A Bright-er Future

by Buz Wolfe

The Real Estate world, as we have come to know it here in our geographic area, will undergo a seismic shift by the end of this very month.

“Bright” MLS is here.

As most consumers know, Multiple Listing Services, commonly referred to as MLS, are the organized “pool” of residential listings which Brokers make available for reciprocal privileges among other Brokers and Agents. Transactions in which the listing broker’s listing is sold by a broker or salesperson from another real estate company are called “Co-Brokered Transactions”.

So what is the big deal and how did it all come about? Well, first a little history.

In the 1970’s and 80’s, the former Carlisle Board of Realtors actually had its own MLs system. A half dozen or more local brokerage firms, comprised of about 200 agents, participated in the MLS – – which was a black and white print version book published every other week. By the early 1990’s, Carlisle brokers voted to abandon the Carlisle MLS and merge into the larger Central Penn Multi-List which covered the entire footprint of the Greater Harrisburg Area. This was primarily Dauphin, Cumberland and Perry Counties along with portions of Northern Adams and York as well as some Lebanon County listings.

In more recent years, the privately owned Central Penn Multi-List was acquired in whole by the Greater Harrisburg Association of Realtors. It has been efficiently managed and operated and has served well the nearly 1500 licensed real estate practitioners here in the mid-state.

The historical problem with multi-list systems, however, has been that they have always been subject to artificial and arbitrary boundaries. Many Brokers, particularly those operating in multiple markets, found it necessary to belong to several multiple-listing associations with different procedures and formats.

Enter “Bright”.

“Bright” actually began with discussions between the MRIS (Metropolitan Regional Information System) and TREND (Delaware Valley Real Estate Information Network) multiple-listing services. MRIS covered the Greater Washington DC Region — Virginia, West Virginia and much of Maryland and extending into Southern Pennsylvania as far as the Chambersburg marketplace. MRIS was one of the largest multiple-listing associations in the country with approximately 40,000 participating practitioners. TREND, with nearly 30,000 real estate practitioners, covered portions of New Jersey, Delaware and Southeast Pennsylvania – – extending into the Lancaster/Lebanon marketplace. Rather than a merger, the two multi-list giants discussed a “consolidation” that would create an entirely new entity.

Along the way, it was decided that it would be prudent to solicit additional smaller multiple-listing services whose markets were contiguous or similarly fit the footprint being created by the proposed “Bright” MLS. Ultimately, six other multiple-listing associations said “yes” including the Greater Harrisburg Association of Realtors (GHAR), Realtor Association of York and Adams County (RAYAC), and Keystone MLS (Lancaster/Lebanon) here in our geographic area. Additionally, three other multiple-listing associations covering portions of Delaware, Maryland and New Jersey joined the effort.

It should be noted that the consolidated MLS does not affect the individual Realtor Associations found within the expanded territory. In fact, some 43 separate Associations will be found within the “Bright” footprint. GHAR will continue to provide support, education and advocacy for Central Pennsylvania licensees.

So, what had been a historically fragmented system will now be unified. “Bright” MLS, now covering much of the Mid-Atlantic Region, will be the largest such system in the country and represents a more natural marketplace.

A few facts about the “Bright” area:

• 85,000 Real Estate Professionals
• Parts of six states and Washington DC
• 40,000 square miles
• 20 million consumer population
• 10 million property records
• 9 million on and off market listings

By removing longstanding artificial boundaries, not only will real estate practitioners benefit, but so will consumers – – in a very large way. Consumers looking to buy a home can now enlarge their search areas and have access to a breadth and depth of single source listings never before available. Conversely, sellers benefit from a far broader range of exposure. In our “real estate world”, this will be particularly beneficial to folks in areas such as Shippensburg, Northern Adams and York Counties where folks often had to determine which area multiple-listing service best served their particular location. No longer will that be the case.

The nation’s largest multiple-listing service will roll out in the Mid-Atlantic Region later this month. There will be a learning curve, for sure, for all involved. But the future does indeed look “Bright”!

*Ray L. “Buz” Wolfe, CRS has been Broker/Owner of his own firm since 1986. In 2016, he was again the Carlisle Area’s Top Producing Independent Broker.
**All information believed to be accurate but not guaranteed.

