Trying to sell your home? Well, it's a buyer's market

Job losses, snow and foreclosures combine to create low prices for houses.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
Bill Caldwell found out what it's like to be a seller in a buyer's market.
As his four-bedroom home in Cortland sat on the market for 18 months, four nearby homes were sold.
"I was pretty much disappointed," said the 57-year-old retired auditor for the state Department of Liquor Control.
The long-running sales effort ended recently when he sold his house for 221,500 -- 40,000 below his original asking price.
He thinks his first real estate agent might have suggested a price that was too high, but he also thinks economic woes of the area hurt him.
After he listed his home, General Motors eliminated the midnight shift at its Lordstown plant, Delphi Packard Electric cut 3,000 jobs, and Forum Health detailed its financial troubles.
Caldwell isn't the only one who is being affected by these economic hits.
"It's a buyers' market across the board," said Dan Crouse, president of the Warren Area Board of Realtors.
First-quarter real estate statistics for the Mahoning Valley bear that out:
Home sales were down. Closings were off 6 percent from the first three months of last year.
Sale prices were mixed in Mahoning and Columbiana counties, but down significantly in Trumbull County. The average selling price of Trumbull County homes declined between 5 percent and 17 percent each month.
More homes are on the market. The monthly average for listed homes in all three counties increased 11 percent.
Homes are on the market longer. The average time that homes were on the market increased 10 percent.
"We have a lot of homes on the market," said Gwen Bush, president of the Youngstown Columbiana Association of Realtors. "We just don't have a lot of buyers."
To attract a buyer, some sellers are being more flexible, said Bush, an agent with McKinney & amp; Associates. Some are offering to help buyers with downpayments or closing costs, depending on the cost of the home.
"Sellers are very motivated," she said.
Crouse, an agent at Real Living Volpini Realty Group, said the reductions at GM and Delphi could have a large effect on the housing market later, if those people decide to sell their homes.
Other factors also are hurting the housing market.
Realtors said increased foreclosures have put more homes on the market and forced down prices because banks sometimes are looking for a quick sale. Foreclosures are up because of people's taking mortgages with low-interest introductory rates and then not being able to afford the payments once the rates rise, Crouse and Bush said.
Septic regulations
Crouse said Trumbull County faces an additional problem -- septic regulations. The county health department there requires inspection of any septic system on a property being purchased in Trumbull County. In most cases, the systems do not pass inspection and have to be upgraded or replaced at a cost of as much as 20,000.
Despite these issues, Crouse said much of the first-quarter decline can be attributed to one factor -- snow.
"Casual shoppers definitely don't come out in bad weather," he said.
Much of the sales decline came in March's statistics. Those number reflect the snowy conditions in February and early March because sale closings typically occur about 30 days after a buyer signs a contract.
Even as the weather warms, however, the number of sales and sale prices should be lower this year than last, Crouse said.
He sees the local housing market split in two.
The market for move-up homes, those priced between 150,000 and 250,000, is being hit hard because fewer people are confident in their financial situation, he said. Those houses are sitting longer and owners are accepting lower prices than expected, he said.
But the market for entry-level homes is faring a bit better because these homes are more affordable, he said.
Here's good news
Behind all of this is a bit of good news -- interest rates.
The national average for 30-year mortgages is about 6.5 percent. That is up from a low of about 5.5 percent in September 2003 but is still low by historical standards.
Crouse said low interest rates bring out buyers because interest costs can be two to three times the cost of a home over 30 years.
In Mahoning County, Bush said she's encouraged by improvements at Youngstown State University and the city's 2010 redevelopment plan.
"We see a future here," she said.
Despite the worsening in the local housing statistics, not everyone is frustrated. Doug and Amy Boldt, the couple who bought Caldwell's Cortland home, found it easy to make two real estate deals.
They fell in love with Caldwell's home when they toured it, so they put their Cortland home on the market. The home on Terre Hill Drive sold in four weeks for 165,500, said Jacqueline Salvato, an agent for William Zamarelli Realtors.
Amy Boldt's friends questioned the attempt to sell a home in this market, but she said her home drew a lot of interest.
"Everyone has the feeling that nothing is moving out there, but that was not our experience at all," she said.
shilling@vindy.com