Merle Sollenberger’s Blog

Here are the numbers from my June 5, 2009 searches in the Lancaster County MLS: 

              Active Listings   UA Listings   Ratio     Prior year Ratio

Jun 5, 2009     2,844            814         28.62%    33.26%

May 7, 2009    2,845            801         28.15%    34.95%

Apr 4, 2009     2,861            642         22.44%    32.03%

Mar 7, 2009     2,812            545         19.38%    31.00%

Feb 4, 2009     2,730            447         16.37%    24.62%

Jan 3, 2009      2,660            427         16.05%    21.29%

These numbers are like a “snapshot” of the market at a point in time.  Other numbers that are reported are based on activity over a period of time, possibly one month, one quarter, or one year.  I like these numbers because they seem to be a “leading indicator” of activity that will be reported on after the period of time has ended.

In reviewing market numbers, we could also consider Months of Supply.  For example, if there are 2,800 properties on the market, and in the last month there were 800 that went Under Agreement, then the calculation is 2,800 divided by 800, equaling 3.5, which represents about 3.5 months of supply of homes at that pace of sales.  In the period of time from March 15, 2009 to April 15, 2009 there were 1011 homes that went under agreement.  Considering that there were 2,861 active listings on April 4, 2009, that represents 2.83 Months of Supply at that time.  Looking back to the 2004, from March 15, 2004 to April 15, 2004 there were 1,264 homes that went Under Agreement.  On April 6, 2004 there were 1,390 active listings, representing a Months Supply of 1.10.  That illustrates that we currently have more than double the Months Supply that existed in 2004, at the peak of the market.  That gives some possible suggestion of how long a home may be on the market.  Some homes will sell sooner, others take longer.  Home preparation and pricing impact that significantly.

However, to put that in the perspective of the national housing market, for example in Las Vegas at one point, there were approximately ten times as many homes for sale per person as we have here in the Lancaster PA market.  Here in Lancaster we have been shielded, (But not completely isolated) from the harsher effects of the national housing market.

The Lancaster County Association of Realtors publication, House Calls, reports in the June 2009 issue that settled units, where the home has transferred ownership, amounted to 409 in April 2008, and was down 16.9% to 340 in April 2009.  They also report that the five-year average of homes sold in April is 449.  In April 2005 we saw 532 homes sold.

Has the housing market reached its low?  Will it improve in 2009?  I don’t know.  We are in a time of uncertainty, fear, liquidation, and volatility.  People who take careful, calculated and well understood risks at times like this tend to be well rewarded for that later.

Have you heard about the $8,000 First Time Home Buyer Tax Credit?  People thinking of buying their first home really should be aware of this and carefully consider the impact of not acting to take advantage of this.

1.      It is a tax credit of $8,000 that reduces your taxes, possibly giving you cash.

2.      With interest rates as they are now, the cost to borrow money is not likely to get less in the future.

3.      With the 2.83 Months of Supply of inventory, buyers have more homes to select from.

4.      With the 2.83 Months of Supply, sellers are not able to demand the prices they may have a couple years ago.

5.      With the 2.83 Months of Supply, buyers are less often in situations where offers are competing with others.

Interest Rates:Wow!  Currently I am aware of mortgage rates ranging from 5% to 6% depending on the number of points a borrower pays.  Those are low rates when you consider the range of rates over the last decade.  What is also unusual is that mortgage rates fluctuate every day, and sometimes multiple times in one day.  Someone checking rates with different lenders will have to be on the phone with each of them a couple times every day if they want to try to get the best rate.  However that will only work if they have a property under agreement, have applied for the loan at all the different places, and haven’t locked in already somewhere.  Lenders are getting more savvy about borrowers playing the field like that, and are less and less forgiving about locking in and then if rates go down adjusting the rate.

Also, I hear that the Federal Government is borrowing money to fund the Stimulus Package, pushing interest rates up.  It’s a sad but true reality that the desired effect of the stimulus package can be a bit minimized by the action of stimulating.  Current homebuyers are likely to benefit from the stimulus package as home values increase in the next couple years as the economy recovers.  Call me if you would like to participate in that.

