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Midstate housing prices dip

Central Pennsylvania may be
joining an unwelcome national trend.

Central Pennsylvania may be
joining an unwelcome national trend.

Measures of home prices slipped throughout the region in the
first quarter of 2008. The declines are relatively modest, but leaders of local
Realtors associations said this was the first downward trend the region has
seen in years.

The median price for homes sold in York County
from January through March dropped 3.3 percent, to about $163,000. The Adams County
median dropped almost 6 percent, to $189,000. The declines are in comparison to
the first quarter of 2007.

<The picture was mixed in greater Harrisburg. The median price rose about 3
percent, to about $165,000. The average price dropped about 1.2 percent,
continuing a trend that began in the fourth quarter of 2007.

<In Lancaster,
the median price for the first four months of the year slipped 3.4 percent, to
$170,000.

<The number of homes sold across the region in the first
quarter fell by almost a quarter, to 3,237. The figures come from local
Realtors associations.

The picture appears to vary widely in different pockets. For
example, the median rose more than 16 percent in York
County’s Central York
School District. It
dropped in the three districts bordering Maryland,
including a drop of almost 10 percent in the Southern York County School
District. Those districts have seen an influx of Maryland residents in recent years. Their
medians are still at least $35,000 above the countywide figure. Similar
breakdowns were not available for other regions.

Tighter lending may be a factor in the drop.

“The banks have tied our hands a good bit, to say the
least,” said Steven Wisotzkey, a real estate agent with Re/Max A1 Realty in
Dillsburg, York County.

The investors that provide financing for loans are demanding
much more detailed proof of income, shutting out some self-employed borrowers,
said Zachary Kuntz, a loan officer at Camp Hill-based Integrity Bank.
Financiers also have pulled back from 100 percent loans, which were popular, he
said.

The upshot for the housing market: “The supply of buyers has
decreased,” Kuntz said.

To make things worse, negative media reports about the real
estate market may have fallen on especially sensitive ears in Central
Pennsylvania. The region’s economically conservative residents
have pulled back from home buying amid the bad news, Wisotzkey said.

Observers said the decline was also a matter of a national
trend catching up locally.

“We have a history here of having a delayed reaction
compared to the national housing statistics,” said Steve Snell, executive
officer of the Realtors Association of York and Adams Counties Inc.

But as with most economic trends, the effect in Central Pennsylvania is less extreme than elsewhere.

“When we’re talking about a correction, we’re talking about
something that’s very, very mild compared to other areas,” said Sherri Pursel,
government-affairs director for the Greater Harrisburg Association of Realtors.

Home prices in greater Harrisburg
historically have appreciated about 1 to 2 percent annually, but that rate
accelerated in recent years before slowing again, said Kate Krusko, associate
broker at Cumberland County-based Century 21 At The Helm.

“We’ve kind of reverted to the mean on that,” she said.

The slowdown is reverberating through the local real estate
market. Homes above $300,000 are barely moving, Wisotzkey said. That’s
especially true in the $500,000-$700,000 range, probably because banks are
charging higher rates on so-called “jumbo loans,” he said.

Meanwhile, people selling homes for less than $200,000 face
tougher negotiations, Krusko said. That makes the trend a good one for
first-time homebuyers, she said.

Several observers said the trend could hurt municipalities
and school districts. They rely on the realty transfer tax, a levy imposed when
a house is sold. Slower sales and lower prices will depress that revenue.

The slower market will hurt businesses that depend on
housing because buyers spend a lot of money making their new houses feel like
homes, Snell said. But Krusko said the economic spillover would likely be limited.

“I think the underlying fundamentals of our area are
strong,” she said.

Realtors are getting pinched, too.

“We were order-takers two years ago,” Wisotzkey said. “Now
we’re working for a living.”


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