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Tuesday, May 3, 2016

Housing market is making gains; realtors expect upswing in 2011

Tuesday, February 8, 2011

Realtors are seeing gains in the housing market that may lead to a much improved year during 2011.

Brenda McCracken, with Century 21 Realty in Monett, is the current president of the Southwest Missouri Board of Realtors. McCracken said 2010 was a year of ups and downs with indicators showing positive signs ahead.

Tax credits offered through the federal stimulus program ended last spring, McCracken said. The offer of financial breaks spurred some buyers waiting for the right opportunity into action. Sales during the rest of 2010 ran rather slowly, until interest rates began to increase in October. Sales picked up in November and December, which McCracken expects to continue.

"Farmland is still in demand," McCracken said. "Cattle prices are up, pushing the drive for more land. We're getting more inquiries about single family homes as well. Monett industries are bringing in people. They are looking for homes, and that's really helped."

McCracken identified a lack of consumer confidence as impacting home sales, particularly for first-time home buyers who have never assumed significant debt before. National news reports really do not reflect the local situation, she said.

"Monett is very insulated due to the industry and the jobs here," McCracken said. "Real estate is local and tied to the local economy. Our economy is better than most. Home prices and taxes are low. Out-of-state buyers laugh at our taxes, particularly when compared to Texas and California"

Since last September, McCracken said there has been an increase of interest in homes valued at $200,000 and above, something the local market had not seen for many months. Houses in lower price ranges have continued to move.

Part of the more recent momentum in sales has been fueled by a return of the United States Department of Agriculture's Rural Development loan program. Money for loans through Rural Development ran out in late spring, and it took until late fall for the U.S. Congress to reauthorize funding.

"Rural Development is a primary lender in our area, because they offer 100 percent financing," McCracken said. "When buyers saw financing available, we saw an uptick in inquiries. The FHA program has been improved as well. We've used it quite often for sales under $200,000."

Local banks have consistently remained a strong foundation for sales. McCracken credited the careful loan practices by local lenders for not over inflating the price of properties, unlike those on the east and west coasts and in the South.

"The value of local homes is still there," McCracken said. "When prices are down, value here recovers quicker."

At the present time there are 134 single family homes with a Monett address on the active market. The number has changed only slightly in the past year. McCracken said inventories are on a higher level than in many years.

"We're seeing a broad spectrum of properties available," McCracken said. "There are a lot of multi-family units on the market for investors. Commercial properties are available. You can buy a lot of space downtown for a little bit of money."

"This is a perfect storm for a buyer. Rates are low, and there's a large inventory," McCracken said.

Money is available, and interest rates are very favorable. The job of a realtor at this time, McCracken said, is not only to find the right property for the buyer, but also to line up the buyer with the right lending program.

"Learning the procedure for purchasing a home is very important," McCracken said. "The first stop if you want to buy a home is to talk to a lender, who will establish a credit score and what kind of payment the customer can make. A realtor will find out what the buyer wants. Then we can go shopping."

Regulations on home loans tightened in the economic downturn. McCracken said regulators found the extremely strict demands had gone too far and were restricting the number of buyers that qualified for loans. The result has built a pent up demand for housing that has been tempered by an overall nervousness in the economy.

"I think the nervousness will hold through 2011," McCracken said. "I paid 9.75 percent interest on my first house. Those of us who have been around have seen 18 percent interest. Now rates are around 5 percent. First-time buyers don't realize equity can build and can build quicker in a lower priced market."

Foreclosures have been very low in the Monett area. McCracken credited relatively low construction in recent years for not leaving a glut of houses on the market, and careful loan practices. As a result, the local market has stayed very sound.

As the local economy picks up, McCracken would like to see industries being more vocal about their hiring plans. Several industries are hiring now, she said.

"Hiring creates confidence in our local economy," McCracken said. "Companies should shout from the rooftops that they are hiring. It raises confidence all the way around.

"We see new businesses opening in Monett and others looking at Monett as a possible location," McCracken continued. "The new YMCA will be a real blessing because it shows growth. How many towns of 8,000 can show that kind of effort and the phenomenal support of the community behind it?"

Economic indicators suggest to McCracken that the economic downturn has bottomed out.

"The real estate market has done the same thing," McCracken said. "I think 2011 will be the year we turn it around and start it back up. I think we'll see a better year ahead."

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