COLUMBIA — It began with a country obsessed with excess.
Then, in 2007, the housing bubble burst.
"We’ve really come through a dark valley, if you will, with the economic downturn," said Don Stamper, executive director for the Central Missouri Development Council and the Home Builder’s Association of Columbia. "There were a lot of foreclosures."
In today’s housing market, Columbia is facing a very different problem. The Home Builder’s Association is calling it a crisis.
There is a shortage of new houses.
"There was a huge pent-up demand, and that demand is showing itself now," Stamper said.
With demand high and supply low, potential buyers were having trouble finding homes to purchase, according to the Columbia Board of Realtors.
"The homes that are being built are in subdivisions that existed before the recession," said Scott Linnemeyer of Beacon Street Properties of Columbia. "There is not a whole lot of new development now because of that inventory that was there."
Overall, 2012 home sales were the highest they had been since 2007, and new construction sales were up 40 percent, according to the Columbia Board of Realtors.
"Today, money is extremely cheap compared to historic levels, and people are taking advantage of that as they should," Linnemeyer said. "If they price it competitively, their home will sell because we have a good market in Columbia."
"I definitely see a steady stabilization of the market," said Doug Muzzy, owner of Muzzy Builders in Columbia. "Most people are now able to sell their existing homes, so they’re able to build new homes."
Unemployment is down, so people feel safer in their jobs and more comfortable making major purchases, he said.
"People are just ready to start buying again," said Jessica Kempf, president of the Columbia Board of Realtors. "The outlook is positive; the first few months of this year look good so far."
In fact, this past January saw record sales, with 97 single-family homes sold; this is the highest number seen for the month since before 2008, according to Columbia Board of Realtors statistics.
Columbia’s Landmark Bank has also seen record numbers for January. The bank’s treasury analysts reported a record increase in deed of trust filings for the month, for both commercial and residential real estate loan transactions. They further reported an indication that all market-area lending institutions showed an increase.
"It’s exciting to see this spike in loan volume and overall demand in the Columbia market. These numbers clearly signal a recovering economy and consumer confidence returning to the market," Annette Bealmear, Landmark Bank vice president and regional real estate manager, said in a news release.
Columbia has most likely reached a new normal in the housing market, which industry professionals see as good news.
"We’re seeing a steady but slower growth," Kempf said. "We had a large growth before with the housing bubble; it’s too risky to grow that fast."
Linnemeyer anticipates a continued uptick in the market but said "it won’t — and shouldn’t — reach the levels it was in 2005 and 2006."
As the housing market grows, Columbia’s economy can be expected to grow with it.
"Education, insurance and health care are all big ones, but the housing market is an economic engine in its own right," Stamper said.
"The housing market affects the local economy immensely; it’s one of the leading indicators of how healthy the local economy is," Kempf said. "That it’s growing is a good sign for Columbia."