Home sale outlook; Capitol-Week-In-Review

What to look for on Smart Talk Friday, January 27, 2017:

Nine years after subprime mortgages and shaky home loans contributed to the Great Recession, home sales have made a big comeback.  Almost five-and-a-half-million existing homes were sold last year and housing starts had their strongest year in a decade.

Although 2016 was a strong year for housing, December was a down month.  Home sales declined by 2.8%.  Analysts believe higher mortgage rates and prices as well as a small inventory of houses on the market all led to the decrease in sales.

These statistics are all national.  What does the home sale and real estate market look like in Central Pennsylvania?

That’s the topic of Friday’s Smart Talk.  Appearing on the program are Greg Rothman, President and CEO of RSR Realtors, Angela Shifflet, Residential Mortgage Sales Manager and Mike Peduzzi, Executive Vice President and CFO with Mid Penn Bank and Daniel Durden, CEO of the Pennsylvania Builders Association.

Also, it’s been a busy week at Pennsylvania’s State Capitol.

WITF’s Capitol Bureau Chief Katie Meyer joins us to discuss updated projection of the state’s budget shortfall by the Independent Fiscal Office, the Wolf Administration’s plan to close the state prison at Pittsburgh to save money and the firing of former Secretary of Drug and Alcohol Programs Gary Tennis.

EMAILS

on housing:

–  My son is disabled and living on Social Security Disability, a very limited income. He has found a small church, zoned residential that the owners will assist renovating into a home, which is on the market for $45,000. He wants to buy this home, and my wife and I want to give him a 20% down payment, however, banks seem to only want mortgages over $50,000 minimum.

If his loan is only $36,000, he can afford the mortgage without worrying about the payments. How can we find a mortgage for this home?

Please help!!!                                                 – Manuel

Angela Shifflet responds: I would suggest reaching out to a local community bank for a Home Equity Loan instead of a Residential Loan.  These loans do not have many of the constraints that residential mortgages have.  With the property type being rather unique there is a strong chance that there could be an appraisal issue with a residential loan and again would be a better fit for a Home Equity Loan. 

 

– You really didn’t answer the question about the $ difference between one point in mortgage rate. 

200,000 for 30 year @ 3.5% vs 4.5%  for example.             – Steven

Angela Shifflet reponds: The difference in the monthly payment is $115.28 each month.

 

– Do any of your panel know anything about buying, building and financing with regards to the Tiny Home market, if any, in this area?                                    – Manuel

Angela Shifflet responds: In regards to the financing, it would be difficult if not impossible to receive traditional financing for this type of property.  If they are permanently affixed to a foundation you could look at a Home Equity Loan from a local, community bank as a possibility.  If the property is the type that is not permanently affixed to a foundation, your options would be limited to an unsecured loan, signature loan or using equity from a different piece of collateral.  You should also ask the builder or manufacturer if they have their own loan programs available for this special kind of financing.

 

–  We built our current home 2007, closed Nov 2007.  There is an expectation of the buyer that the builder will adhere to best building practices and be morally and ethically responsible on building a good, solid, safe home.  From going through the building process, I can say, most of the regulations that the builder was required to follow (Fed, State, Township) were NOT excessive.  The builder would have left us with a horrible house if they were not required to follow the regulations.  I feel they skimped every opportunity they could especially in the soil management area.  (Chartwell – York County)

As far as changes to the mortgage regulations, I am disgusted with how the banks were allowed to play the games they got away with in 2006, 2007, 2008.  We applied for a mortgage, signed paperwork on a package we agreed with.  Wednesday before our closing, the bank contact called to say our package was no longer available.  They had a different package, but the monthly payment was going up $400/month.  We didn’t see the paperwork until the night before closing.  We had to decide to go with the new mortgage agreement or pay a fee to the builder for delaying the closing.  We went with the mortgage.  We were horribly played.  My sincere hope is that the regulations on banks do not get lifted during the new ‘Wall-Street/Banker’ administration.  (National City, now PNC)                                                                                                        – Jeanette

– Uncontrolled or poorly controlled stormwater runoff has caused increased flooding and streambank erosion that affects roads, homes, and businesses.  So lack of regulation also has a cost, but it is borne by landowners and municipalities downslope and downstream.                – Lynn, Duncannon

– I live in Manheim township in Lancaster county, notorious for high regulations.  After talking with the inspector before a project, I appreciate the regulations.  They are for safety, keeping up with technology.  There are to many fly by night builders where building is shoddy and potentially harmful shortcuts are taken.

Here’s the big surprise: He showed me a copy of our original home building plan from 1972.  It was hand drawn, that is quickly sketched on a yellow pad. Exterior walls with dimensions in feet.  Neither our front porch nor our back porch are even on the sketch!

The original builder was high caliber and the original owner was an engineer.  For us, it worked out.  We have a solid home.                                                                 – Sandy