Area housing market registers slow but steady year, data show
WILLMAR -- Unemployment and uncertainty about the economy have slowed the housing market in Kandiyohi County this past year.
But homes are continuing to be bought and sold, especially houses in the mid- to lower price ranges.
The region appears to have avoided the worst of the housing bust being seen in the Twin Cities and surrounding suburbs, local real estate agents say.
"Locally we haven't seen a significant change, mainly because our local economy continues to be fairly stable," said Bruce Vogel of Lakes Area Realty.
Over the past 12 months, "we kind of just remained stable. It hasn't been growing much," he said.
These days, consumers shopping for a home are most likely to be first-time home buyers looking for smaller, affordable homes.
"We certainly had a lot of first-time home buyers this year," said Betty Bollig, a broker and Realtor with Counselor Realty of Willmar.
Homes in the $75,000 to $100,000 price range "are the ones that we're seeing bought in the market today," she said. "We have not seen the mid- to upper end."
Statistics tracked by the West Central Association of Realtors show that median home prices are slightly down this year but sales have been steady.
From Nov. 1, 2008, through Oct. 31 of this year, 251 homes were sold in Willmar. For the same period the previous year, there were 231 sales. The figures are for houses listed with the Multiple Listing Service and represent about 90 percent of the total home sales.
For all of Kandiyohi County, the comparable figures are 390 home sales during the past 12 months and 405 sales during the 12 months prior to that.
Median prices for Kandiyohi County fell from $128,000 to $125,000. But they stayed relatively stable in Willmar, dipping from $123,700 to $123,500.
On average, homes in Kandiyohi County have been on the market for six months before finding a buyer. In Willmar, it has been taking about five and one-half months this year for a home to sell.
With unemployment still relatively high, consumers are being cautious, Vogel said. "People are still going to be a little apprehensive to take the big jump."
Construction of new homes also is down.
In 2006 the city of Willmar issued 28 building permits for new single-family homes. By 2008 this number had dropped to 19. As of the end of October, the city had issued just 16 permits for new single-family home construction.
"The interest rates are still wonderful. They're very low," Bollig said. "It's the uneasiness in the economy. It's people not knowing if they have a job."
Several closings this year have fallen apart at the last minute because of job losses, she said.
The closing process also is taking longer, she said. "It is taking us twice as long to get units to closing. It is twice as much work and the sale prices are lower. It's just been a lot of work this year."
Real estate brokers are hoping that the extension of a tax credit for homebuyers will spur more activity in the market. But it's not clear whether it will have a long-lasting effect, since many of these buyers may already have been planning to purchase a home and will simply accelerate their decision to take advantage of the tax credit.
One benefit of the downturn in the housing market is that it has become easier for buyers, especially first-time buyers, to purchase a home.
The escalation in home prices at the beginning of the decade made it difficult for many of these buyers to get into the market, Bollig said.
The rental market also appears to have strengthened, she said. "People now have some rental properties that they're able to get into. That's a good thing."