National headlines have painted a bleak picture for the real estate market this past year. However, local realtors say the situation may not be so bad.Media around the nation have focused on one of real estate's worst years in recent memory. According to the National Association of Realtors (NAR) February 2008 forecast, existing home prices are likely to have fallen 1.9 percent to an average of $217, 600 in 2007. The same group reported as of December 2007, 13 percent fewer single-family homes were sold than in the previous year.
However, Lancaster County's economic trends do not necessarily mirror those of the national market. Ferne Silberman, a realtor from Coldwell Banker in Mount Joy, said this is a good economic area in that it does not share some of the problems other regions do, such as failing industry and weather concerns.
"If people are listening to national media and letting that affect their decisions, they shouldn't be," Silberman said. "My production has not been affected."
Jim Pappas of Coldwell Banker in Centerville agrees. "Traditionally, Lancaster County doesn't have the swings in real estate like the New Jersey and Florida markets. We usually have a steady incline, and when we hit a recession we don't have the drops that they have."
It is true that the number of local home sales dropped in the past year. Statistics from the Lancaster County Association of Realtors indicate a 33.4 percent drop. In January 2007, 344 homes were sold, compared to 229 this year, but the average sale price rose.4 percent from $187, 104 to $187, 771.
One reason the situation appears so bad is the real estate market boomed for the past five years.
"People got really spoiled by the way the market was a couple years ago," Silberman said. Now prices and sales are evening out.
"The market now is what it seemed like 10 years ago," said Mike Stum, a broker at Real Choice Real Estate in Lancaster City. "It's being magnified in the news because it was so busy for a stretch of years."
Despite the slump, this may be a great time to buy a home in the area. According to Stum, with fewer potential buyers there will be less competition, and buyers can often negotiate price and the payment of closing costs.
"I think what we're seeing is the sub-prime market has gone away; the people with bad credit were pushed out of the market," Stum said. "This will wake some people up that if they want to buy a home, they need to clean up their credit."
Joseph Gallo, a broker at Re/max in Hershey, agrees, blaming mortgage companies and appraisers for lending to people who couldn't afford the payments. Those with a credit score of 680 or higher are considered prime candidates for borrowing, earning them good rates, and making this an advantageous time for those in that category to look for a house.
"It's a wonderful, opportune time to buy a property," Gallo said. He added that current low interest rates favor purchasing a home. Mortgage rates are hovering just above 6 percent, and had been as low as 5.75 percent.
"People are waiting [to buy], but interest rates will come up again," Gallo said. "It hasn't been better for a long time."
The NAR projects that prices will likely remain steady through 2008 then rise 3.1 percent by 2009. Today's market favors the buyer, but that does not necessarily make this a bad time to sell.
Local realtors say the fact that the rising sale prices of past years have slowed down does not mean it is a bad time to list a property. According to Pappas, even if a family sells their residence for a little less than anticipated, they can turn around and buy their next home lower than expected.
Silberman also noted that this is an excellent time for people in starter homes to sell and move up, because listings priced in the $200, 000-$300, 000 range are priced very well. "It's not like market values have actually declined in our area; they're holding steady," she said.
In addition, both Pappas and Gallo said homes under $200, 000 are selling quickly. Gallo added he has been able to close sales in this price range within days in the Hershey area.
Even with shaky sales nationally and an uncertain future for the real estate market, people are still buying and selling locally. "People are out there looking, Silberman said, noting open house attendance has risen substantially in the past few months.
Gallo also said business has recently been busy and that now is an excellent time to get involved in the real estate market. He said, "As long as the interest rates are low and people are working, there's no reason not to follow the American dream and buy a home. It's the best investment you could make."