York and Adams Smart Growth Coalition

More jobs need to fuel York County housing market

4/26/2011
 
More jobs need to fuel York County housing market
A national real estate expert spoke Tuesday about what is needed to boost the local housing market.
By SEAN ADKINS
Daily Record/Sunday News
Updated: 04/26/2011 04:58:20 PM EDT

York, PA - Most people tie their wealth to the value of their homes rather than to stock portfolios.

"I believe that housing wealth is a big driver to the economy," said Lawrence Yun, chief economist and senior vice president of research for the National Association of Realtors. "While the national housing market is down, it can be hard for the economy to recover."

Yun spoke to local business leaders about his outlook on the national, state and local housing markets at The York County Chamber's Economics Club breakfast Tuesday morning.

Between Jan. 1 and March 31, the median sale price of a local home was $132,900 compared to $148,000 reported during the same time last year, according to the Realtors Association of York & Adams Counties.

Overall, the number of homes sold in York County between January and March fell 8 percent from 757 sold in 2010 to 693 this year, according to the association.

Here's what Yun had to say about the local market:

Q: What must take place in order for the York County real estate market to improve.

A: At this price level, between $130,000 to $150,000, it's always about jobs. Many people in York County who are buying homes are doing so in a very conservative fashion. They are staying within their strict budgets. People with decent jobs can afford to buy a home at this level. Given that the national job creation is showing some signs of recovery -- one million jobs were created last year and, possibly, I'm keeping my fingers crossed, two million jobs this year -- that will mean more jobs for this area and, naturally, that will lead to an improvement in home sales.

Q: Last month, York County's unemployment rate fell four-tenths of a percentage point to 7.2 percent. What does that mean for the local housing market?

A: At 7.2 percent, that's doing very well compared to the national level. That's a good, positive trend. You will likely find that more people are working. That rate is indicative that more small businesses in the area are beginning to hire more people. For the home buyer, it's all about the jobs.

Q: On Tuesday, the average price for regular gasoline was $3.79 per gallon -- a nearly $1 jump compared to this time last year, according to AAA's Daily Fuel Gauge Report. How will the price of gas affect the local housing market?

A: Higher gas prices are a daily reminder that there is something wrong with the country. The higher prices hurt consumer confidence. For those people who need to make longer commutes to work, such as those who drive to Baltimore, the higher gas prices will be a negative. Those people would be less likely to consider York County as a place to live.

Q: Currently, the mortgage interest rate for a 30-year fixed home loan is about 4.8 percent. By the end of the year, rates could climb to 5.5 percent. Will the increase in rates price many people out of the market?

A: The change in rates, at the median sale price, will mean very little to monthly mortgage payments. It will be very minimal compared to higher-priced markets.

sadkins@ydr.com; 771-2047

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