June 5–LIMA (Source: The Lima News By Kelly Byer) – Owning a home is the quintesential American Dream, but for many people stuck trying to sell a home in this economy, the dream is becoming a nightmare.After the market collapse in 2008, home prices dropped and there were more houses on the market than those able to buy them — a trend that looks to continue a little longer based on national and local statistics.
A slow recovery
Prices fell nationwide by 4.2 percent in the first quarter of 2011, sinking back to mid-2002 levels, according to numbers released Tuesday by the SP Case Shiller Home Price Index. This comes as a blow to the U.S. economy, in which the housing market plays a key role.
“If people are buying homes, they’re feeling secure in their jobs and secure in their economic future,” said Amy Sack-man Odum, Lima community development director.
Odum said although the local housing market has somewhat follow the general downward trend, prices haven’t fluctuated as widely as they have in larger cities.
“Lima, believe it or not, tends to be a bit more stable in its housing market than many other larger metropolitan communities,” she said.
Tim Stanford of Yocum Reality said the Case Shiller Home Price Index should also be taken in perspective.
“Part of the problem is they’re always looking backwards,” he said. “It’s a 60-day rearview mirror, and it also focuses on the 20 major metropolitan areas.”
Stanford said he doesn’t think the statistics accurately reflect the local market, — or even the current market in major cities. Locally, areas affected by housing hardships are across the board.
“It’s been pretty uniform in terms of demand for property in that there is more supply than there is demand,” he said. “There are foreclosures in every neighborhood and short sales are in every neighborhood.”
The local market
Realtors may be weary of national housing statistics, but the local numbers don’t look much better. The problem for sellers is that there are too many houses on the market. Some are there because the owner has moved. Others are the result of foreclosures. The rest stem from the fact that we have fewer residents than we did a decade or so ago.
“What Lima and other communities in the Midwest are facing is a glut of housing because of declining populations,” said Brian Sachs, a housing analyst with Chicago-based Turner Capital. “You already have too many homes, which pushes prices down, then you have people who can no longer afford to own or are just too weary to try anymore. On top of all that, you have a near record decline in buyers because people are afraid to enter the market. It all adds up to a price level that is almost artificially low,”
Sachs’ job is analysing housing markets for potential investors. He was among the analists who touted the value of Lima property in the 1990s when the city regularly topped lists of cities with the most affordable housing. He is back on the Lima bandwagon.
“If I were investing in housing, Lima would be a good spot. You have some good quality housing going very low right now. I have to believe those numbers will go up in time,” Sachs said.
The most notable change in the Lima market in the past year has been cost. The average cost of houses sold in the region declined by close to $20,000 over the past year, according to figures from the West Central Association of Realtors. The average home sale was $95,517 in the first quarter of 2010. This year, it was $74,537. In the same period, the average days a house remained on the market jumped from 100 to 121, an indication that it is taking longer to find a buyer.
Stanford believes those numbers will improve when the job market does.
“I think, like much of the rest of the country, that more jobs will help with more home sales,” Stanford said.
Although prices are close to those in 2002, Stanford said he stil sees houses moving on and off the market faster.
“Things are improving, not as quick or as dramatic as we’d like to see, but it’s getting better,” he said.
Foreclosures and vacancies
Those local number do not include sales through foreclosures and other who have just walked away from their homes. That’s one number that is going up.
Last year, Odum said, 396 houses were on the city’s parcel program, which gives a seasonal notification to abandoned properties and then mows once a month at the cost of the homeowner. So far, there have been 459 properties placed on the parcel program this year. That can be used as an indication as to whether the houses have been abandoned.
“If they’re maintaining their properties, they’re usually still actively engaged with them,” Odum said. “Vacant properties are very often foreclosed properties or abandoned, meaning they’ve been vacant for more than six months without any kind of activity.”
Often the result of foreclosure, these vacant homes are left to be sold by the bank or at sheriff’s auctions. In 2010, there were 395 houses that went through sheriff sales, according to the Allen County Sheriff’s Office. Through the end of May, there have been 193 this year. Although the number of foreclosures appears to be slowing, Sgt. Alan Mefford said that is because of bank delays in filing.
“Foreclosures are still holding steady throughout the country,” Mefford said. “It’s just that they’re holding off on filing.”
Buyers and sellers
As a result of a bill passed in 2009 that requires a deposit at the time of sale, investors are not among the majority of buyers at these sheriff auctions, Mefford said.
“The banks are buying most of them back,” he said. “Very few investors are buying them from us anymore.”
Mefford said investors deal with banks instead.
Neil Obringer, president of West Central Association of Realtors, said the low housing prices bring investors looking to sell and rent houses.
“The investors that I personally work with are buying with the attitude of rent them out until the market rebounds and then sell them,” Obringer said.
When Anne Wenger listed her Shawnee Township house a year ago at about $170,000, she was hoping it would be easy to sell. She “got lucky,” and it sold within a few days.
“We put it on the market mainly because the first-time homebuyer incentive was getting ready to end,” she said.
Wenger partially credits the renovations made and the home’s status as move-in ready. Having built a house in Michigan, Wenger relocated, but her parents’ house in Lima has also been on the market since fall with no luck.
“My impression right now is the banks are just really being cautious, so it’s hard to get a loan for a home,” she said.
Wenger said she remains hopeful the house at a listed price of $159,000 will sell, having had only three offers so far.
“I think anybody that’s in the process of trying to sell should just hang in there,” she said. “I think it’s going to get better. It’s just a matter of time.”
You can comment on this story at www.LimaOhio.com.
Source: The Lima News By Kelly Byer
To see more of The Lima News or to subscribe to the newspaper, go to http://www.limanews.com.
Copyright (c) 2011, The Lima News, Ohio
Distributed by McClatchy-Tribune Information Services.
For more information about the content services offered by McClatchy-Tribune Information Services (MCT), visit www.mctinfoservices.com.
NYSE Alternext:AEZ,
A service of YellowBrix, Inc. Publication date: 2011-06-05