Thank You!

Prepared by:   J. Merle Sollenberger, GRI, CRS, Associate Broker, Realtor®Prudential Homesale Services Group150 North Point Boulevard, Lancaster, PA 17601717-560-9100     www.msollenberger.com        msollenberger@topproducer.comLicensed in PA

Here are the numbers from my May 7, 2009 searches in the Lancaster County MLS:

                        Active Listings   UA Listings    Ratio          Prior year Ratio

May 7, 2009                2,845               801        28.15%          34.95%

April 4, 2009               2,861               642        22.44%          32.03%

March 7, 2009             2,812               545        19.38%          31.00%

February 4, 2009         2,730               447        16.37%          24.62%

January 3, 2009           2,660               427        16.05%          21.29%

Looking at the ratio changes from April to May, last year was an improvement of 2.92%.  From April to May this year, the ratio improved 5.71%.  We still see a slower market than we have for several years, but we need to remember that just a few years ago we talked about the market being hot, and that it could not sustain that pace indefinitely.  Homes are generally taking longer to sell, and sellers are not enjoying the eagerness buyers exhibited just three or four years ago.

May 4, 2004, the ratio of under agreement listings to active listings was 128.52%.  That means that for every 100 houses actively for sale, there were also 128 that were already under agreement.  Recent activity indicates that for every 100 houses actively for sale there are 28 in addition that are under agreement.  This shows that there is a significant difference in the market environment.

My personal experience points to the fact that even in that environment, people still choose to move, and therefore buy or sell homes.  I have enjoyed being involved in several properties getting sold in the last few weeks.  Recently we have seen much more activity in our offices, with stronger activity in new listings and with properties going under agreement than we did a year ago.

There is still economic news that points to the challenges in the housing and financial markets.  Unemployment figures remind us that some people are experiencing job losses, and other news indicates that people are generally uneasy about committing to major purchases.  Those who are not concerned about their job may find now to be a great time to make a move.

In all of this, as you consider moving, ask yourself if you want a Realtor® with experience and many tools to market properties and help buyers locate a home?  Or do you want someone that works for less, just because they are less sure of the value they bring to you.

With my experience and the programs and services I can offer as an agent with Prudential Homesale Services Group, you can look forward to a great experience in buying or selling a home.  I’d love to assist you in getting to where you want to go.

Thank You!

Prepared by:   J. Merle Sollenberger, GRI, CRS, Associate Broker, Realtor®

Prudential Homesale Services Group

150 North Point Boulevard, Lancaster, PA 17601

717-560-9100     www.msollenberger.com        msollenberger@topproducer.com 

Licensed in PA

People are thinking of Spring and possibly moving.  The inquiries at our Kiosk at the Park City shopping mall continue to be positive.  Also, this past week a buyer bought one of my listings, and another person listed a condo with me.  Several other people met with me, asking questions about selling or buying.  I have been busy. 

Here are the numbers from my March 7, 2009 searches in the Lancaster County MLS:

                         Active Listings   UA Listings         Ratio           Prior year Ratio

March 7, 2009             2,812               545        19.38%          31.00%

February 4, 2009         2,730               447        16.37%          24.62%

January 3, 2009           2,660               427        16.05%          21.29%

December 4, 2008       2,848               518        18.19%          24.15%

November 7, 2008      2,903               593        20.43%          20.43%

Various price ranges show different levels of strength.  In the report preparation I use nine ranges.  The ratios from the information generated on March 7 is:

List Price                                 Ratio

$1-$50,000                              29.23%

$50,001 to $100,000               26.13%

$100,001 to $150,000             37.24%

$150,001 to $200,000             24.44%

$200,001 to $250,000             18.10%

$250,001 to $300,000             13.11%

$300,001 to $400,001             10.62%

$400,001 to $500,000             6.20%

$500,001 and above                5.18%

All Ranges                              19.38%

With most of the homes falling into the middle price ranges, and with the ratios for the middle three ranges being near the overall ratio of 19.38%, we can see that the pace of home sales being slower affects a significant group of people.  The highest price homes are moving more slowly on average, and if you are selling a home in one of the two highest ranges, the competition is strong.  In the highest price range, there were 193 homes for sale, and only 10 under agreement as of March 7, 2009.

