Rebound in Valley homes sales expected

By Don Shilling

Real estate sales in the Mahoning Valley fell 24 percent last month.

Falling interest rates should help the Mahoning Valley end a summer slump in home sales, a real estate official said.

Mortgage rates at some area banks have fallen under 6 percent, which is a drop of about 0.5 percentage point, said Kathy Carroll, president of the Youngstown-Columbiana Association of Realtors.

Lower rates could help a local real estate market that has been down for some time. The market rebounded some in the spring, but new figures show that bounce didn’t last.

Sales of single-family homes in Mahoning, Trumbull and Columbiana counties dropped 24 percent last month after a 7 percent decline in July.

Carroll said many local people have been looking at homes but haven’t been willing to make an offer because of uncertainty over their finances. Lower rates could spur them into action, she said.

Bankers have said interest rates have declined this week because of the federal government’s takeover of companies that buy and sell mortgages on the secondary market. The shaky financial condition of the companies had unsettled investors, which led to higher mortgage rates.

Carroll noted the drop in interest rates followed another good sign for the local economy: the creation of a third shift at the General Motors’ Lordstown complex.

“It’s been tough, but all these little things are going to come together,” Carroll said.

The Realtors association had been expecting the local housing market to recover next spring, but the lower rates could spur a recovery even sooner, Carroll said.

A good number of people have moved into the area for GM jobs but are renting until they sell their homes in another state, she said. Lower interest rates nationally will help make that happen, she said.

As an added bonus, Carroll said she thinks the waves of foreclosures from the subprime lending crisis are over. Though foreclosed home are still on the market, there should not be another big hit of new foreclosed homes, she said.

Carroll had a warning for homeowners, however. Don’t expect to get the same price for your home that your neighbor received two years ago, she said. Home prices have fallen since then.

Sales results for Mahoning and Trumbull counties bear this out. The average sales price for Mahoning County in August was $108,300, compared with $111,400 in the same month last year. In Trumbull County, the average last month was $78,800, compared with $95,100 a year earlier.

Columbiana County saw its average price increase from $89,900 in August 2007 to $92,300 last month.

Sales prices were down in all three counties in July. Mahoning’s average price was $94,600, down from $106,600. Trumbull’s average price was $95,400, down from $99,500. Columbiana’s average price was $80,200, down from $87,100.