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NAME THAT FORM

by Buz Wolfe

One of the most noticeable changes in the Real Estate Industry has been the proliferation of forms and standard agreements and addenda over the years. When I entered the real estate business, back in 1982, we could have listed your house with a one sided, 8 ½” x 11” document and sold it using a two sided, 8 ½” x 11” document. My clients frequently laugh when I share this story.

The Pennsylvania Association of Realtors and the Pennsylvania Real Estate Commission are both dedicated to an effort to protect the consumer when it comes to standardized forms and documents. As such, the scope and variety of these documents evolve on a constant basis. This month, we will look at two state mandated forms that are required in almost every real estate transaction.

CONSUMER NOTICE

The first Pennsylvania state mandated form is known as the Consumer Notice. This form was established by the Commonwealth of Pennsylvania back in November of 1999. At that time, Pennsylvania joined forty-seven other states with some form of a Consumer Notice.

I often compare the Consumer Notice to your Real Estate “Miranda Rights”. The document itself makes certain that the consumer immediately understands that “THIS IS NOT A CONTRACT”. It is, rather, an effort to advise consumers as to the various types of relationship that they might establish with a licensed real estate practitioner.

The first page of this two page document largely outlines the various agency relationships that are available to a consumer. These relationships typically follow along these lines:

Seller Agent – A seller’s agent represents the seller of a property and is required to act in the best interest of the seller. In a typical residential transaction, the listing broker or agent represents the seller and has duties and obligations in their agent capacity.

Buyer Agent – Buyers are also frequently represented by their own agent. As a Buyer Agent, the responsibility is to represent the buyer of the property irrespective of how any commissions might be paid (usually by the seller).

Dual Agent – Dual Agency exists when the same Broker represent both the seller of the property and the purchaser of the same property. Dual Agency is legal and permitted in Pennsylvania provided that it is disclosed to all parties involved. Written consent is required to confirm such a disclosure. In some cases where the Broker is a dual Agent, he will “designate” agents to act exclusively for the seller and the buyer. This is known as Designated Agency.

Transaction Licensee – In very rare instances, a real estate licensee may act as a Transaction Licensee. In effect, the Transaction Licensee does not have an agency relationship with any of the consumers present in the transaction and serves primarily as a “facilitator” in getting the property sold. Transaction Licensees are seldom found in the practice of residential real estate and more common place in the commercial and industrial arena.

The second page of the Consumer Notice outlines all of the duties that a Licensee owes to the consumer. These include rather common sense obligations such as reasonable and professional skill, honesty and good faith, full disclosure, accountability for escrow and deposits, appropriate documentation, advice and information , etc. It also reinforces the fact that almost all contractual terms between a licensee and a consumer are negotiable. A real estate licensee is required to present and explain the Consumer Notice to a prospective client before any “substantive discussion” pertaining to real estate in general or a property in particular. A Real Estate Recovery Fund exists within the Commonwealth for consumers who feel that they have been the victim of fraud, misrepresentation or deceit.

SELLERS PROPERTY DISCLOSURE STATEMENT

Shortly after creating the Consumer Notice in 1999, Pennsylvania adopted the “Real Estate Disclosure Law” in 2000.

The purpose of the Seller Disclosure Law was to replace the long standing practice of “caveat emptor” or “Buyer Beware”. In short, it requires a seller to provide information regarding the condition of the property that they are selling.

The Seller’s Property Disclosure Statement is to be used for all properties that are between one and four residential dwelling units. Although there are some exceptions to the Seller Disclosure requirement, the sale of an Estate being one of the most common, most residential transactions will include a Seller’s Property Disclosure Statement. The Statement is actually to be provided to a prospective before entering into any formal agreement of sale.

The Seller’s Property Disclosure Statement is a ten page document which the seller is required to complete to the best of their knowledge and ability. Items covered in the Seller’s Property Disclosure Statement include:

• Seller’s expertise
• Owner occupancy history
• Condominium/Planned Community/ Homeowner Association information
• Roof and attic
• Basement and crawl spaces
• Termite / Wood destroying insects
• Structural items
• Additions / alterations
• Water supply
• Sewage system
• Plumbing system
• Domestic water heating
• Heating system
• Air conditioning system
• Other equipment and appliances
• Land/soils
• Flooding, drainage and boundaries
• Hazardous substances and environmental issues
• Miscellaneous

Naturally, the seller is required to be forthright and honest and to make full disclosure as to the condition of the property and any known defects. In some cases, the seller may indicate that certain systems are “unknown” to them. As discussed here previously, a buyer is well served to conduct their own home inspection and satisfy themselves entirely as to the condition of the subject property rather than relying solely on the Seller’s representation.

