J. Merle Sollenberger, GRI, CRS

The $8,000 First Time Home Buyer Tax Credit has been extended, and, there is now also a $6,500 credit for people selling a home and buying another! People thinking of buying a home really should be aware of this and carefully consider the impact of not acting to take advantage of this. To take advantage of this, you need to purchase a house prior to the end of April 2010. That means buyers need to be under agreement on a property before April 30, 2010, and settle on that property on or before June 30, 2010.

Here are the numbers from my November 4, 2009 searches in the Lancaster County MLS:

Active Listings UA Listings Ratio Prior year Ratio

Nov 4, 2009 2,907 641 22.05% 20.43%

Oct 6, 2009 2,882 759 26.34% 22.65%

Sep 8, 2009 2,884 773 26.80% 24.12%

Jul 7, 2009 2,761 796 28.83% 29.17%

May 7, 2009 2,845 801 28.15% 34.95%

Mar 7, 2009 2,812 545 19.38% 31.00%

Jan 3, 2009 2,660 427 16.05% 21.29%

Price ranges up to $250,000 again show the most strength in activity and ratio. Above $250,000 there is much less activity and the average time on market is significantly longer. The Market Absorption as reported in The Lancaster County Association of Realtors publication, House Calls, indicates that in price ranges up to $300,000 the "Months Supply" maximum is 7.3, whereas $300,000 to $400,000 is 15.2 and $400,000 and up is 20.7. That indicates that someone selling a home in the $400,000 and up price range may need to be prepared for possibly nearly two years of time on the market.

The Lancaster County Association of Realtors publication, House Calls, reports in the November 2009 issue that settled units, where the home has transferred ownership, was up 22.4% in September 2009 over September 2008. Pending home sales for September 2009 have increased over 2008 by 26.8%. The pending home sales increase again points to future months of increased settled units, possibly in October, November, and December.

Our office has been seeing nice sales numbers again this month. September and October 2009 were much improved over September and October 2008, but with the $8,000 tax credit scheduled to end in November, things have quieted somewhat.

Things have been interesting lately. Recently there were two transactions where my buyers had entered into an Agreements of Sale on the homes, but unusual issues came up and both agreements ended up being released instead of settling. This is unusual in typical market environments, but not so much in the current environment. Buyers and Sellers both take on some risk when they enter an Agreement of Sale to sell or buy a home. Even knowing that risks exist doesn't eliminate the frustration when plans get changed.

On Tuesday I was talking with someone who is selling their home without a Realtor®. He told me he had his home sold twice, but when it came to getting the agreement in writing, the buyers backed out. One even bought a house on the street next to his home. He also mentioned that someone from out of town had called him, and when he talks to them next he will make an offer they can't refuse. It appears he may be giving away any commission savings he hoped to enjoy by not using a Realtor®.

Also, someone told me about a recent auction on a house, and that prior to the auction the auctioneer approached a neighbor that was attending the sale and invited him to make a bid on the property just to get the bidding started. When the auction started, the neighbor did that and no one else bid any higher, for a long time. Ultimately the bidding went higher after several recesses, but the sellers did not accept the maximum bid after all of that. It appears to me that buyers tend to go to auctions and FSBO's expecting or hoping for a bargain.

With all of the challenges home buyers and sellers can be faced with in the market, doesn't it make sense to use the services of a Realtor® that has helped many people through the buying and selling process over the last decade?

If you know someone who is thinking of buying or selling, please recommend they call me. I'll also be happy to contact them if that is appropriate.

Thank You!

Prepared by: J. Merle Sollenberger, GRI, CRS, Associate Broker, Realtor®

Prudential Homesale Services Group

150 North Point Boulevard, Lancaster, PA 17601

717-560-9100 www.msollenberger.com msollenberger@topproducer.com

Licensed in PA

Feel free to visit me on Facebook.com, LinkedIn.com, or Twitter.com.

