This weekend I took the boys to a show they had been begging me to go to. What was it? A Truck Show! Not just any truck show, but a Mack Truck Show held in Lititz PA (Brunnerville, to be exact) at the facility of the Gerhart Equipment Company.
There were LOTS of trucks there...
Big trucks, small trucks (not too many of those though), dump trucks, tow trucks...trucks!
My oldest son has been reading about trucks and could name most of the models. It was definitely not my cup of tea...
The Gerhart Truck Show is apparently one of the biggest truck shows in Lancaster County annually (it's the only one that I know of, actually)...
There was a bluegrass band and food (of course), with proceeds going to the Brunnerville Fire Company, who had a lot of volunteers there doing a great job.
Did I mention that there were a LOT of trucks there?
Another month gone by...and time to look at the numbers for August 2009 for the Lancaster County Residential Real Estate market. As you know, I'm a charts guy so here are some charts!
Overall, we had a good month! Pendings and Closed home numbers are way up. New listings held steady, which we really needed to keep the supply down as long as possible while sales crawl back up. I'm particularly happy to the see the prices coming down (correcting slowly). After many months of higher average days on market for sold homes, the number came sharply down to 2008 levels. All good!
I tried to highlight the same timeframes for the last 2 years so you can see the curves. For example, last year the sales were already tailing off after peaking in June 2008 (pink line). This year, although far off 2007 levels, the home sales numbers are behaving more "normally". The big question is "what will happen in the fall?" when the bottom fell out last year...
My two little bubbles show my thoughts on the average new listing an ultimate sales prices - the Seasonally-adjusted numbers (12 months rolling average) are both on the decline, in my opinion nicely correcting downwards. Overall, countywide, we've only seen less than 10% average price declines in sold homes.
Let's look to see how September shapes up - I'll be posting that one pretty soon since I'm interested to see what happened!
On another note, Sheriff Sales in Lancaster County are up 20% over 2008 (as of the already-posted November sale). Where will that go?
Once again, a bunch of us Twitter nuts got together at the nutty time of 7am at our old standby, the Prince Street Cafe in downtown Lancaster City PA. The conversation was led by Brenda (@crazywidow) about new locations to try for future tweetups, and we developed a new list to work on. Thanks Brenda!
The gang today was:
@neilrhen
@russellfrost
@poservarial
@bbes
@lancasterhomes
@airport_girl
@crazywidow
@danielklotz
@poservarial
@chuckholt
@odonnellsteve
@godesignunit x2
@KMueller62
@ryanlandgraff
Looking forward to the next tweetup!
This is one of those posts where I wish I didn't have to write it, but felt it was so important to my readers that I would be remiss not to at least talk about it.
Everyone out there probably knows somebody who is behind on their mortgage payments, looking for alternatives and likely also just finding out that their home's value has dipped below what their loan amount is. I know some within my own personal circles. It's a tough situation for me to advise them as a professional because it's such a personal challenge to their pride and self-worth, not to mention their plans and dreams for the family. The question we're asking is "when is this going to stop and where are we heading?"
I'm going to put up a few graphs that show the trends nationally with regards to mortgage delinquincies:
This chart is by quarter - Single-family mortgages set a new record delinquency rate in the second quarter of 2009, according to a quarterly survey by the Mortgage Bankers Association. Those of us in the real estate business see the foreclosure process (just visit the local Sheriff Sale docket to see the current numbers) but the looming delinqency-to-foreclosure issue is far, far larger.
The Wall Street Journal on 8/3/09 reported the following quote: “While subprime mortgages sparked the first round of housing problems two years ago, now "troubles are lurking further up the food chain," says Joshua Shapiro, chief U.S. economist at MFR Inc. White-collar job losses have accelerated while more adjustable-rate loans to prime borrowers are resetting to higher payments. ‘You put all that together, it leads me to believe that the next leg down on home prices is going to come from the top,’ he says.”
