Shippensburg Real Estate Market – Home Values

Posted on April 27, 2010 by JA/LEX Real Estate in Shippensburg homes for sale Shippensburg real estate Shippensburg real estate agents

Brought to you by: JALEX Real Estate Services

“What goes up must come down.” There is not a better way to describe Shippensburg area real estate values. In fact, that can be said of home values nation wide. There are real estate markets that have seen much larger decreases in home values than what we are seeing here in Shippensburg and Chambersburg, Pa. Take a look yourself and search for homes in areas of Nevada, Florida or Michigan. Look at what you can buy now in those areas which were hit much worse than ours. Recently I asked a client of ours who is selling a house in the Shippensburg area for around $200k, I asked, “what can you buy this same type of home for in the Orlando, Florida area? (which is where they want to relocate) $80,000 was his answer. Here in Shippensburg and Chambersburg the local housing market has not seen drastic reductions in home values like other national markets. But home values have been effected, especially in certain price ranges.
If you are looking for a new home in the price range between $100,000 and $150,000 there has been very little effect on Shippensburg home values. Two reasons that this segment of the market has been unaffected are first, the first time home buyer’s tax credit currently set to expire at the end of the week. Second is the low level of available inventory in this price range. The $8000 first time buyer tax credit has caused the local Shippensburg and Chambersburg real estate market to be very active with first time buyers taking advantage of loan programs such as USDA and FHA financing to purchase their first homes with 0 down payment or as little as 3.5% down. In most cases the seller has been willing to pay the closing costs to sell their homes. Credit score requirements are higher than they once were but scores in the low 600′s can qualify for these loan programs. Why would a person renting a home not buy their first home for close to what they are paying for rent and receive an additional $8000 tax credit to pay off debt or put towards principle? Because the Shippensburg real estate market has been so active in this price range with these buyers homes listed in this price range are selling quickly for full price. The First time buyer’s credit is set to expire though at the end of this week on April 30th. What happens after that is any one’s guess. I think that homes priced under $150,000 that are in good shape will continue to sell especially those Shippensburg area homes that are lower in price and a good value.
Next is the market segment $150,000 to $200,000. In the Shippensburg market there are a lot of homes listed in this range. There are two specific types, newer bi-level style homes and homes built in the 60′s, 70′s and maybe the 80′s. Many of the older homes are Ranch style homes, upgraded and are located in some very nice neighborhoods. These homes have dropped in price over the past two years. The newer bi-level style homes are priced in the $160,000 to $190,000 range. In fact, now you can purchase a brand new 3br/2.5bath bi-level style home in Shippensburg with a 2-car garage for $174,900. This negatively affects the value of homes that are not new. There are homes in this Price range that were purchase when market values were higher a few years ago and they are listed in the Shippensburg market for the same price that these new homes are selling for. I expect that these older homes will continue to see their value decrease as they compete for buyers with new homes that are also decreasing in price.
The price range $200,000 to $250,000 has not been as active but new homes are selling in this range in the Shippensburg area. Shippensburg area home builders are competing with one another and with homes available for re-sale in the shippensburg area. Prices are falling. Home builder are becoming more efficient. Material prices are decreasing. Land prices have dropped some. And right now PHFA is offering a 4.5% fixed rate for new homes. This significantly effects the Shippensburg re-sale market in this price range because why would someone purchase a 4 bedroom home for $219,900 if they can have a new 4br home for the same price? The homes that have some land are selling in the Shippensburg area. The new Shippensburg homes that are being built primarily in developments have smaller lot sizes. Those re-sale homes that are selling in this price range are homes that may have sold a few years ago for a higher price. Those homes that we see for sale in the Shippensburg area in this price range that are re-sale typically have longer market times. Your home has to be special to compete with the others as well as the new homes. Appraised values have been lower too especially in this range. Appraisers are required to use comparable sales data on homes that have sold as close as possible to the subject property and as close as possible to the date. This means that if all of the homes within one mile of your subject property have sold for less than yours and they all sold in the past three months then that is what your home is worth regardless of what the home next door sold for two years ago. And the finished space in your basement does not matter in terms of the Appraised value, nor does any of the over improvements you have made to the home. Prices for re-sales in this market segment will continue to recede due to increasing inventory and new home construction.
Then there are Shippensburg area homes priced above $250,000. These homes have seen the largest reduction in values already. However, real estate must go on. People do continue to live regardless of the market conditions. People will continue to relocate, get married and divorced, grow their families and continue to seek the best for their families. Home values with regard to the higher priced homes have a will continue to drop because a lot of people paid much more for that house than it was worth. Banks loaned money for those houses and people bought them. Builders took their clients to the cleaners because the clients could not help themselves and the banks made it possible. Who is to blame for that? In my opinion it is ultimately the home buyer who “pulled the trigger” or who signed the contract. However, in the current Shippensburg market environment banks are looking our for their bottom line. And they are over scrutinizing value. Before they were not paying attention to it at all. Then there is the builder or developer who was just “helping make the dream possible”. Who helped themselves to huge profits along the way, new trucks, boats, rental properties land. Now many of them have also over extended themselves and are now struggling as much as the people they “helped”. The higher priced homes in the Shippensburg market are losing value at the fastest rate. There is no demand because cash is scarce for everyone. New homes are being built much more efficiently and wit lower priced materials. And Appraisals are back to Earth. The upside to this is that many people in these homes have money or know what it takes to make money and should weather through this storm. But they will not be moving for some time because they are buried.
Overall, The Shippensburg real estate market is not nearly as affected as other areas nationally. Our home values have seen a reduction over the past couple of years instead of an appreciation. The Shippensburg area and the Chambersburg and Carlisle areas are growing and people are moving here. The schools are good. The work ethic is high. Crime rates are low. The entire area has much to offer and people and business is moving here. The Shippensburg real estate market is adjusting to the years of appreciation and demand. After this adjustment, locally and nationally, the Shippensburg area will continue to grow and home values will start to appreciate again but at much lower rates.
What does the the immediate future hold for Shippensburg home values? All I can ask is do you want to stay? Or do you want to sell? If you want to stay then stay. If you want to sell and you bought in the past 5 to 7 years then you may need to bring some cash to the table. That is unless you have a home in good shape priced in the low $100′s.