Harrisburg home prices continued to rise in December 

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In a refrain that’s become a broken record, home sales prices rose last month in the Harrisburg region, as it’s still very much a seller’s market. 

Sylvia Hess, president of the Greater Harrisburg Association of Realtors, wrote in a document she prepared on 2022 real estate trends that prices are expected to continue climbing this year, though at a slower pace. 

Compared with the year before, median sales prices in December went up 4.5% in Cumberland County ($244,820 to $255,000), 11.1% in Dauphin County ($185,000 to $205,550) and 5.9% in Perry County ($179,900 to $190,500). 

In 2021, prices jumped 9.6% in Cumberland and nearly 14% in Dauphin, Hess noted. 

Statewide, that number was 14%, the Pennsylvania Association of Realtors just reported. 

Hess said national housing forecasters are projecting 2022 price increases of anywhere from 3 to 7%, with the average at about 5 to 5.5%. 

Locally, she estimated price growth would be in the 5 to 7% range. 

Mortgage rates are also expected to rise, causing affordability concerns. This means “people who were able to qualify last year may not be able to purchase that very home they were qualified to buy when rates were lower,” Hess wrote. 

In 2022, inventory should improve a bit, she said. Combined with some lessening of demand due to the higher mortgage rates, that could result in less “intense” competition. Instead of 10 or more offers, for example, a listing might get two to three offers, Hess explained. 

As of December, however, houses were still selling fast. In Cumberland County, the average days on market was 21, compared with 49 two years ago. The average days on market in Dauphin County was 19, compared with 43 in December 2019. 

Hess said her major worry is how the elevated cost of lumber and other materials is pricing some people out of the market for new construction. 

Also, 80% of closed sales last year in Cumberland and Dauphin were purchased with cash or conventional financing, which is historically high, she said. Because many first-time buyers need help with closing costs or qualify for loan programs that allow for a low-down payment, their offers are often turned down by sellers in this market, Hess added. 

And if these entry-level buyers can’t find a house they can afford because there’s inadequate supply, “we’ll see many more renters, allowing homeowners’ wealth to continue to grow while renters will see accelerating rents,” she wrote. 

That, in turn, makes it even harder for them to save money to purchase a house, Hess explained, so the dream of homeownership is deferred even more.