Jeff Geoghan MBA - Lancaster PA Real Estate Expert

Many of the homes in Lancaster County are older with great architectural detail and character. However, one of the less attractive historical features, from an insurance perspective, can be the”knob and tube” wiring that is commonly found in homes built prior to the 1930’s. As a result, homebuyers may have trouble finding a Homeowners Insurance carrier that will insure a home with knob and tube wiring.

What is “knob and tube” wiring?
Knob and tube wiring is an electrical wiring method that was commonly installed in buildings between 1880’s to the 1930’s...

Visit my Lancaster PA Real Estate Blog for the full article on Knob & Tube Wiring Insurance Issues, thanks!

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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 lancaster pa photography portfolio. Comments are welcome!

Courtesy of Ray Smith - Home National Mortgage

Here is a snapshot analysis on the current state of extending the first time homebuyer tax credit.

Relevant Legislation In the House:

H.R.3761 : To amend the Internal Revenue Code of 1986 to extend the first-time homebuyer tax credit, and for other purposes.
Sponsor: Rep Biggert, Judy [IL-13] (introduced 10/8/2009) Cosponsors (12)
Committees: House Ways and Means; House Appropriations
Latest Major Action: 10/8/2009 Referred to House committee. Status: Referred to the Committee on Ways and Means, and in addition to the Committee on Appropriations, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

H.R.3773 : To amend the Internal Revenue Code of 1986 to extend the first-time homebuyer tax credit, and for other purposes.
Sponsor: Rep Edwards, Donna F. [MD-4] (introduced 10/8/2009) Cosponsors (5)
Committees: House Ways and Means
Latest Major Action: 10/8/2009 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

The house ways and means committee will also be holding a hearing on the tax credit next Thursday (http://waysandmeans.house.gov/hearings.asp?formmode=view&id=8096). They will be discussing the success of the program thusfar, possible fraud as a result of the program and the possibility of extending it.

BOTTOM LINE: Speaker Pelosi has publicly stated that she wants to see the tax credit extended but I do not see her as a co-sponsor for the legislation formulated in the house. I will keep a close watch on the house ways and means committee meeting next week to see what the tone of the committee is. As of right now, there is a long way to go because all bills are still being discussed in committee and have not been taken to the floor for a vote.

Relevant Legislation In the Senate:

37. S.1678 : A bill to amend the Internal Revenue Code of 1986 to extend the first-time homebuyer tax credit, and for other purposes.
Sponsor: Sen Cardin, Benjamin L. [MD] (introduced 9/16/2009) Cosponsors (11)
Committees: Senate Finance
Latest Major Action: 9/16/2009 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.

This article was published hours ago http://www.google.com/hostednews/ap/article/ALeqM5guZ2uxoyv-PmSFsGGANQP8oGSqmAD9BBOFUO2. To summarize, it looks like the tax credit, which is being pushed by the Obama Administration, is being pursued much more aggressively in the Senate than it is in the house. Speaker Harry Reid and Senator Dodd, Chairman of the Banking Committee are both backing a bill to extend the credit. This is important as it will allow the bill to get pushed through committee faster unto the floor for a vote.

OVERALL ANALYSIS: It appears that the most powerful members of each chamber are fully backing a tax credit and that legislation is in the works. However, it is still in committee at the present time and not ready to vote in either Chamber. It is a good sign that the major players are attempting to push it through.

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Ray Smith Home National Mortgage Address: 1000 North Prince St., Lancaster, PA, 17603 Office Phone: (717) 538-0354 Cell Phone: (717) 538-0354 http://www.mortgagemanray.com

September 2009 Summary

Home sales in Lancaster County fell from August levels but did not drop appreciably from numbers posted in recent months, posting 423 in September, the same amount as in September 2007. The average sales price continued it’s slide from July highs to reach $181,435 in September. The sustained sales numbers combined with the falling average sold price is likely a result of the push to encourage first time home buyers to take avantage of the expiring $8,000 Federal tax incentive.

For the expanded coverage of the month's sales, visit my Lancaster PA Real Estate blog.

