inspection contingency period!

If you have any questions about inspections or Lancaster PA real estate I’d be happy to answer them at jeff@yourlancasterhome.com.

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(c) 2011 Jeff Geoghan

Today I’m in Denver, PA at the offices of Fulton Mortgage Company speaking with manager Gary Seidel about what mortgage reps actually do, and why it’s so important to talk to one early on in your home search.

Gary points out that mortgage reps have a critical role in getting you the house of your dreams:

1) The mortgage rep pulls your credit report and review your credit history & scores. This is an important discussion, since most people have a somewhat inflated view of their credit worthiness and often some corrective action is needed to get ready for a mortgage.

2) The mortgage rep works with you to get your ideal payment and savings numbers, then applies his knowledge of the various mortgage products (FHA, Conventional, RHS and others) to figure out which product will work best for your needs. Then he works up an estimate of costs that is so critical to make you comfortable with the buying decision.

3) The mortgage rep is on top of the rapidly changing mortgage market, espcially important today in 2011 as government guidelines and regulations are constantly afftecting interest rates, tax questions and many other factors that will keep your plan up to date.

As I say so often, it’s very important to get your mortgage plans in place EARLY – no mortgage, no house. Nobody wins when a prospective buyer overestimates their ability to afford a home and ends up frustrated. If you’re thinking of buying a home, I encourage you to reach out to Gary at 717-629-7257 (cell) or gseidel@fultonmortgagecompany.com today.

Questions about buying a home in Lancaster, PA? I’d love to hear from you at jeff@yourlancasterhome.com or by commenting below. Hope you’ve enjoyed this episode of yourlancsterhomeTV!

Visit our homepage for Lancaster PA Real Estate

We’re doing our regular catch-up for Lancaster PA real estate sales this year…through January 29th.

This year, there have been 629 new listings on the market, and 167 listings have closed. In the same time frame last year we’d had 778 new listings and 210 closed listings – that’s just about a 20% decrease in both categories. Clearly the market has contracted over 2010 so far.

What’s happening with median home prices in Lancaster? Last year, it was $165,450 year to date. This year, it’s at $169,900, a 2.6% increase over 2010. The average price reduction from list to closing last year was 6.07%, this year is up to 8.25%. That’s because list prices are running higher this year…another interesting development.

So, initial signs point to a contracted real estate market with prices on the uptick. I’m seeing the possible signs of supply & demand kicking in, since there seems to be increased buyer activity right now. All this bodes well for the all-important spring selling season. Stay tuned…

If you have comments feel free to leave them here or email me at jeff@yourlancasterhome.com.  Check my website for Lancaster PA real estate.

Press Release – Lancaster County Pennsylvania 2010 Home Market Review

Download the PDF version – Lancaster County 2010 Real Estate Market Review

Local experts look at data and trends from the past year in Real Estate

Lancaster, PA (January 20, 2011) – The Jeff Geoghan Realty Group reported its analysis of the previous year’s residential real estate market for Lancaster County, Pennsylvania this week.

For full year 2010, residential home sales in Lancaster County were down 9% from 2009, totaling 4,102 units.  New inventory on the market in 2010 topped 9,000 listings, up 8% over 2009.  On another note, the median sold price in the county rebounded slightly from losses in both 2008 and 2009 – 1% over 2009 to $172,000.  “The residential home market in Lancaster County saw a clear correction downwards in 2010, the tax credit ‘bubble’ in spring notwithstanding” commented Jeff Geoghan, founder of the realty group.  “Homeowners can expect to see this trend of more listings and fewer sales continue into 2011 as HUD (US Department of Housing and Urban Development) and private banks release more foreclosure inventory into the real estate market”.  Geoghan continued “the ultimate effect of these devalued properties on median prices in 2011 will be a factor to watch”.

