Recession still affects the face of Greencastle and Antrim
The latest effects of the economy get mixed reviews from local agents involved in commercial growth and real estate transactions. Since the recession officially began in December 2007, as declared by the National Bureau of Economic Research, area watchdogs have seen the market bottom out and recovery take a slow path back.
Though Sheetz is adding a second Greencastle store on Buchanan Trail East, not much else is happening in the immediate area. But it is a positive sign that a corporation is willing to expand, years into a downturned economy.
Mike Ross, president of Franklin County Area Development Corporation, keeps tabs on the indicators as part of his job.
"Overall, from an economic standpoint, generally the first half of 2010 was better than the first half of 2009," he said. "Some businesses are struggling, but by and large this year is better."
FCADC conducted a formal survey of constituents recently. The result was 'consensus optimism', that things are better. "But it hasn't risen to a level of confidence yet," he cautioned.
He knows there is apprehension on the part of business managers, whose workforces are still less than they used to be.
While Manitowoc has called back some employees, the July announcement that Jerr-Dan was moving operations out of Greencastle will change the latest numbers.
"We have not yet recovered on the employment side that we'd like," Ross noted, but said the increased production of some companies in turn benefited the supply chain down the line.
Franklin County's unemployment rate in June was 8.8 percent, still worse than the 8.3 percent of the previous year, according to the Bureau of Labor Statistics.
Ross said that while Norfolk Southern's startup in building an intermodal facility in southern Antrim Township is a positive step, there are no other imminent projects in the southern half of Franklin County. Atapco has begun roadwork in Antrim Commons Business Park, but no company has committed to settling in the park, stretching from Commerce Avenue to Exit 3. The expectation of the developer is that at build-out, in up to seven years, 2,000 jobs will have been created.
At the northern end of the county, Volvo's expansion in Shippensburg brought excitement to that community. The move should bring in more jobs, but officials haven't released how many. It is based on the call for road construction equipment.
FCADC, a public/private nonprofit corporation, works to bring in new businesses, retain and expand current businesses, and help with the startup of new companies. Ross talked with manufacturers last fall. "They all thought the economy had bottomed out and that 2010 would show incremental progress. That's what it's been."
The real estate market may not have seen its worst yet, if members of the Pen-Mar Regional Association of Realtors are accurate in their prediction.
"We still don't think we've quite hit bottom," said director Karen Starr, an agent with Jack Gaughen Real Estate.
The Franklin County sheriff's department has correlating data. It has seen a dramatic increase in foreclosure auctions in 2010.
"It's gone up a great deal," said Lori Hardsock, Real Estate administrator, who handles all the details on the bi-monthly auctions.
In 2008, 321 properties went on the block. The number rose to 390 last year, and already in 2010 Hardsock has processed paperwork for 418 homes, which includes 84 for the Sept. 10 auction. In the past, she reported that people lost their homes when owners became seriously ill, and they or the family could not keep up payments. Of late, the most notable reason for the sales is owners losing their jobs, leading to a financial crisis.
Fewer bidders attend the auctions, held at the courthouse, because the bargains are not to be had, she added. A representative from the mortgage company announces the lowest acceptable bid, or else the bank will keep the title and try to unload the house in another way.
"We used to get multiple bidders, but for the July sale of 94 homes, only five sold," Hardsock stated. "That was actually a lot. Usually it's only two."
As the Pen-Mar members compare data, they find similarities with client experiences. With sale prices dropping one percent a month last year, they saw bright spots due to the federal economic stimulus program, but sellers and buyers still encountered problems. The agents carry a full inventory of houses. Selling prices are now at the 2003 level, before the bubble of 2005-06 when numbers soared, to the amazement of people on both sides of the 'For sale' sign.
As 2010 heads into fall, Starr does not think the market will bounce back dramatically, but take small steps.
The $8,000 tax credit for couples, and $4,000 for singles, helped people acquire new homes, especially when the government extended deadlines. In 2008-09 first-time homebuyers qualified for a $7,500 credit, which had to be paid back. When the $8,000 credit appeared, along with a $6,500 incentive for repeat home buyers, and the deadline was pushed from November to April 30, realtors saw an uptick in activity. People were interested in both downsizing and upgrading. Then, because banks had become so stringent in granting mortgages, settlements weren't occurring on a timely basis. Congress reacted and extended the closing date to Sept. 30.
"That's good," said Starr.
She and her peers are unable to help people who are underwater, that is, owe more than the home is worth. But as they work with qualified buyers, they find that the people still have issues with credit. The lenders have tighter guidelines. In the past, realtors provided three comparable home sales for the appraisal. Now Starr often sees five as the requirement, and still the buyer cannot rest easy. An underwriter may do a desk review and ask for yet another appraisal, meaning more money out of the buyer's pocket.
And often, the numbers come in less than people expect, which doesn't please the sellers. If they have not lived in the home for long but need to sell, the house can be worth $20,000 to $60,000 less than they paid for it. "They are losing money big time," said Starr.
Gone are the days when buyers from Washington DC and Baltimore came, cash in hand. Now sellers have to be realistic.
"Their lowest asking price tends to be the realtor's highest asking price," Starr continued.
Therefore, Pen-Mar members strive to educate their clients on the market. "When they understand the realities, they handle the situation much better. If you list it right, there are people buying, but you have to be the best house in the price range."
Still, buyers are wary to exceed their comfort level. Starr has noticed that even with good deals available, the home shoppers are concerned about the economic forecast, including job stability. They want to be able to purchase a home and not worry about losing it in a few years.
Some new residential neighborhoods in Greencastle have taken a hit in sales, she said, and now offer homes well below starting prices of $399,000 during the bubble. They've trimmed the size of floor plans and scaled back on upgrades. One development, though, has caught her attention, actively selling new construction, often 2,500-square foot homes for about $250,000.
"We never thought we'd see those prices again," she said.
Security through home equity can be a reality for citizens once more, Starr assured, if people take care of their finances. That should start when they are teenagers.
"Young people don't understand how credit reports will affect them in the future," she said. "Our board is really pushing its members to educate people, so they can make the right decisions."
Residents continue to look for signs the economy is improving, watching commercial and industrial development, which in turn affects the housing market.
Since Jan. 1, realtors sold 72 single-family homes in the vicinity. Listing prices ranged from $30,000 on Letzburg Road to $450,000 on Putting Green Court. They have 166 active listings in Greencastle and State Line. Asking prices range from $109,000 on Hager Road to $2.8 million for a 72-acre farm on Molly Pitcher Highway North.
Nevertheless, Ross is hopeful. He thinks 2011 will be stronger for Franklin County's business climate, which has fared the recession better than neighboring counties.
"Drive around," he urged. "There is still activity. That's encouraging. It hasn't died."