So the industry has come a very long way with respect to “disclosure” over the past fifteen years or so. The Consumer Notice has helped Buyers better understand agency relationships and licensee’s obligations. The Seller’s Property Disclosure Statement has allowed buyers to better understand the condition of the property that they are purchasing and has also helped minimize post settlement disputes between seller and buyer.

As always, an experienced real estate professional can help you navigate the maze of forms involved in a real estate transaction and help you get to where you really want to be – – a happy seller or happy buyer.

*Ray L. “Buz” Wolfe, CRS has been Broker/Owner of his own firm since 1986. In 2016, he was again the Carlisle Area’s Top Producing Independent Broker.
**All information believed to be accurate but not guaranteed.

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Real Estate Remorse

by Buz Wolfe

It is commonly acknowledged that buying or selling a home is, for most people, the largest financial transaction that they will likely encounter in their lifetime. As such, it is only reasonable to expect that you will experience a wide range of emotions when going through the transaction process itself.

Even experienced real estate purchasers and homeowners making their second or third purchase are not necessarily exempt from the anxiety that can creep into the mind of someone making a decision that will have a major financial impact on their future and their family.

Most people purchasing a home believe that their number one concern surrounds the issue of price. Am I paying too much for this home? What if values drop or a better property comes on the market at a better price? How do I know if I struck the best deal and if I have received the best advice? How do I know I have made the best decision regarding interest rates and financing options? These are all very natural concerns. Using an experienced and knowledgeable real estate broker or salesperson can prove invaluable. A real estate professional should be able to provide you with realistic market data and information that will help you evaluate your particular situation. They should also help surround you with a team of knowledgeable professionals who can assist with the entire maze of financing, inspections, title and legal, settlement requirements, etc.

After “price”, buyers most often are concerned with the overall condition of the subject property. They may have concerns that there are major repairs or improvements required or that there may be hidden or latent defects which are not discovered prior to closing. For peace of mind, a buyer should rely on a qualified home inspector (as described in last month’s article) to help them evaluate both the present condition of the property as well as educate them on what future maintenance and repair will likely lie ahead.

After making a commitment to purchase, almost all buyers will, at lease to some extent, begin to second guess themselves and their decision. A lot of emotions are involved in the decision to purchase a property and sometimes, when those emotions subside, there can be a change of heart or at least a serious reconsideration. Within the industry, we call this “Buyer’s Remorse”.

Sellers are not immune from their own worries and concerns when it comes time to selling their home or property. The number one fear for sellers is always, “Am I selling too low?”. This is particularly true if the seller gets early and heavy activity and secures an offer to purchase very quickly. The natural reaction is “I wasn’t asking enough”. The reality is, and I have seen this time and time again over more than thirty years, your first offer is often your best offer. If you believe that you have prudently priced the property at something close to Fair Market Value, you should not be surprised to get a solid offer very close to asking price and very early on in the process. Typically, the longer the listing remains on the market, the more price negotiation will likely be required. Rarely, particularly in a seller’s market such as we are currently experiencing, does a seller “leave money on the table”.

Although the process of selling your home is also very emotional, sellers need to not take personally comments or feedback or to construe a lack of showings or activity as a reflection on them. Many things contribute to slower showings and activity. This could have to do with the overall price range, number of competitive listings on the market, or the extent to which updating or repairs are required.

Today’s buyers insist that homes – – – virtually in all price ranges – – are updated and in a reasonably good state of repair. The days of buyers purchasing a home they intend to occupy and “fix it up” are somewhat gone. This has been dictated by modern day mortgage underwriting guidelines and buyer mindsets. Sellers need to keep in mind too, that the home inspection will identify required repairs or improvements that will have to be addressed in some form or fashion if you hope to get to the settlement table. This is why obtaining a home inspection before listing the property and making obvious repairs and improvements at the onset can save a great deal of time.

FEAR. False Expectations Appearing Real. Well, they might be false, but they sure can be real. By working with an experienced real estate professional, both buyers and sellers may successfully address the top fears found in real estate transactions.

*Ray L. “Buz” Wolfe, CRS has been Broker/Owner of his own firm since 1986. In 2016, he was again the Carlisle Area’s Top Producing Independent Broker.
**All information believed to be accurate but not guaranteed.

