Local, national housing markets improving

On a local and national level, the news for the housing sector is beginning to look better.

The average list price of new and existing homes in the Fort Smith/Van Buren area is up 1.6% between Jan. 5 and April 20, according to a report released April 20 by the Arkansas Realtors Association. The median list prices for homes in the area is up 3.1% in the same period.

Figures from the ARA show the following:
Fort Smith/Van Buren real estate markets
• Average list price of new and existing homes
20 APR: $190,394
5 JAN: $187,232

• Median list price of new and existing homes
20 APR: $151,500
5 JAN: $146,900

• Inventory of new and existing homes
20 APR: 1,033
5 JAN: 1,023

However, it likely will require several months — if not a year or more — before home sales declines begin to abate. There were 218 homes sold in January and February in Crawford, Franklin and Sebastian counties, down 21.2% from the 277 sold in the same period of 2008, an ARA report released April 1 noted.

NATIONAL ANGLE
A report issued April 20 by Kiplinger Letter editor Jerome Idaszak suggests their are signs of recovery in the national housing sector.

“(T)here are signs that the long fever is breaking and that improvement is at last, at least, imaginable. Sales are starting to strengthen. Real estate agents are seeing more traffic, lured in part by the tax credit for first time buyers as well and by historically low mortgage rates,” Idaszak noted in this report.

Even so, he said the housing market “may feel even worse in coming months, as foreclosures keep rising and home prices continue their downward slide. There’s no doubt that the patient is still very ill.”

The bottom line, according to Idaszak, is that the the building sector is not likely to fully recover “until 2010 at best.” He said there is too much inventory of unsold homes in the pipeline, and the slow economy makes it doubly difficult to work through the inventory.
“The long string of quarters, starting in 2006, in which residential construction subtracted from U.S. gross domestic product won’t end till the fourth quarter of this year, and housing won’t become a positive contributor to economic growth until next,” Idaszak noted.

Idaszak’s comments and predictions included:
• Investors are returning to hard-hit areas in Florida and Southern California as well as to some regions, such as northwest Indiana, that didn’t experience the price bubble and bust.

• Foreclosures and tighter credit is swelling the ranks of potential renters, with banks turning down potential buyers. That’ll help to offset what’s likely to be a quarter million fewer new households formed this year — about 750,000 of them instead of a million.

• Foreclosure numbers will likely rise further in coming months. March was the first month after lenders began to lift moratoriums imposed in 2008 on foreclosure actions. This year, odds are over 3 million homes will wind up in at least the first stage of foreclosure.

• Much of the country can expect little or no further deterioration in prices this year. Home sales will bottom out in summer.

• Actual housing starts are catching up with the decline in new-home permits, suggesting that the flow through the construction pipeline is finally ebbing.