Housing market banking on growing consumer confidence

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Housing sales are down locally, but statistics show owning a home continues to be a good investment.

Figures for the second quarter of 2012, which ended June 30, were released Friday by Genesee Region Real Estate Information Services, the information subsidiary of the Greater Rochester Association of Realtors.

Transactions for the quarter showed a 25 percent decrease from the second quarter of 2011 with 2,640 homes sold, compared to 2.371 during the same period last year. The number of homes listed dropped by 8 percent from the same quarter last year. The median sale price was up 2 percent to $122,500, from $120,000.

“Although closings were down during the second quarter, as compared to the same period last year, inventories are also down and with many reports of multiple offers, we’re seeing glimpses of a shift to a seller’s market locally,” Steve Babbitt, president of the GRAR board of directors, said in a release.

Housing data-analysis firm CoreLogic reports that fewer homes on the market guard against a downturn in prices, as seen during the middle of 2010 and 2011.

“The housing recovery is ongoing, but appears to be happening in stages rather than a steady climb,” said GRAR CEO, James Yockel.

This past quarter also showed a modest increase in property values from the second quarter 2011, which, according to the release, indicates that purchasing a home in the Greater Rochester and Finger Lakes region continues to be a great investment.

“With a 109 percent increase in pending sales compared to the same time a year ago, we project a robust impending third quarter,” Babbitt said.

Most Monroe County towns and villages showed a jump in median home prices year over year, with the greatest gains in Riga, up 22.9 percent, from $140,000 to $172,000 and Parma, up 19.6 percent, from $115,000 to $137,500. The biggest drop was 13.1 percent in Chili where the median sale price went from $137,000 a year ago to $119,000 in the second quarter of 2012.

In the five Finger Lakes counties that are part of the Genesee Region, sales prices in the Wayne County town of Macedon increased 11.6 percent to $145,000, and dropped 21.3 percent, from $$96,500 a year ago to $75,900 in the second quarter of 2012, in the Genesee County town of Batavia.

“The housing market’s recovery is encouraging, even though mortgage lending and down-payment requirements continue to be a challenge,” Babbitt said. “The local economy is gradually improving, interest rates remain low and affordability is at an all-time high.”

GRAR continues to support the local residential real estate industry by promoting the benefits of home ownership and using the services of a Realtor when buying and selling a home.

Additional real estate information is available on the association’s website at www.HomeSteadNet.com.

Joining GRAR officials were members of the Rochester Home Builders’ Association, who announced area homebuilders are taking orders and making up for the weaker sales of 2011.

“Every weekend we see more new faces looking at our models,” said association Chairman Joe Sortino, president of Sortino Properties. “We had a strong spring market and we hope that the increase in traffic continues and results in more sales next quarter.”

Sortino said that all-time low interest rates and consumer confidence has given all area homebuilders more confidence that the market has bottomed out and is coming back.

Monroe County new home building permits were up by 52 permits or 16 percent in the second quarter with 373 permits issued for single-family homes in the first half of the year, compared to 321 for the same six months in 2011. Wayne and Ontario counties saw double-digit declines with 27 single-family permits issued this year, compared to 38 a year ago, in Wayne County. Ontario was down from 135 to 98.

“Our area is one of the first nationwide showing improvement,” said RHBA CEO Fred A. “Rick” Herman. “Local employment is steady, home prices remain steady and consumers are now ready to buy. We are seeing greater demands than predicted in some markets.” (See www.rochesterhomebuilders.com)

The Mortgage Bankers Association of the Genesee Region forecasts that interest rates will increase slightly this year to approximately 4 percent for a 30-year fixed-rate mortgage. However, current 30-year fixed-rate mortgages are at approximately 3.80 percent, which is the lowest level this year. Conforming loan size interest rates in Rochester and the surrounding counties are essentially on par with most areas of the country.

Interest rates declined in the second half of 2011 and have remained relatively flat since then, and most recently have further decreased. It is expected that the purchase originations will be similar to 2011 levels, while refinance transactions increased 45 percent for the first half of 2012 compared to the same period in 2011.

The increase in refinance transactions is being driven by continued relatively low interest rates in conjunction with the expanded Home Affordable Refinance Program 2.0. The revised HARP program offers greater flexibility in qualifying criteria with respect to debt-to-income, loan-to-value and combined loan-to-value.