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Local home sales continue to slide

Local home sales continue to slide

When daffodils and school doors burst open, it is usually a sure sign that house hunters are about to begin their annual rite of spring.

But May brought no respite this year for northwest Ohio's beleaguered housing industry, newly released figures show.

Sales and prices slipped once again in May, which is typically one of the best months in which to sell.

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Sales were down 12 percent in Lucas County and 19 percent across northwest Ohio from a year earlier, according to the Toledo Board of Realtors.

Selling prices slipped to an average of $108,000 in Lucas County and $116,000 in northwest Ohio from about $130,000 in May, 2007.

"The homes that are selling are the ones owned by people who can afford to lower the price to where it needs to be," said Kendall Gigax, an agent with Danberry Co. Realtors, Toledo. "The buyers are beating up on the sellers," she said. "If the sellers can afford to be beat up on, the house will sell."

Prospective buyers are scared away by job-security concerns and gushing gasoline prices, said Jim Loss, owner of Loss Realty Group in Sylvania Township. "Even though interest rates are good, the biggest thing that has to change is consumer confidence."

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Real estate agents see some signs that the market may be starting to turn, but Mr. Loss conceded that could be wishful thinking. "This can't go on forever," he said.

In May, the only price ranges that had showed increased activity in Lucas County were $50,000 and under (up 40 percent) and $250,000 to $499,999 (up 12 percent).

Overall, 386 single-family homes sold in May compared with 440 in the same month last year. Areawide, there were 594 sales, down from 733 last year.

The figures do not include condo sales, which slipped 45 percent to 23 in Lucas County and 39 percent to 33 in northwest Ohio.

Through the first five months of 2008, sales slipped 15 percent in Lucas County and 18 percent areawide.

The slump has brought big changes to the way business is conducted locally.

Unable to get prices high enough to pay off mortgages, sellers are often being forced to make up the shortfall.

"I've got a closing coming up on Friday where the sellers have to bring a check for $26,000 to the closing," said Ms. Gigax, of Danberry. Sellers frequently must bring lesser amounts to the table.

When financially struggling sellers owe more than a house is worth, banks often agree to accept less than they are owed if a seller is found quickly, she added.

Last fall, she was involved in the sale of a $160,0000 house with a $145,000 primary mortgage and a $92,000 second mortgage. The lender holding the second mortgage received just $3,000. "They accepted, knowing they would see nothing" otherwise, Ms. Gigax said.

Once, it was common for buyers to close on a new house before selling existing residences. That seldom happens now, said Stan Rinda, a marketing director with Chicago Title in northwest Ohio. "People are being very, very careful," he said.

The industry got good news in mid-May when Fannie Mae, a government-affiliated mortgage financier, relaxed a policy requiring buyers in distressed housing markets such as Toledo to make minimum down payments as high as 20 percent of the purchase price, Mr. Rinda said. That has been reduced to 3 or 5 percent.

Spring and summer months are usually good times to sell a house because families are eager to relocate before the start of a new school year, explained Joseph DiSalle, sales manager with DiSalle Real Estate Co. in Maumee.

He isn't surprised that sales didn't pick up this May, however. "Homes are selling but at a slower pace," he said.

He hopes that election of the next president will boost consumer sentiment enough to revive sales next year at this time.

Contact Gary Pakulski at:

gpakulski@theblade.com

or 419-724-6082.

First Published June 11, 2008, 9:34 a.m.

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