Economist finds stability in Pa. housing
JOHNSTOWN BUSINESS WEEKLY
HARRISBURG – The market took its toll on the real-estate industry in 2007.
But 2008 should bring a “back to basics” mentality when it comes to consumers purchasing homes, according to a consulting economist for the Pennsylvania Association of Realtors.
“We’ve lived through a period in which we’ve forgotten that housing provides shelter and user benefits for households,” said Austin Jaffe, chairman of the Department of Insurance and Real Estate at the Smeal College of Business at Penn State.
Housing markets in Pennsylvania typically lag behind national markets, Jaffe said.
As housing prices accelerated after 2001, prices in Pennsylvania edged upward much more slowly.
Jaffe said that by mid-2006, the real-estate market began to turn, but prices in Pennsylvania never increased as much as they had in neighboring states such as New Jersey and Delaware or in the “hot” markets of Florida, California, Nevada and Arizona.
There is no reason to expect Pennsylvania housing markets will behave like some declining markets when they did not behave like them on the incline, Jaffe said.
The latest housing numbers out in Pennsylvania indicate that the median sales price of a home has increased to $201,000, a 4.7-percent jump from $192,000 in 2006.
Pennsylvania house sales were off by just .03 percent in November 2007, with 69,224 sold in the state compared with 69,461 sold in November 2006.
Because Pennsylvania housing markets are less volatile than other markets, the impact of various shocks ranging from Federal Reserve policy to national mortgage finance will likely issues be considerably less, Jaffe said.
“We’re at a turning point right now,” Jaffe said.
“This is not the end of the world for the real-estate industry, it’s a return to basics that has served the industry for a long time.”
