Bad News for the Real Estate Pessimists

Sales of existing homes unexpectedly rose last month as a warmer than usual winter boosted demand in many parts of the country, but a slack demand in some areas produced what one analyst called a "tale of two cities."

The National Association of Realtors reported Thursday that that sales of existing single-family homes and condomiums rose by 5.2 percent in February to a seasonally adjusted annual rate of 6.91 million units.

Analysts said the weather-related boost was likely to be short-lived with sales expected to slow again in coming months as rising mortgage rates further cool the housing market which has posted record sales levels for five straight years.

"Weather conditions across much of the country were unseasonably mild in January and likely were a factor in higher levels of buyer activity, which boosted sales that closed in February," said David Lereah, chief economist for the Realtors.

The Realtors have been forecasting that sales of previously owned homes would fall by about 5 percent this year compared to last year's record pace. But Lereah said he may have to revise that forecast given the unexpected strength in February.

The price of homes sold in February rose to $209,000 for the nationwide median, the point where half the homes sold for more and half for less. That was 10.6 percent above the median price in February 2006. But analysts are forecasting those double-digit price gains will also moderate this year as demand slackens.

From Breitbart.com

Presidential Appointment

On Friday, President Bush announced his intention to appoint me to the National Veterans Business Development Corporation. The Veterans Corporation Board of Directors includes Defense Secretary Donald Rumsfeld, Veterans Administration Secretary James Nicholson, and Adminstrator of the Small Business Administration, Hector V. Barreto.

"The National Veterans Business Development Corporation, doing business as The Veterans Corporation, is a Federally-chartered 501(c)(3) organization that was created by Public Law 106-50, the Veterans Entrepreneurship and Small Business Development Act of 1999. This Act recognized that America "has done too little to assist Veterans.in playing a greater role in the economy of the United States". The Corporation is charged with creating and enhancing entrepreneurial business opportunities for Veterans, including Service-Disabled Veterans. The Board of Directors is appointed by the President of the United States and provides governance over TVC." http://www.veteranscorp.org/

I am thrilled and humbled by my appointment. I intend to be worthy of the honor. To be sure, I also intend to continue my full-time work at RSR REALTORS, selling and appraising real estate.

Patriot News Sunday Editorial March 12, 2006

HARRISBURG’S FUTURE IS LOOKING UP


For over 25 years I have run along the Susquehanna River and as a teenager I would run at night across the Harvey Taylor Bridge inspired by our shining Capitol and Lady Liberty. During this time, I often longed for Front Street to return to its idyllic past of gracious mansions along the tranquil currents of the mighty Susquehanna.

My dream of white picket fences and children playing in the front yards of Front Street is just that. The reality is the Front Street mansions, then and now are only suitable residences for select few or the Governor.

Most mansions have been converted to office buildings. Other structures along Front Street have no architectural or historical value. Raising the height restrictions on Front Street would change the highest and best use to demolition and redevelopment.

Harrisburg City Council is considering a proposal that would raise the height limit to 110-feet along a 12-blocks from Verbeke Street to MaClay Street. The changes should not block the view of the Capitol which reaches 272 foot into the sky.

Already there are a dozen buildings along Front, Second and Third Streets that exceed the height limit proposed. The proposed zone is a full seven blocks north of Forster Street and the Capitol Complex.

Ironically, the State Archive Building, which was built in 1965 to house and preserve our Commonwealth’s history, blocks the view of the Capitol Dome from the north of the City – including, in more irony, the view from Capital Street.

The only building more depressing than Archive Tower is the similarly windowless building on North Second and Pine – looks like it was designed in the Soviet Bloc circa 1975. I am guessing it is even more depressing for those inside than out.

The most notable academic studies into building height restrictions are Alain Bertaud’s report for the World Bank (2003) and MacKinnon Arnott’s (1977) general equilibrium model. Both concluded that height restrictions, for all their aesthetic benefits, increase the cost of housing and real estate, drive development to outer spatial rings and ultimately have a cost to society in areas of congestion and affordable housing.

Land-use decisions are affected by government action in real estate markets. Zoning rules and regulations aspire to minimize externalities by separating different types of uses, as well as greenbelt laws and urban growth boundaries, which limit the spatial expansion of cities.

Governments also exert control over the density of development. While minimum-lot-size rules and other regulations are designed to limit suburban development densities, a much used tool is the building-height restriction and FAR (floor area ratios), which govern development in the central district of cities.

The most obvious examples are Washington, D.C., where no building can be taller than the U.S. Capitol, and Paris, where height restrictions attempt to preserve the character of the central city. Although the use of height restrictions in both of these cities is driven by aesthetic considerations, building-height restrictions may also be imposed in an attempt to achieve other goals.

