By DAVID A. MANN, Evening News
David.Mann@newsandtribune.com
Foreclosures: up.
Home building: down.
Number of Realtors: down.
When it's all added up, it sounds pretty grim. But all that bad news is adding up to good buys for those with cash and a decent credit score, local Realtors said.
Less construction
"Residential [building] has just about come to a halt," said Bob Polston, town of Clarksville building commissioner. His office issues a building permit each time a new home is constructed within the town.
In 2007, his office issued 64 single-family residential building permits. That number decreased to just 16 in 2008, town records show - a drop of about 75 percent.
"It's way down," Polston said.
The story is the same in other areas. In 2007, the New Albany Building Commissioners office issued 100 single-family residential building permits. It saw a 63 percent decrease in 2008, when just 37 permits were issued.
Jeffersonville actually saw an increase from 2007 to 2008. Commissioner Russ Seagraves says the upswing may be attributable to a recent annexation by the city. Jeffersonville issued 74 permits in 2007, 94 in 2008.
The story is similar for Realtors.
In 2006, Schuler-Bauer Real Estate Services - one of the area's largest agencies - marketed and listed homes for more than 100 builders. That number is down to about 40 builders.
Barbara Popp, chief executive officer at the company, notes that there are three or four builders in the area who are still able to do good business.
A lot of builders didn't have the necessary experience, said Jeff Corbett, president of Premier Homes of Southern Indiana. Many didn't have actual construction companies, but would subcontract everything out.
Approximately $120,000 to $150,000 homes are selling in The Fields of Perry Crossings near Sellersburg and the Woods of Northaven in Jeffersonville. More pricey homes also are selling in Hawthorn Glen near Sellersburg and at Elk Run near Hamburg.
"We're selling in all of them," Corbett said.
Lower-priced homes always sell more regardless of the market, but he notes that a more than $200,000 home in Elk Run recently sold.
"It's really just a matter of finding a buyer who's looking," he said.
Homes in many areas were overbuilt when the market was up, according to Suzann Slayton, president and chief executive officer of the Southern Indiana Realtors Association, or SIRA.
In Clark County, the area between Charlestown and Jeffersonville saw a lot of construction over the last few years, she said. In Floyd County, Galena, Greenville and Edwardsville saw a similar trend.
A market downturn
The market shift has been a few years in the making.
"We really started to feel it happening [in 2007]," said Popp.
Business was down about 25 percent from 2007 to 2008.
According to Slayton, the number of Realtors has declined as well. Just a few years ago, the association had 900 members in Clark, Floyd, Harrison, Crawford, Perry, Scott and Washington counties. That number has dropped to about 725.
The number of sales have declined during the past few years, as well. In 2007, 3,524 homes were sold in the area, according to SIRA. The median sale price was $123,000. In 2008, 2,625 homes were sold at a median price of $119,500.
January numbers are not yet available.
Popp said that the slumping market has given her firm a reason to be more efficient, recently merging a couple of its offices.
Good deals
On the flip side of the decline, a buyer's market has emerged.
"There's some excellent buys," said Pat Harrison, chairwoman of SIRA. Her firm, New Albany-based Harrison Realty, recently had a couple of houses selling for less than $40,000.
A 1,142-square-foot home along Ekin Avenue in New Albany - across the street from the home of state Sen. Connie Sipes - recently sold for $25,000, Harrison said.
The home needed a little plumbing work, but it had three bedrooms and central air.
"It wasn't horrible - it was a good deal," she said.
A deal is in the works that would sell a two-bedroom, 1,000-square-foot home with a large garage along Roosevelt Avenue in New Albany for $38,000, she said.
"It's amazing," she said. "[The area has] never seen that kind of price."
There are 28 homes listed as being for sale for less than $40,000 in New Albany, she notes. There are two in Jeffersonville.
"Some are needing a lot of work, but some don't," Harrison said.
"It could not be a better time for people who want to be homeowners," Slayton said.
In December 2008, the median sale price for a single-family home was $94,000, SIRA statistics show. A year prior, the median sale price was $119,500.
And Slayton said the price drops were widespread.
"I don't think there is a certain area where people are scraping up deals."
Cash and credit
Buyers are now looking for existing homes that are inside city and town limits, Slayton said, something she believes is partially because of last summer's high gas prices.
But while bargains are plenty, for the most part buyers will still need to have cash for a down payment and decent credit. The zero-down payments and easy credit deals of a few years ago are gone.
"The era of anything goes is over," Slayton said.
Harrison notes that the Federal Housing Administration is demanding that Realtors ask for a down payment that is at least 3 percent of a home's value. And that they want credit scores to be at least 600 or better.
"Realtors have now become counselors," she said.
In some cases, people have to go to loan counselors, wait a few months and get their credit histories polished before being able to buy.
Popp believes that part of the problem can be attributed to a misconception that no money was available for those interested in purchasing homes. While many of the Web-based lending operations have disappeared, trusted local banks are still lending, she said. There also are still federal programs for first-time homebuyers.
Harrison, Slayton and Popp all said that business increased in January, though monthly numbers have not yet been released.
There's been more hope among both homebuyers and Realtors during the last month, Popp said. There's even been a pickup in business since the inauguration of President Barack Obama.