Here are the numbers from my October 6, 2009 searches in the Lancaster County MLS:

Active Listings UA Listings Ratio Prior year Ratio

Oct 6, 2009 2,882 759 26.34% 22.65%

Sep 8, 2009 2,884 773 26.80% 24.12%

Jul 7, 2009 2,761 796 28.83% 29.17%

May 7, 2009 2,845 801 28.15% 34.95%

Mar 7, 2009 2,812 545 19.38% 31.00%

Jan 3, 2009 2,660 427 16.05% 21.29%

Several of our Prudential Homesale Services Group offices saw very strong production in September. The North Pointe office I work in was almost 37% above goal for the month in pending home sales. Some of this may be due to the $8,000 tax credit, which is scheduled to end November 30, 2009.

Buyers and Sellers are both a bit uneasy now. Buyers are uneasy due to wondering if they are buying at the right time, if prices will decline. Sellers wonder if they should wait to sell until the market improves. Sellers and Buyers anxiety also increases when inspection or appraisal issues arise, which happens frequently. Several people selling homes expressed significant relief when they reached an agreement to sell. Reaching that stage gives them the confidence that someone wants to buy the home in an environment with a lot of bad news and uncertainty.

The Lancaster County Association of Realtors publication, House Calls, reports in the October 2009 issue that settled units, where the home has transferred ownership, was up 16.5% in August 2009 over August 2008. Pending home sales for August 2009 have increased over 2008 by 30%. The pending home sales increase again points to future months of increased settled units, possibly in September, October, and November. House Calls reports that the $100,000 to $200,000 price range had the strongest performance. This is likely due to the $8,000 tax credit currently offered buyers that haven't owned a home in the last three years, since many will be buying their first home.

On September 25 I attended the Sheriff Sale at the Lancaster County Courthouse. There were 133 properties on the list to be sold. Many were continued until November 25, but 30 were sold. Of the 30 sold, all but 4 or 5 were sold to the bank forcing the foreclosure. The good news is that approximately 100 homes remained with the current owner who worked something out to prevent the foreclosure sale. The remaining homes will likely be sold in the next few months by the mortgage company using a local Realtor®. In July, there were over 150 homes on the Sheriff Sale list, so the 133 in September is a reduction of 11.3%. In a time when there is a lot of national news coverage on foreclosures, this is information that illustrates how our area in Lancaster is insulated a bit when considering other areas of the country.

Time is almost gone on the $8,000 First Time Home Buyer Tax Credit! People thinking of buying their first home really should be aware of this and carefully consider the impact of not acting to take advantage of this. To take advantage of this, you need to purchase (and settle on) a house prior to the end of November 2009. That means buyers need to be under agreement on a property before early to mid October. With the increasing length of time the mortgage process may take, it may be challenging to get approval and settled before November 30, 2009. There is a possibility the Tax Credit may be extended, but the Cash for Clunkers program was not extended, and the $8,000 Tax Credit may also not be extended.

Borrowing for a home loan increases in complexity and challenge. Lenders are faced with increasing rules and regulations and are still learning to work within the context of the legislation. Appraisal issues come up, but can be anticipated with a proper market analysis's being done by both the listing agent and the buyers agent. Buyers really need to get pre-approved to know how much they are qualified to purchase. Simply using a calculator on the Internet is no longer enough to be confident. Credit scores have become even more important that they were a year or two ago. Lenders have increased the level that a credit score for a buyer must be to qualify. Buyers that have been pre-qualified several months ago really should talk to their lender again to verify they continue to be qualified for what they are looking for.

A big Thank You to everyone who has recommended my service to someone they know. I really appreciate the confidence that shows you have in me, and will do everything I can to continue to earn that confidence.

If you know someone who is thinking of buying or selling, please recommend they call me. I'll also be happy to contact them if that is appropriate.

Thank You!

