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Signs point housing market picking up steam
Foreclosure numbers down, prices steady
The last five years have not been good to home builders or real estate agents. The recession definitely took its toll on the housing market.
That is beginning to change, and while no one is ready to declare a return to the good times of the mid-2000s, the number of home buyers and home prices are both on the upswing.
Home values took a dive during the recession that began in 2007, and low prices lingers today. But, according to DataQuick, a company that monitors home prices, the value of homes is picking up statewide and slightly in Tulare County.
Local real estate broker Derek Land has seen improvement, but he is cautious about the future.
“All signs point that way,” he replied when asked if the market is turning around. He said they are seeing more and more traditional buyers, but inventory is down and there are still far too many short sales and foreclosure sales to declare the housing bust being over.
“We’re not seeing a drop off in short sales at all. They are still a big part of our business,” said Land.
Local home builder Gary Smee, who took out a majority of the 32 new home building permits last year in the city of Porterville, said until home values began to appreciate regularly, the home building industry will continue to be slow. The 32 home building permits was far below numbers seen since the mid-2000s.
“People are willing (to buy), but appraisals are making it tough to buy,” said Smee, explaining that many families are finding they do not yet have enough equity in their home to afford a new or larger home.
However, he said other areas are seeing a big rebound. “Bakersfield’s going crazy,” he said of the larger town to the south where the economy is reportedly booming again.
In Porterville, both Smee and Land said there are more people looking, but inventory of existing homes is way low. Land said he was told the availability of homes — new or existing — is at a 15-year low.
Smee is not planning any new large subdivisions this year, but Porterville City Manager John Lollis said there has been some interest shown in the city for reviving existing housing projects that were never developed.
Smee said his company built 70 homes in the region last year and he does not see that increasing by a lot this year. He did agree, however, that Porterville does not have a lot of developed lots on which to build and only demand will have developers creating new subdivisions.
Even a good existing home is hard to find, said Land. He said the traditional buyer or seller — a person selling a home to purchase a larger home — is increasing and that home values are increasing, both good signs for the future.
But, prices are still lower than they were when the recession hit.
DataQuick reported the median price the 58 homes sold for in Porterville in December was $120,000, up 8 percent over December of 2011, but that is only slightly better than the average of the past 12 months.
While foreclosures have declined, short sales have not. Short sales are where the lender agrees for the owner to sell the home for less than what is owed.
RealtyTrac reported there were just 61 foreclosure proceedings begun in December in Porterville and 10 in Lindsay. Foreclosure numbers began to drop off in the middle of last year, falling below 100 a month for the first time in years. In November, RealtyTrac reported 72 foreclosures begun in Porterville, but in the past year has reported as many as 129 in a single month.
Smee said these are different times. “We’re in a unique period where interest rates are low and home prices are low, but rental rates are high.”
Land said it is even more unusual than that. “It’s a strange market. It is a great time for sellers and for buyers,” he said, explaining that interest rates and prices remain low, but sellers are getting multiple offers and “we’re selling homes in the first couple of weeks.”