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A national report Tuesday on housing prices in the nation’s 20 largest cities shows that metro Toledo still lags behind other sections of the country in home-price appreciation.
But local real estate experts say that area home prices are rising and will accelerate as unemployment decreases and consumer confidence grows.
The Standard & Poor’s Case-Shiller home price index released Tuesday indicated U.S. home prices jumped 10.9 percent in March compared with a year ago, the biggest increase since April, 2006. Prices rose to an average of $151,710 in March from $136,830 a year earlier.
By contrast, figures from the Ohio Association of Realtors showed that home prices in the Toledo multiple listing service, which includes 10 counties of northwest Ohio, rose just 1.6 percent in March to $99,415.
The Ohio association cautioned that its figures may not be complete because of the state group’s early reporting deadlines.
And figures released last month by the Toledo Board of Realtors suggest that the average home price is higher. According to the board’s figures, home prices in the 10-county Toledo multiple listing service actually rose 4 percent in March. The Board of Realtors also said that in just Lucas and upper Wood County, home prices rose 11 percent in March.
Whether northwest Ohio rose 1.6 percent or 4 percent, the fact prices are rising steadily bodes well for the rest of the year, said Brad Crown, president of the Toledo Board of Realtors and a real estate agent with Toledo’s Re/Max Central Group.
“Even though we have demand, I don’t think there’s enough demand to drive prices up quickly,” Mr. Crown said. “Which is why it’s still a good time to buy in Toledo because our prices haven’t shot up 20 percent over the past year.”
Mr. Crown said demand cannot grow because inventory remains down significantly — a decrease of 14 percent in March in the entire MLS and down 18 percent in metro Toledo compared to a year earlier.
“We’re still badly in need of inventory. The new stats are alarming statistics to me,” he said. “At the beginning of 2012, there was no indication that 2012 was going to be any better than 2009, 2010, or 2011. But when it was over, … we had the best year in five years in Toledo.”
But an especially strong wave of sales hasn’t occurred since the recession, which is something Toledo real estate industry officials still hope to see, Mr. Crown said.
At least foreclosures no longer are the reason home prices aren’t skyrocketing, he added.
Foreclosure specialist Rod Culler, a real estate agent with Welles-Bowen Realtors, said foreclosures have leveled off. “They are lower than they have been in years. Foreclosures were still 40 percent of the market over the last year. Now they are just 10 to 15 percent of the market,” Mr. Culler said.
The Welles-Bowen agent said he’s seeing pent-up demand, and experiencing multiple offers on some properties. But when will home prices surge?
“When there’s more jobs. Unemployment is still 7 percent in the market. Sales prices aren’t going to increase much more than the cost of living,” Mr. Culler said. “Unemployment is still higher than other parts of the country, and that is causing uncertainty and some resistance in the market.”
Carol Dimas, a real estate agent with The Danberry Co. Realtors, said home sellers and buyers would do well not to get too excited or frustrated by the Case-Shiller numbers because they reflect changes in markets that have little in common with Toledo.
“The fact that prices are going up is more good news,” she said. “But I would caution people that when you talk national sale prices, you’re talking about markets that are very different from Toledo.”
Mark Kruse, another Danberry agent, said it is also important to remember that prices are rising fast in other markets because they also dropped very fast and steeply in some of those markets. That scenario did not happen in metro Toledo, he said.
“From 2007 to 2011, our prices dropped 15 to 18 percent. But in other markets, like Las Vegas, or parts of California or Florida that had huge upswings in the early part of the decade, they came crashing down at a higher percentage. So we are doing very well,” Mr. Kruse said.
“The simple law of economics says that if demand is higher than supply, the prices will go up,” he said. But Mr. Kruse said that while demand for homes is strong, that doesn’t mean buyers are jumping into the market to buy.
Much of the available inventory consists of homes with about 80 percent move-in ability — that is, about 20 percent of the home needs fixing, whether it’s a roof, furnace, or other major investment.
“Today, I see many buyers that want a 95 percent home. A lot of people are sitting on the sidelines waiting for the right home to come along,” Mr. Kruse said.
Well-kept homes are selling right away, he said. But many homeowners who now wish to sell suffered during the recession to the point that they had no money to keep their homes updated.
“That can have a tendency to flatten the value. If the guy next door did all of those things to fix up his house and you didn’t, his house will sell twice as fast as yours,” Mr. Kruse said.
Dan DiSalle Jr., of DiSalle Real Estate Co. said some buyers are finding difficulty in getting loans, which also is keeping prices down. “That limits the number of potential buyers and borrowers. The banks have tightened things up a lot,” he said.
Still, Mr. DiSalle said if you go to pockets of the metro area — Perrysburg, Sylvania, and certain other suburbs — demand is growing significantly and housing prices are rising quickly.
“We are seeing that happening in the ’burbs. Toledo proper, not so much. But that will come along eventually,” Mr. DiSalle said. “You really have to dial it down neighborhood by neighborhood.
“For now, we’ll take the 2 to 4 percent growth in prices,” he added.
Contact Jon Chavez at: email@example.com or 419-724-6128.