Jim Gillespie, president and chief executive officer of Coldwell Banker, faults the national media's focus on foreclosures and the subprime mortgage crisis for keeping home buyers on the sidelines these days.

"This is the absolute best time in my 33 years in real estate to buy a home," he said last week during a visit to Lancaster.

Interest rates are still low, he explained. Inventory levels are high, and prices are stable.

 Monday, he'll take the same message to New York, where he has interviews lined up with The New York Times, The Wall Street Journal, Forbes, BusinessWeek and CNN.

Gillespie, who oversees a brand with 117,000 agents and brokers worldwide, was in Lancaster to visit new affiliate Coldwell Banker Select Professionals and to speak at an agency-sponsored dinner at Meadia Heights Golf Club.

Prudential Homesale Services Group, the largest seller of homes in Lancaster County, had been a Coldwell Banker agency for 25 years before switching its affiliation to Prudential at the beginning of April.

Before the end of April, the Coldwell Banker brand was back with a new affiliation with Realty Select, which changed its name to Coldwell Banker Select Professionals.

Prudential Homesale employs about 1,250 people in nine counties, nearly 450 of them in Lancaster County. Coldwell Banker Select employs more than 100 people in Lancaster and another half dozen in Hershey.

Gillespie said he had come to town "to support our new affiliate" and to help in its efforts to recruit more agents.

"I'm not doing my job if I sit in the office in Parsippany," the corporation's New Jersey headquarters, he said.

Like many real-estate companies, Coldwell Banker has taken a hit during the recent slump in the housing market.

In 2005, a record year, existing-home sales totaled nearly 7.08 million nationwide, according to the National Association of Realtors. Last year, that number was 5.62 million, a drop of about 20 percent in two years.

Lancaster County reflected the national trend — but to a lesser extent — with sales of both new and existing homes dropping from 6,453 in 2005, also a record year locally, to 5,735 in 2007, an 11 percent decline over two years, according to figures from the Lancaster County Association of Realtors.

That decline steepened in the first quarter of this year when home sales in Lancaster County dropped 29.5 percent, compared with the first quarter of 2007.

Most real estate booms last about five years, Gillespie said, followed by a two-year "correction."

But the boom that ended in 2005 had gone on for 10 years and the current correction is in its 34th month, he said.

When will the downturn end?

Gillespie said he has no idea, but that doesn't change his advice to potential buyers.

"You should not try to time the market," he said. "People who try to time the market get burned."

Home purchases are important investments, regardless of the state of the market, Gillespie said. They usually increase in value between 1 percent and 2 percent above the rate of inflation and offer significant tax write-offs.

"We're three years into this thing. If people wait too long, prices will go back up and inflation may kick in with higher interest rates," he said.

People get the impression from news reports about foreclosures that there is an increased risk to buying a house right now, Gillespie said.

In fact, he said, 69 percent of the people who lost their homes last year were in eight states: California, Florida, Ohio, Michigan, Nevada, Arizona, Texas and Georgia.

"We haven't seen foreclosures here" in Lancaster County like they have in other parts of the country, said Ryan Hess, the chief executive officer of Coldwell Banker Select Professionals.

Local agents who specialize in foreclosure sales for other real estate firms agree.

Foreclosures have definitely risen here, said Matt Shuffelbottom, an agent for Prudential Homesale, but "we don't see anywhere near the numbers here" that other areas have had.

There is "an upward trend," said Jim Saunders, of Dan Diller Realtors, but "I would have no fears currently of buying a home in Lancaster County and losing value."

Nor will most buyers have trouble obtaining a mortgage, despite reports of how the subprime crisis has affected lenders, Gillespie and Hess said.

The loan programs that have disappeared, Hess said, are the ones that attracted people who really shouldn't have been buying a home or who were trying to buy homes priced beyond their means.

"We're back to doing business like we were doing five or six years ago," Hess said. "If you have good credit, you can get a mortgage."

Timing the market
Home inventories are high right now, but construction of new homes has slowed dramatically during the past few months, and there are still opportunities for owners to sell existing homes.

"Six million homes will be sold this year" nationwide, Gillespie said.

"What we've seen here locally is that homes are still going to sell," Hess said. "We've had several recent listings that have had multiple offers."

The sellers who get hurt in a buyer's market are the ones who have homes that are in a poor location or that are in poor condition, Hess said.

Gillespie agreed. "Real estate is not a commodity. No two pieces are the same," he said. "Sellers have to first and foremost price the home right."

In general, though, home values rose so much before the downturn, most sellers can still realize good returns even if prices have slipped recently, Gillespie said.

Nor should sellers assume that prices are going down in every case, said Doug Rebert, a managing director at Prudential Homesale.

"Price appreciation is [still] taking place in certain price categories in a number of south central Pennsylvania areas," Rebert said.

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Dennis Larison is editor of the Business section and can be reached by telephone at 291-8753 or by e-mail at dlarison@lnpnews.com.