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.