Credit market slows home sales

By Don Shilling

Mahoning and Trumbull counties see home sales down for the fifth straight month.

Large losses in the stock market have home buyers staying on the sidelines, a real estate official said.

“It’s getting tough out there, and Wall Street is not helping,” said Kathy Carroll, president of the Youngstown-Columbiana Association of Realtors.

Stock markets have had some large drops recently as the nation is mired in a credit crisis. The Dow Jones industrial average plummeted 370 points, or 3.6 percent, Monday. The Dow is down 25 percent for the year.

Some buyers don’t have stock investments and others don’t understand the markets, but they still don’t want to be buying a home as stock prices are falling, Carroll said.

“People who have never watched it before are watching it now,” she said.

Home sales last month were off 6 percent in Mahoning County and 18 percent in Trumbull County when compared with September 2007, the Realtors association reported Monday. Columbiana County, however, saw an 83 percent jump.

Sales of homes in Mahoning and Trumbull counties have been down each month since May when compared with last year. The numbers reflect home closings, which typically occur about 30 days after a deal is signed.

Prices in all three counties were down last month. The median price — the midway point of all sales — for Mahoning County was down $1,000 to $72,000, while Trumbull County’s dropped $5,750 to $71,000 and Columbiana County’s fell $17,200 to $70,000.

Carroll said appraisal values are coming in lower these days.

“It used to be that homes appreciated a couple percent a year. That’s all out the window now,” she said.

Carroll doesn’t expect home values to return to their high points for a “long, long time.”

The most active part of the market locally in September was for homes between $35,000 and $80,000. Many of those buyers were investors, including some from out of town, she said.

Some of the investors intend to refurbish the homes and then sell them, while others intend to rent out the homes, she said.

She added that there was a little bit of activity in September for homes between $150,000 and $200,000.

Some buyers moved into the market when mortgage rates fell under 6 percent in early September, but the recent tightening of credit markets has pushed those rates back over 6 percent, she said.

shilling@vindy.com