Lancaster PA Real Estate Blog

Pulled up a snippit today with the catchy headline "Suburbia's March To Oblivion".  The title did its job and I dutifully pulled up the link.  The author of the short piece came straight out and announced that suburbia was doomed because of the mortgage "crisis".  He continued to point out that some professors in universities have been calling for the obliteration of suburban life in favor of a return to urban locations, leaving vast swaths of suburbia to decay and crime, etc. etc.  By 2025, one academic pronounced.  All this was too much for the author who, apparently gleefully, predicted that the "frantic selling" was only the beginning of a profound change in American life.  To me, it sounded like something out of a "Mad Max" movie.  I think they actually want this to happen...

Oh, then I noticed that it was from the New York Times.  In the business section, no less.

Relieved, I set the article aside until now.  Only a writer for the NYT would be so misguided as to write of a normal economic cycle like it was the end of time, and of course to rely on college professors (with unknown personal agendas) for his research.  I was sad (but not overly surprised, sorry Gil) to see our own Gil Smart quoted prominently in the article.  At least he voiced the one concern about this sillyness.

 Read it here.  I just remembered why I don't rely on "the times" when I'm interested in our times.

According to a Washingon Post article, homes priced at an "exact" amount tend to sell for more that homes priced with lots of zeros.

Researchers at Cornell (spending those grant dollars well, I see) conducted lab tests last year on graduate students (?) and examined sale prices in a couple of busy locations in the US.  How they accessed MLS data is anyone's guess...

Anyway, the results were that people tended to view the exact price more favorably than the "big number" price. 

"The study concluded that because people are used to precise numbers for items that don't cost much and to round numbers for large amounts, consumers generally and home buyers specifically tend to perceive that a price is smaller if there are digits at the end instead of zeros."

Even the researchers thought this was a bit "ridiculous" but asserted that our response to a price was more than just "deliberative reasoning".  So, a home priced at $435,500 looks more reasonable to us than $436,000.  Even better, $498,750 would look better than $500,000 (that's a lot of zeros!).  Their study concluded that a favorably-priced home sold for about $1,400 more.

The Washington Post article also referenced some research done by Redfin where they found that a home priced in an increment of $500 tended to be the most favorable. 

While this is nothing new to any of us, I suppose it's an interesting note to remember when discussing price with a seller.

I had a closing yesterday for a great upscale Lancaster City townhome.  Everything went smooth even though the lender was coming out of California (no reflection on my home state).  Our title guru, Jim, had arranged things so that the package was here with time to spare.  The buyers had availed themselves of an incredible deal offered by the lender (nationally-known) - the lender paid all the closing fees and still had a competitive rate.  Very nice!  Our in-house mortgage rep reviewed it and couldn't match it.  Hmm...where's the catch?  Come on, there's got to be a catch?  Aren't they making $$$ on the back end?  Maybe so, but all the terms looked clean.

At the settlement table things got interesting.  The seller was a single lady who was leaving the area.  When her agent arrived he questioned the payoff amount immediately, and asked the see the payoff letter.  Oops!  Turns out the seller had refinanced last summer and the new loan contained a huge prepayment penalty!  She was livid.  The agent was both embarrased and frustrated for her (or would that be "with her"?).  The buyers and I looked on during all this commotion.  The seller claimed that the Loan Officer had not told her this, and that she had told him she might sell soon.  This mistake cost her almost $6,000 right off the top.  Talk about a rude surprise!

Well, my buyers got their turn.  Buried in the buyer loan docs was a single piece of paper regarding a "buyer protection plan" that went along with the loan.  Whoa now!  Jim (title rep) asked the buyers if they were aware of this and of course they were not...the bank was giving them the first year "free" and the monthly fee would be $37 for the life of the loan!  That's almost $4,000!  We were naturally concerned that the great deal on closing fees was predicated on the buyers signing this document.  

Thankfully, after Jim got the lender on the phone they agreed to let the buyers waive this "protection plan".  My immdiate thought was "how many bonehead title people just make the buyers sign this because they don't understand it" and "how many buyers don't actually read the stack of loan docs and would sign this?"  My folks, happily, managed to avoid it and have a great home at a great price.  The seller, on the other hand, did not do so well at the settlement table.  

What's the moral of this story?

1. If you're a buyer, ask your loan rep if there's any fine print - make sure nothing new is inserted at the settlement table.
2. If you're a seller, ask your lender if you have a prepayment or other fee should you sell now.
3. If you're a listing agent - ask your seller if they've asked the lender yet! 
   
4. If you're the buyers agent be ready for all eventualities, and communicate with the title rep.
   

This morning Lancaster County PA had the opportunity to "go solar" - at least in one small way.

The Lancaster County Career & Technology Center hosted an informational event surrounding the installation of a thermal solar system in their project "green" home adjacent to their Mount Joy facility.  The event was promoted as an opportunity to see a hot water system going in and ask questions of the manufacturer's rep.  