Washington, DC’s height restrictions, passed by Congress in 1899 enacted a height limit for the District prohibiting private buildings from being higher than the Capitol, which reaches 288 feet above Capitol Hill at the crest of the Statue of Freedom.

It was George Washington who issued the first height restriction on buildings in the Nation’s Capital. The Father of our Country wasn’t trying to protect the Capitol (built in 1793) or his monument (started in 1848 and completed in 1885 – interrupted by the Civil War). He was concerned about architectural design and fire safety.

The modern urban planning professionals and academics now believe that the only appropriate way to develop in constricted urban areas are to build up instead of out. Due to our Commonwealth’s arcane laws against annexation, the redevelopment of the City of Harrisburg will be confined to its 8.1 square miles.

Allowing development to go up will create less expensive residential and commercial real estate opportunities. By driving development out of the cities more farms are lost to sprawl. This spatial enlargement affects consumers both by raising their average commuting distance and by pushing up the housing prices they must pay.

Harrisburg’s tremendous rebirth over the last twenty years is reaching a critical point where demand exceeds supply. As it is said, “buy land, they ain’t making any more of it.” Modern Urban development sees new land in the redevelopment of under utilized building sites by building up – preserving farm land in the suburbs and lessening congestion into the region. The future of Harrisburg is looking up, City Council should continue to look there for inspiration and progress.

W. Greg Rothman is President/CEO of RSR REALTORS® and was a founder of the Harrisburg Young Professionals.

Harrisburg Magazine: "To Buy or Not to Buy"

Nice piece in Harrisburg Magazine offering advice from REALTORS:

"There are a limited number of properties on the market...However, with historically low interest rates, there has never been a better time to be a buyer.

The City of Harrisburg has been popular for young professionals... Emerging markets (for investment) are the towns of Central Pennsylvania -- places like Steelton, Carlisle and New Cumberland.

Most people want to know what their homes are worth -- and what their neighbors homes are worth."

TIP: "Like everything else, be honest. In a hot market, it is important to be financially, mentally and emotionally ready to buy or sell. If you are just looking or exploring the market, that's fine-- just tell your agent up front."

HOMES IN HARRISBURG WEBSITE

Visit the updated Greg Rothman real estate website...http://homesinharrisburg.com

Mortgage Rate Slips Lower

Freddie Mac reported on March 3, 2006, that interest rates on 30-year, fixed-rate mortgages averaged 6.24 percent this week, down from 6.26 percent last week.

The 30-year rate declined for three straight weeks at the beginning of the year, then posted four straight increases, hitting a high for 2006 of 6.28 percent three weeks ago.

Average rates on one-year, adjustable-rate mortgages edged up slightly to 5.34 percent this week, from 5.32 percent last week.

One year ago, 30-year mortgage rates averaged 5.79 percent and one-year ARMS were at 4.41 percent.

New Keller Williams of Central PA franchise opens.

Congratulations to Patrick Smith, formerly of the Homestead Group and Keith Sealover, formerly of Jack Gaughen ERA, on their new residential real estate franchise of Keller Williams Realty. Keller-Williams Realty already has over twenty offices in Pennsylvania, but none in the Greater Harrisburg Market.

Both Patrick and Keith are outstanding top producers who I finally joined in the Top 1%* of residential agents in the Greater Harrisburg Area last year. Their new office will immediately make a positive impact on the residential market. I have enjoyed working with them in the past and consider them class acts who I admire.

I wish them luck -- though they won't need luck to be successful.

2005 Winner's Circle Top 1% (in alphabetical order) April 1, 2005

Timothy Clouser, REMAX
Timothy Costello, REMAX
Joy L. Daniels, REMAX
Donna Fleetwood, REMAX
Joan E. May, Jack Gaughen ERA
W. Greg Rothman, RSR REALTORS
Keith A. Sealover, Jack Gaughen ERA
Patrick Smith, The Homestead Group
John H. Smith, REMAX
Steve Thompson, Prudential Thompson Wood
James Wise, The Homestead Group

THE NEW LISTING FOR 2006 WILL BE ANNOUNCED ON MARCH 24, 2006. Check back for the upated list on March 25, 2006.

Building Surges in January 2006

From the news....

Construction of new homes and apartments shot up in January 2006 at the fastest pace in more than thirty (30) years!

The Commerce Department reported yesterday that building activity was up 14.5% when compared to December 2005, pushing construction to a seasonally adjusted annual rate of 2.276 million units nationally.

That was the fastest construction rate since March 1973 and the annual rate of 1.819 million units is the all-time high.

Reminds me of the Yogi Berra quote about the restaurant..."Noboby goes there anymore, it is too crowded." He might remark on this market...

"Nobody is buying real estate anymore, there is nothing for sale."