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Published: Sunday, 7/16/2006

Housing-market slowdown catches up with Toledo area

BY GARY T. PAKULSKI
BLADE BUSINESS WRITER

THE DIN of construction hammers faded and thousands of homes went unsold in northwest Ohio and southeast Michigan in the first half of 2006.

Sales were steady and price increases were modest during a long mortgage-rate-driven boom that sent home values into the stratosphere in many parts of the United States.

But the area has not escaped a housing slowdown beginning to take hold around the nation, preliminary reports show.

New housing construction slipped by a third in northwest Ohio's two most populous counties in the first six months of the year from last year, building officials said. In Michigan's Bedford Township, building also declined, but by a smaller percentage.

The number of unsold used homes in northwest Ohio as of June 30 was 15,705, up 8 percent from a year ago, according to statistics provided by the Toledo Board of Realtors.

The toughest sell: Homes priced at $300,000 and above. The crop sprouting "For Sale" signs in this segment grew by 17 percent compared with the first half of 2005 and they now account for one of every 12 unsold homes.

"It's tough," said real estate broker Jim Loss, of Loss Realty, Toledo.

"It's all about price now," he added. "You have a small number of buyers and they have a lot to choose from. Your house has to be in good condition and at the right price to sell."

"This market is bad," said Jim Soden, a retired automotive engineer who has been trying for more than seven months to sell his lushly landscaped two-story in north Toledo's Shoreland area.

Although experts point to slowly rising mortgage interest rates as the reason for the nation's sales decline, Mr. Loss said additional dynamics are at work in Toledo. Developers built dozens of subdivisions and thousands of homes over the past decade but the area hasn't had sufficient job or population growth to absorb the increase, he said.

With signs of a gradual uptick in employment, he is hopeful that demand will catch up to supply.

A Blade analysis of statistics on used-home sales in the first six months of the year suggests that the problem isn't that buy-ing has stopped but that the market can't absorb the number of homes being put up for sale.

Just 5 fewer single-family home sales took place in northwest Ohio through June 30 than the 4,177 in the first six months of 2005, according to reports filed with the multiple listing service, through which member-real estate agents share information about listings and sales.

The reports cover Lucas and 11 surrounding counties including Ottawa to the east, Putnam to the south, and Williams to the west.

But the median selling price of a free-standing single-family home - not including condominiums - slipped $2,000, or 2 percent, to $113,000 from $115,000 in mid-2005, said officials of the Toledo Board of Realtors, which manages the listing service.

Officials emphasized that the numbers are preliminary and likely to change as agents add sales completed during the period.

On the short, immaculately groomed Riviera Drive, in north Toledo's Shoreland section, six For Sale signs are posted on lawns.

They include the one at Mr. Soden's house.

He's gone through 450 flyers, given tours to 10 people, and lowered the price to $174,900. But he had no offers. Prospective buyers praised the house but explained that they didn't want to make a move until they sold their own homes, he said.

After buying the four-bedroom house two years ago for $170,000, Mr. Soden, who is 59, invested $25,000 in improvements including landscaping and granite countertops. He said he will take a loss if he receives his asking price. But he and his wife are eager to move to a smaller house in southeast Michigan, where Mr. Soden figures he can lower his tax burden.

Across northwest Ohio, 36 percent of houses that eventually sold were on the market for three months or longer in the first half, up from 34 percent a year earlier, according to Realtors' data. That figure doesn't take into consideration homes that remain unsold.

Some areas are struggling more than others.

In the city of Toledo, not including the upscale enclave of Ottawa Hills, the number of unsold homes shot up 19 percent to 2,571 and median selling prices slipped 4 percent to $82,500.

Suburban Sylvania was one of the few places where the median price increased, to $205,950 from $197,250. Still, that area also had an increase in inventory of homes, with the number unsold climbing to 391, or 13 percent more than at mid-year 2005.

And sellers accepted an average of 10 percent less than their asking prices.

The situation was similar in Perrysburg, where the median price of a home was unchanged at $200,000. That city also had a slight dip in the number of sales and an increase in unsold homes.

The Monroe County Association of Realtors, which oversees the multiple listing service in Toledo's southeast Michigan suburbs, was unable to break out sales data by town and township.

But Monroe County overall experienced a 15 percent decline in the number of sales to 635 and a 4 percent drop in median price to $158,000, the organization said. Meanwhile, 2,895 homes remained unsold at mid-year.

Housing starts slipped 16 percent in the first half in Bedford Township, to 62 from 74, according to township officials who track that data.

That drop was smaller than in Lucas and Wood counties, the two biggest in northwest Ohio. Home construction plunged by 32 percent in each, to 377 from 556 in Lucas, and to 222 from 327 in Wood.

Ottawa County, the third of four counties that make up metro Toledo, by mid-year issued 4 percent fewer permits: 109 compared with 114 through June 30 last year.

Complete figures were unavailable for Fulton, the fourth metro Toledo county.

Hardest hit are contractors who build 100 or more houses a year, said Charles Schmalzried, president of the Home Builders Association of Greater Toledo.

"They're feeling the pinch more than custom home builders who build five houses a year and work out of their houses and a pickup truck," said Mr. Schmalzried.

"Maybe they're building three homes instead of five."

Construction of homes that are not pre-sold has slowed significantly, Mr. Schmalzried said.

A logjam in the used home market is having a ripple effect, he added. "I would have 20 contracts if people could sell their existing homes," he explained.

Hair stylist Kelley Antoine figured she would have no trouble selling her three-year-old, four-bedroom house on a one-acre lakefront lot in Sylvania Township's Twelve Lakes subdivision.

But 13 months after putting the home on the market, finishing the basement to increase its appeal, and lowering the price $75,000 to $425,000, she and husband Andre have yet to get an offer.

Contact Gary Pakulski at:

gpakulski@theblade.com

or 419-724-6082.



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