I had a great time talking to various attendees and looking over the systems involved.  Kim Patrick and Doug Lyon from LCCTC have done their homework on many fronts.  The system being installed is an Oventrop System 5 (see the brochure here) in conjunction with an instant-on electric heater by Seisco.   

On-hand was the Managing Director for Oventrop US, Joseph Walsh.  Joseph was very knowledgeable and has a good grasp of the emerging solar market in the US. 

 After a thorough explanation of the system and installation, he took questions from the audience. The topic quickly turned to cost issues, and his response was that a typical installation to drive an 80-gallon hot water heater was between $7,500 and $10,000.

The evacuated tubes that harness the sun's energy are made for Oventrop by Beijing Solar, and are based on a design originated by Daimler-Benz in Germany, where Oventrop is based.  Joseph had a sample tube (he's holding it on in the photo) for attendees to handle.

Also note the Seisco unit on the wall in the corner of the photo.  This heater will be arranged to provide support heat should the solar system fail to deliver the preset temperature.  For example, if the desired temp. is 130 degree and the solar can only manage 100 degrees, the Seisco unit will pick up the extra 30 degrees. 

Water distribution is via a PEX manifold - truly trick stuff! 

This photo gives you an idea of how they've laid things out.  The hot water is fed into a single manifold (to equalize pressure and allow a small 3/8 inch pipe to transmit better to the outlets) with separate valves for each need.  Red piping denotes hot, blue cold.  The white piping is another green building system - rainwater harvesting.  As I've noted in other posts, this home has two 1,300 gallon rainwater harvesting tanks buried just outside.  Water is pumped into the basement and into the lower manifold, which is completely separate from the upper blue/red manifold.  The white pipes supply the washer, toilets, hose bibs etc. with recycled rainwater.  

Overall, the morning was a great insight into just some of the new technologies that are revolutionizing home building in the US.   If you are interested in talking green building in the Lancaster County area, keep your eyes on this space for more news as it breaks!

For Lancaster PA homes for sale click here. Jeff Geoghan is a top real estate expert in Lancaster County, PA, and an involved community member. Jeff's work has been featured in the Lancaster Newspapers, WGAL Channel 8, PA Business Journal and Wall Street Journal. Jeff's blog on Lancaster County and its homes is nationally-featured. Contact Jeff for more help with your Lancaster PA Real Estate needs. Jeff is also a photographer - view some of his portfolio. Comments are welcome!

It was bound to happen.

The top 3 real estate bloggers (indeed, the only 3 active real estate bloggers) in Lancaster County, PA decided it was high time to meet face to face and compare notes. 

The place - Symposium Restaurant on Centerville Road.  A very cool Mediterranean-style gathering spot, with a killer lunch menu at reasonable prices.  The staff gave us a private corner to chat, which we did in abundance.  

Could the event have been billed as the:

Lancaster PA Real Estate Bloggers Summit?

Yes, sure why not?  Brian Shulman from Mastros Real Estate, Jeannie Kontis from the Bob Wells Team at Coldwell Banker, and myself from Long & Foster represent the best of real estate blogging in Lancaster County.  I am proud to know these dedicated professionals and only wish we could all work together!  Now that would be something...

Topics of the lunch (BBQ burgers for all, by the way - great minds think alike) were contact management software, smartphones, prospecting methods, other favorite bloggers (that would be you), widgets and assorted blog plug-ins, New York and other subjects of interest. 

The time went very quickly, to say the least!  Despite the fact that we all came from different brokerages, the common bond of total enthusiasm for blogging and the benefit it has brought us unites us in a deeper way.  We each truly are glad to see the other succeed, and are excited to go back and tweak our business to follow on the path to ultimate real estate success.  It's great fun, too!   Many of you came up in conversation and we all thank you for you support and stimulation - without ActiveRain we wouldn't know each other, let along all of you! 

My sincere thanks to Jeannie and Brian for sharing their excitement and hopes.  I look forward to doing it again.

Oh yes, and the burgers were incredible too. 

Live the Lancaster County dream - a small farm of your own to grow organic food and raise free-range chickens!  (OK, that'd be my dream...).

This 4 bedroom historic home was built back in 1895, and includes a bank barn and lots of space.  Located in one of my favorite areas in the county, Central Manor (see my post about Central Manor farms), this farmette has lots of potential to be the "spread" you've be looking for.  And at $374,900, how can you beat it?  Come see this property by calling me at 717-799-0851 or emailing me at the right of this page.

For more details and photos click here.

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For Lancaster PA homes for sale click here. Jeff Geoghan is a top real estate expert in Lancaster County, PA, and an involved community member. Jeff's work has been featured in the Lancaster Newspapers, WGAL Channel 8, PA Business Journal and Wall Street Journal. Jeff's blog on Lancaster County and its homes is nationally-featured. Contact Jeff for more help with your Lancaster PA Real Estate needs. Jeff is also a photographer - view some of his portfolio. Comments are welcome!

