Scott Allen, The Herald Journal
An over-abundance of homes on the market was a large factor cited for an average decrease in local residential sales and prices in 2007.
The same concerns that have troubled buyers, realtors, and lenders nationwide have hit home in White and Carroll counties as most area communities witnessed a slide in house prices in 2007.
A report, "Residential Real Estate Market Report for White and Carroll Counties," issued on Friday, Jan. 25 by broker John Koppelmann of Zook Realty GMAC Real Estate used data from the White County and Lafayette Associations of REALTOR's Multiple Listing Service (MLS) to determine how the local real estate market reacted during a year of national financial uncertainty. The report, available at Zook Realty offices in Monticello and Delphi, showed that in most areas sales and prices were down in 2007.
"As a whole, the national housing market saw decreases, but it is probably due to lack of buyer confidence," Koppelmann said in the report. "It sure isn't due to lack of inventory."
"We've had a lot of homes built, where people have gone out and built new homes and then tried to sell the others. We're over-extended right now; we have too many houses on the market," explained Lake-Land Real Estate broker Butch Moody.
Foreclosures were a big part of the vast number of homes waiting for buyers, and could still be an issue until some of the recent subprime lending issues are resolved, the report clarified.
Many subprime lenders traditionally gave mortgages to high-risk borrowers, who soon found they couldn't make the payments and in many cases sold their homes short to dump the burden.
Lenders began foreclosing on homes at an alarming rate in 2007, putting more homes on the market. Though there are more homes on the market than ever, loans are increasingly harder to obtain.
"We've had quite a few foreclosures. There's a lot of those loans being made, those subprime loans, where people were thinking 'well if I want a house, I don't even have to have any money down, just go out and borrow a hundred percent,'" explained Moody. "When the credit crunch hit, that was one of the first things that went away. The loan market has really tightened up."
According to the report, the average price of homes within Monticello limits decreased about 5 percent, from $86,124 in 2006 to $81,769 in 2007. Nine less homes were sold in Monticello in 2007 than in the previous year. Homes outside Monticello but within the Twin Lakes school district decreased in price from an average of $129,522 in 2006 to $120,138 in 2007, a change of about 6 percent. Twenty less homes were sold in that area in the span of a year.
Homes in and around Delphi decreased an average of about 8 percent between the reported years, as 21 less homes were sold through MLS.
Brookston also reported slackening home prices; although twice as many homes were sold in 2007 than in 2006, their costs fell about 70 percent.
The final cost of homes in Wolcott increased in the two year period, jumping from the average $74,828 cost of eight sold homes in 2006 to $88,789 for nine homes sold in 2007. The average sales price of homes increased about 8 percent in Monon, though eight less homes were sold within city limits in 2007 compared with the previous year.
Though most areas experienced a downturn in the price of home sales, properties that traditionally sell to prosperous investors saw increased sales prices in 2007 over the previous year. "On a positive note, waterfront and second homes faired well this past year," said Koppelmann in the report. "Waterfront real estate seems to be a proven sound investment."
Property along Lake Shafer, including Big Monon Bay, saw an average price increase of $15,253, though six less homes were sold in 2007. Lake Freeman also faired well, seeing properties go for an average of $208,967 in 2007. This was an increase from average 2006 sales of $201,263 per unit.
More homes were sold along the Tippecanoe River in 2007 than in 2006, and at higher prices: 18 homes were sold in the former year at an average of $74,955 while 28 homes were sold in 2007 at an average of $89,071.
"People that have the money, they're not affected by the gas prices and the taxes as much. They have the income, and they're still wanting to buy lake property," said Gilda Hickman, a broker with Real Estate Network. "The lake properties have not been affected."
Though the housing market has seen some trouble in the past year, realtors and brokers hoped that stricter regulations on subprime loans would swing the trend the other way. It was noted that the value of White and Carroll County homes on the whole have maintained a steady increase over the last decade; homeowners are still making good on their investment, and brokers hope to see a price increase in 2008.