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Real Estate Trends

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by Jan K. Allen

SBJ Contributing Writer

The Springfield Multilist Service reported 4,534 residential properties sold in the Springfield area marketplace in 1997. Of those sales, 767 were in the $30,000 to $60,000 price range.

In a community that is approaching an average home cost of $100,000, according to an estimate by Max Perryman, managing broker for RE/MAX House of Brokers, this number of low-end home sales seems healthy. However, total houses sold in the same price range in 1996 was 903, which suggests a shrinking market.

The majority of sales in

that broad $30,000 to $60,000 range for both those years were houses between $50,000 and $60,000, another hint that low-end properties may be becoming scarce.

Jim Jones, owner of Jones and Company, said he believes there are plenty of houses available in the under-$60,000 price range, but there aren't enough buyers.

Jones constructed several three-bedroom starter homes in 1997 for a sales price of under $60,000 and ended up having to rent the units due to lack of buyer interest.

The 1,100-square-foot houses are situated on fill-in lots in north and northwest Springfield. The homes feature all-vinyl siding, central heat and air, and single-car garages.

Those amenities, coupled with attractive interest rates, should have been enough to entice new home buyers, but Jones couldn't find any takers.

However, he said he had no difficulty leasing the properties for $500 and $525 per month, which is about the same as the house payments would run under loan programs currently available.

Jones said he blames the soft market for the lack of interest in lower-end housing, and not the price range. With activity slow in general, it is hard to pick a price range that is ailing more than any other, he said.

In agreement with other real estate professionals, Jones said that the center city, north and northwest regions are the areas where buyers can most likely find a home under $60,000.

Increased land values and costs of construction have contributed largely to this trend, Jones said.

Agent Ethel Curbow, affiliated with Coldwell-Banker Vanguard, Realtors, agreed with Jones that houses under $60,000 are still available, but she added that it becomes increasingly hard to find quality homes in that price range.

Homes under $60,000 are becoming few and far between on the south side, Curbow said, but there are still some available in the center city, north and northwest.

Curbow said there has never been a better time for first-time buyers, with attractive loan programs offering low down payments and other incentives.

The drawback for most young couples is coming up with the money that is needed up front.

In looking at first-time buyers, Curbow also made the observation that young couples are often unwilling to accept the starter-level homes that exist under $60,000, setting their sights higher than their pocketbooks.

Perryman said that it is becoming a real problem to find affordable, livable housing in the lower price ranges. New subdivisions aimed at first-time buyers usually start in the $70,000 range.

Many young buyers can't qualify, Perryman said.

Higher land prices and materials costs have made it harder for contractors to build anything under $70,000. Tract homes under $60,000 are becoming a thing of the past, Perryman said.

In the resale market, homes are available in the center, north and northwest area, with a few in the southwest, Perryman said.

There are a variety of loan packages available to renovate houses in targeted areas under government programs, but not many buyers are willing to take advantage of the programs.

Some bond programs make it possible to boost the buyer into a higher-priced home, but they must have good credit to qualify, he said.

"In the lower-end properties, homes are out there, and money is out there, but

it's just getting harder to find" buyers, Perryman said.

MLS statistics support the premise that most homes under $60,000 are located

in the central and north portions of the city.

Of the total sales in the $30,000 to $60,000 range, 224 were located northwest, 179 northeast, 188 southwest and 176 southeast.

Each of these regions contains some center city areas, which accounts for a portion of the sales.

Houses between $50,000 and $60,000 account for about 70 percent of these sales.

MLS statistics were provided by Judy Huntsman, managing broker for Coldwell-Banker Vanguard, Realtors, and Lou Sable, director of the Greater Springfield Board of Realtors.

INSET CAPTION:

767 homes in the $30,000-to-$60,000 range were sold in '97, compared to 903 in '96.

PHOTO CAPTION:

Jim Jones, owner of Jones and Company, said a shortage of low-end homes is not necessarily the problem. A group of brand-new, under-$60,000 homes he developed near Phelps Street (above) were eventually leased because no buyers came forward.[[In-content Ad]]

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