Hello everyone, I've finally decided to put together an outside blog (after how many years, Brad Andersohn?) and would appreciate it if you could check it out and give me some feedback! I took a Wordpress template, downloaded it onto my hosting account and went to town redoing it to get the look I wanted! Lots of fun (mostly) learning PHP, CSS and new Photoshop functions. But the net result is no $$$ out of pocket!

Jump there now...thanks! I'd like to get some traffic flowing through it.

One of the buzzwords crisscrossing the business internet this year is "Shadow Inventory".  I'd like to take the opportunity to explain what this is and how its going to affect you as a real estate pro or homeowner in the coming year.

Actually there are two definitions of Shadow Inventory being used today - but don't let that be confusing.  Here they are:

1) The amount of homeowners who are likely to put their homes on the market once they perceive that things are sufficiently improved so that their property will sell in a reasonable time for a reasonable price.

2) The amount of properties that have entered mortgage delinquency, are at some stage along the foreclosure process and will carry through to ultimate resale in the market.

As you can immediately see, the first definition of "Shadow Inventory" is more emotional and harder to estimate - but we who are in the industry probably all know somebody who's "holding off" making a move until things appear better.  I recently received this email from a client who has been hesitant to put his home on the market:

"At this time, I do not think we are considering a move. I see too many "for sale" signs that have been on lawns for more than a year. I know some of the prices the homeowners are asking and I think they are reasonable......and they are still not selling. It seems most of the home sales are under $200,000 and I am sure not going that low with my home. I guess I will wait out the economy problems."

According to Zillow.com's Second Quarter 2009 Homeowner Confidence Survey: "...many homeowners could be waiting on the sidelines to sell. When asked about future plans to sell, 29 percent of homeowners said they would be at least 'somewhat likely' to put their homes on the market in the next 12 months if they saw signs of a real estate market turnaround, creating 'shadow inventory' that could slow a recovery."  Estimates range from 11 to 30 million homes waiting on the sidelines depending on who you read - either way a staggering number.  Reuters quoted Zillow's Chief Economist Stan Humphries as saying "The number of homes listed officially on the market, while still at historically high levels, might be only the tip of the iceberg".

The second form of "Shadow Inventory" in housing is attributed to homes going through delinquency and foreclosure.  Laurie Goodman of Amherst Securities and her team of analysts have done a bulk of work on this subject - watch a recent interview on just this subject:

They have been using the term "Housing Overhang" to describe what is happening.  The Amherst team used, among other sources, the data from the Mortgage Bankers Association Delinquency Survey for the second quarter 2009. To quote the MBA press release, "The combined percentage of loans in foreclosure and at least one payment past due was 13.16 percent on a non-seasonally adjusted basis, the highest ever recorded in the MBA delinquency survey".

By the way, the numbers estimated 7 out the 56 million estimated homes in the U.S are heading for public sale...almost a year and half of real estate sales (135% to be more exact).  Can you say "lots of new inventory"?  The Amherst Study concludes "...housing overhang is the single largest impediment to a recovery in the housing market" (quoted from a Forbes article on the study).

So the "Shadow Inventory" of 7 million foreclosures being forecasted to hit the real estate market, in addition to the "Shadow Inventory" of milllions of other homeowners just itching to get their home sold, will be an imposing challenge to home prices (and appraisals, in the case of all those foreclosures).

If you're a homeowner and your market is relatively stable at the moment, you might want to consider putting your house on the market sooner than later, or sidestep the sale altogether if you don't really need to move.

If you're a Real Estate pro, you should watch local and state statistics closely and be informed about the changes in inventory going on.  Another good idea is to get in tune with sheriff sales in your county (mine is Lancaster County, PA) so as to be able to explain what's really happening to your clients and the public. 

Hopefully this article has helping enlighten us to what's being referred to when we hear "Shadow Inventory" used with regard to the homes market.

Don't forget to check out my recent article examining the coming storm of Mortgage Delinquencies.

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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 lancaster pa photography portfolio. Comments are welcome!