Mid-priced home demand outpaces supply, agents say

by Paul Schreiber

SBJ Reporter

pschreiber@sbj.net

A shrinking supply of homes in the $100,000 to $150,000 price range the range most sought after by local would-be buyers makes for slim pickings, according to local Realtors.

The median price for the 7,688 new and used homes sold in 2003 in Greene, Christian and Webster counties, along with some surrounding communities, by Multilist of Springfield members was $116,156, said Ed Peterson, owner of Century 21 Peterson Real Estate in Bolivar and president of MLS.

In 2002, there were 6,588 homes sold at an average sale price of $112,703, Peterson said.

Of 2003's total, 4,741 homes were three-bedroom, 1,825 had four or more bedrooms, and 1,122 were one- to two-bedroom, Peterson said.

Diminishing supply

There are not enough homes available in the $100,000 to $150,000 market to "keep up with the demand," said Judy Huntsman, president of Coldwell Banker Vanguard Realtors. "There's not enough product on the market right now to fit that price range."

According to MLS statistics, the fastest-selling area is in southwest Springfield and extended to the county line MLS zones five through seven where 1,494 homes were sold in 2003 at an average price of $131,896. This compares to 2002 figures for the same zones where 1,208 homes sold for an average price of $126,169.

"The highest selling zone last year was Southwest 6; it has been for five consecutive years," Huntsman said, adding that Coldwell Banker's home-selling statistics matched the Multilist numbers. Southwest 6 covers the area south of Highway 60 and west of Kansas Expressway outside the Springfield city limits.

Moving outward

The lack of available homes in all price ranges in Springfield is attributable, in part, to a decrease in home production. For 2003, Springfield's 394 single-family housing starts dropped almost 100 compared to 2002's total of 486, said Matt Morrow, executive officer of the Home Builders Association of Greater Springfield.

Greene County housing starts, on the other hand, shot up from 993 in 2002 to 1,254 in 2003, and were at a record level for 2003, Morrow said. It outpaced 2002 in all months, except one, he said.

So far for January, however, housing starts in both Springfield and Greene County lag compared to 12 months ago. In the city, 21 permits were pulled this January against 36 last January, Morrow said. In the county, there were 113 homes begun in January 2003, while 75 were started this January.

HBA measures home construction in terms of housing starts rather than finished homes to gauge how the market is currently, Morrow said. "We do housing starts mainly because it's a better indicator of where the economy is right now as opposed to where it was six months ago."

Financing

Ease of getting mortgage cash into the hands of home purchasers has quickened the real estate market as well.

Home buys can be made with a "first deed of trust line of credit where people can borrow up to 95 percent of purchase price with no mortgage insurance, and it acts like a line of credit," said Aaron Jernigan, president of mortgage banking at The Bank. It's like a home-equity line-of-credit, except on a first mortgage, he added.

Jernigan said there are also 100-percent programs available where there's no money down required, and the seller pays all closing costs, which typically run $1,000 to $1,500 depending on purchase price.

Cliff Daniel got a 5.75 percent interest rate on his $130,000 Ozark home through Equitable Mortgage and has a 30-year mortgage. His three-bedroom, two-bathroom home has a two-car garage, jetted tub, gas fireplace, dishwasher, microwave above the stove and hardwood floors in the kitchen.

Daniel worked with Kirk Hewitt of Coldwell Banker to find the home.

For the 7,688 area homes sold in 2003, 5,195 were financed by conventional loans, 1,061 by Federal Housing Authority loans, 864 by cash, 187 by the Veteran's Administration and 50 by the seller, Peterson said.

The remaining 331 homes were sold by other means.

What to expect

For homes MGM Properties builds in the $130,000 to $150,000 price range, exterior extras often include irrigation systems and landscaping, said Terry McKee, president.

Interior elements in these homes, such as upgraded cabinets, whirlpool tubs, bathroom tile floors, kitchen hardwood floors, hearth rooms and an occasional upstairs' bonus room are often part of the package, he said.

Both Huntsman and Peterson said home buyers in the $100,000 to $150,000 price range aren't typically requesting specific amenities, however. This detail shopping comes from people in the $200,000 price range and beyond, Huntsman said, adding that specific decor, floor coverings, and textured countertops are commonly sought.

In higher-end homes at $250,000 to $750,000, home buyers often request amenities like high-tech microwaves, convection ovens and sub-zero refrigerators, McKee said.