Prepared by: J. Merle Sollenberger, GRI, CRS, Associate Broker, Realtor®

Prudential Homesale Services Group

150 North Point Boulevard, Lancaster, PA 17601

717-560-9100 www.msollenberger.com msollenberger@topproducer.com

Licensed in PA

Feel free to visit me on Facebook.com, LinkedIn.com, or Twitter.com.

Here are the numbers from my September 8, 2009 searches in the Lancaster County MLS:

Active Listings UA Listings Ratio Prior year Ratio
Sep 8, 2009 2,884 773 26.80% 24.12%
Aug 7, 2009 2,805 791 28.20% 25.04%
Jul 7, 2009 2,761 796 28.83% 29.17%
Jun 5, 2009 2,844 814 28.62% 33.26%
May 7, 2009 2,845 801 28.15% 34.95%
Apr 4, 2009 2,861 642 22.44% 32.03%
Mar 7, 2009 2,812 545 19.38% 31.00%
Feb 4, 2009 2,730 447 16.37% 24.62%
Jan 3, 2009 2,660 427 16.05% 21.29%

This table shows the ratios of the number of properties currently under agreement divided by the number of properties actively on the market for 2008 and YTD 2009. The January through June time period had lower ratios in 2009 than we saw in 2008. However, in July the gap narrowed and in August and September has reversed, and activity is now stronger than last year. The Lancaster County Association of Realtors reported in The Lancaster New Era and Intelligencer Journal on August 28, 2009 that there was a 25.3% increase in the number of homes going under agreement in July 2009 over July 2008.

The Lancaster County Association of Realtors publication, House Calls, reports in the September 2009 issue that settled units, where the home has transferred ownership, was down 3.3% in July 2009 over July 2008. Pending home sales for July 2009 have increased over 2008 by 25.3%. The Pending home sales increase points to future months of increased settled units, possibly in August, September, and October.

Time is running out on the $8,000 First Time Home Buyer Tax Credit? People thinking of buying their first home really should be aware of this and carefully consider the impact of not acting to take advantage of this. To take advantage of this, you need to purchase (and settle on) a house prior to the end of November 2009. That means buyers need to be under agreement on a property before mid-October. With the increasing length of time the mortgage process may take, a safer path may be to be under agreement in late September. There is a possibility the Tax Credit may be extended, but the Cash for Clunkers program was not extended, and the $8,000 Tax Credit may also not be extended.

Thank You!

Prepared by: J. Merle Sollenberger, GRI, CRS, Associate Broker, Realtor®
Prudential Homesale Services Group
150 North Point Boulevard, Lancaster, PA 17601
717-560-9100 www.msollenberger.com msollenberger@topproducer.com

Licensed in PA

Feel free to visit me on Facebook.com, LinkedIn.com, or Twitter.com.

Here are the numbers from my August 7, 2009 searches in the Lancaster County MLS:

Active Listings UA Listings Ratio Prior year Ratio

Aug 7, 2009 2,805 791 28.20% 25.04%

Jul 7, 2009 2,761 796 28.83% 29.17%

Jun 5, 2009 2,844 814 28.62% 33.26%

May 7, 2009 2,845 801 28.15% 34.95%

Apr 4, 2009 2,861 642 22.44% 32.03%

Mar 7, 2009 2,812 545 19.38% 31.00%

Feb 4, 2009 2,730 447 16.37% 24.62%

Jan 3, 2009 2,660 427 16.05% 21.29%

Once again, it's clear that the market in the Lancaster area is strengthening in 2009 compared to 2008. Looking at the trend last year for May, June, July, and August, the ratio was declining, and this year it is consistently in the area of 28% for those four months. In this last four months we did not see an increase, but neither did we see a 10% range decline like last year over the same time frame.

