Hope for housing market
Would-be buyers taking the plunge
Number of homes sold in Lawrence per year and change from year earlier, according to numbers from the Multiple Listing Service compiled by McGrew Real Estate:
2008: 1,066, down 25.5 percent
2007: 1,431, down 7 percent
2006: 1,538, down 9.6 percent
2005: 1,702, down 1.4 percent
2004: 1,726, down 1.3 percent
Home sales in Lawrence are down 25 percent from the previous year, sale revenues are off even more and home prices fell last year for the first time in memory.
But the sky is not — repeat, not — falling.
When President Barack Obama signed a $275 billion housing stimulus program last month, he just might have nudged the first of many welcome dominoes waiting to fall in Lawrence’s residential lineup.
That’s because people like Joel and Brooke Sauer are in the market once again, generating hope that optimism will re-emerge, sales will pick up and that pent-up inventory up the line — all the way from entry-level homes to high-priced residences — will be reduced.
“With the economy the way it is, everybody’s afraid to move on anything like this,” admitted Joel Sauer, who drives a forklift at Hallmark Cards Inc. “There’s always the fear: What if one of us gets laid off? There’s always questions.”
But the stimulus program, approved last month, will provide a one-time, $8,000 nonrefundable tax credit to first-time and other qualifying homebuyers like the Sauers — people who don’t need to sell a home to buy one, and therefore can help inject activity back into a market that’s been sagging for months, even the past several years.
“When we found out we wouldn’t have to pay this credit back, that helped cement our decision,” he said, preparing to close on their $137,500 purchase later this month. “When it’s just free money in your hand, you can use that to fix up anything in the house, or just have a little savings account.”
The stimulus program is injecting a dose of guarded optimism into the market for buyers, sellers and Realtors alike, just as the spring sales season approaches.
Randy Barnes, president of the Lawrence Board of Realtors, said that the stimulus likely would help persuade at least some qualifying buyers — people who haven’t had a mortgage for at least the past three years — to consider purchasing a home.
“It isn’t going to hurt,” said Barnes, a Realtor for Realty Executives Hedges Real Estate.
Realtors are hoping for something to help turn things around this year. Among the findings included in a Lawrence housing market report for 2008, released this week by McGrew Real Estate:
• Realtors moved 1,066 Lawrence residential properties during 2008, about 25 percent below the previous year’s 1,431.
• The total value of sales slid to $208.8 million, down 27 percent — or nearly $80 million — from the total for the previous 12 months.
• The average price paid, $195,858, dipped 3 percent from the $201,452 average for 2007.
Price declines were accelerating as the end of the year approached, said Dennis Snodgrass, McGrew’s president and managing broker. That means sellers need to be as cognizant as ever about ensuring that their listings are priced “realistically,” given market conditions.
“In the past, as long as you were priced somewhere in the ballpark, you would sell,” Snodgrass said. “You can’t do that today. You have to be priced sharp, and you have to have your house in great condition.”
Becky Mondi, a Realtor for Re/Max and a director for the Lawrence Board of Realtors, said she already had seen the tax-credit spur transactions. Now it’s a matter of keeping the momentum going.
“The stimulus program has certainly brought the buyers out,” Mondi said. “What I’m seeing is that the entry-level buyer is opening the door for that seller to move up, and then it starts a chain reaction.
“There is activity in the market, and I’m starting to see sporadic activity in more moderate to upper-level markets.”