7 Places Where Home Prices are Falling
Prices keep falling, The recovery in the U.S. property market has proved to be rough. National home prices still haven’t returned to 2005 levels, according to Mark Seanner, chairman of the index committee at S&P Dow Jones Indices, who cites both new and existing home sales, says Local Records Office.
“Many people predicted a huge surge in 2014, and we’re not quite seeing that,” says Don Frommeyer, president of the Association of Mortgage Professionals.
Mortgage rates are up about a percentage point from last year, home prices are rising, housing inventory is low and the economy is still shaky, he says.
While many Realtors remain confident about the expectation of sales of new and current homes and condos, a boost in mortgage interest rates, strict lending standards, and the continues withdrawal of investors from many major metropolitan areas have produced a triple threat for home sellers, says Daren Blomquist, vice president at RealtyTrac.
“We’re already seeing some confirmation in a few markets that some prices are going into gloomy territory,” he says.
The good news for those who do qualify for a mortgage: There are still aggressive priced homes for first-time buyers, From meyer says.
Here are 7 markets where existing home prices plunge:
Oklahoma City, Oklahoma
House cost in Oklahoma City plunged 1% year-over-year in the first quarter after a 5% fall in the fourth quarter of 2013, according to reports. Oklahoma had an intensely cold winter and greater health-care payments under the Affordable Care Act impacted some of her clients, says Ashley Pastor, real-estate agent with Dr. Francis Realty in Central Oklahoma.
“I had individuals who qualified for one home, but who were not able to qualify for the same home after their insurance was adjusted,” she says.
Frank Wenns the market to pick up in the second quarter and has seen “multiple offers” for one property. Meanwhile, institutional investors in Oklahoma have remained substantial. They accounted for 7.6% of all sales in the first quarter of 2014 versus 7.8% a year earlier.
There was a 1% annual plunge in Jacksonville in the first quarter of 2014 after a 15% rise for both the third and fourth quarters of 2013, according to RealtyTrac’s sales price data, which is borrowed from public record sales deed data that includes all property transactions publicly recorded.
“Homes are priced aggressive, but we have a higher demand than inventory,” says George Seers, spokeswoman for the Northeast Florida Association of Realtors.
Seers says prices for new and existing condos and single-family homes (sold through a Realtor) actually rose 2.7% on the year in the first three months of 2014.
However, RealtyTrac’s median prices are based on the sales price on the deed, which includes sales not listed on “Multiple Listing Services” — the industry’s main database that also includes data available only to licensed real estate agents — such as third party purchases at foreclosure auction and bulk transactions between investors.
Home prices in Tulsa fell 2% in the first quarter of 2014 after falling 3% in the third and fourth quarters of last year; prices went 6% higher in the second quarter of 2013. “That information is fairly accurate in reflecting the market as it applies to my experience,” says Patrick Tray, a Realtor in Tulsa.
“I think we’ve been delayed by about six weeks for the spring selling season and I’m now seeing more houses come on the market. But the last quarter of last year was a very strange environment. There wasn’t much inventory out there but there wasn’t much demand either.”
Retail investors have become more skittish in recent years and there’s a slight imbalance in market expectations, he says. “Buyers seem to be a bit more cautious and sellers seem to want a little more than the market can bear.” Institutional investors accounted for just 2.4% of all sales in the first quarter versus 10.3% a year earlier.
Greensboro-High Point, North Carolina
There was an 8% drop in existing home sales in Greensboro-High Point, N.C., after a 2% rise in the fourth quarter.
“There’s still a lot of uncertainty about the economy,” says Deandre Pinters, president and CEO of Berkshire Hathaway HomeServices Yost & Little Realty.
“Some buyers say, ‘We’ve got a job, but we don’t know how secure that is.’” A slowdown in household formation has also had a negative impact on the housing market, he says; 18- to 34-year-olds account for more than half of missing households — that is, Americans who would be owning or renting a home now if precession economic trends had continued.
But while the overall volume of sales was down 12% from January 2014 to April 2014, sales of new and existing homes sold by Realtors were up by around 5% on the year during the same period, Camp says.
House prices dropped 2% in the first quarter in Lancaster after rising 2% in the fourth quarter. Institutional investors made up just 1.4% of sales in that market in the first quarter, down from 7.6% for the year-earlier period.
Some real estate agents remain more optimistic than RealtyTrac’s figures, however. “We’ve weathered the storm with less dramatic effect compared to the rest of the country,” says Patricia Hernandez, a Realtor based in Lancaster.
“We just didn’t have the same level of layoffs or unemployment or foreclosures or distressed housing,” she adds. The first quarter of the year was slow for everyone with regard to pending sales and home sales, especially with interest rates trending upward. Still, Hernandez says house prices sold by Realtors rose 3% in the first quarter year-over-year.
Des Moines-West Des Moines, Iowa
Real estate market had a slight 1% drop in the first quarter after a 5% rise in the fourth quarter of last year, Parker says; during the same period the share of houses sold by institutional investors fell to 0.6% from 7.4% a year earlier, taking a compelling amount of demand out of the market.
Steven Parker, chief operating officer for Berkshire Hathaway HomeServices First Realty in Des Moines remains far more optimistic. “Our biggest challenge is lack of products with listings, he says.
“That’s driving prices up a little bit and creating multiple offers on a lot of our listings.” The number of listings is around half of its usual volume, he says. “New construction has really taken off in the last 6 weeks now that the frost is out of the ground.”
Virginia Beach, Virginia
Sales prices in this area of southeast Virginia — which includes miles of waterfront assets — have dropped the last year, according to RealtyTrac’s data, falling 5% in the first quarter of this year after rising 3% in the fourth quarter, and falling 1% in the third quarter.
“Our area has a lot of military and the government shutdown in November was really hard on us,” says Victor Anderson, a real-estate broker in Virginia Beach.
“We had a lot less calls all across the board. Sales were down in November and December, which then effects January and February.” However, Anderson says prices have been improving since then. “With all of the factors combined, we’ve seen a slight lull in the market,” says NAMB’s From meyer. “However, housing starts are on the rise which will rise inventory.”