Home sellers in Lancaster settled on average for 94.5% of the original list price in 2010, making the county among the markets nationwide to see better than 90% of list prices at the closing table.  Commented Geoghan “Lancaster County is a stable environment for prices overall, and the long-term trend looks to continue

Other Lancaster PA Real Estate highlights in 2010: The School Districts of Lampeter-Strasburg and Manheim Township tied for highest median home price at $210,000, while Quarryville Borough posted top median price, also of $210,000.  The highest-priced residential sale was $992,000 for a 6,500 square foot home in Manheim Township.  The fastest-selling (average days to close) area in Lancaster County was Lititz Borough at 81 days.

For more 2010 Lancaster County Real Estate statistics and analysis watch yourlancasterhomeTV at http://tv.yourlancasterhome.com, and visit http://www.lancasterparealestateblog.com for charts and graphs of Lancaster home prices and sales.  All data from Keystone MLS.

Today I start a series on reviewing Lancaster County home sales in 2010, and will look at various facets of the real estate market such as geographics, price distribution and trends.  This episode looks at home sales by borough (an official term for “town”), including Lancaster City.

Click here to get the full report (please specify in the comment section what you’d like).

I look at 3 criteria, dealing with residential home listings:

1) Percent change in total home sales versus 2009

2) Median sales price rank and percent change over 2009

3) Average “days to close”, ranked

Quarryville had the greatest increase in home sales in 2010, with a 22% increase over 2009.  On the other hand, East Petersburg had the biggest decrease at a whopping 40%.  I think these numbers reflect changes in demographics over time (from older to younger).  East Pete has been undergoing such a transformation for years – perhaps Quarryville is seeing that now.  Lancaster City had an 18% decrease over 2009, to 487 homes sold.

Quarryville topped the charts in median sales price with $210,000 average.  I expect that there were a few family farms mixed in with the residential listings to get to that high number.  The borough with the lowest median sales price was Columbia, with $80,700.  Lancaster City came in at $87,900, second-lowest for 2010 (that was a 12% decrease from 2009).

Lititz Borough was the big winner in average days to close, dropping 25% from 2009 to only 81 days (this time frame includes everything – time on market plus inspections etc).  Lancaster City fell midway down the list at 107 days to close, up 7%.  Interestingly, Adamstown Borough came in at the bottom with 192 days to close on average – not sure why that would be unless new construction skewed the figures there.

So there you have it.  If you have any questions feel free to email me at jeff@yourlancasterhome.com

As a west-coast refugee, I happen to really like contemporary style homes. While they are certainly less common out here in “amish country”, they can be found tucked in around Lancaster County and are just a lot of fun to check out.  One contemporary style I like in particular is called “Mid-Century Modern” and I’ve seen several around our area.

Today I am in a small, less-expensive example but still most definitely Mid-Century Modern, localed on the west side in Lancaster Township. Check out the beamed ceilings, glass walls and high transom-type windows. This home was built by a designer in 1947 who also reportedly built one or two of the Mid-Century Modern examples up on Blossom Hill north of the city in Manheim Township. The home that am filming this episode in does not appear to have been significantly upgraded in it’s lifetime, meaning that some original “modern” features still remain like the solid wood closet doors and even a very period dining room lamp. I love this stuff!

Mid-Century Modern design was in vogue from the late 1940’s through about 1970. This style had many iterations but most often was a one-floor layout with a flat or peaked roof and heavy beaming on the inside, without an attic. There were no basements in most cases. Floor to ceiling windows and “glass walls” to bring the outside in was a key component. A proponent of the mid-century modern movement was a builder named Joseph Eichler, who designed amazing homes on the west coast in the 50’s and 60’s.

In Lancaster PA, Mid Century Modern styled homes are obviously few and far between. I listed and sold a wonderful one in Manheim Township last summer (I really wanted to buy it myself!).  You can see the tour from last summer here. I’ve toured several and every so often one comes up for sale. Remember, a mid-century modern home is a contemporary, but a contemporary is not always a mid-century modern…

As many of you know, I am an advocate of greener homes. I found this video of a news story about a green remodel of a mid-century modern home in Palm Springs Cailfornia.

If you’d like to talk more about mid century modern homes or contemporary homes in general feel free to email at jeff@yourlancasterhome.