Economic Recovery: A Real Recovery or Mirage? Edition: Southeastern PA (c) Prudential Fox and Roach, REALTORS®

1. The Chairman’s Report
A Message from Lawrence F. Flick, IV, Chairman and Chief Executive Officer
Prudential Fox & Roach, REALTORS® and The Trident Group
SPRING/SUMMER 2012 REGIONAL EDITION: SOUTHEASTERN PENNSYLVANIA
THIS IS NO MIRAGE
The good news keeps getting better, and the signs are Affordability
very real — our country’s economic recovery is not a Home buyers have more purchasing power than ever
mirage that will disappear before our eyes. Our before. The combination of low interest rates and home
economy has strengthened and our real estate market prices make this a once-in-a-generation opportunity.
is heating up. Because the key indicators have changed
gradually over an expanded period of time, it hasn’t Favorable mortgage rates
always been clear that we were headed in the right Mortgage investors believe that this recovery is
direction. Caught up in the daily news of stops and real and that means there is only one way for rates
starts, highs and lows, it’s been easy to lose sight of to go — up. We’ve seen rates creep up already in the
where we were headed. But now we can see that the past several weeks. Though overall mortgage rates are
upturn is real — this is no mirage! projected to remain low, they will not be as favorable
in the future as they are now.
OUR REAL ESTATE MARKET
Growth in the number of sales
If your personal circumstances dictate a move… if you
Pending sales in our marketplace have grown at a
want to buy a new home… if you want to sell your
positive rate each month since April 2011. And
home, now is the time to move forward. For buyers and
through March 2012, the number of pending sales is
sellers, it’s important to push ahead. If you’ve been
approximately 20% over what they were in 2011,
holding off because of uncertainty or for “better”
significantly exceeding our expectations.
market conditions, consider this:
1

2. Level house prices Growing consumer confidence
House prices have stabilized. Moody’s Analytics shows Consumers are spending again. Their debt is more
house prices leveling out in 2012 and beginning to manageable, and they feel better about their jobs. The
rise in 2013. Although prices have come down over Conference Board’s Consumer Index measuring current
the past five years, housing has continued to be a solid conditions is at its highest level since 2008.
long-term investment.
Strong manufacturing growth
THE ECONOMY
It was manufacturing that kick-started our national
If you’ve read previous issues of my Chairman’s Report, economy’s upward trend. As economist Joel Naroff says,
you know I’ve been positive about the economy and our “The manufacturing sector is the rock on which the
real estate market for the past two years. There was good recovery is being built and the base is as stable as it gets.”
reason to be so. The economy was growing, and the real
estate market in our region was more stable than in other Rising employment
areas of the country. Then the economy struggled to As more businesses begin to hire, the unemployment
withstand the effects of the Japanese tsunami, the Greek rate has dropped, despite more job seekers entering
debt crisis and the Arab Spring. These unexpected the market.
non-local events fostered uncertainty and made both
businesses and consumers wary to move forward. But the Job growth is stronger than it has been in recent years.
situation is different now. After nearly three years of slow Between February 2011 and February 2012, the
yet steady growth, the economy has gained serious economy gained two million jobs. In the past three
momentum. I believe there is enough traction now to months, 734,000 jobs have been added. Compare
deflect another unexpected event, including higher gas this to 2009, when the country was losing 750,000 jobs
prices. All of the current indicators are strong: per month!
2

3. After nearly three years of slow yet steady growth,
the economy has gained serious momentum.
Recovering stock market search even though they wanted to make a move. But
Though they still experience ups and downs, today, these buyers are venturing beyond initial interest.
the Dow, NASDAQ and S&P have all made They are setting up appointments, attending open
considerable gains in the past two years. houses, and making offers! In fact, many of our sales
associates report that sellers whose houses are in
WHY BUY NOW? excellent condition and priced right are receiving
multiple offers. We haven’t seen that in quite a while.
There hasn’t been a better time to buy a home in a
generation! The combination of low interest rates and THIS IS NO MIRAGE
leveling prices create a very real market condition
favoring buyers. Though the rise in interest rates and What we are seeing is real — it’s clear — it’s no mirage.
house prices will not be dramatic, they will undoubtedly If you’ve wanted to move, now is the time. Don’t delay.
rise. Therefore, if your circumstances warrant a change, Contact your Prudential Fox & Roach sales associate
you will want to benefit now from today’s positive and your Trident mortgage consultant today!
trends. Otherwise, you may look back in a year and
realize you missed your best purchasing opportunity.
WHY SELL NOW?
The best reason to sell now is to take advantage of the Lawrence F. Flick, IV
pent-up demand being unleashed as our economy Chairman and Chief Executive Officer
strengthens. Many potential buyers had postponed their Prudential Fox & Roach, Realtors® and The Trident Group
What we are seeing is real — it’s clear — it’s no mirage.
If you’ve wanted to move, now is the time.
3

4. AN INDEPENDENT VIEW
Joel L. Naroff, Ph.D., is the rate has generated renewed consumer optimism and
President and founder of spending is rising. While the surge in gasoline prices
Naroff Economic Advisors. is reducing household purchasing power, unlike 2008
He is a consultant to and 2011, the economy is strong enough to absorb
the hit without slowing sharply. The outlook is for
Prudential Fox & Roach,
the economy to accelerate as we go through the rest
Realtors and The Trident of the year.
Group. A nationally
recognized economic The improving economic landscape has significant
forecasting expert, Joel was implications for the housing market. Prices have
stabilized and in many areas they are starting to rise,
awarded the Lawrence Klein
though slowly. At the same time, interest rates are
Award for Blue Chip forecasting excellence and was the moving upward, reflecting the better business
Bloomberg Business News top economic forecaster in conditions. The combination of higher mortgage
2008. In 2007, he received the National Association of rates and stable or even rising home values should
Business Economists Outlook Award and was named the create a change in the strategy of buyers. Once they
top economic forecaster by MSNBC in 2006. recognize that both prices and interest costs are going
to increase, fence sitters will have to move more
Both the national and regional economies are quickly. Given how affordable homes are currently,
beginning to pick up speed. Job growth has been now would be a great time to get serious about
strong with almost every type of business in all purchasing a home before the rising costs really begin
industries adding workers. The falling unemployment to kick in.
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