More Calhoun County homes were sold in the second quarter of 2012 than in the same period in each of the last three years, indicating consistent improvement in the market. However, a glut of foreclosures is still keeping the market from fully recovering from its downturn in 2007, experts say.
“There is no question that the housing market is improving, it’s been improving for a while,” said Everett King of ERA King Real Estate in Anniston. “But until we get foreclosure inventory to normal levels, we can’t really measure the true state of the market.”
According to the Alabama Center for Real Estate, 279 homes were sold in Calhoun County in April, May and June — an increase from 255 homes sold in the same period last year. The amount of homes sold in the second quarter is also more than the 271 homes sold during the same period in 2010 and the 220 sold in the second quarter of 2009.
In contrast, before the recession hit in 2008, 383 homes were sold in the area during the second quarter of 2007 and 406 in the second quarter of 2006.
Alabama had similar improvements in home sales in April, May and June. Center for Real Estate statistics show state home sales were 9.7 percent higher than in the same period last year.
Like King, Leonard Zumpano, professor of finance at the University of Alabama and the chair of real estate economics for the Alabama Association of Realtors, agrees that the housing market is improving.
“There is strong evidence across the country that the housing market has bottomed out,” Zumpano said. “I think because interest rates are incredibly low, it’s spurring more people to buy.”
However, Zumpano also agrees with King that foreclosed homes are still keeping the market from making a full recovery.
“There is no viable mechanism in place to really eliminate that glut from the market,” Zumpano said of foreclosures.
Banks foreclosed on many homes around the county when the housing market collapsed in 2008. Skyrocketing unemployment then led to further foreclosures, which in turn lowered home sales prices. The housing market has been slowly recovering ever since.
According to the Calhoun County Probate Office, there were 102 foreclosures during the second quarter, an increase from the 79 foreclosures during the same period last year.
King said until foreclosures drop to between 2 and 3 percent of available housing inventory, the market will not be fully recovered.
Chuck Ward, real estate agent with Billy Isom Realty in Oxford, agrees with King that foreclosures still represent a barrier in the way of a full housing market recovery.
“Sales are slowly moving up … but foreclosures are hurting the property values of the remaining houses,” Ward said. “We’ve got to get the economy straightened out to get rid of the foreclosures to help out the average seller.”
But even after most of the foreclosures are off the market, interest rates could then become an issue, King said. Currently, the federal government is keeping interest rates artificially low, around 3 percent, as a way to encourage home purchases.
“But we know that at some point, they’ll have to let interest rates find their normal level, and how will that affect the housing market,” King asked.
King said the base price of a home is not usually as important as the interest rate.
“The price won’t go up as much as the interest rate will in the next four to five years,” he said.
Star staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star