published Wednesday, June 22nd, 2011

Housing at 2002 levels, sales fall 23% from May 2010

A home is seen for sale in Alameda, Calif. Home prices have fallen nationwide, stymied by foreclosures, a surplus of unsold homes and continued reluctance of Americans to buy homes.
(AP Photo/Ben Margot)
A home is seen for sale in Alameda, Calif. Home prices have fallen nationwide, stymied by foreclosures, a surplus of unsold homes and continued reluctance of Americans to buy homes. (AP Photo/Ben Margot)
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Chattanooga real estate remained sluggish in May, though some statistics indicate that the market may be stabilizing.

The number of homes sold by Realtors fell 23.5 percent from the 634 sold in May 2010, though home sales were up 0.2 percent over April’s figures.

The 485 houses sold in May were the fewest sold in that month since 2002, when 479 were sold, according to figures provided by the Greater Chattanooga Association of Realtors.

Local median home prices also fell 4.3 percent over the past year to $124,900, but were up 4.5 percent from April. The number of days a home stood on the market before a sale increased 11 days from the previous year, though it was unchanged from the prior month.

However, comparisons using 2010 figures are inevitably distorted because of that year’s homebuyers tax credit, experts have said. The tax credit caused home sales to spike artificially before crumbling to new lows when it expired.

One real statistic that heartens Realtors like Jennifer Grayson, president of local group, is the drop in local foreclosures. Chattanooga foreclosure sales fell even as foreclosures nationwide made up 31 percent of all purchases. The Associated Press reported that forceclosures could rise once pending foreclosures backlogged in courts and probes hit the market

“After months of hovering at a consistent level of about one-third of our MLS sales, foreclosures are now showing a consistent drop to less than one-in-four of sales,” Grayson said. “More people are staying in their homes, and that has to be a gratifying sign for anyone.”

That may be good news, but the structural conditions necessary for a quick rebound don’t yet exist, said Kurt Reiman, head of thematic research at UBS Financial Services, on a visit to Chattanooga’s local UBS office.

“If we want the housing market to recover, we need a climate that builds jobs,” Reiman said. “Right now you’ve got kids graduating from college who can’t find a job, so they’ve moving back in [with] their parents.”

Grayson, however, placed blame for short-term housing woes squarely in the lap of the lending community.

“The lending community needs to return to sensible standards,” Grayson said, a statement echoed by Chattanooga Area MLS President Dan Griess.

“More than 160 lawmakers in the House of Representatives agree with us that rules requiring a 20 percent down payment will make it harder for credit-worthy borrowers to get homes,” Griess said.

But as with the housing crisis that precipitated the nationwide economic meltdown, putting consumers in homes they can’t really afford has its consequences, Reiman said.

“It’s when you provide perverse incentives that you run into these problems,” he said. “Getting people back into jobs is what really reinforces housing formation.”

Right now, however, the U.S. has a nine-month supply of housing, or about 3.72 million unsold dwellings, according to the Associated Press.

Contact staff writer Ellis Smith at esmith@timesfreepress.com or 423-757-6315.

about Ellis Smith...

Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...

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NoMyth said...

A 20% downpayment should be the requirement, without exception. It is unconscionable that Grayson and the realtor groups accept no blame in the housing crisis as they colluded with mortgage brokers, appraisers and lenders to run up housing prices and boost their unearned commissions. These people are as guilty as the hedge funds and investment banks for the damage done to the U.S. economy. They should be ashamed of what little work they do and the ridiculous commissions that they charge, all under the protection of their cabal with the lobbyists at the National Association of Realtors. This is America at its worst. It is shameful that the TimesFreePress so ignorantly paints these villains in a positive light and, by taking their quotes, implies to the public that they are a credible source of information. Downright shameful. Wake up America!

June 22, 2011 at 8:46 p.m.
harlanlopez123 said...

Mortgage refinancing means re-funding the mortgage loan with better terms as well as conditions, most likely from a different lender. It is one way to save money. Search online for "123 Refinance" they found me 3.1% refinance rate and also gave free analysis of my mortgage. You got to learn the secrets.

June 23, 2011 at 2:59 a.m.
Momus said...

This is a buyer's market. Me and the wife are looking to purchase a vacation home now that it's more affordable and sellers are willing to deal.

June 23, 2011 at 11:50 a.m.
eurekbennison said...

This is a late in time discussion but just an additional info. The housing market in western countries is always flactuating numbers. In united kingdom for this year, the prices increases by 8.4 percent although there are countries that remained quite stable for several months like the housing prices in singapore. Although th country have huge demands with flats, condos and apartments, the government still used to infiltrate over supply. Her's the example from http://www.onlinepropertydeals.com/.

October 23, 2014 at 2:12 a.m.
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