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SO, YOU WANT A HOME INSPECTION?

by Buz Wolfe

For several years now, the WHOLE HOUSE INSPECTION (i.e. Home Inspection) has become pretty much a standard condition for all Agreements of Sale for residential real estate. In theory, this is a good thing. The old days of “caveat emptor” (Buyer Beware) are long gone.

The Home Inspection process was designed to inform the Buyer of any legitimate issues with the home that might require repairs, improvements, or even replacement. Although the Seller is obligated to make good faith acknowledgements in the Pennsylvania mandated Seller Property Disclosure Statement, there are often deficiencies within the home about which even the homeowner is unaware. The Home Inspection process provides the opportunity to discover any deficiencies and educate the Buyer about future maintenance and repairs as well.

Legitimate structural issues such as the discovery of termites or radon gas or mechanical issues involving the functionality of the furnace, well or septic almost always should be addressed prior to closing. While there is no obligation on the part of the Seller to remedy these defects, it is generally prudent to do so and rarely are we unable to resolve these types of issues between the parties. Repairs are made in some instances while a cash concession is made in others.

The problem arises, however, when Buyers and Buyers’ Agents use the Home Inspection to create a “second negotiation”. In these instances, the Home Inspection is used as a tool to renegotiate the “business deal” already struck between Seller and Buyer. This causes many problems and, far too frequently, may result in a contract being terminated. This is where level heads and common sense are necessary.

As a Buyer, you would do well to be reminded that the Seller has probably already negotiated to their “bottom line” and, in many cases, also agreed to provide “seller assistance dollars” to the purchaser as well. While LEGITIMATE items are fair game, trying to renegotiate a new roof for the same 15 year old roof that you have already agreed to buy is just asking for trouble. And, my experience tells me that the less amicable a transaction becomes, the less likely it ends up at the settlement table. So, Buyers should be reasonable when evaluating their Home Inspection.

Sellers, on the other hand, would be well served to spend $400 or so and have a home inspection done before or shortly after they list their home. By identifying legitimate items that require repairs or improvements, they can save time and money in making these corrections or, at a minimum, quantify the amount of money that will be involved in the “second negotiation”. While Sellers are rarely willing to take this advice, I find that more and more of my clients are beginning to give this serious consideration at the front end in order to avoid a lot of extra headaches at the back. It truly is money well spent.

Keep in mind, too, that there are three types of Home Inspectors. Those that really don’t know what they are doing all that well; those that believe they are “God’s gift to the transaction”’; and those who are good, common sense “providers of information”. As hard as it may be to believe, there is no certification or requirement to become a Home Inspector in the Commonwealth of Pennsylvania. While it is highly suggested that consumers use an Inspector who is a member of ASHI (American Society of Home Inspectors), these individuals vary greatly with regard to their actual level of expertise. As such, they tend to call out anything imaginable to cover potential liability and avoid any exposure or future litigation. They also might feel a need to justify their fee. Trade specific experts should be called in to evaluate anything that is uncertain to the Home Inspector himself. Home inspectors do have limits to their expertise.

So, the notion of having a Home Inspection is certainly a good idea. The manner in which the Home Inspection results are treated is the difference between a happy Seller and Buyer shaking hands at the closing table or parting ways before the Sold sign appears.

*Ray L. “Buz” Wolfe, CRS has been Broker/Owner of his own firm since 1986. In 2016, he was again the Carlisle Area’s Top Producing Independent Broker.
**All information believed to be accurate but not guaranteed.

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ASSESSMENT vs. APPRAISAL

by Buz Wolfe

Many people interchange the terms “Appraised” and “Assessed”. While there are similarities to these valuations, there are also very distinct differences.

“Appraisal” is a “valuation of property by the estimate of an authorized person”. Real estate appraisals are conducted by licensed and certified real estate appraisers. Real estate appraisers are either Certified Residential or Certified General Appraisers. Federal guidelines outline appraisal process and technique. The overriding guideline is known as USPAP – Uniform Standards of Professional Appraisal Practice.

Lenders are required to obtain appraisals as part of the mortgage financing process. Certified appraisals are also frequently used to determine real estate values associated with estates and divorce proceedings.

There are three accepted appraisal techniques. These are known as the Sales Comparison or Market Data Approach; the Income Approach; and the Cost Approach.

