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Stability keeps NEPA housing market afloat
US Land and Ranches—02/18/2008—Courtesy of The Citizens Voice.com
BY ELIZABETH SKRAPITS
STAFF WRITER
DALLAS TWP. - Headlines and news programs are full of gloom and doom about the national mortgage meltdown and the bottom falling out of the housing market.
But local and state real estate agents say the situation in Pennsylvania - particularly Luzerne County - is not so bad.
Although sales are slower, homes are still selling in parts of the county. Residential values remain on the rise in some areas, especially the Back Mountain. And it's a great time for buyers, experts say.
"All these economists talking about the housing industry are talking about markets like California, Arizona, Florida, Ohio, Nevada," said Deborah Krohn, president of the Greater Wilkes-Barre Association of Realtors. "It definitely is not dreary as everybody is saying it is. They're not talking about Pennsylvania."
Is there likely to be a housing bust similar to that of other states?
"It's not going to. Pennsylvania is a different market. Pennsylvania didn't have the peaks and valleys that the California market had, and the Nevada, and the Ohio. Pennsylvania is a much more conservative market," said Samantha E. Krepps, spokeswoman for the Pennsylvania Association of Realtors. "Pennsylvania overall is doing pretty well in comparison with other states."
The most recent data from the Pennsylvania Association of Realtors indicates home sales in Pennsylvania are down 1.8 percent. The National Association of Realtors' statistics for the end of 2007 have Pennsylvania home sales down 13.5 percent, and nationwide home sales down 20.9 percent from 2006. Many states fared worse, ranging from Florida, where home sales were down 29 percent, and California, down 29.8 percent; to Nevada, down 44.2 percent.
The foreclosure rate also lowered in Pennsylvania in 2007, bucking a national trend, industry reports show. Pennsylvania Builders' Association spokesman Scott Elliott confirmed Pennsylvania's housing market is different - even within the state.
"Most people feel that Northeastern Pennsylvania is one of the growth areas for the state," Elliott said. "A lot of people get distracted by the national statistics, but you have to realize all real estate is local."
Kevin Smith, a broker-owner at Century 21 Smith Hourigan Group and past president of the Greater Wilkes-Barre Area Association of Realtors, said he doesn't worry about a stable future in the Northeastern Pennsylvania housing market.
He listed the region's appealing features: It is well-situated with interstates and the airport for distribution, and it is close to New York and Philadelphia. It has a stable workforce and numerous educational resources, such as colleges and universities. There are golf courses and ski areas and other recreational amenities, and there are expanding entertainment venues such as Montage Mountain, Wachovia Arena, theaters and restaurants.
"It's a terrific place to live," Smith said. "There's not much that you can't do here."
What real estate experts say
Real estate transactions are down 12 percent from 2006 in the region the Greater Wilkes-Barre Area Association of Realtors serves, which Smith said stretches from Pittston to Nanticoke, Mountain Top to the Back Mountain. There were 2,507 homes sold in 2006 and 2,182 in 2007.
However, specific markets within the region showed gains. For example, home sales went up 2 percent in Wilkes-Barre City, with 363 sold in 2006 and 372 in 2007. The average Wilkes-Barre home price went up from $62,621 in 2006 to $67,680 in 2007, about 8 percent.
In the Back Mountain, which is made up of the 10 municipalities in the Dallas and Lake-Lehman school districts, there were fewer home sales in 2007 than 2006 - but on average, values increased by approximately 11 percent.
"The Back Mountain has just been so good for so many years," Smith said. "Just a little less houses sold last year. No value changed. It's a very safe investment, I would say."
"The Back Mountain is a strong area, and as far as I'm concerned, will always be a strong area," Krohn agreed. "We have excellent schools, we have great resale, and I don't think prices are diminishing to the point where people should be concerned."
In Mountain Top, Luzerne County's other main growth area, home sales also dropped in 2007, but average home prices stayed roughly the same, Smith said.
However, in the Hazleton area, sales declined by 15 percent to 20 percent in the last 18 months, said Ken Temborski, owner of Aggressive Realty and Rentals in Conyngham.
"The market is definitely in a transitional period," he said.
The database of the Greater Hazleton Association of Realtors Inc. had about 226 listings last year, Temborski said. There are currently 510.
"The supply has doubled of homes, which ends up bringing the prices down," he said. "Supply lower, prices higher; supply higher, prices lower."
Properties are also remaining on the market longer.
"A year ago the average time to sell a home was 60 days. Now you're probably looking at 120 days," Temborski said.
There should not be a reason for alarm, Smith believes.