A way to interpret that is that for every home that was under agreement, almost 20 more were not under agreement yet.  In the lower price range of $150,001 to $200,000 for every home under agreement, approximately 4 hadn’t yet reached point of being under agreement.

The current administration is working on several pieces of legislation aimed at assisting banks in making loans, assisting consumers in preventing foreclosure and renegotiating mortgage loan terms, and providing funds to stimulate the economy into growth.  Part of the incentives includes offering tax credits to buyers of homes.

Is now really a good time to buy a home?

With interest rates being at such low levels, I believe it is.

With the selection of homes available currently, I believe it is.

With the lower competition from other buyers, I believe it is.

With the economic stimulus packages thrusting so much money into the economy, and with the possible inflation and subsequent increase in property values that may result from that, I believe it is.

Is now really a good time to sell a home?

With interest rates being at such low levels, I believe it is.  It helps buyers qualify financially.

With our Lancaster County area having such a diverse economic base that we’ve been shielded somewhat from the more severe downturns of other areas, I believe it is.

With some sellers with high mortgage balances listing their properties at inflated prices, making properly priced homes more attractive, I believe it is.

If you have a change in you life that requires you sell a home, I believe it is.

Thank You!

 Prepared by:   J. Merle Sollenberger, GRI, CRS, Associate Broker, Realtor®Prudential Homesale Services Group150 North Point Boulevard, Lancaster, PA 17601717-560-9100     www.msollenberger.com        msollenberger@topproducer.comLicensed in PA

As people begin to think of Spring and possibly moving, I have seen an increase in the number of inquiries at our Kiosk at the Park City shopping mall.  Just this past week the character of inquiries has moved from “how is the market” to “we are thinking of moving”. 

Here are the numbers from my February 4, 2009 searches in the Lancaster County MLS:

                        Active Listings   UA Listings    Ratio         Prior year Ratio    2004/05 Ratio 

February 4, 2009      2,730               447        16.37%          24.62%            75.45%

January 3, 2009        2,660               427        16.05%          21.29%            85.24%

December 4, 2008    2,848               518        18.19%          24.15%            85.74%

November 7, 2008    2,903               593        20.43%          20.43%            95.00%

The Lancaster County Association of Realtors February 2009 newsletter House Calls indicates: “in a recent report by the Lancaster County Association of Realtors® (LCAR), the 4,424 homes sold in 2008 is a 23.0 percent decrease from the 5,746 sales in 2007.  The record is 6,453 sales in 2005.  The $187,447 average sale price for 2008 is a 3.3 percent decrease compared to the 2007 price tag of $193,869”.  We have seen a slowing of the pace of sales, but we have not seen the sizable decline in values that other areas have seen.

Much of the national news focuses on areas of the United States that are outside of our Lancaster County Market area.  Mark Korman, one of our company directors, recently indicated that in Las Vegas, 1 out of 78 homes are in the foreclosure process, while in Lancaster County it is 1 in 3,126.  Our area was recently identified by both Kiplinger and Forbes as a good place to weather a recession.

The United States and other countries have put together various stimulus packages.  President Obama and Congress are considering passage of another $750 Billion package to supplement the package in 2008.  With all that money flowing into the system, I could envision that we soon see a strong resurgence in the real estate and financial markets in the next year or two.

Is this really a good time to buy? Is it even possible to sell?  I think it is a great time to buy.  Interest rates are low by historical standards.  I hear rate quotes of 6 percent recently.  While that may not be as low as we have seen recently, it is a far lower rate than the 18 percent rate that some people were paying in the 80’s.  Also, when considering the Ratio’s listed above, buyers now are experiencing a larger selection of homes they can choose from, and they are faced with multiple offer situations much less frequently than in the years around 2004 and 2005.