The first objection someone may have would be to say "yes, but historically those who are delinqent usually get their act together and come current on the mortgage after a while". That WAS true, but not anymore! We call that the "Cure Rate", that is the rate of delinquencies that go back to current. The Wall Street Journal reported on 8/24/09 about a Fitch analysis that found that the Cure Rate from 2000-2006 was 45% (which means about half of people fix their delinquency). However, as of July 2009 the rate had dropped to just 6.6%! That means that over 90% of delinquent customers are going to foreclosure. Take a look again at the above chart...
The next thing someone will say is "well, that's the 'sand states' and not my area". Here's the chart for all 50 states showing the same breakdown of delinquencies and foreclosures. Guess what - most states have a significant problem, especially compared to historical figures.
Now the next thing someone may say is "aren't those loans going to get 'fixed' by a loan modification?" I know several people right now who are applying for a Lancaster County loan modification but are waiting and waiting. I hope it works out for them...
In reality, loan modifications are hardly making a dent. To me, that's a burning question. Why arent banks being more aggressive in giving customers the option to extend their loan and/or reset to a lower rate? Why are they being SO difficult? The people I know don't want to be foreclosed. They CAN make payments. They just need the terms redrawn to allow them to catch & keep up. Loan modifications are not helping us get this crisis under control.
What are the causes of all these delinquencies? Here's a chart that is enlightening:
We hear a lot about adjustable rate mortgages being the culprit, but the reality is that it's the loss of jobs and the tanking real estate market that's the perfect storm. See my previous post on unemployment in the nation, the state and Lancaster County.
Keep in mind, this post is not intended to give us "good news". You may be experiencing good things in your market and that's great. My intent is to get us thinking about the challenges that aren't going away and how we're going to address them as homeowners, agents and professionals. I'd love to hear your ideas!
I thought this review of unemployment in Lancaster, the state and nationally would be timely given my upcoming set of articles on the state of home sales and the real estate market outlook. Here's a chart showing the historical trends:
You'll notice right away that the Pennsylvania unemployment rate very closely tracks with the national unemployment rate. In 2009 you can see that the national rate is leaping up & away as other states (such as Nevada and Michigan) jump into the middle teen rates for unemployment.
Lancaster County has historically tracked about two percentage points below the state and nation but you can see that the gap has closed in recent years. We're getting hit with the same big spike in 2009 and are at all but 8% right now. The national rate is approaching 10%.
Here's the definition of "unemployed" that is commonly used. Keep in mind, by this definition people who are not actively looking for work are NOT COUNTED - that includes folks who have given up the search for the time being and those who are underemployed (not earning enough to support themselves). The actual percentage may run into the high teens...
Why am I talking about this? I've been doing homework on our future market here in Lancaster County and the impact that foreclosures will have in driving down prices. I beleive there's a whole new wave of foreclosures coming this winter and into 2010. If you're like me you're probably talking to people who are just about to lose their house (or voluntarily give it up - we'll talk about that). The unemployment situation is a root cause of all this.
Look for my next article on the develping story of mortgage delinquincies and the failure of "loan modifications".
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Your One-Stop source for expert Lancaster County PA Real Estate assistance. Jeff's blog is nationally-featured and he's been quoted in Lancaster News, PA Business, WGAL & the Wall Street Journal.
Raised on Long Island, Jeff received his Associate Degree in Business at Suffolk College in 1985. He transferred to Penn State at University Park, PA to complete his undergraduate studies, earning a Bachelors of Science in the Marketing discipline in 1988. RJR Nabisco Brands, who had taken Jeff on as an intern in the last summer of his time at Penn State, offered him a sales position calling on accounts across Long Island. Thus began his career, one which would lead him to Lancaster armed with one of the top resumes in the Real Estate industry.
In the past sixteen years Jeff has worked for several multinational corporations, rising from route sales to managing large accounts and working daily with company chairs and officers. Along the way Jeff acquired his MBA in Business Management at Dowling College in Oakdale, NY. More importantly, Jeff has operating a multimillion-dollar internet sales division and in that capacity handled innumerable customer service calls, successfully resolving the vast majority. This in combination with his years of consultative sales experience has given Jeff an innate feel for the needs of the customer which he has successfully integrated into his Real Estate practice.
