The Housing Bubble

The Daily Star reports from New York. “Otsego County is bucking state and national trends in home sales, sales and prices continue to increase. ‘The market is still very busy, but the market has normalized,’ said broker Carol Chesser. ‘We are still seeing home sales, but not as many multiple-offers.’”

“Paula Loesel, an associate broker in Stamford, said sellers don’t always accept and understand that they may not be able to get the price for the home that the market once brought.”

“Jim Mead, an associate broker in Oneonta, said the area is driven by downstate buyers. Mead said those who are selling might want to take advantage of the current climate. ‘If people want to sell, they’re better off to do it now than to wait,’ he said.”

The Utica Observer Dispatch. “Houses are taking longer to sell, much to the chagrin of local homeowners. Nationally, that slowing-down process is being called the bursting of the housing bubble.”

“When Jody Thomas decided to sell her New Hartford home, she thought the quality of the house, its school district and the neighborhood would have potential buyers flocking to buy it.”

“That was in April. Three months later, she lowered the purchase price by 5 percent to $138,000. Three months after that, she lowered the price to $134,900. The three-bedroom, 1,500-square-foot ranch-style house finally sold. ‘It seemed like forever,’ said Thomas, who sold a house in Clinton much quicker three years ago.”

“Those whose livelihoods are invested in the local market are noting the recent changes. ‘It’s a little lower than it’s been in the past couple of years, but we’ve had a phenomenal past couple of years,’ said Brady Endryck, executive officer of the Home Builders Association of Mohawk Valley.”

“The phenomenal years to which Endryck is referring are illustrated through the number of single-family building permits issued in the Mohawk Valley. They have increased every year since 2000, with the biggest surge being a 10.6 percent increase to 563 permits between 2004 and 2005. Endryck expects a decrease in 2006, although figures won’t be available until the new year.”

“‘We’re down quite a bit this year,’ said Whitestown Codes Enforcement Officer Phil Husted, who has issued 10 single-family home building permits so far this year, compared to 34 by the same time last year and 35 for the entire year in 2004. ‘It’s been a slow year for everybody, I believe, as far as building new homes,’ Husted said.”

“‘It’s a good place to buy a house because I think the home prices will be fairly stable,’ said Celia Chen, director of housing economics at Moody’s Economy.com. ‘I think there is an adequate supply of land,’ Chen said. ‘There’s not a lot of population growth. And the economy alone is not that fast growing. It doesn’t need to correct.’”

“Kimberly Salatino’s patience was tried for a few months, but now a huge weight has been lifted off her and husband Christopher’s shoulders. Last month, the South Utica residents accepted a bid for their home, which had been on the market since September.”

“The pressure was on since they had entered into a contract to buy a bigger home in southeast Utica. ‘I thought it would be easier, but I know we missed the summer market,’ said Kimberly Salatino. The couple still lowered the selling price by 5.3 percent to $179,000 to entice a buyer, Salatino said.”

“The region’s percentage of homeowners struggling to afford housing has increased in the past several years, government figures show.”

“And that increase in the percentage of people spending 30 percent or more of their income on rent or a mortgage is coming at a faster rate than the national and state increases. This is the case despite the fact Mohawk Valley housing prices did not soar at the rate seen in the South and along the coasts.”

“In 2005, 26.8 percent of Utica-Rome area residents with a mortgage spent more than 30 percent of their household income on housing costs, compared to 16.4 percent of residents in 2000, according to U.S. Census Bureau data. ‘It’s not a great number, but I don’t think it’s terrible,’ said Celia Chen.”

“She said the area is still quite affordable in terms of housing. Our median housing price is about one-half the national average, but median incomes are also far lower.”

“Still, household incomes aren’t rising, which could cause a problem down the line, economist Trudi Renwick said. ‘If incomes don’t rise and housing prices continue to rise, you’re going to catch up with the rest of the state at some point,’ she said.”

The Concord Monitor from New Hampshire. “Half-acre parcels selling for as much as $600,000 on Loon Mountain in Lincoln are posted with the names of owners who hail from Belmont, Hingham, Stoneham and a half-dozen other towns within a 35-mile radius of Boston.”

“At a time when the New Hampshire real estate market has slipped into its first downturn in nearly a decade, the state’s largest ski areas are launching aggressive real estate ventures like Loon Mountain’s expansion project. ‘There is a very large population in this country looking for second homes,’ said Ed Brisson, VP of northeast operations for Centex. ‘What we are building responds to what the market is looking for.’”

“Most buyers so far have been families in their mid-30s from the Boston area, Brisson said, and they don’t want to have to get in the car and go across the street to ski when they’re there”

“‘They keeping building everywhere, and people keep buying it,’ said Karl Stone, spokesman for a statewide ski industry association. ‘It shows there’s a lot of disposable income in our society.’”

“Peter Francese, a demographer from Exeter who has studied the second-home market extensively, said New Hampshire has the third-highest number of second homes in the country. And even though the real estate market has hit what Francese calls a ‘plateau,’ in which sales have gone flat after a long span of boom years, the market for second homes in the state is likely to continue growing.”

“Still, he said, building a hefty inventory of second homes during a real estate slowdown is enough to make him ‘a little nervous.’”

“‘I would be a trifle nervous if I were in that business,’ he said. ‘I wouldn’t be worried sick because the market will pick back up again, but in the short term, it’s a little nerve-wracking because I doubt they’re selling at the pace they were a couple of years ago.’”