If a home is still the biggest investment most people will ever make, then homeowners in Michigan and Ohio may feel a bit cheated of late.
Michigan ranked worst in the nation for a drop in housing prices for the third quarter this year from a year earlier, and was the only state to have a drop in value in the past six years, a federal report released yesterday shows. Ohio was just one notch better.
Industry reports this year have indicated a slide in the national housing market and price drops in Michigan and Ohio. But the latest report paints a stark picture.
Toledo ranked last out of 10 metropolitan areas in Ohio, according to the Office of Federal Housing Enterprise Oversight. The price dropped three-quarters of 1 percent from July through September, compared with the same period a year ago.
"Prices are dropping. That's reality," said Dan Lepkowski, a real estate agent with Re/Max Central Group in Toledo. "It's been that way for a while and the Realtors that don't admit that aren't being straight."
Among a group of smaller metropolitan areas, Sandusky was second-worst, with its prices falling 3.13 percent this fall compared with a year earlier, the report shows. It was the third straight quarter in which home prices declined in the Lake Erie resort area.
Nationally, home prices increased an average of 7.7 percent, but the rate of increase slowed. Bend, Ore., was the hottest market, with one-year price growth of 30.4 percent, according to the independent agency of the U.S. Department of Housing and Urban Development.
The figures are gathered from new and refinanced home loans from mortgage backers Fannie Mae and Freddie Mac. Actual prices were not reported, only the percentage gained or lost.
Andrew Leventis, an economist for the housing enterprise oversight office, said the economy in Ohio and Michigan is the big culprit for lost home values.
"There's that and relatively anemic population growth. That reduces demand for housing," he said. High unemployment affects population growth rates and to some extent, mortgage default rates, he added.
Michigan had an average price drop of 0.55 percent from the third quarter 2005 to quarter ending Sept. 30 this year. Over a five-year span, Michigan prices gained 16.6 percent, paltry when compared with the 55.5 percent national average.
Eleven Michigan cities finished among the 20 cities nationally with the lowest rates of housing price growth over the past year.
The list included Detroit, Flint, Lansing, Muskegon, Grand Rapids, Jackson, and Saginaw. Even Ann Arbor, an affluent college town, had a 2 percent decline in home prices.
Monroe, Mich., was one of the few cities with positive price growth, albeit, a flat 0.1 percent.
Ohio, the report found, had a 1 percent increase in prices over the past year and 17.3 percent over five years.
The performance in the metro areas was mixed.
Canton, Cincinnati, Columbus, Cleveland, Dayton, Mansfield, and Youngstown showed growth, Akron and Lima joined Toledo with declines.
Toledo ranked No. 263 among 379 major metro areas studied nationally, while the best in the state was Mansfield, at No. 217 with 2.9 percent growth.
The only potentially positive for the Midwest, said Mr. Leventis, is homes in the region did not have a dramatic decline in value. But, he added, "That's because there wasn't much [home value] appreciation to begin with."
Dan DiSalle, Jr., vice president of DiSalle Real Estate Co., Toledo, said stagnant home sales in the Toledo area mainly are in the move-up market, or houses $200,000 and up.
"My experience is in the move-up price ranges there is mostly an oversupply," he said.
"But it seems like there's always a good market for first-time buyers."
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