The most commonly used approach in residential real estate is the Sales Comparison or Market Data Approach. This technique involves an appraiser identifying the sales of comparable properties that have actually sold and settled as recently as possible. The appraiser then makes certain adjustments in comparing the features of the comparable sales to the subject property. While these adjustments can be somewhat subjective, they are used to reconcile the value of the property in question.

“Assessment” is “to make an official valuation of property for the purposes of taxation”. In other words, the assessed value of your property determines the amount of real estate tax that you will pay to the taxing authorities. This would be the county/municipal tax and the larger school tax. In our region, the county/municipal tax runs on a calendar year, whereas school taxes are based upon a fiscal or academic year of July 1 – June 30.

Assessors, like appraisers, must be licensed in the Commonwealth of Pennsylvania and must also complete continuing education every two years and work within the USPAP requirements as well.

While the assessed value of your property is supposed to represent Fair Market Value, this is not always the case. Cumberland County assessed values currently date back to 2008. County wide assessments were previously done in 2004 and in 2000. Cumberland County did not update assessed values between 1972 and 2000. When assessed values become outdated, a Common Level Ratio is used to determine the current value.

There are approximately 95,000 taxable properties in Cumberland County. Historically, about 1/3 are under assessed, 1/3 are over assessed and about 1/3 fairly close to actual Fair Market Value.

If you feel that your property is over assessed for tax purposes, there is a procedure by which you can appeal your tax assessment and attempt to get it lowered. This usually involves retaining a certified appraiser to support the appealed value.

In the Commonwealth of Pennsylvania, assessments are conducted at given times on a county wide basis. Properties are not reassessed each time they are sold or conveyed. The exception to this rule would be new construction or properties that experience extensive renovation or repair. Perhaps as many as half of the sixty seven counties in Pennsylvania have not conducted a county wide reassessment for twenty, thirty, forty or even fifty years. The notion of a reassessment is a daunting one indeed. The scope and expense is significant and it is often a political problem for reluctant county commissioners. Cumberland County has done a rather good job in keeping values fairly current and is fortunate to have an extremely professional and competent assessor office.

So, in conclusion, an appraisal should represent the Current Day Fair Market Value of your property. An assessment is a valuation provided by the county for the benefit of the taxing authorities. You would be well advised to check the assessed value of any real estate that you may own to make sure that it is at least fairly in line with actual Fair Market Value. If you suspect that your assessment is too high, you should contact a licensed appraiser to further discuss an Assessment Appeal.

*Perry County Chief Assessor Randy Waggoner and PA Certified General Appraiser Andy Wolfe contributed to this report.
*Ray L. “Buz” Wolfe, CRS has been Broker/Owner of his own firm since 1986. In 2016, he was again the Carlisle Area’s Top Producing Independent Broker.
**All information believed to be accurate but not guaranteed.

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MILLENNIALS MATTER!

by Buz Wolfe

Much has been written about Millennials – – the group of young adults born between 1981 and 1997 who have now surpassed Baby Boomers as the nation’s largest living generation. Millennials are affecting the national economy in a big way.

When it comes to real estate, Millennials have been slow to use their numbers to influence the housing market. In fact, Millennials have not, until recently, been entering the housing market in any significant way. I have attributed this in the past to four specific reasons.

First, many Millennials have been unemployed or at least under-employed. Second, many are also loaded up with student loan debt. Third, many have simply not seen the investment value of home ownership and have either elected to live at home or rent in very large numbers. Fourth, fewer Millennials are getting married at this age than those from previous generations – – approximately 42% of those age 25-35 got married last year as opposed to 82% of same aged Baby Boomers back in 1963.

In many respects, the housing market resembles the “food chain”. Millennials largely represent the “First Time Buyer” or “Entry Level Buyer” necessary to allow the next generation to “trade up” to larger and more expensive properties. This often enables older, more mature sellers – – often Baby Boomers – – to downsize into smaller and more manageable properties. A decline in First Time Home Buyers creates a problem with this ownership progression.

All of this, however, is beginning to change. Millennials, as a group, have tremendous bargaining power. Although largely starting at a financial deficit as to the Baby Boomer generation, their 75.4 million population has begun to increasingly enter the housing market. According to the National Association of Realtors, 2016 existing home sales hit the highest peak since 2006. First Time Home Buyers accounted for nearly one third of these sales.

