Flippers Face Tough Stretch in York County, Pa.
For five years, a Lower Windsor Township, Pa., couple has been buying, remodeling and reselling homes - a process known as flipping - for a profit.
But for the last six months, Jeremy Rauhauser and Karen Hake have just not been able to resell - or flip - a 50-year-old house in East Manchester Township.
Of the 50 homes they have flipped to date, this is the longest it has ever taken the couple to make a sale.
About two months ago, the house-flipping duo even ditched their real estate agent and pitched a neon sign announcing the three-bedroom home was for sale by owner, and reduced to sell.
“He (the real estate agent) is a great guy and does a great job, but we’re looking for any way to sell this property,” Rauhauser said, noting they reduced the price by about $20,000.
“But so far, that’s not helped a whole lot, either.”
York County mortgage foreclosures are on the rise, and local real estate sales in 2006 were stagnant, as the number of houses on the market remained high, making it more of a buyers’ market.
There were 2,863 homes on the market in February 2007, compared to 1,386 in the same month in 2005, according to the Realtors Association of York and Adams counties.
“There was a period of time when the inventory was quite limited,” said Steve Snell, executive director of the association. “From my perspective, it was an unbalanced market that wasn’t healthy.”
The Pennsylvania housing market bubble burst over the last year. Locally, the market cooled down, but the number of home sales remained in line with the year before.
Now, concerns are that the troubles in the subprime market - home loans for people with poor credit - might further slow the national housing market.
Though there are now fewer water-cooler discussions about homes selling in hours or days in the York area, those stories are still out there, too.
A slowdown in the market is at least due to the 200-home developments popping up all over York County, where some residents are perplexed by the recent phenomenon of buying a large house with little property.
“I think it’s a status symbol for people. They need a home that looks like $400,000, even if it was built in six days and who knows what might be wrong with it inside,” said one home builder.
Randy Shearer said he has been trying to sell his three-bedroom home for about two and a half months with no success. The home is on North High Street, away from the busy Route 74, but just off downtown Dallastown.
He admits it has been slower than he thought, but he thinks the cool-down in the market is more about recent weather than a complete and utter lack of Pennsylvania mortgage demand.
“Everyone likes the house, and the price is right. If there is a problem, people are saying they don’t like the slope (of the property),” Shearer said. “But I think once the weather starts cooperating it’ll sell.”
Trouble with financing: Experts think part of the problem with the market now might be that potential buyers are having trouble getting home loan financing.
“I’m not sure people realize how much is involved with getting approved” for a home mortgage, Hake said. “We’ve had people interested; they’re just not able to get the financing.”
Part of the reason for the delay, he said, is because people don’t know how mortgage approval (or mortgage refinancing, for that matter) actually works.
Previous to this home, home flipper Jim Fry said he had enough good buyers to avoid those who “don’t have all their ducks in a row.”
“I had a buyer, but they had financial difficulties,” Fry said. “I’m not sure if it’s just a lot harder to get a home loan, or if everyone is expecting to buy a house without a down payment.”
SOURCE: York Dispatch