Housing Update
Interesting update on some markets from the Real Estate Journal.
Utah homes worth their salt
Utah apparently has missed the news about the end of the housing boom, with median selling prices on the way up. For example, Utah County’s Alpine area saw median selling prices rise 57.2% to $529,000 between the first quarter of 2005 and the same period this year. In Hooper, located in Weber County, prices appreciated 40% in the first quarter to $230,000 from the previous year, the The Salt Lake Tribune says. “Most people in Utah should not pay much attention to all the talk of a housing bubble,” the paper quotes Richard DeKaser, chief economist for National City Corp., as saying. National City produces a quarterly “House Prices in America” report. There is little chance of housing prices declining in Utah, with the exception of the St. George area — which the report deems as “extremely overvalued,” the article says. Driving the rise in demand are an increase in jobs, higher wages and an influx of people from other states, The Salt Lake Tribune says.
Commuting costs brake California’s Central Valley sales
More far-flung than other Bay Area suburbs, California’s Central Valley is experiencing a housing market downturn more pronounced than in the Bay Area, the Mercury News says. During the residential real-estate boom, home buyers were buying properties farther from San Francisco in exchange for cheaper price tags, and Central Valley communities proliferated, the paper says. But now, with higher gasoline costs, rising mortgage rates and significantly appreciated real-estate prices, homes in the region are harder to sell and prices are falling. The article reports that in California’s San Joaquin, Stanislaus and Merced counties, sales of new and resale homes dropped 29% in the first five months of this year from the same period last year, according to DataQuick Information Services. At the end of May, almost 4,000 houses were up for sale in San Joaquin County, a year-over-year rise of almost 250%, the Mercury News says. To get an idea of the commute between these communities and San Francisco, a calculation on Indo.com shows that the driving distance between the San Joaquin town of Tracy and San Francisco is 62 miles.
North Carolina’s coastal market changes tide
Along North Carolina’s coast, home sales appear to have crested, making sellers wonder if the market is in a correction — or even worse — a collapse, says The News & Observer. In the Outer Banks, located at the northern end of the state, year-over-year sales of existing homes fell by more than 50% in April and May, the article says. In May, the average home price in the Outer Banks dropped about $100,000, or 16%, from the year before, the paper says. With a glut of oceanfront homes, buyers are asking for discounts of 10% to 15% from sellers’ asking prices, the paper says. (Though sellers are resisting price cuts, The News & Observer reports.) The not-so-sunny portrait is about the same throughout the coastal area, with sales of existing homes in Brunswick County (on the south of the coast) down by approximately 50%, and sales of existing homes in Carteret County showing a drop of 15% in May and a 34% dip in April.
Buyers scarce in Michigan
Michigan is experiencing one its slowest housing markets in history, says The Detroit News. To attract buyers, home builders and individual home sellers are offering incentives, the paper says. For instance, one Commerce Township homeowner is offering a two-year lease for a BMW X3 SUV for any real-estate agent who sells her $699,999 home. Some sellers are turning to Web sites that allow real-estate agents to bid for the chance to sell a homeowner’s property, the article says. Agents are offering lower real-estate commissions in exchange for sellers’ business, The Detroit News says. Responsible for the housing market slowdown are “the state’s sagging economy and low consumer confidence,” the paper quotes one local real-estate agent as saying. “People have kind of lost faith in the real estate market,” the article quotes another realtor as saying.
Foreclosure frenzy in South Florida
A slowing housing market and increasing interest and home-insurance rates have combined to create a swell in the number of home foreclosures in South Florida, says South Florida Sun-Sentinel. In the first quarter of this year, there were 3,000 additional foreclosures (a rise of 40%) than at the end of 2005, the paper says. Those most at risk for foreclosure are homeowners who stretched their real-estate dollars during the housing boom through creative financing, the article says. In the first quarter, foreclosures rose 69% in Palm Beach, Fla., from the end of the previous quarter, the paper says. “We’re seeing people who have overbought and their rates are going up now and they can’t afford their houses,” the president of Foreclosure.com says.
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