A similar study by ValueInsured , cited by the Pennsylvania Association of Realtors, indicates that 62% of all Millennials think that the housing market will be better for them personally in 2017. Millennials who are not currently homeowners are actually the most optimistic about the housing market. Over 40% believe that they will be able to purchase a home in 2017.

Many Millennials, during the period of time in which they were probably first cognizant of economic conditions, observed the housing downturn of 2008-2012. For this reason, many of them questioned real estate and home ownership as a prudent investment. That, too, has changed with 85% of Millennials now believing that homes are a good investment. This confidence level leads all age groups in a NAR study.

Studies have shown that the net worth of an average homeowner in the USA is approximately $250,000 while the net worth of the average renter is only about $4500. Clearly, Millennials are beginning to recognize this reality as they enter the work force, marry and have children. In 2017, nearly half of Millennial home buyers will have at least one child – – up significantly from both last year and 2015.

So, the group believed to be the least engaged, most wired and most likely to take a new job are actually beginning to purchase homes and settle down. By 2030, they will number nearly 80 million. By that time, “Generation Z”, those people born in the early 2000’s, will actually surpass the Millennials in total size. Then, the food chain will change again.

*Ray L. “Buz” Wolfe, CRS has been Broker/Owner of his own firm since 1986. In 2015, he was again the Carlisle Area’s Top Producing Independent Broker.
**All information believed to be accurate but not guaranteed.
National Association of Realtors, Pennsylvania Association of Realtors, Central Penn Business Journal all used as information sources.

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SCHOOL IS IN

by Buz Wolfe

Each year, dozens and dozens of individuals and families relocate into the Greater Carlisle Area. Although many of these families are affiliated with the United States Army War College, just as many others are transferees who are newly employed due to the nice diversification of businesses, industries and institutions that support our strong local economy.

In many instances, folks actually select a school district before selecting a new home. Here in Southcentral Pennsylvania, we are blessed to have some of the best public schools among the 499 School Districts serving the Commonwealth of Pennsylvania.

The Greater Carlisle Area Chamber of Commerce hosts an “Education Breakfast” each year at which the Superintendents of the four Carlisle Area Schools – – Big Spring School District, Carlisle Area School District, Cumberland Valley School District and South Middleton School District – – bring local business leaders up to date on happenings within the overall education sector as well as within their own School District. I was happy to attend that function again this year and will share some of those thoughts – – along with a few personal anecdotes.

The Big Spring School District, located in Newville, is our most rural school district. It serves the Municipalities of West Pennsboro Township, Borough of Newville, South Newton Township, North Newton Township, Lower Frankford, Upper Frankford, Cooke Township, Lower Mifflin Township, Upper Mifflin Township and Penn Township. It is the only area school district with a declining enrollment – – like approximately 2/3 of Pennsylvania’s total School Districts. With a $48 million budget and an enrollment of 2,560 students, the District largely faces an aging population and the relocation of fewer families than its peer School Districts. The Big Spring School District experiences a poverty level of approximately 44%. Despite all of these obstacles, Superintendent Dr. Richard Fry is quick to point out that the District boasts very good buildings and facilities and more than 19 Advanced Placement (AP) offerings. And, when it comes to PIAA wrestling, the Bulldogs are always a factor with which to be reckoned!

The Carlisle Area School District serves the Borough of Carlisle, Borough of Mount Holly Springs, Dickinson Township and North Middleton Townships. Carlisle sees a slightly increasing enrollment which currently stands at about 5,200 students. It tends to be the most transient of the four neighboring School Districts largely due to the existence of the United States Army War College. About 350 students per year are introduced into the Carlisle Area Schools because of the USAWC – – this representing an annual “in and out” figure of about 28%. The student body tends to be more diverse than the other area Districts and experiences about a 40% poverty level factor. Its $79 million annual budget is carefully managed – – as evidence by the continued on-going building improvements seen within the District. The Carlisle Thundering Herd has a renowned reputations in both athletics and music. Its boys basketball team won four consecutive State Championships in the 80’s and finds itself again this year competing in the State Tournament. John Friend is the latest in a long line of distinguished educators and administrators who have served as Superintendent of Schools.

