KINGMAN - After a pair of lackluster months, home sales in the Kingman area had their best showing in nearly four years in March, with local inventory falling to is lowest level since the start of the housing market collapse in late 2006.
According to data released by the Kingman/Golden Valley Association of Realtors, local homebuyers purchased 93 single-family homes in March, their highest single monthly sales figure since May 2006. March sales saw a sharp increase over January and February, which posted just 56 and 55 home sales, respectively.
Month-end inventory also fell to just 455 homes, the lowest level since February 2006, and the fourth consecutive month of declining inventories.
Month-end inventory last peaked in April 2008 at 1,026 homes and has been steadily falling ever since, with only occasional diversions from the overall trend.
The March figures reflect a similar nationwide trend reported last week by the National Association of Realtors, which saw the biggest month-over-month percentage increase for new home sales in 47 years.
Much of the credit has been attributed to a pair of federal tax incentives being offered to first-time and existing homebuyers. It remains to be seen, however, whether sales will continue their momentum after the incentives expire at the end of this month.
As with any news about the housing industry these days, the good is counterbalanced by the bad: despite the continual decline in inventory, home sellers have yet to see a reversal in the downward spiral of their home values. In fact, for the first time in years, local home sale prices actually dipped below the six-figure mark in March, with the average home selling for just $98,575. That's less than half the peak sales price of $225,631 in June 2006 and $16,000 cheaper than last year's average sale price of $114,776.
According to KGVAR president Kathleen Murray, the drop in price is one of the main contributors to the boost in home sales, combined with the federal tax incentives and a renewed push from home investors. But today's home investors, she noted, are a far different breed from the "flippers" who helped push the market toward collapse through the mid-2000s.
"We're not seeing Las Vegas investors coming in and buying 25, 30 houses in speculation; these are good, local people investing in Kingman," she said. "These are long-term investments, people that are looking at a home either to place a child or use as a long-term rental. You will see some people pick up a foreclosure, do the repairs and put it back on the market, but we're not seeing a lot of that."
Murray said foreclosures are also no longer the dominating presence they were even just six months ago. Instead, she said, new federal assistance initiatives rolled out just this month under the government's Making Home Affordable Program are already beginning to help keep homeowners in their homes by helping them secure lower mortgage payments, renegotiated terms or assistance in selling their homes before they enter foreclosure.
"We're not going to see the major effect until August or September, because banks are ramping up to get their processes in place to make it happen in the timeframe the government's requiring," Murray said. "But you won't see as many foreclosures going forward, fewer short sales, henceforth, fewer homes on the market under price pressure, which will level the market and hopefully reverse the downward trend in housing prices."
Murray said Realtors are expecting a dip in sales shortly after the federal tax incentive programs end this month, but their hope is that low interest rates and reasonable pricing combined with the new home retention programs will soon balance that out and eventually restore equilibrium to a lopsided market that gave disproportionate bargaining power first to sellers, then buyers following the market collapse.
"Right now, our builders cannot build if the cost for building a home cannot compete with the resale market," she said. "I'd like to see that equal. Pricing and interest rates and more federal programs to prevent foreclosure will help to balance that out."
For now, however, it appears homebuyers are squeezing as much value out of the expiring tax credits as they can. While the final sales numbers for April won't be available until mid-May, Murray said the ongoing figures are already impressive, with 69 single-family homes already closed and an astounding 254 sales still pending. Inventory has also continued to drop and is currently below 400.
"What you're going to see in April is more owner-occupied residential sales, and I believe that's because more people are moving on the tax credits," she said. "I think it's quite a number, and I know the Realtors in town have been busy."
In fact, Murray said many Realtors are as busy now as they've ever been, with some working in excess of 10 hours a day attending courses, earning certifications and doing what they can to educate themselves and their clients on the new government assistance programs available to them.
"The speculator foreclosures have gone away. Now we're trying to help people that are truly affected by the economy," she said. "Those that are in the business now are hardworking and learning what we need to do to help these people."
But as with any recovery, Murray said jobs and the overall economy will ultimately dictate when homeowners can expect to begin demanding more money for their homes. And with local unemployment still in the double-digits, when that actually happens remains anyone's guess.
"All I can do is hope it happens," Murray said. "It's all about the economy. And it's hard to see where the economy's going to be even six months from now."