Someone selling a home now to “move up” may not sell for as much as they wish, but the purchase they make is likely to be even more attractive.  An example may be that if they sell for 3.3% less than they may have three years ago, 3.3% of that home sale price is less than 3.3% of the price for the home they are purchasing.  That difference, combined with the lower interest rate they are more likely to enjoy now than if they wait until the economy gets vigorous again, will benefit them for years to come as they enjoy the new home.

Buyers considering new construction homes may see even more value than they could have a couple years ago.

Regarding selling a home now:  In House Calls, LCAR reported that there were 925 homes sold in the fourth quarter of 2008, and considering that the five-year average of fourth quarter sales is 1,314, things could be worse.  The homes that are selling are prepared well for the market.   Well prepared includes cleaning, staging, pricing, showing convenience, and availability.  People who address these areas properly sell their homes.  They do not need to keep showing the home, wondering when someone will indicate true interest with a written offer.

Now is a great time to buy a property!

 Prepared by:   J. Merle Sollenberger, GRI, CRS, Associate Broker, Realtor®Prudential Homesale Services Group150 North Point Boulevard, Lancaster, PA 17601717-560-9100     www.msollenberger.com        msollenberger@topproducer.comLicensed in PA

January 20, 2009 

Dear President Bush,

Thank you for your service to our country over the last eight years.  It was a challenging time for our country, with 911, hurricane Katrina, two wars, economic challenges, and many other things.

As I listened to parts of your press conference a day or two before the inauguration it was clear that you had disappointments.  I hope though, that you have a larger sense of serving well, and feel and believe that many people appreciate your service.

Laura was always very graceful in her demeanor as she related to people.  She is a beautiful woman that complimented your public appearances as well as your overall effort to serve our country.

People will criticize some of your choices.  Yet I appreciated the sense of conviction you showed as you spoke of your decisions.  I personally had a sense of confidence in your decisions, based on the belief that your knowledge of situations was far beyond mine.

In years to come, the historians will write commentary about your presidency, and events in the future will either confirm your decisions or show the flaws in your choices.

I felt sadness watching you step on the helicopter for the ride to the airport and as Air Force One took off, taking you to Texas.  Having been in and out of leadership roles, I imagine your feelings as you watch the attention of the country shift from you to President Obama.  I wish for you a speedy and comfortable transition from the role of President to the private roles you will fill in the future.

If you are ever near Lancaster, PA, I’d love to have lunch with you, my treat.

Thank You,

J. Merle Sollenberger

January 20, 2009

Dear President Obama,

Congratulations on your election and inauguration.  Today I watched news coverage of the event and was inspired.  To have over 2,000,000 people gather in Washington today to watch and listen as you take the oath of office indicates that many other people are inspired as well.

Inspiration is good for us, especially at this moment in time.  There are many things going on that concern us.  There are challenges with the economy, with national security, wars, climate change, and many more.  Yet today your assumption of the role of President of the United States gives many people hope and inspiration.

As we have seen today, the orderly passing of power from Mr. Bush to you is a wonderful process, a process that we have enjoyed repeatedly with prior presidents.  Many people in other countries do not experience seeing that process in their country, and could become discouraged when a leader acts in a manner that is not beneficial to the entire country.  Our process of a new leader refreshes our hope and our faith in ourselves.

Mr. Obama, many people voted for you because of your message of “Change”.  Your comment today that 60 years ago your father may have been denied service in a restaurant because he is black, and here today you are elected president, speaks to the significant changes we have seen in our country in a few generations.  That change was very positive and a great stride.

The real, serious, and many challenges you mentioned in your speech, challenges that will be met, will best be overcome by a new era of responsibility by all of us.  I intend to do my part in meeting those challenges in my family, community, career, and life.  As you mentioned, in the future let it be said that we did not turn back or falter.

Mr. Obama, the “American Dream” was renewed again today.  May you be blessed and guided by God in your work and life as you strive to continue that renewal for our country and for the world.

Thank You!