The fact that Cumberland County is the fastest growing county in Pennsylvania is well evidenced by the Cumberland Valley School system. Serving a number of the “West Shore” municipalities – – Middlesex Township, Silver Spring Township, Hampden Township and Monroe Township, Cumberland Valley is the largest school district within the Greater Carlisle Area and is growing at a very rapid rate. An increase of 1,450 students is projected over the next ten years according to Superintendent Fred Withum. Their 9,000 student enrollment includes approximately 20% at poverty level, making it easily the most affluent District within our market area. The Cumberland Valley Eagles are no stranger to State Championships either – having secured several State High School Football Championships.

South Middleton Township is home to the South Middleton School District, headquartered in Boiling Springs. It is the only area District to serve one single municipality. According to Dr. Alan Moyer, current enrollment stands at approximately 2,200 student (25% poverty). The South Middleton School District is also home to many newer and upgraded buildings and facilities. The “Bubblers” are also recognized for having one of the finest high school wrestling programs in the Commonwealth.

As a homeowner in any of these Districts – – or a property owner, in general – – your property taxes are a key factor in supporting the financial operations, of each District. Total property taxes in Pennsylvania exceed $14 billion annually. While elected official continue to search for ways to replace real estate / property tax with other forms of revenue, school districts must continue to rely on this income as actual Federal dollars continue to dwindle while Federal mandates on our schools continue to increase. Your real estate taxes are based upon the assessed value of your home as established by Cumberland County in January of 2010. Later in this series, we will discuss the difference between Assessed Value and Appraised Value.

To sum it up, the Greater Carlisle Area is blessed with four excellent public school systems that boast outstanding programs, facilities and leadership. Each of the Districts have some of their own unique and special characteristics. Finding the one that best suits your children might just determine where your next house will be!

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ALL REAL ESTATE IS LOCAL

By Buz Wolfe

There is an old adage that says “All politics are local.” Well, in many ways, the same holds true for Real Estate. All Real Estate is local.

Each month, I hope to bring you some insight into local trends within the Real Estate market. In addition, I hope to have the opportunity to provide some explanation and dispel some misconceptions about Real Estate related items and issues. I frequently refer to the “local market” as the “micro-market”. The market to which I refer is that of the Greater Carlisle Area – – much the same footprint as The Cumberland Valley Business Journal itself. In many subtle and even not too subtle ways, the Carlisle market differs from the East Shore and West Shore markets as well as those of our nearby friends in York, Adams and Perry counties.

On the other hand, local real estate trends often mirror larger national trends and patterns. It has been my experience that, while we frequently follow national economic trends effecting real estate, those national trends are sometimes slower to reach our micro-market and, in turn, sometimes slower to disappear.

Historically, the Greater Carlisle Area Real Estate market has been a conservative one – – very much a reflection of the conservative mindset and lifestyle experienced throughout much of the region. Property values have historically appreciated in value at a rate mirroring inflation and cost of living averages. Typically, this has been somewhere in the 2%-5% range. During the height of the Real Estate Bubble (2003-2006), we did experience near double digit annual appreciation in property values. Conversely, we saw values begin to decline commencing in 2007 – – something which I had never witnessed before in our market area.

Property values, particularly residential property values, have pretty much now returned to 2005-2006 levels. In other words, if you have owned your home since the “pre-bubble” period, its value has returned. Although there are still a few instances where people who purchased at the very top of the market are not yet quite whole again – – we see very few folks who remain in an “under water” situation.

To this point, the National Association of Realtors has confirmed that 2016 was the best year for existing home sales since 2006. Previously, 2015 had been the best year in a decade and it was actually surpassed by 2016 results. This is precisely consistent with our own experience within our company.

So, what can we expect for 2017? Locally, as well as nationally, here will be some of the key points to watch:

• Existing home sales will continue to climb.
• Home values will continue to grow.
• Mortgage rates are likely to increase, but nominally.
• Overall home ownership rates will stabilize and/or increase.
• First time buyers will continue to increase and account for nearly 1/3 of home sales after renting or living at home for much of the past decade.

Nationally, a lack of inventory has become a problem. I am beginning to observe this on a local basis as well. A shorter supply of inventory typically manifests itself into more of a seller’s market – where we see less price negotiation and shorter days on market periods. We are seeing both.

Locally, the residential market for well-kept properties under $300,000 remains extremely strong. While homes in the $300,000-$400,000 range seem to be less in demand, there is also definitely a small and available pool of prospective buyers of even higher ends homes.

Unless this lack of inventory restricts sales, expect calendar year 2017 to be on par with the very strong years of 2015 and 2016. It just may be that the “good old days” are now.