"Every business goes through high periods and readjustment periods," he said. "When you compare 2007 to 2006, it was the best year for real estate sales in Luzerne County in the 27 years I've been in business. And if we're 10 percent off the best ever - and I have to believe that's the best ever - so what?"
What developers say
The CertainTeed fiberglass insulation plant in Wright Township is laying off up to 100 people in March. That could be symbolic of the downturn in the nationwide housing industry, Temborski said.
"Last year, the year before, new home building was skyrocketing, and we were having a hard time competing," he said.
New home sales are down, although the home-building market is not as directly affected by the mortgage crisis as the real-estate market.
Summit Pointe Builders principal John Halbing, whose projects include the 44-lot Windsor Farms in Kingston Township and 101-lot Saddle Ridge in Dallas Township, agrees business is down since its best year - 2006.
"It's not doom and gloom like other parts of the country, but we're definitely off 20, 25 percent," Halbing said. "Two to three years ago I was turning two to three homes away for every home I took. I couldn't build that many homes. I was recommending competing builders."
Now, he is talking to contractors he hasn't heard from in years who, he said, are "beating the bushes" for business.
To sell properties, Halbing is using competitive pricing and incentives. Those might include additional site work, an extra allowance for landscaping, or adding special details into a house at no charge, he said.
"What I said a year ago is, ?I'm going to have to work a little harder for a little less money,' and we can do that. It's not the end of the world," he said.
At Windsor Farms, where the homes average $350,000 to $650,000, there are two lots remaining. Halbing wishes he had more because they sold so well. Saddle Ridge is a bit slower, although the recent sale of the entire second phase - 40 lots - to the Hazleton branch of Fine Line Homes is a positive sign, Halbing believes.
Dallas-based Landview Properties Inc. is a land company specializing in large-lot developments. Buyers then build homes on the cleared lots.
One of the company's developments is Goodleigh Manor in Dallas Township, which consists of 137 lots on 500 acres. About 50 lots have already been sold, and the roads aren't even blacktopped yet, said owner Jim Comes.
"We've had activity out here. We knock one off every week, every other week," he said.
Joseph "Jay" Naparlo's Yalick Farms on Routes 415 and 118 in Dallas Township is an ambitious project: a planned residential development with 112 townhouse units, 128 condominium units and 35 retail shops.
The region's first planned residential development is marketed toward people of all ages who want a "lifestyle change," spokeswoman Jody Fiorini said. There is a pool, clubhouse with a fitness room and ballroom for private parties, and all exterior property maintenance is included.
"It's really appealing to people if they want to make the move to a community where maintenance is really low and frees them up to travel, work, or take care of their families," Fiorini said.
Condos start at $209,000, townhouses at $289,000 to $329,000, Fiorini said. The first group of townhouses are already built, and six are under contract by buyers, she said. Ground isn't broken for the condominium units, because the developer wants to pre-sell the first eight-unit building before starting construction, Fiorini said. Pre-sales just started.
"But we have several spoken for already and a ton of interest in those," she said. "Our open houses are staying busy; our Web site is busy, we've got a ton of phone calls, a ton of people stopping by. So the interest is really, really high."
What the future holds
Developers, experts and realtors all believe sales will pick up in 2008 into 2009 - and the current market translates to good news for Northeast Pennsylvania home buyers.
"Locally, now is one of the best times in a decade to buy a home," Elliott said. "There's a good inventory, builders are willing to add incentives to entice buyers. Five years ago that wouldn't have happened. And interest rates are decreasing."
In the last few years, people were waiting for homes; now there's a better selection and choice, Temborski said.
"It is a very good time for the buyer right now. It's a good market," he said.
Sellers shouldn't be discouraged either, Krohn said. She said in Pennsylvania you still can list your home, sell it quickly, and get the most money the market will allow - as long as your price is realistic.
"I have actually cautioned my buyers they are not going to steal a property right now," Smith said. "Real estate always holds its value."
Homes that reappear in real estate publications are likely overpriced, Krohn said. Sellers have to keep reducing until they get to fair market value. Then the homes sell, she said.
Home builders are also offering good deals, Halbing said.
"I'm telling my clients that 2008, especially spring of 2008, is probably the best time to build a house I've seen in three or four years," he said.
The Back Mountain is still an affordable place to live, compared to the Lehigh Valley and the Poconos, Halbing said.
"People who come in from other parts of the country are happy with what we can provide them for their budget," he said. "Usually they are able to sell a house for $400,000 and build one for less money."
Elliott summed it up:
"Real estate is local, and actually it's a great time to buy in your region right now," he said. "People hear the national news and get cold feet, and as a result, they might miss a great opportunity."
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