In the Sunday Springfield News Leader (November 2, 2008), Ryan Colvard reported on unique buying opportunities in local residential real estate, even in today’s challenging market. Among those interviewed for the article was HBA of Greater Springfield Executive Officer Matt Morrow. Following is the full story:
Bargains to be had locally for first-time home buyers
Local Realtors confident economy will bounce back quicker here than elsewhere.
RYAN COLVARD • FOR THE NEWS-LEADER • NOVEMBER 2, 2008
Springfield’s housing market has remained largely unaffected by market turbulence and could be heading for an upturn once the national market stabilizes, area Realtors say.
According to the National Association of Realtors, the weakest housing markets are along the coasts, in such states as California, Florida and the Washington, D.C., area. Springfield has fared better.
“We’re not on the coast — we’re not Florida, we’re not California — where most of these speculative buys were,” said Art Maxwell, sales manager of Coldwell-Banker Vanguard. “… A lot of these speculative buys were secondary houses, not the buyer’s primary home. They were investment properties. And like most other investments, when it goes bad you dump it.”
There’s a lot of doom and gloom, he said, but there shouldn’t be.
Local Realtors have confidence in the strength of Springfield’s economy; however, it seems that potential buyers and sellers are still uncertain about the stability of the housing market. This uncertainty will most likely continue through the end of the year.
“Perception is reality, and if it’s put out there enough, then people start thinking that it’s not time to buy a home because it’s a bad investment, which in Springfield is the wrong-headed decision,” said Maxwell.
First-time home buyers in particular are in a position to benefit from low selling prices and competitive rates. First-time home buyers are defined as those who have not purchased a home within the past three years.
“If you’re a first-time home buyer, there’s never been a better time. When the first-time home buyers have low rates like they do now, and they can get into homes because the housing prices are so low, you’re not going to see a stagnant market for very long.”
First-time home buyers entering the market creates what Maxwell described as a “train effect” — pulling along the next group of potential buyers and allowing them to move up into better housing.
Besides first-time buyers, cash buyers and those who are moving to a higher-end home also stand to benefit. Still, public doubt concerning the market has deterred many home buyers from taking advantage of the situation.
“There’s a psychology right now that is preventing people from moving because they don’t want to lose on their house,” said Matt Morrow of the Home Builders Association of Greater Springfield. “But in reality most people are moving up, and if you’re moving up then the numbers work in your favor.”
The current market situation in Springfield has caused the construction of new homes to slow, as builders and residential developers wait for existing homes to sell. An influx of first-time home buyers is needed to spur demand.
The decision for builders to temporarily curb residential construction projects is the right thing to do, according to Morrow, who said that it benefits Springfield’s economy in the long run by not saturating the market with homes that aren’t being sold.
“Builders and developers here are stopping. This is good –it’s exactly what they should do,” Morrow said. “What has to happen before new construction can really get rolling — in any kind of successful way again — is that some of the inventory of existing homes needs to start moving.”
“Once that secondary housing market starts to get going again, that’s when you’ll see everything really start to pop.”
Springfield began to experience the housing slump later than other areas of the country, according to Morrow, and professionals in the business believe that Springfield and the surrounding areas will recover earlier as well.
“We have a lot factors that work in our favor here,” said Morrow. “One of the things about our local economy, which goes much further than homebuilding, is that we do tend to be diversified and less subject to the real highs and lows.”
Judy Huntsman, a real estate broker for Coldwell-Banker, said the cyclical nature of the market points toward future gains.
“The market’s going to build up again. There’s probably going to be a brief shortage of houses since the builders have shut down. We’re really thinking the first quarter of next year is going to be big,” said Huntsman.
Professionals within the local housing market who understand how markets have a tendency to fluctuate are concerned that media coverage of the national economic slump will artificially depress local markets.
“People are hearing all of the national media saying it’s just desolate — that you can’t sell a house, you can’t give it away — and that’s just not true,” said Murney Associates Realtor Rhonda Burks.
“It’s balancing out, which is the way a market should be, but it’s not the doom and gloom we’re hearing nationally. There are different areas of the country that are really struggling. We’re not struggling.”