Spring is a time of renewal and, for many, that means taking stock of where and how they live.
Those in the real estate business say it’s their most hectic time of the year, with people busily buying, selling and moving. As a result, we thought it was the right time to ask two of Harrisburg’s most prominent real estate professionals, Wendell Hoover and Ray Davis, a few questions about what they’re seeing in the local market—how it’s developing and changing—as the spring buying season peaks.
1. What do you believe is the main strength in the Harrisburg city market? The main weakness?
The main strengths of the Harrisburg city market are well-built homes that can be or have been renovated. Most homes have great historic charm with original hard floors and exposed brick walls. A good number of the homes are located in a walkable neighborhood and also close to the Susquehanna River. The third main strength is affordability, with the majority of homes under $200,000.
The main weakness is the number of residents leaving the city due to their opinion of the public school system. This is becoming less of an issue as the number of school options increase.
2. Have you seen any notable trends or changes recently over who is buying houses in Harrisburg city?
The biggest demographic of homebuyers in Midtown Harrisburg continues to be single individuals or couples in their mid-20s to mid-30s. Most of these buyers are first-time homebuyers.
There are two trends that have changed over the past several years. The first is families moving into the city because they want to raise their children in an urban, walkable community. This trend will likely continue if school choice options increase in the coming years. The second trend is empty-nest couples whose children are grown and out of the house. They own a larger home with a large yard that needs to be maintained. A move into a smaller city home will potentially reduce utility costs and significantly reduce lawn maintenance costs and time. The added benefit is being able to walk to restaurants and entertainment venues.
3. How do you assess the current residential market around Harrisburg? Why?
The current residential housing market is extremely strong right now. In some price ranges, we are seeing numerous competing offers. One of the reasons is that interest rates have remained low. Even more importantly, I think most people are willing to buy their first home or buy a different home because they are confident in their current personal finances and their future financial situation. This increased demand has resulted in a lack of supply. If you are considering selling, my advice would be to meet with a qualified, experienced realtor to find out what the price range of your home may be.
4. Is there a generation gap between older and younger buyers as far as factors like location, walkability, environmental concerns, etc.? How, as a real estate agent, do you address this?
In general, I think that younger buyers are willing to consider smaller and less renovated homes as their first home purchase. Often, walkability and proximity to friends are major factors for younger buyers. I also think city living is more popular with younger buyers. Having said that, there is an increasing trend of older buyers selling their larger suburban home and moving into a city or more walkable community.
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1. What suburban location do you regard as especially popular with homebuyers right now? Why?
As the saying goes, “location, location, location.” That’s the single, most important factor in purchasing a home. There is no simple answer to this. Buyers choose a location based on their life situation at the time of their purchase. Buyers focused on price range and value/cost will look for homes in areas where they can get as much home as possible for the lowest price. Some buyers are very sensitive to property taxes and may chose a municipality with lower millage rates. For buyers with children, their first priority is purchasing a home in their school district of choice. Buyers who want more privacy will look for homes with larger lots. Buyers whose greatest priority is convenience to shopping, dining, highways will chose a neighborhood in close proximity to these amenities.
2. What feature or amenity in a home are buyers increasingly looking for that wasn’t really on the radar five or 10 years ago?
Features and amenities that buyers expect depend on several factors, including not only the buyer profile and lifestyle but also price range.
Buyers purchasing new construction expect energy efficiency and low maintenance. Homes with green features and smart homes with lighting, security and heating/cooling that can be operated from a cell phone have become an expectation in high-end, custom-built homes. More and larger windows continue to gain popularity. Open floor plans continue to be popular, although, 10 years ago, an open floor plan meant something a little different than it does today. Today, there is often very little separation between kitchens and living space. In many cases, buyers want the kitchen to blend into the adjacent living space. Wood floors have changed significantly, too. Engineered wood has become increasingly popular and offers many choices. Shiplap wood treatment on walls was unheard of just a few years ago.
The oversized luxury master bathroom is losing popularity and giving way to slightly smaller but functional bathrooms. Home offices have become an expectation, too. Trends are not limited to indoors. More attention is being given to outdoor living spaces with features like outdoor kitchens and fireplaces.
3. How is the greater Harrisburg market unique from close, larger urban markets like Philadelphia or Baltimore?
Generally speaking, south-central PA is a more conservative market, and a little more immune to extreme appreciation and depreciation often experienced in larger urban markets. Our state Capitol also contributes to the stability of our market due to the stable workforce.
4, Interest rates appear headed up for the first time in years. Do you believe that will impact the residential market a lot? Why or why not?
Interest rate hikes (and drops) always impact the residential market to some extent. The impact will vary depending on several factors, including how extreme the change is, how long it has been since rates have changed significantly and the overall state of the economy.
Minor fluctuations in rates are common and do not have much of an effect. If rates have been stable and low for an extended period, a rate hike will cause buyers who are “sitting on the fence” to jump and make a decision due to their fear that rates will continue to increase. If rates continue to rise over a long period of time, there will be a lag in sales for a period of time, but, eventually, when rates stabilize, activity returns to a normal level. The biggest impact I have ever seen was in the 1980s, when rates were very unstable and the only affordable option for many homebuyers was an adjustable rate. I don’t think we will see that again.
Bottom line: We are a transient society and, regardless of rates, people must move for a variety of reasons. So, unless there are extreme conditions, the impact in the long-term is not severe.