Looking at the various price ranges on August 7, 2009 we see the following:

Price Range Active Listings Under Agr. Ratio Ratio 5 yrs ago C/5yrago

Up to $50,000 71 30 42.25% 76.12% 55.5%

$50,001 to $100,000 202 68 33.66% 98.44% 34.2%

$100,001 to $150,000 353 181 51.27% 196.77% 26.1%

$150,001 to $200,000 602 230 38.21% 157.02% 24.3%

$200,001 to $250,000 470 128 27.23% 89.95% 30.3%

$250,001 to $300,000 422 64 15.17% 66.67% 22.8%

$300,001 to $400,000 359 65 18.11% 42.76% 42.4%

$400,001 to $500,000 124 15 12.10% 31.67% 38.2%

$500,001 and higher 202 10 4.95% 28.75% 17.2%

Totals: 2,805 791 28.20% 103.22% 27.3%

Analyzing this shows that change in demand has had the hardest impact on the $500,001 and higher price range. The current ratio is only 17% of the ratio five years ago, whereas Up to $50,000 and $300,001 to $400,000 price ranges kept their ratio's much higher proportionally than the others. Considering that most houses sold fit into the $100,001 to $250,000 price ranges, these changes have had a significant impact on a lot of people.

Clearly the $100,001 to $150,000 range is the one most in demand. As price range increases there is generally a decline in the UA/A ratio. It appears that properties in the $500,001 and higher range are seeing the least activity.

The Lancaster County Association of Realtors publication, House Calls, reports in the August 2009 issue that settled units, where the home has transferred ownership, was down 14% in June 2009 over June 2008. Pending home sales for June 2009 have increased over 2008 by 3%. They also reported that in June 2009, the $100,000 to $200,000 market was up 30 percent over June 2008 in pending home sales. This may be the beginning of a positive trend. Last week an article in the Wall Street Journal reported that new construction activity is beginning to increase again.

Recently someone stopped when I was at our Prudential Kiosk at Park City, and mentioned that their house went down in value here in Manheim Township. They had heard from someone that house values were down 30% and they assumed their house had declined also. After a brief discussion, they were pleased to understand that they likely had not experienced a significant reduction in value. Lancaster County Pennsylvania is an area that was recently listed in the top ten areas for real estate market strength. I believe it is because we have a diverse economy, with a good variety of sectors in service and manufacturing. We are not dependant on any one sector like Detroit is on the automobile, and Florida is on tourism.

HVCC. "Havoc" is how it's referred to, but HVCC stands for Housing Valuation Code of Conduct. Recently regulations have become effective that relate to the mortgage loan and appraisal processes. HVCC relates to the appraisal process, and other regulations address Truth-in-Lending issues and underwriting issues. The time it takes to process and approve mortgage loans has increased recently, and any changes that buyers/borrowers want to make after getting approval will delay the process. Buyers need to have a higher credit score now to purchase a home than they would have needed three years ago. At a time when the unemployment rate is increasing, although at a slowing rate of increase, it is more challenging to get approval since buyers may have been downsized in a number of ways. Even if a buyer hasn't been downsized, if they are concerned about their job stability, they are likely to not pursue purchasing a home until they are more comfortable that they are secure.

Time is running out on the $8,000 First Time Home Buyer Tax Credit? People thinking of buying their first home really should be aware of this and carefully consider the impact of not acting to take advantage of this. To take advantage of this, you need to purchase (and settle on) a house prior to the end of November 2009. That means buyers need to be under agreement on a property before mid-October.

Thank You!

Prepared by: J. Merle Sollenberger, GRI, CRS, Associate Broker, Realtor®

Prudential Homesale Services Group

150 North Point Boulevard, Lancaster, PA 17601

717-560-9100 www.msollenberger.com msollenberger@topproducer.com

Licensed in PA

Feel free to visit me on Facebook.com, LinkedIn.com, or Twitter.com.