There was a good article on MSN recently dealing with the housing market.  I was impressed with the thoroughness and thoughful insights expressed by the author, Melinda Fulmer.  Here's the link:

http://realestate.msn.com/Buying/Article2.aspx?cp-documentid=6112643

In the conclusion of her article the author points to 5 good reasons to buy right now, and 5 good reasons to wait.  You should read them, ESPECIALLY IF YOU'RE AN AGENT PAID TO INFORM THE PUBLIC.

In the meantime, here are some good quotes for Lancaster Countians:

"But for many buyers, there's no real need to wait for the market as a whole to officially bottom out, says Delores Conway, director of the Casden Forecast at the University of Southern California's Lusk Center for Real Estate. "Real estate is local," Conway says, and therefore what constitutes the bottom for the country is meaningless for those looking to buy and sell homes in their own neighborhoods." 

"Waiting for the absolute bottom to hit before buying puts you at risk of missing it and getting caught up in a market on the upswing. Plus, for some first-time home buyers, owning simply makes better economic sense than renting."

"...even in a down market, the best houses are at least holding their value...For some people, the value of the local public schools will play a large part in their buying decision. A well-designed house in an established area with a good public-school district will hold its value and save you money in the long run. "These places don't get hurt as much as the whole market, and they recover faster"

"Of course, there are some people who are better off waiting in this market: people who bought their current home in the past couple of years. In this short period of time, the value of the home hasn't gone up enough to compensate for the agent's commission and other selling costs."

"...five is the magic number when it comes to buying and selling: If you've been in your house five years and plan to move to a place where you will stay at least another five, you're probably OK."

"If there are a lot of foreclosures continuing to pop up, prices might fall further than you'd like in the short term. That may not be an issue if you plan to stay put for a while, but it could limit your options if you need to sell or refinance your mortgage."

"But ultimately, the market will come back up, he notes, even those markets in California that are taking a beating. "Does anybody really believe that California won't come back again, and with a vengeance?" he says with a chuckle."  (I threw that one in for my California friends...)

Mrs. Fulmer makes one of the best arguments that "now is a good time to buy" of anyone I've heard recently.  She examines the circumstances that would make buying a good choice, but also recognizes the reasons for staying put. Rather then believing or rejecting this happy slogan blindly, we should analyze how our local market is changing and change ourselves to find success.  

So for those whose opinion tends towards "waiting for the bottom" - my challenge would be to look at your circumstances and reasoning, and don't make a foolish mistake just because the media says the sky is falling.

Here are the 5 reasons, reprinted with Melinda's permission:

5 REASONS TO BUY

1. Prices in the neighborhood you are interested in are relatively stable. Either they are holding their own or increasing, or the pace of decline is slowing significantly. If you have to move and don't like apartments, the small penalty you pay for missing the bottom may not mean much.

2. You plan to stay in the home for more than five years. If you can stick it out that long before selling, economists say you’ll probably ride out any downturn and come out ahead on price.

3. Your rent rivals a mortgage payment. If you can afford to buy, it can give you one bonus that renting can't: the mortgage-interest deduction on your taxes.

4. You've found the right house in the right area for you. The schools are great. You love the area and know it would be hard to find another house like the one you have your eye on. In a better market, you would most likely have much more competition for that home.

5. You've built equity in your house and are moving to a place where homes are cheaper. In your new market, your money will go a lot further.

5 REASONS TO HOLD OFF

1. You've lived in your house less than two years. Chances are you haven't had enough time to accumulate equity in your home. Indeed, you may have negative equity, if you live in many areas such as California, Florida, Arizona or Nevada.

2. Your job security is uncertain. If your company or business is in distress, it's probably better to stay put until the smoke clears.

3. You don't plan to stay in your next house at least five years. While it's not important to buy at the exact bottom of the market, it is important to stay long enough to ride it out completely.

4. You don't have good credit or a decent down payment. Do you have a job and income you can document? As a result of  the subprime lending crisis, lenders are much more careful about whom they're giving their money to.

5. You have an existing home to sell in a neighborhood where prices are dropping precipitously or where the number of foreclosures is spiking. In this climate, you're probably better off waiting out the storm.

(Courtesy Melinda Fulmer and MSN Real Estate)

The Intellingencer Journal reporter who called me Friday is a regular reader, and wanted to use my post about home prices in Lancaster County as part of an article he was writing about recent home sales numbers.  The article was on the front page of Saturday's paper.  Interested reader can see it here online.   My analysis was fairly well-represented and even my chart was reproduced.  Just another example that if you choose to work with me as your real estate representative you're getting an informed, forward-thinking professional as your partner.  Kudos to the paper for sharing my blog with their readers!