The Current State of the Housing Market

The current housing rental market in Harrisburg and beyond is somewhere between the rapidly growing and somewhat volatile market of the past two years and the more steady position of the late 2010s. Gone is the hyper-market of last year, but due to the still-heightened demand, many landlords are still getting decent application and offer rates.

The main positive to report is that we have not experienced widespread rental rate or sales price declines year-over-year, even as the market slows down. However, to keep this up, landlords everywhere need to understand new trends within the housing market and how they can continue beating the competition and bringing in new tenants.

Harrisburg Property Management Group keeps a close eye on these trends to help our landlords stay at the top of their game.

The Housing Market and the Economy

Over the past year, utility rates have increased in many places by as much as 30%. Combined with the rise of rentals overall, these price hikes have eaten up the discretionary income many people used to have, resulting in an inability to fulfill the same monetary obligations they have in the past. Similarly, mortgage rates have increased by 100%, leaving many homeowners to wonder whether it's better to invest in a rental property over buying a new home.

These economic conditions have both improved the rental market for landlords and made it nearly impossible to enhance profits year over year. Previous homeowners and people relocating to the area make up many of your prospective tenants, but rising inflation and stagnant incomes mean that they aren't able to deal with rental rates much higher than what already exists.

With that in mind, 2022 has been quite a “flat” year in relation to the average rent in Harrisburg, PA, given the substantial growth the housing market underwent during 2020 and 2021. When you consider the gains made over the past few years, this is not necessarily a negative for most landlords. Instead, it's an excellent time to review your place in the market and make preparations for whatever moves the industry makes next.

Choosing Rental Rates

As an active participant in the economy, you know prices are increasing everywhere. Inflation based on supply chain concerns and tumultuous current events has brought challenges to everyone, regardless of their income level. While it may make sense to supplement this lost income by increasing rental rates, we urge you to consider this method carefully before enacting it.

Whether you're offering renewal rates to existing tenants or listing prices on vacant lots, now is not the time to introduce sizeable price increases. This is especially true if you've already adjusted your rates to market or near-market rates in the past two years. Many of our clients who have significantly altered their prices have seen an increase in vacancies and decreased interest in their properties. However, when your rental rates are decent, most properties are moving through the market reasonably fast. Most properties we work with move through the Harrisburg rental market within a month.

In prior years these increases were not an issue, as there was usually a waiting list of prospects willing to pay the higher rate. However, this is no longer the present environment. As such, we're experiencing record numbers of new rentals, especially as landlords soften their rates. While we're not encouraging sizeable rental rate reductions, we do suggest you stay aware of the current market conditions and understand it's not the time to push your luck on increasing rates.

Current Sales Trends

During the so-called hyper market of the last couple of years, it was common to schedule as many as 60 showings and field up to 20 offers within the first few days of listing. Between significant mortgage price increases and lower levels of interest in home buying, these numbers have decreased significantly. Still, compared with sales throughout the mid-2010s, selling a home in 2022 can be quite profitable.

Within the first couple of weeks of advertising your property, we'd expect you to see about five to 10 showings and one or two offers on average. If your property has been on the market for two or three weeks without suitable prospects, you should be prepared to make adjustments to remain competitive and secure a buyer. Based on current sales trends and the higher interest rates settling in, we expect house sales will continue to be volatile. Therefore, if you are considering selling in the short term, it may be advantageous to do so soon rather than later, as the short-to-medium term for house values may be a decline.

When your marketing strategy isn't going as planned, our experienced landlords know how to put your property in front of the residents of Harrisburg, Camp Hill, Hershey and the rest of Central Pennsylvania. We'll help increase your viewership and introduce you to some of the best tenants in the area.

When discussing trends in housing sales, we would be remiss not to mention the increase in foreclosures happening around the country. Currently, regulations on home foreclosures are keeping many of these properties from going back on the market, so it's unclear how this influx of new availability will affect sales and market interest.

Handling Delinquency

As inflation increases and more people than ever struggle to keep their bills in order, delinquency has become more complicated than having “bad” tenants who don't want to pay. This trend is most noticeable in low-income areas. 

With this in mind, even your best tenants may be at risk of becoming delinquent, leaving you with a dilemma. Having a personal relationship with good tenants can make their turn to delinquency challenging for you to handle. A property management company like Harrisburg Property Management Group can manage this situation with ease and professionalism so you won't have to. We have a well-vetted delinquency and legal process that allows us to efficiently handle all matters surrounding delinquency.

We'll do everything we can to encourage your tenants to get their accounts back in good standing. If that doesn't work, we'll move forward by starting the eviction process. Together, we'll work to understand what occurred, how it happened and steps we can take to prevent it in the future. While eviction is rarely the result anyone wants to see, an expedient eviction process means you'll have new inventory to offer for the upcoming season.

Let Harrisburg Property Management Group Keep You Ahead of the Curve

Despite the “flat” housing market of 2022, changing buyer attitudes and increased economic instability spell major upcoming changes for the industry. Landlords everywhere should invest in guidance from experts keeping a close eye on what comes next.

Harrisburg Property Management Group is run by landlords who have been in your shoes. We know understanding the Harrisburg rental market is just as important as taking care of your properties and ensuring your tenants are satisfied. When you choose us to work with your Central Pennsylvania rental properties, we'll help you take care of everything, from navigating changes in the market to finding new tenants and keeping your houses maintained.

Contact us today and our team members will be happy to discuss everything our services can manage for you!