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Third of Summit houses sell for less than $30,000 in November; agents cite foreclosures
By Jim Mackinnon
Beacon Journal business writer
Published on Thursday, Dec 18, 2008
Of the 303 homes sold in November in Summit County, almost a third — 91 — went for less than $30,000 apiece.
That helps explain why November sales figures were dismal in the Akron area compared with a year ago, according to the latest report from the Akron Area Board of Realtors.
Home sales for the month dropped 12.2 percent from the 345 homes sold in November 2007. Sales were down from 419 homes in October.
The dollar value of the properties that exchanged hands plunged by a larger percentage, 30.8 percent, to $32.2 million from nearly $46.6 million in November 2007. The average price of a home sold last month was $106,413, which was 21.2 percent less than the $134,995 a year ago. In October, the average sales price was $127,596.
Jim Camp of Cutler Real Estate thinks he knows a big reason why the value of sold homes was down so much last month: Foreclosures.
There were more properties priced under $100,000 (177 homes) in November than those over $100,000, said
Camp, partner and general manager at Cutler.
A large number of homes were sold because of foreclosures, and many of those were in the $10,000 to $30,000 range, he said.
''That drives down the average sales price,'' Camp said.
In Summit County, foreclosures tend to be found more in the urban inner-city neighborhoods, he said.
Also helping drive down the average and median prices was the lack of new-home construction that tends to command higher prices, Camp said.
The last two months have been particularly tough, he noted.
''The September sales looked pretty good,'' he said. ''I was pretty optimistic at the end of September. Then October hit.''
The stunning impact of the U.S. credit and economic crises that hit in October created the worst climate he had seen since getting his real estate license in 1965, Camp said.
Low mortgage rates
But with interest on conventional 30-year mortgages dropping below 5.5 percent, the worst might be behind the real estate market, Camp said.
Interest rates on 30-year mortgages as recently as the week of Nov. 6 averaged 6.2 percent, according to the National Association of Realtors.
The Mortgage Bankers Association reported this week that as of Dec. 12, the average interest rate on a 30-year mortgage decreased to 5.18 percent from 5.44 percent the previous week.
While mortgage rates have been dropping to flirt with historically low levels, it's unclear if Tuesday's cut in the federal funds interest rate by the Federal Reserve will impact fixed-term mortgages, according to the Web site Bankrate.com.
Fixed-rate mortgages usually do not change significantly in response to changes to the fed funds rate, the online financial information site reported. Thirty-year fixed-rate mortgages are priced off the 10-year U.S. Treasury note, which is now trading at the lowest levels since the 1950s, Bankrate said.
The Fed's Nov. 25 announcement that it would buy up to $500 billion of securitized loans caused mortgage rates to plunge to near 45-year lows, according to Bankrate.
The U.S. Treasury reportedly also is considering making purchases under the new $700 billion TARP program that could drive mortgage rates to 4.5 percent.
Adjustable-rate mortgages might be more sensitive to the Fed's actions, Bankrate said. That means, depending on the exact nature of their mortgage, some people with ARMs could see their rate adjust downward the next time the mortgage resets, Bankrate said on its site.
Bankrate said sinking mortgage rates and new tax incentives for first-time buyers, including a tax credit of up to 10 percent of a home's purchase price, up to $7,500, are enticements for people who have sound finances, a secure job and an extended time horizon.
It's also a good time for homeowners with good credit — people with scores above 680 — to look into refinancing and locking into a mortgage rate, Bankrate said.
Renewed interest
Camp said the drop in mortgage interest rates is spurring renewed interest among home buyers. About half his business involves first-time home buyers, he said.
Camp said that Cutler's online leads are running better than they have since December 2006. That could lead to more online showings than in any previous month, he said.
Cutler's mortgage company likely will have its second-best month of the year in December, because activity has picked up substantially the last couple of weeks, he said.
''Unless something crazy happens, I'm optimistic for next year,'' Camp said.
There will still be employment and divorce-related foreclosures, but likely fewer among real estate speculators foreclosed upon by their lenders, he said.
Fearful consumers
Camp said he looks at interest rates and consumer-confidence figures to judge where the economy will go. Interest rates are dropping, but consumer confidence still needs to improve, he said.
He said he is hoping that the plunge in gasoline prices will help put money into consumers' pockets.
Earlier this year, he was guessing that an economic recovery would start sometime in the third quarter of 2009.
''Now I feel we'll see it sooner rather than later,'' Camp said.
The Stark County Association of Realtors reported that the average selling price for a home in Stark County in November was $108,861, down about 1 percent from $109,962 in November 2007. There were 212 homes sold last month, down 10.2 percent from 236 a year ago.
In other news, Cynthia Slabaugh of Howard Hanna will be installed as president of the Akron Area Board of Realtors at its 97th installation banquet on Jan. 17 at the Raintree Country Club in Green.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.
Of the 303 homes sold in November in Summit County, almost a third — 91 — went for less than $30,000 apiece.
Get the full article here.
Comments
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Tallmadge, OH
Posted 09:40 AM, 12/18/2008
If there was ever a time to challenge your home assessment by the county auditor for property taxes, now is the time. You should be able to reduce your tax valuation by a large percentage. Home prices are falling free fall in Summit County right now including even sacromental Hudson.
akron, oh
Posted 11:43 AM, 12/18/2008
If the homeowners of this county don't line up outside the tax accesment office soon, they will be indentured servants to Donofrio.These crazy inflated "market values" are in large part responsible for the current mess.
Make your appointment at the Board of Revision as soon as possible.
Have a realtor pull up recent sales and listings and ask why your value is 2x recent sales for similar properties.
Posted 04:03 PM, 12/18/2008
You could buy 898 Baughman St for a "s o n g " ,now !!!!
Akron (west), OH
Posted 05:37 PM, 12/18/2008
My guess is the county is really going to fight the mass lowering of property values. They have been living “high on the hog” the past few years with the higher tax revenues. Now that home values are dropping (the by “value” I mean selling price. The actual “value” is an entirely different animal) the county is instantly losing money and cannot support itself in the manor in which it has recently become accustomed.
My realtor told me the county had/has a law where your home’s purchase price will be the new stated value…until the next assessment of course. But recently, the county has not been lowering values as low as say a foreclosure sale would be. That would be an artificial lowering o f your value and not valid. But wait…we all agree that home have been artificially inflated over the past few years…..
Posted 02:08 AM, 12/19/2008
While visiting several mortgage related websites, I found Mortgage Information Search. It is really a very helpful site; you can also check it out.
