Yellow Springs housing market holds own, with some bumps

RECESSION IN THE VILLAGE
This is the fifth in a series of articles looking at how the unstable economy is affecting various aspects of Yellow Springs life, including businesses, nonprofits, the arts, housing and schools.

By Brooke Bryan

The aftermath of the sub-prime mortgage fallout finds the nationwide housing sector still in a serious rut caused by widespread job loss, record foreclosure rates and declines in value across the housing spectrum. Nationally, average house sale prices have dropped to the level of those of 2003, according to research and data company Standard & Poor’s. Ohio is among the worst 10 states, with sales in the first quarter of this year showing a decrease of 24 percent below average sale prices of 2003, according to information from the Ohio Board of Realtors.

But what is true for the nation as a whole is not necessarily true for Yellow Springs. Data collected from various county agencies and the Ohio and Dayton Area Board of Realtors reveals that the village housing market has its own trends.

Overall, the Yellow Springs housing market appears to be in a holding pattern. During the past several years of economic turmoil, the village has maintained housing prices well above the comparative county and state figures, and avoided the steep declines many markets face.

But while on a much smaller scale than the national market, Yellow Springs has experienced a bubble and a decline, suggesting that, while the village may be somewhat buffered from national trends, it is not immune to what analysts call “market correction.”

Village buffered, not immune
The Yellow Springs housing market has fluctuated widely over the past six years, and still, current average sale prices are nearly 16 percent higher than they were in 2003, according to the Greene County Auditor Web site. The current average sale price in the village is $197,812, compared to $170,736 in 2003.

From 2003, the Yellow Springs market climbed to a high point in 2006 — a year when home buyers paid a premium in a fast moving market — with an average sale price of $245,000, when the average property sat on the market for 134 days. In 2007, however, sales dropped off to $232,000, and houses began to linger on the market for an average of 168 days.

A drop can be seen between 2006 and 2007 when one compares what sellers wanted for their properties and what buyers were willing to pay. In 2006, buyers paid an average of 96 percent of the original asking price, while in 2007, buyers were paying closer to 92 percent of the original list price. And then from 2007 to 2008, the Yellow Springs market saw an almost 15 percent decrease in the average sale price, from $232,461 to $198,344.

This softening of the village housing market roughly coincides with the announcement of the closure of Antioch College in June of 2007, an event some feared would impact perceptions of the viability of the village as a whole.

And yet, the correction leaves room for what realtor Samantha Eckenrode called “slow, steady appreciation” over a multi-year period.

In fact, for tax purposes, the recently increased property tax assesments are “below what they could have been,” according to Greene County auditor Luwanna Delaney, who stated in a recent phone interview that the Yellow Springs market has not lost any value.

People seem willing to pay whatever is necessary to live in the “unique society” of Yellow Springs, she said.

The number of units sold in 2008, 54, mirrors the 2007 total of 55 homes sold. In 2006, 59 village homes were sold, compared to 62 in 2005 and 36 in 2004, according to the Dayton Area Board of Realtors.

Agents look at a nuanced market
The housing market is a complex phenomenon with a variety of influences, according to six local realtors in recent interviews.

 “The urge to oversimplify real estate statistics is great,” said Eckenrode of Coldwell Banker, and statistics can be “tricky” in a market where houses are unique and absolute numbers are very low, she said.

While local agents emphasized different aspects of the data, all surveyed agree that the market, generally, is moving at a slower pace than in years past.

Another point of general agreement is what Eckenrode called a “dramatic shift in perception.” In other words, sellers and buyers have to grapple with the longer length of time it takes to sell a home from listing to closing, partly due to more careful bank and appraiser procedures in the wake of the sub-prime mortgage crisis, she said.

Agents also believe that the market will rise again to levels seen at the high point.

For Eckenrode, at the end of the day, human behavior determines the market. “It is what sellers are willing to sell for, and what buyers are willing to pay,” she said.

Because housing in Yellow Springs is more unique than it is uniform in construction, Rick Kristensen of Remax Realty finds price per square foot to be a “good benchmark” for gauging the real estate market. Average square foot prices in Yellow Springs reached a high of $130 in 2006, before falling more than 10 percent to $115 per square foot in 2007, according to data from the Dayton Area Board of Realtors. In 2008, this figure climbed somewhat, to $120 per square foot, Kristensen said. He cites this 3.7 percent increase in average square foot costs as a sign that the market is picking up.

The drawback of using square foot prices to gauge real estate trends, according to Bambi Williams (partner in the mother-daughter Coldwell Banker duo with Eckenrode), is that square foot calculations fail to compensate for what she calls “cubic footage,” or amenities that homebuyers seek like tall ceilings, storage, agreeable floor plans, and mature trees.

It is also difficult to account for location and condition in square foot calculations, Eckenrode added, and different construction plans can skew the square footage calculation.

Post sub-prime financing
Another factor affecting the housing market involves what Eckenrode termed a “general uncertainty about financing.”

“The mortgage industry has gotten conservative in response” to the nationwide trends that spawned the sub-prime crisis, said Craig Mesure of Coldwell Banker, and as credit standards have tightened, fewer potential buyers can qualify for conventional mortgages.

But those that do qualify, Williams notes, find that they can afford more house for less with interest rates hanging around 5 to 6 percent for conventional mortgages.

A new first time homebuyer program, part of the federal stimulus package, will give new home buyers (or those who have not owned a property within the last three years) an $8,000 or 10 percent of cost credit against their federal income tax liability, Kristensen said. Any amount remaining will be given to the homebuyer as cash back, he said.

Noting that this program is significantly different than the first time homebuyers tax incentive offered in 2008, Agent/Owner Debra White of Remax Resources said it is important to note this is an actual credit, and does not have to be repaid.

This credit is beginning to spur a higher level of sales throughout the Dayton area, White said, first affecting the entry-level market, which she believes will then spur the median-priced market by mid-summer.

The fact that we are not a “transitional village,” with a schedule of people regularly moving in and out of housing due to relocation, affects the village’s statistics, Mesure said.

Prices may be slightly down overall, he said, with higher end homes pulling in less than they might have two years ago, but the fact that a portion of the housing stock is owned outright by retirees or those who purchased their properties when prices were low decades ago helps protect against foreclosures.

Regardless of the health of the overall market, individual families still feel the effects of the recession. In Yellow Springs, eight foreclosure notices have been filed with the Greene County Clerk of Courts this year, though only one property has actually been foreclosed upon, according to information from the Sheriff’s Office.

Mesure expects to see the trend in Yellow Springs housing to be marked by retirees and empty nesters downsizing, with a few BRAC–related incoming families helping to support the existing housing stock.

 “We have to find a way to embrace BRAC as a tool to help our community,” Mesure said, as military-related relocations and associated knowledge and technology sectors will be the sector driving Dayton area growth.

 “As the Dayton area reinvents itself from a post-industrial economy to a knowledge- based economy,” Mesure said, “we need to include ourselves” in that shift.

Contact: bbryan@ysnews.com