J. Merle Sollenberger

Here are the numbers from my January 3, 2009 searches in the Lancaster County MLS: 

                        Active Listings   UA Listings    Ratio    Prior yr Ratio    04/05 Ratio   2001 Ratio

January 3, 2009           2,660           427        16.05%    21.29%        85.24%          23.10%

December 4, 2008       2,848           518        18.19%    24.15%        8.74%            35.31%

November 7, 2008      2,903            593        20.43%    20.43%        95.00%           33.91%

October 4, 2008          2,879           652        22.65%    28.76%        90.55%          33.36%

September 6, 2008      2,819           680        24.12%    32.90%        95.09%          35.99%

August 9, 2008            2,852           714        25.04%    41.02%      103.22%          (n/a)

July 5, 2008                 2,736           798        29.17%    44.61%      109.65%          39.34%

June 3, 2008                2,664           886        33.25%    49.34%      129.82%          41.86%

May 6, 2008                2,638           922        34.95%    48.47%      128.52%          43.30%

2008 Ended with a lot of people saying things like “I’m glad that’s over” and “that was a rough year, I hope 2009 is better”.

The Intelligencer Journal/Lancaster New Era reported January 1, 2009 that the stock market finished the year at 8776.39, a 33.84% decline for the year.  That market decline has unnerved many people as they look at their retirement and investment portfolio.  Jobless claims have risen sharply recently nationwide, and even in Lancaster where we have been insulated well from much of the most painful unemployment and housing market declines we are seeing an increase in jobless claims.   Recently economists declared that we have been experiencing a recession since December 2007.

Someone ask recently about having their house reassessed due to the market decline.  In Lancaster we have not seen any significant decline in home values.  Recently there were fewer homes changing ownership in Lancaster each month compared to prior years.  For example, the Lancaster County Association of Realtors publication, House Calls, reported in the January 2009 issue that there were 281 homes sold in November 2008, down 35.1% from 433 that sold in November 2007.  For the first 11 months of 2008 the number of homes sold is down 23.0% from the same period in 2007.  The lower number of homes sold does not identify an overall value decrease in what those homes sold for.  For example, a home that sold for $200,000 in 2006 may still sell for a similar amount today, not necessarily much above or below the $200,000.

Some good news is that oil prices have dropped from a high of approximately $145/barrel in early summer to $96/barrel in September and to $68/barrel in October and now are down to $48.42/barrel today as reported on CNBC.  Gasoline prices at the pump have declined from around $4.00/gallon to the $1.659/gallon I paid today.

Interest rates are in the 5% to 6% range for 30 year fixed rate mortgages.  There are lenders offering loans.

The election is over and Mr. Obama plans to be sworn in on January 20 and is pressing for another stimulus package to bolster the economy.  There is a huge amount of enthusiasm for his presidency as evidenced by the record number of people expected to come to Washington DC for the inauguration.

Recently we have seen buyers seeking bargains in the housing market, but sellers are not always agreeing to lower prices and are holding their properties in anticipation of things getting better.  As I mentioned in October, that alone is a positive indicator of belief in the future.

The United States and other countries are putting together various stimulus packages.  With all that money flowing into the system, I could envision that we soon see a strong resurgence in the real estate and financial markets in the next year or two.

Now is a great time to buy a property!

 Prepared by:   J. Merle Sollenberger, GRI, CRS, Associate Broker, Realtor®Prudential Homesale Services Group150 North Point Boulevard, Lancaster, PA 17601717-560-9100     www.msollenberger.com        msollenberger@topproducer.comLicensed in PA

Here are the numbers from my October 4, 2008 searches in the Lancaster County MLS: 

                        Active Listings   UA Listings    Ratio              2007 Ratio       2001 Ratio

October 4, 2008          2,879               652        22.65%          28.76%            33.36%

September 6, 2008      2,819               680        24.12%          32.90%            35.99%

August 9, 2008            2,852               714        25.04%          41.02%            (not recorded)

July 5, 2008                 2,736               798        29.17%          44.61%            39.34%

June 3, 2008                2,664               886        33.25%          49.34%            41.86%

May 6, 2008                2,638               922        34.95%          48.47%            43.30%

The Stock Market has declined significantly recently.  Yesterday the Dow Jones Industrial Average declined 514 points to 8,519, after reaching its all time high of over 14,000 just over a year ago on October 9.  That is an approximately 40% decline from its high last year.  Today at 2:00 PM the DJIA is down over 170 points again.  Recently several large banks and financial firms have failed, and more are expected.

