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Increase in homes has brought about slowdown in sales

February 19, 2007|by JENNIFER FITCH

Editor's note: This is the second of a two-part series on the housing market in Franklin County, Pa.

CHAMBERSBURG, PA. - About four months have passed since construction was completed on a three-bedroom house that Paul Gunder has listed for sale in Rouzerville, Pa.

Two years ago, the $229,000 house would have seen several buyers competing for it, the 28-year Franklin County, Pa., Realtor said.

"It very possibly could have been sold before it was finished," he said.

Franklin County homes, on average, are staying on the market 75 to 90 days, while they were selling in 30 to 60 days in 2005, according to Eric Gossard, vice president of Pen-Mar Regional Association of REALTORS Inc.

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During the boom in the market, existing homes were, in some cases, snapped up before the sellers' new homes were completed.

That was the case for Tom and Jennifer Hoffman of Waynesboro, Pa., who owned an older, well-maintained house on Park Street, but moved into a new home on Welty Road in August 2005.

"We were outgrowing our house. We had three bedrooms and were expecting our third child," Jennifer Hoffman said.

They bought a parcel, hired a contractor and put their home on the market.

It sold in about three weeks, she said.

"We moved in with my mother-in-law for about a year because our house sold a lot quicker than we thought," Hoffman said.

Now, though, "my current customers are still trying to sell their existing home before they move into their new one this month," said Pam Anderson of Chambersburg's Anderson Construction.

Gossard contended that home sales are not down, but that there are more houses out there thanks to five to eight homebuilders who had lots approved when the market was better.

"There's a lot of homes sitting out there for sale," Gossard said.

"Talking to the other people I work with, the trades that work with other builders, they're seeing a slowdown. One of the signs is an increasing number of existing homes on the market," said Anderson, who is president of the board of directors of the Greater Chambersburg Chamber of Commerce.

Ernie Stewart said the market has slowed but not come to an abrupt stop.

"It almost seems that at some point along the line there had to be a slowdown," said Stewart, who is president of the Franklin County (Pa.) Builders Association.

Home prices increased 9 percent from 2005 to 2006, Gossard said, but the increase was less than the 20 percent hike from 2004 to 2005. The average sale price of a house in Franklin County in 2006 was about $210,000, Gossard said.

"The cost of new homes has come down a little bit," Stewart said.

Houses listed at $250,000 or more are the ones now "sitting idle a little longer," Stewart said.

"The upper-end houses are suffering right now because they were dependent on people coming out of Maryland," Gunder said.

New homes are generally selling for at least $250,000 to $300,000, and "the buyers are really, really taking their time," said Gunder, of Jack Gaughen Realtor ERA.

RE/MAX Realtor Steve Spray said he feels any "slowdown" in the housing market applies to the high-end housing stock from out-of-state developers who "have literally overbuilt."

"There have been some people moving up from Washington, D.C., but there's a limited amount of them," Spray said, adding that houses at the median sales price have been selling well.

Houses priced from $150,000 to $200,000, which are mostly existing structures, are the ones that generally appeal to Franklin County natives, Gossard said.

"The average time on market for these homes is still really low," Gossard said.

Some Realtors and homebuilders said December was a bright spot for 2006.

"I think it's going to gradually build back again, but it's not going to be what it was two years ago," Gunder said.

The National Association of Realtors forecast Feb. 7 that existing home sales will improve, but that "new home construction will be dampened until inventories decline further."

Staff writer Don Aines contributed to this story.

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