COLUMBIA – Home sales are increasing. Home prices are rising. New home construction is at its highest level since March.
After the housing crisis and four years of recession, real estate agents and builders in Columbia are guardedly optimistic that the market is recovering. In hindsight, last year may have been the low point for Columbia. Home sales declined to the lowest point during the recession, with only 1,514 single-family home sales in Boone County.
Today, the data tells a different story.
Single-family home sales in June increased 44 percent, compared to June last year, according to the Columbia Board of Realtors. In comparison, new home sales nationally increased 15.1 percent during June, according to the U.S. Department of Housing and Urban Development.
Columbia's data shows June as the busiest home sales month of 2012, with 271 single-family homes sold, compared to 220 in May and 191 in April.
June home sales also set a new bar in average home sale price:
- Home prices increased 11 percent from June 2011, to $204,786.
- The average price was the highest since 2007.
- The average June sale price was $18,000 higher than the average price so far this year.
Home sales are not the only metric increasing in Columbia, with new construction permits also rising:
- July residential single-family construction permits increased 47 percent from July of 2011.
- July single-family construction increased 16 percent from June 2012.
- July was the busiest month for new single-family home permits issued since March.
The real deal
For real estate agents, 2012 has been a busy year. Kim Coleman of Prudential Vision Properties, and president of the Columbia Board of Realtors, is sensing a change in attitude.
"I think that people that were on the fence a year ago have decided to go ahead and buy. Interest rates are historically low and prices right now are still fairly reasonable in Columbia," Coleman said. "There is more consumer confidence in Columbia."
Coleman described the years of the recession as "pretty tough for home sellers."
"From 2008, our market has gone down, until last year. It was one the slowest we've seen," she said.
A slow build
The revival of the housing market is also affecting builders. Doug Muzzy, owner of Muzzy Builders, Inc., is seeing a steady rise for home construction in Columbia.
"For us, we're talking to a lot more people now, we've seen that ratchet up significantly," Muzzy said. "It's becoming a little more consistent. It's going to be a slow rise out of the depths of where it was."
Muzzy is cautious about the numbers, viewing it as a market correction.
"I think the main thing for us is that anytime you see a surge in the numbers, the markets are stabilizing," Muzzy said. "People are feeling more comfortable about their jobs, investments, and such. They're feeling like they can take a chance on a big purchase and invest in a home."
Don Stamper, executive director of the Home Builders Association of Columbia, sees many positive indicators.
"Every home builder I talk to is really busy, every realtor I talk to is really busy," Stamper said. "That's good for the local economy and good for people that struggled through the downturn."
Stamper sees home sales and home construction stabilizing in Columbia.
"It's going to stabilize here and at least it's going in the right direction," he said.
Impact on rentals
Meanwhile, the market for single-family house rentals in Columbia is "pretty tough," Coleman said.
Many homes large enough for a family are already leased in Columbia. Rental rates for what's available are rising because of a short supply.
Coleman explained one possible cause for the lack of space. People moving to Columbia with their families from areas where the housing market has not recovered are finding it impossible or inadvisable to sell their house.
"We've had a lot people upside down in their home value. They may owe more than their house is currently worth," Coleman said.
So they move to Columbia without selling their previous house, leaving them without enough cash to buy a new home.
An improving market
Home sales in Boone County are up 25 percent for the year compared to the same months last year. Just under 1,000 homes have been sold so far this year, with 734 sold last year in the same period.
Coleman sees the increase in numbers from last year as a sign of steady growth, digging the Columbia real estate market out of its 2011 dip.
"We're pretty busy. We're hoping that it keeps up," Coleman said. "We've seen that month over month — the business is just increasing."
Residential construction continues to increase in Columbia, with 546 permits issued so far this year.
Muzzy sees new construction levels at his business approaching pre-2008 levels, meaning busier months ahead.
"We're already getting pretty close to the construction level we'd like to be at," Muzzy said. "What we'll find is, as the market continues to improve, the number of projects that we have further out on our calendar is getting stronger."