Recent trends building optimism about real estate
Tribune-Democrat By: Brenda Szelong
The National Association of Realtors says pending home sales rose 8.2 percent in February, signaling a second in response to the homebuyer tax credit. An April 5 release from the NAR shows that the Pending Home Sales Index for February 2010, a forward-looking indicator based on contracts, remains 17.3 percent above February 2009.
Sue Lease, associate broker with Re/Max Team Realtors, is seeing the effects of the tax credit on a local level. “We have had a number of buyers take advantage of the first time home buyers tax credit,” she said.
The program provided a credit of 10 percent up to $8,500 for contracts written through April 30 and with the closings by June 30.
“I have found, though, that First Time Buyers are wise enough to know that if they don’t find the home that is right for them by April 30, they will look until they find one that suits their needs, “Lease said.
This tax credit also grants up to $6,500 to current owners purchasing a new or existing home between Nov. 7 and April 30. Lease said that she and her husband, Bill Lease (also an associate broker with Re/Max), are noticing an increase in their business from last year.
“There was a lot of concern at the end of 2008 and through a good portion of 2009 due to the state of the national economy,” Sue Lease said. “When people heard that we were in a recession, some become cautious in making a major purchase such as a home. For us, 2009 was a year of us and downs.”
However, as Lease points out, this area did not see the dramtic losses some other areas of the country realized in 2008.
“Cambria and Somerset counties never experienced the huge price increases that occured in areas such as Florida, Las Vegas and California,” she said, “so our market did not take the big hit in prices that some of those areas have experienced.”
“Although foreclosures have increased here, we certainly don’t have the dramtic foreclosure number that have occurred in some of those places.”
“We do have more buyers calling to ask about foreclosure properties specifically. People tend to think they are going to get a better deal buying a foreclosure. But, foreclosures are often not in as good condition as homes that are owned by individuals so it may work, but buyers have to go in with their eyes wide open and usually be willing to do some more work on foreclosure than other homes.”
‘Part of the processs’
Because of the recent recession and foreclosures, Lease says an area that has become increasingly difficult is the underwriting guidelines that are constantly changing and become more stringent all the time.
“We greatly appreciate what the local lenders do to help buyers work starts after the home is sold.”
“Just because a house is under contract does not mean we’re going to make it closing. As profressional realtors, we need to enjoy being problem solvers. Working through the entire transaction requires patience and tenacity. Home buying is an emotional, stressful process. Agents need to be prepared to help their clients get through all of the stages that get their home to closing.”
And just who are those clients?
“Our buyers and sellers have always been a broad mix, ranging in agres from 23 to 90 and moving for a variety of reasons.” she said, “buying their first home, buying larger homes or downsizing, moving into or out of town or moving to another area closer to work. With the rise in gasoline prices, some buyers consider their commute to work when they are looking at homes.”
Lease said the average selling price for this region from December 2009 through February 2010 ranged from $115,945 in December to $83,771 in January to $91,342 in February.
Gray areas in market
As emerging sector in real estate is the senior market.
Linda Rauch-Howard, an associate broker and seniors real estate specialist with Howard Hanna Heritage, says that there has been a void in servicing the needs of seniors for a long time.
“Seniors have many issues that need addressed.” Howard said. “Most likely they have lived in their home for many years, so there is an emotional attachement as well as an abundance of personal items that needs disperced in some way.
“Additionally, they may be dealing with health issues while making many of the selling decisions on their own.”
Howard says she sees downsizing starting at a much younger age.
“I see people in their 50s and 60s looking for a smaller, more economical home to maintain,” she said. “They still want a home that allows the children to visit, but the need to have a four-or-five bedroom is gone.”
“People in their late 60s and beyond start looking for even more independence from a home that will tie them down.”
“These people are looking for newer apartments and condo style living…especially if they want to travel more or have a second home in a warmer climate. I also see more seniors wanting to free up their time and not be burdened with lawn work, snow removal and outside home repairs.
What should seniors consider for a move after several years in the same family home? Howard offers a “Moving for Seniors” workbook in addition to a list of services and a market analysis to assist seniors with the entire moving process.
“They need to plan ahead and should clearing out unwanted items that they won’t want to take,” Howard said.
“They will want to make those minor repairs to the home so they have an idea of how much equity will be working for them on their next home. They should start researching their options on what type of home, apartment or condo will suit their needs.”
Build or buy?
Those looking for a new home may also consider building as an option. Dan Eshleman, a Realtor with Century 21 All Service Inc., is seeing a variety of different homes being built as he represents the owners of the Estates of Parker Woods in Richland Township and Ramblin Hills in Windber.
“I’m seeing most building two-story homes with four bedrooms and two-and-a-half baths,” Eshleman said. “Folks desire spacious kitchens with an open floor plan to include the kitchen, a family or great room and a separate dining room. They dream of a three-car garage, but most just get two garage bays.”
“I am also seeing an increase in the number of ’empty nesters’ desiring to build. If this trend continues, we will start to see more ranch-style homes being built at about 1,800 square feet.”
Eshleman has noted that people looking to build are considering areas outside of Richland Township when they realize that lots of similar or larger sizes are less expensive outside of Richland.
“Ramblin Hills has realized an increase in traffic and interest as well as sales as more buyers are seeing the opportunity to build their dream home at a lower overall price..buyers who normally would not have considered Windber in the past,” he said.
“If people want to stay in Richland, it is my opinion that Parker Woods is the township’s best kept secret. The location is perfect for all the amenities of Richland, plus residents are afforded privacy and custom built homes. We had one spec house built in this development last year and it recently sold. We see this as a positive sign of things to come as we prepare to open other phases of this development.”
Finding best option
Dick Burke, owner of D.B. Homes, has also built homes in Parker Woods and is seeing an increase in business.
“In 2009, we actually built more homes that any other year in what most experts considered a down market,” Burke said. “Our business was up about 10 percent from 2008, and 2010 is very busy. However, we have noticed that most customers are a little more selective when optioning any upgrades.”
While Eshleman said he is seeing the average size home being about 2,500 square feet, Burke is seeing an average of 1,800 square feet with minimum of three bedrooms, with many families requesting four bedrooms.
“We have a nice mixture of two stories, cape cods, and ranch homes being built,” he said. “Our demographics have maintained consistency from baby boomers looking to downsize into one level home, to families growing out of their current space and need to upsize, to first-time homebuyers looking for a starter home.”
Whether they’re buying an existing home or building a new home, Sue Lease points out that people will pursue their best option.
“When people are ready–whether it be someone buying their first home, moving into the area, downsizing or moving out of the area–when the time comes, they buy or sell, as needed,” Lease said.
“Interest rate are at historical lows, which make it a great time to buy if folks are ready and comfortable with their own financial situation,” she said.
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