For 3rd year, Valley home sales fall

By Don Shilling

Figures show sales of homes in the Mahoning Valley dropped 11 percent last year.

Home sales fell for the third straight year in the Mahoning Valley as a staggering economy scared people away from buying a home, despite falling prices and interest rates.

People bought 4,317 homes in Mahoning, Trumbull and Columbiana counties last year, which was down 11 percent from 2007.

The 2008 total is down 20 percent from 2005 when 5,413 homes were sold in the three counties.

Many would-be buyers are worried about losing their jobs and their shrinking retirement accounts, said Mike Garmone, vice president of residential mortgage lending at Home Savings and Loan Co.

“I think what’s holding people back is concern over what’s going to happen,” Garmone said. “‘Am I going to have a job? Will the stock market start to turn around?’”

He added, however, that the elements are in place for a rebound in home sales if people can gain some sense of financial security.

Mortgage rates are about 5 percent, and home prices have been falling for the past 12 to 18 months.

“That’s a good recipe for the market to pick up soon,” he said.

It probably won’t be known if the recovery is starting until late February or March, when the home-buying season normally starts, he said.

Eric Caspary, president of the Youngstown-Columbiana Association of Realtors, said he’s looking forward to a rebound but is trying to be cautious after three straight years of falling sales.

“I think we’ll have a better spring compared to last year. How much better? I don’t know,” he said.

He doesn’t expect sales to surge back to 2005 levels. That was the best year ever for real estate and much of that boom was fueled by easy credit terms that don’t exist any longer, he said.

Sales actually picked up in December in parts of the Valley. Trumbull County recorded 101 home closings last month, compared with 88 in December 2007, while Columbiana County recorded 41 home closings, up one from December 2007.

Mahoning County recorded 133 closings, down from 155 in the same month of 2007.

Caspary said appraisals show that real estate prices have stabilized after dropping about 10 percent last year.

Bruce Wenmoth, executive vice president of retail lending at First Place Bank, said he’s also seen signs of stabilization, which he said is critical to bringing buyers back to the market. People don’t want to buy a home if they think it will decline in value, he said.

“If we stabilize the declining values, I’m optimistic we’ll have a good year,” he said.

If job losses cause another wave of foreclosures, however, prices will fall again and buyers will stay on the sidelines, he said.

Figures from the Realtors association show that the average sales price in both Mahoning and Trumbull counties dropped 9 percent last year.

In Mahoning County, the average sales price was $89,259, compared with $98,011 in 2007. Back in 2005, the average sales price was $106,690, which was 16 percent higher than last year’s number.

The average sales price in Trumbull County last year was $81,903, which was down from $90,269 in 2007. In 2005, the average price was $101,062, which was 19 percent higher than last year’s number.

Columbiana County’s average sales price last year was $83,031, which was down 3 percent from 2007 and 14 percent from 2005.

shilling@vindy.com