The Good News!

Congress passed the legislation to fund the banking system, the “bailout”.  Steps are being taken to restore confidence among banks, with the intent being to encourage lending to help consumers and businesses have the resources they need to conduct business.  The Fed has injected vast quantities of money into the financial systems, and central banks in other countries have done the same.  With all of this money injected into the system, I believe that when the economy resumes its growth, we will see significant activity in housing and other industries.  I believe there is now pent-up demand, where people have chosen to not move now, but when things look better will follow through with their plans.

Other good news is that oil prices have dropped from a high of approximately $145/barrel in early summer to $96/barrel in September and to $68/barrel at approximately 2:00 PM today.  Interest rates are in the 6% to 6.5% range for 30 year fixed rate mortgages.  There are lenders offering loans.  In two weeks the election will be over.  It may be that counting ballots will still have us in suspense, but the campaigning will be over.

Recently we have seen buyers seeking bargains in the housing market, but sellers are not always agreeing to lower prices and are holding their properties in anticipation of things getting better.  That alone is a positive indicator of belief in the future.

Like I mentioned in September, oil prices, and interest rates are down, people are getting married and starting families.  That makes now a great time to buy a property!

 Prepared by:   J. Merle Sollenberger, GRI, CRS, Associate Broker, Realtor®Prudential Homesale Services Group150 North Point Boulevard, Lancaster, PA 17601717-560-9100     www.msollenberger.com        msollenberger@topproducer.com

What a difference a few months can make in the local real estate market.  The numbers from my August and September 2008 searches in the Lancaster County MLS indicate the following:

                        Active Listings   UA Listings    Ratio                     2007 Ratio       2001 Ratio

September 6, 2008      2,819               680        24.12%          32.90%            35.99%

August 9, 2008            2,852               714        25.04%          41.02%            (not recorded)

July 5, 2008                 2,736               798        29.17%          44.61%            39.34%

June 3, 2008                2,664               886        33.25%          49.34%            41.86%

May 6, 2008                2,638               922        34.95%          48.47%            43.30%

April 6, 2008               2,523               808        32.03%          50.33%            38.11%

March 6, 2008             2,403               745        31.00%          50.76%            34.49%

February 2, 2008         2,340               576        24.62%          47.33%            28.60%

January 5, 2008           2,273               484        21.29%          33.22%            23.10%

A week ago two huge mortgage firms, Fannie Mae and Freddie Mac, were “bailed out” by the Federal Government.  This past weekend, after a search for capital, Lehman Brother failed to find a buyer for itself and the Fed declined to bail it out.  Merrill Lynch, also needing capital, was purchased by Bank of America.  These are very significant events in the US and world financial markets.  These events are the result of many mortgage borrowers defaulting on their loans and the resulting challenges in the mortgage security markets.  Today, the uncertainty on Wall Street has investors moving money into bonds, pushing yields down, along with mortgage rates.

Other good news is that oil prices have dropped from a high of approximately $145/barrel to $96/barrel today.  Hurricane Ike went through the Gulf of Mexico and into Texas this weekend, but did not damage the oil production facilities extensively.  That is good news for those heating with oil this winter as well as for many transportation services and users of petroleum products.

Each day the newspaper reports the Engagements and the Obituaries, showing that many activities go on in spite of what happens in the real estate and financial markets.  At Park City, our local shopping mall, people still stop at our display to ask about homes.  The shoppers are carrying bags with items they purchased.  In the midst of the caution people are still making purchase choices.

Oil prices, and interest rates are down, people are getting married and starting families.  That makes now a great time to buy a property!

 Prepared by:   J. Merle Sollenberger, GRI, CRS, Associate Broker, Realtor®Prudential Homesale Services Group150 North Point Boulevard, Lancaster, PA 17601717-560-9100     www.msollenberger.com        msollenberger@topproducer.com