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Home sales up, but things remain slow

Photo

Photo by Bill Olmsted

A SOLD sign tops off a For Sale sign on the eastside Janesville condo. so far in 2010, sales of existing homes is running ahead of 2009 numbers.

JANESVILLE — Overall home sales are up, but the Rock County housing market is mirroring the grim national picture when it comes to new home sales.

Only six newly built homes in Rock County were sold in May, according to the South Central Wisconsin Multiple Listing Service. That’s a 45 percent drop from last year and an 81 percent drop from April 2005, when new home sales peaked at 32.

Real estate agent Donna Panico of The Realty Group of South Central Wisconsin said most potential buyers don’t have the financial security to enter the market.

“I think the biggest factor is fear,” Panico said. “They’re very fearful of the unknown. They don’t know if their job is going to be there. They don’t know where their income is going to come from.”

Rock County numbers echo national housing woes. A report released by the U.S. Department of Commerce on Tuesday showed a 33 percent drop in new home sales to 300,000, the lowest numbers on record.

A drop was widely anticipated because the Home Buyer Tax Credit expired April 30. The credit gave first-time homeowners a tax credit of $8,000 and repeat homeowners a credit of $6,500.

Local real estate agent Jerry Morse said Rock County saw an average of eight accepted offers a day in late April. In May, they dipped to 3.5 a day.

“The drop in sales for May definitely didn’t surprise realtors,” said Blair Winn, the incoming president of the Rock-Green Realtors Association. “We knew that the tax credit was going to give an artificial bump and there would be a downturn afterward. The question is how the market reacts afterward.”

Other local numbers were more encouraging.

Overall home sales jumped 34 percent compared to last year. But Panico and Winn both noted that large portions of those sales are the result of foreclosures or short-sells.

While the struggling economy heavily contributes to the housing crisis, increased lending regulations also have made things more difficult for some potential buyers.

Winn said some of his clients had loans fall through because the rules for credit underwriting changed—imposing additional restrictions on banks—in the middle of the approval process.

“Things happen so quickly that if you have a borderline credit score, you could be qualified and be looking good one week and the next week you could not qualify for the loan,” Winn said.

One housing indicator got a boost in May: The average sale price of a house in Rock County was $119,271, up nearly $6,000 from April.