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Published: Monday, 1/28/2013

Area housing market rousing from industry’s nightmare

Growing awakening sees prices rise, inventory shrink

BY JON CHAVEZ
BLADE BUSINESS WRITER
Danberry real estate agent Donna Friesner, in the front foyer of 224 West Front St. Perrysburg. Danberry real estate agent Donna Friesner, in the front foyer of 224 West Front St. Perrysburg.
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When Megan Meyer Foos, Toledo Board of Realtors chief executive officer, recently began to put together the 2012 year-end review of the area’s housing market, she could not believe how pleasant the experience was.

“It’s like it was a dream. The only thing we’re still struggling with is inventory — and that’s a lack of inventory for people out there looking to buy,” she said.

From 2009 to 2011 the northwest Ohio housing market was more like a nightmare than a dream, with the average sale price of homes dropping an average of 8.9 percent, the median home price dropping an average of 23.2 percent, and total dollar volume dropping an average of 9.7 percent.

But 2012 was a strong rebound year, according to statistics provided by the board of Realtors.

Compared to 2011, the number of home sales in the board’s 10-county multiple listing service territory rose 6 percent, the average sales price increased 4 percent, the median sales price grew by almost 7 percent, and the total sales volume was up more than 10 percent.

Meanwhile, the total of new listings dropped 4.3 percent, while the number of days a listing stayed on the market before selling dropped by 4 days to 123.

“I think [2012] was the best year we’ve had in a while,” said Brad Crown, Toledo Board of Realtors president.

Mr. Crown, a real estate agent with the Re/Max Central group in Sylvania Township, said 2012 personally was his best year for sales since 2007.

“I talked to other Realtors at various functions during the holidays and they all said the same thing. The market here awoke from its slumber in the past year,” Mr. Crown said.

More people are looking to buy, and there are fewer houses on the market. For many homeowners, that means their homes are worth more and selling a home could be easier.

Donna Friesner, an agent with the Danberry Co. recently held an open house at a historic home at 224 W. Front St. in Perrysburg. The open house drew 17 prospective buyers.

“Seventeen groups of people. That’s a lot. Normally, if we got two or three, that’s a successful open house,” Ms. Friesner said. “That was the best open house I’ve ever had.”

“I checked January, 2012, and January, 2013, and there were 50 less houses on the market this month compared to a year ago,” Ms. Friesner said. “That’s made a difference in the number of buyers. The housing values have gone up too.”

“It seems like we’re not in a buyer’s market in certain areas anymore. …In Perrysburg, it’s not a buyer’s market, and it’s not a seller’s market. It’s a level playing field now. I believe we have finally gotten to that point. Not every area is like that, but it is in Perrysburg."

Toledo and northwest Ohio’s housing market reawakening is similar to a national revival in the housing market after a nationwide decline that started in 2007.

In 2012 sales nationally reached 4.65 million, the best year for sales since 2007 when sales hit 5.03 million.

“When you look at 2008 through 2011, homes sales were slow, flat, and weak. So we’ve got the best volume in five years and the strongest percentage increases since 2004,” said Walter Molony, a spokesman for the National Association of Realtors.

“The main reason is the tightening of the inventory. We now have the tightest supply since May, 2005,” Mr. Molony said. “And unsold inventory is down 22 percent from 2011.”

Like the trend nationwide, tighter inventory is fueling the resurgence of the Toledo and northwest Ohio markets.

In 2008, new listings coming into the Toledo Board of Realtors’ MLS system totaled 19,897. In 2011 new listings dropped to 15,933, and last year they dipped further to 15,253.

Inventory varies from month to month, but in January, 2012, inventory levels stood at 14,960 homes. By December the level had dropped to 10,470 homes.

“That’s a 30 percent decrease in inventory from the start of the year to the end of the year,” Mr. Crown said. “As a result, we saw a lot of things happen in the last year that we hadn’t seen in the past.”

Mr. Crown said increased demand generated by dropping local inventory levels resulted in multiple offers on good properties and more homes selling at or above their list prices.