With Jeff Geoghan as your representative, you can be assured of the very best in personal, professional service. Contact him today to discuss your real estate hopes and dreams.
Jeff R. Geoghan strives to provide the very best in service and expertise possible to his customers. Whether you are looking to sell a home or buy your "dream home", Jeff Geoghan is the right choice. Also, Jeff is an agent focusing on ways to encourage the growth of "green building" practices and energy efficient homes, for greater environmental stewardship in the real estate process.
Throughout the United States, there is a rising interest in ways to beat skyrocketing fuel prices, live more independently of the "grid" and protect the environment of which we are all called to be good stewards of. The sentiment has even reached into the state and federal governments, who are now beginning to recognize this movement as "not going away" and are working on incentives to spur development. The good news is that homeowners have more resources at their fingertips that ever before, and that accomplishing the goals of independence, savings and environmental stewardship are more attainable than ever.
The Real Estate industry nationwide, however, has huge opportunities available to share these emerging and now-standard technologies with the home consumer. In the home sales process, little to absolutely no emphasis is placed on the energy consumption of the home or the degree to which "green" building practices are employed (in new homes especially). In our fossil-fuel world of central Pennsylvania, home sellers, buyers, builders and agents do not focus on doing things better & cleaner but take fuel oil, gas and grid electricity for granted even as these items rise in price constantly. There is a better way!
The mission of Jeff R. Geoghan, his partner firms and YourLancasterHome.com is to bring change to the industry in central PA by focusing on the ways Real Estate customers can save money, improve their lifestyle and reduce dependence on fossil fuels with their attendant costs. Through his affiliation with the Green Building Association of Central PA Jeff will help educate his clients on ways to improve homes through "green" projects, and inform buyers on the merits of different new home constructions. Through his affiliation with the Northeast Sustainable Energy Association, Jeff will help educate on ways to reduce energy expenses in the home, and to explore alternative energy options that are already available. Lastly, as an official Energy Star Partner Jeff will educate on the relative merits of appliances, insulation, lighting and other energy-saving strategies. Here at YourLancasterHome you will find benefits offered nowhere else in the Real Estate industry today.
With a solid track record of residential sales in and around Lancaster County, Jeff is well-placed to offer the top-notch service expected of a professional agent. If you, as a prospective home sales customer, are looking for the edge in energy management, Jeff stands alone as the agent of choice.
"We beleive Jeff went above and beyond the normal service. He made us feel like we were the only clients he had. We highly recommend Jeff" - The Haines - Hamilton Park
"Jeff was a pro in all respects to our sale and purchase. He was calm when times were stressful. He always returned our calls promptly! We felt like Jeff was working for us every day...he was wonderful from the first open house through settlement"- The Swionteks - Manheim Township
"Jeff was a pleasure to work with...I will be recommending him to my friends! - The Johnsons - Lititz
"Jeff was an outstanding agent, and we would highly recommend him..." - The McEdwards - East Hempfield Township
"Jeff answered every single question we had about the process...we would recommend Jeff to anyone" - The Gildeas - Manheim Township
"Jeff Checked things even more thoroughly than we did. He was fun to bounce ideas around with, can see possibilities, helps bring relevant information and confidence to decision making" - The Weavers - Columbia
"I told a lady my kids were playing with at mall to call you...and gave her my name as a reference" - The Saint Cyrs, East Petersburg"
"Jeff was looking out for us and when he saw something that was not right in a house, he was honest enough to let us know. He really was looking out for our interests" - The Maris' - Manheim Township
"Jeff was willing to show us many homes without us feeling like we were inconveniencing him. Seeing numerous homes helped us narrow down our priorities...he was patient with us!" - The Stoltzfus' - Lititz
"Was very quick on our counteroffer - coming to us on a Friday night to sign, ensuring that we would get the house" - The Halls, New Holland
"The first afternoon we met, I was sold on Jeff" - Alisia Lara, Lancaster City
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