Here are the numbers from my July 7, 2009 searches in the Lancaster County MLS:

Active Listings UA Listings Ratio Prior year Ratio

Jul 7, 2009 2,761 796 28.83% 29.17%

Jun 5, 2009 2,844 814 28.62% 33.26%

May 7, 2009 2,845 801 28.15% 34.95%

Apr 4, 2009 2,861 642 22.44% 32.03%

Mar 7, 2009 2,812 545 19.38% 31.00%

Feb 4, 2009 2,730 447 16.37% 24.62%

Jan 3, 2009 2,660 427 16.05% 21.29%

In analyzing that information, it's clear that the market in the Lancaster area has strengthened a good bit in 2009 compared to 2008. Considering the ratio in January 2009 was 16.05% and has improved to 28.83% in July (a 12.78% improvement), and that the ratio only strengthened 7.88% last year, it seems like there is renewed vigor in the Lancaster market. That may be due to the economic stimulus packages put in place earlier this year. The Unemployment Report of 9.5% unemployment that was released last week points to continued problems, but considering how that number is developed, it could mean something as insignificant as more people who were unemployed and gave up looking, began looking again. That is a sign of renewed hope, not of more problems. Economically, we still haven't seen the growth we enjoyed over the last few years, but as an economics professor I had in college said, "In every expansion are the seeds for a contraction, and in every contraction are the seeds for an expansion". We will get there. Warren Buffet speaks of his confidence that over the next 10 years we will see good things in our economy and business environment. There are too many creative and enterprising people in our country for things to not get better.

The Lancaster County Association of Realtors publication, House Calls, reports in the July 2009 issue that settled units, where the home has transferred ownership, amounted to 471 in May 2008, and was down 12.5% to 412 in May 2009. They also report that the five-year average of homes sold in May is 506. In April 2005 we saw 532 homes sold. This is consistent with my numbers listed above. With the April ratio of Under Agreement divided by Active Listings in 2008 being 32.03% and in 2009 being 22.44%, we can expect that we will see fewer homes settle in May of 2009 than for 2008. However, with the ratio being 28.83% for July 2009 verses 29.17% for July 2008, I predict we see a smaller decline in number of settlements in August 2009 vs. August 2008. That may be the beginning of a positive trend.

Once again, have you heard about the $8,000 First Time Home Buyer Tax Credit? People thinking of buying their first home really should be aware of this and carefully consider the impact of not acting to take advantage of this. To take advantage of this, you need to purchase a house prior to the end of November 2009.

•1. It is a tax credit of $8,000 that reduces your taxes, possibly giving you cash.

•2. With interest rates as they are now, the cost to borrow money is not likely to get less in the future.

•3. Buyers have more homes to select from.

•4. Sellers are not able to demand the prices they may have a couple years ago.

•5. Buyers are less often in situations where offers are competing with others.

Interest Rates: Although the mortgage rates have increased slightly over the last month or so, they are still near the low's of the last 30 years. House Calls, reports in the July 2009 issue that the national average commitment rate on a 30-year, fixed-rate home loan as of June 25^th was 5.42%, down from 6.45% one year ago. In response to the increase in foreclosures and short sales, lenders have tightened eligibility requirements for borrowers and are rechecking credit scores and other facts just before settlement, and are requiring more verifications for assets and employment.

The world is changing, in many ways. Technology and culture are the areas that stand out to me the most. We have become so reliant on mobile technology, and use it to communicate in ways previously not common. Teenagers and young adults plan their lives with mobile phones and text messaging in much different ways than prior generations did. Social networking sites like Facebook, LinkedIn, MySpace, Twitter, and others are becoming so much a part of people's lives now that they check their sites sometimes several times a day. As a Realtor®, I have needed to utilize those sites to reach people. It is all a very fascinating study in culture change. Include the economic dynamics in our community and nation recently and you have a very complex and changing environment. This is an exciting time to be living in.

Thank You!

Prepared by: J. Merle Sollenberger, GRI, CRS, Associate Broker, Realtor®

Prudential Homesale Services Group

150 North Point Boulevard, Lancaster, PA 17601

717-560-9100 www.msollenberger.com msollenberger@topproducer.com

Licensed in PA

Feel free to visit me on Facebook.com, LinkedIn.com, or Twitter.com.