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2016 IN THE REAR VIEW

by Buz Wolfe

Before we take a look at our 2016 business year, please allow me to extend my best wishes for a Happy New Year! I truly wish all of our clients, customers and associates a 2017 blessed with much health and happiness.

Calendar year 2016 was another successful and profitable year for Wolfe & Company Realtors. We celebrated our 30th Anniversary and opened our new appraisal division. Our settled transactions were on a par with 2015 – – which was the best year we had enjoyed since back in 2006.

On a personal level, I settled $10,000,000 in real estate transactions. This again made me the top producing Broker within the Greater Carlisle Area and placed me within the top 3% of all agents conducting business within the footprint of the Greater Harrisburg Association of Realtors. My average settled transaction price of $339,152 was tops among all area Brokers and Salespersons.

Wolfe & Company office production again placed us a very solid 4th among all of the real estate companies doing business within the Greater Carlisle Area. While operating with less than half of the residential agents found in the top 3 area offices, our $35,342,000 worth of closed transactions actually placed us within the top 15% of the 217 offices doing business in the entire Greater Harrisburg Area.

Mitch Gelbaugh, Erin Wolfe, Eric Shryock, Harry Snyder, and Tracy Sharp all continued to be among the top producers in the market place. Although Wolfe & Company Realtors does not use the “Team” approach in our business, their collective total of over $21,000,000 in settled transactions is impressive by any measure.

As we begin our 31st year of service to the Greater Carlisle Area and beyond, we have both great pride in our history and great optimism toward our future. We fully expect 2017 to be another banner year for Wolfe & Company Realtors. We look forward to serving you like no one else can! #NOFEESNOTEAMSNONONSENSE.

*Ray L. “Buz” Wolfe, CRS has been Broker/Owner of his own firm since 1986. In 2016, he was again the Carlisle Area’s Top Producing Broker.
*All information believed to be accurate but not guaranteed.
*All information obtained from Central Penn Multi-List/Greater Harrisburg Association of Realtors sources.
*Agent totals exclude those licensees known to focus on commercial or appraisal activity.
*Production numbers do not include transactions known to be outside the Greater Harrisburg Association of Realtors / Central Penn Multi-List footprint.

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HOMEOWNERS HOME VALUE EXPECTATIONS GROWING CLOSE TO APPRAISERS

by Buz Wolfe

Last month, I talked about appraisers and appraisals. In this blog, I will touch briefly on the “perception difference” between appraisers and property owners as well as some DO’S and DON’TS when preparing your house for its sale and appraisal.

According to the Pennsylvania Association of Realtors, the average appraisal last month was only 1.15% lower than the expectation of the homeowner – – or, in many cases, the sale price established in the pending sale contract. PAR indicates that this is the fourth consecutive month where the gap between the appraisal and the expectation has decreased.

Home values across the Commonwealth have increased nearly 6% since October of 2015, although the fall and winter market will likely show a miniscule drop in prices. When the market recovers from a downturn and prices begin to rise, it takes some period of time for “comparable sales” to establish themselves so that the appraiser has data to support what may actually be going on in the marketplace.

Many houses require a little bit of work before hitting the market or some additional work will be required after the home inspection or appraisal process. We are frequently asked by our clients which repairs or improvements will actually help them achieve their sales goal or which should be left to the buyer. According to the Council of Residential Specialists (CRS), to which I belong, these are items that the seller should consider fixing:

• Simple and inexpensive fixes such as poorly hanging doors, condensation leaks, broken cabinets, plumbing leaks, landscaping, painting, etc.
• Electrical issues
• Items presenting a clear safety risk or issues such as broken steps, missing handrails or buried or abandoned oil tanks.

Items best left for the buyer to fix include:

• Cosmetic items which might appeal to a specific taste
• Energy enhancements
• Major appliances

Our Associate Brokers and salespersons are experienced and in an excellent position to give you advice about how to prepare your home for the market and how to establish a value consistent with that which is likely to be identified by your appraiser.

Remember, EXPERIENCE MATTERS! Please accept my sincere wishes for a Merry Christmas and I look forward to working with you in 2017.

*Ray L. “Buz” Wolfe, CRS has been Broker/Owner of his own firm since 1986. In 2016, he is again the Carlisle Area’s Top Producing Independent Broker. **All information believed to be accurate but not guaranteed.

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