State of the Market -May 2005
by Bill Gladstone, CCIM, SIOR


The real estate market in the greater Harrisburg market continues to flourish as we move further into the second quarter of 2005. The sale market remains very active, and the leasing market has picked up considerably compared to the second quarter of last year. The main reason leasing has increased is rising interest rates. Tenants looking for equity were buying buildings because interest rates were low, but are now looking to lease. The economy is improving in many of the different segments and there are fewer companies closing and consolidating.

The sale market is somewhat slowed by the limited product available in the market. Many buildings were sold in the early part of 2005 and late in 2004. As a result, the demand for purchase has remained high, forcing the prices to some all time highs. Although purchasing is declining to some degree, it is hard to tell because there are no buildings available. Unlike other times, this phenomena has transcended all the different sub-markets, such as office, commercial, industrial, and even land. This trend will continue until more space shows up on the market, which will happen as interest rates continue to rise and people slow their buying habits.

Some hot pockets of activity to watch on the West Shore are the Carlisle Pike on the west side of Route 114, and Route 114 at the I-81 Interchange. On the East Shore, watch Route 39 at Route 22 and Linglestown Road in the area of Colonial Road. These are only some areas starting to show tremendous growth due to pent up demand. Prices will remain high in those areas and new areas will come in right behind them as the activity continues.

Overall, Harrisburg has an increasingly vibrant real estate market. The area will grow dramatically over the next several years.

**Feature in the May 2005 edition of the "New Properties" email.

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