It also generated intense competition among buyers for the best properties.

Recently Mr. Crown worked with a client who contacted him on a Wednesday about two homes that had come onto the market that Monday.

When he checked them out, Mr. Crown found that one home already had an accepted offer and was off the market.

“This other one was still available, so we decided to see it that Saturday and when I called the [listing] agent on Friday, I was told that home was already sold,” Mr. Crown said.

That intense competition for good properties that began in 2012 likely will continue this year, Mr. Crown said.

“I think it’s going to be a competitive year. You have a perfect storm of low rates and good prices and low inventory,” he added.

Chris Hall, manager of the Danberry Co.’s Perryburg office, said competition for the dwindling number of good properties is likely to drive sales higher in the winter months, a time when activity normally slows.

Thus far, January has been unusually busy, Mr. Hall said.

“We’ve seen multiple offers and over-list-price offers that are getting beat out by people willing to pay cash. It’s a good thing, but I think it’s an inventory thing,” Mr. Hall said.

“I think a lot of people have been sitting on the sidelines waiting for the right time. We’ve had some say they’ll wait until spring to put their house up for sale, but there won’t be more competition in the spring than there is right now,” Mr. Hall said. “I think they may be missing out on a good thing by waiting.

“First-time buyers don’t necessarily wait until spring to buy a home. They’re not waiting on schools to get out. They want to buy a house now, and that’s driving the market,” he added.

Tom Williams, president of the Ohio Association of Realtors, said Toledo and northwest Ohio’s experience in 2012 was typical for the entire state.

“In 2012 Ohio made a huge jump over ’11. From all indications, things are going to continue this year,” said Mr. Williams, a real estate agent with Northwood Realty in Youngstown.

“Ohio has had 18 [consecutive] months of sales gains, and average sales prices have gradually increased as well, both in small rural areas [and] cities,” Mr. Williams said.

According to the state association, the average sales price rose 5.5 percent to $134,951 in 2012.

“The average sales price jumping 5.5 percent, that’s a huge factor right there because the public is viewing that — mulling over whether they’re going to sell their homes. From an equity standpoint, people lost a lot in the last few years, and now they are kind of looking at recouping that back,” Mr. Williams said.

The OAR president said historically low interest rates and good prices are helping to bring buyers back into the market.

“But overall I think it’s the confidence of the public that is starting to come back because of, hopefully, greater job stability,” he said.

“It’s a mind-set people have right now. They’re cautiously optimistic,” he added.

Mr. Molony said after several years of depressed housing prices, the revival of the housing market is lifting prices nationwide. In the United States, the median home price in 2012 was $176,600, up 6.3 percent from 2011, according to NAR figures.

Rising prices, Mr. Molony said, is welcome relief for many homeowners who were “underwater” — that is, they owed more on their mortgage than their homes are worth.

Additionally, figures show that the nation’s foreclosure problem, a leading contributor to a decline in housing values and prices, continues to improve.

In 2011, the number of distressed sales — sales of homes in foreclosure or those in which the proceeds of the sale fell short of the balance owed, also known as a short sale — totaled 33 percent of all sales.

Last year distressed sales totaled 24 percent, and Mr. Molony said the NAR is forecasting that will fall to 15 percent later this year.

“The rise in prices is lifting these upside-down owners above water. If those people become whole again they will become better able to sell their homes or be returned to positive home equity,” Mr. Molony said.

The NAR expect home prices nationally to increase 4 to 4.5 percent in 2013.

But the U.S. housing market is still a few years away from normal, Mr. Molony added.

According to the Realtors’ group, 5.5 million homes sold in a year is a normal year but that likely won’t occur for at least three years.

“New home construction is improving, but not enough. So if it doesn’t pick up, we could see excessive price pressure on homes due to multiple bidders,” he said.

“We think 2013 will be a 5.1-million year for home sales, with maybe 5.4 million in 2014,” he added.

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.



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