Negative views about economy affect local housing market

Paula Carter

The majority of Boone County residents polled by a research firm said they had negative views about the economy, and nearly one in five reported a loss of income in the past year.

The economic climate affects the local housing market, and respondents were far more interested in remodeling than they were in moving.

“Moving into a new home” this year was the lowest-ranked “wish” among options presented in the survey, behind taking a vacation out of state, making home improvements, getting a different vehicle or starting a college fund for their children.

Horizon Research Services conducted the survey by telephone in February to identify the perceptions and intentions of local residents regarding home buying. The survey included 400 randomly selected residents, and the margin of error for the sample size is 5 percent. Horizon compiled and analyzed the results in a report, “The Real Estate Edge.”

“The design of the study sought to measure economic impact as reported first-hand by local residents, as well as to separate interest from action with regard to the real estate market,” Paula Carter, Horizon’s data analyst, said. “We captured the level of desire to participate in the real estate market separately from the measure of intent to buy or sell in the next one to five years.”

Highlights from the research:

• Of the homeowners interviewed, 8.2 percent expressed a strong “hypothetical wish to move into a new home this year, and 5.4 percent had a strong interest in putting their house on the market this year.

• Twenty percent of homeowners indicated a strong interest in moving within Boone County in the next five years.

• Among those homeowners strongly interested in moving within Boone County in the next five years, 25 percent said they are strongly considering putting their houses on the market in 2008.

• Of the highly interested homebuyers, 73 percent were most interested in homes that cost more than $150,000, and 33 percent were most interested in homes valued above $200,000.

“Since there is so much media coverage of the housing market, many potential sellers seem to feel they would have to do additional work to their house in order to make it more marketable and competitive with so many other houses available,” Carter said. “The most common improvements planned in 2008 are remodeling or updates for kitchens, bathrooms, flooring, landscaping and cosmetic improvements, such as interior design and paint.”

• The respondents were asked to mention the first thing that came to mind when hearing the words “the economy.” When the comments were categorized, 58.5 percent were deemed negative, 4.3 were positive, and the rest were either neutral or in the “don’t know” category.

• Respondents were then asked to identify sources that most influence their views of the economy. Nearly 70 percent of the perceptions had to do with the media; 12 percent pertained to personal experience, observations and/or conversations; and about 11 percent were related to the respondents noticing higher prices.

• Of the media sources, television was mentioned the most frequently—followed closely by print media—and only 10 percent of respondents mentioned either radio or the Internet.

• When asked about events with a financial impact on them, 18 percent of respondents said they experienced a loss of income in 2007, and 11 percent cited having a large medical expense not covered by insurance (78 percent of respondents had full-time jobs).

• Asked about the degree to which national events regarding the local economy would affect the local economy, nearly 50 percent indicated they expected a significant negative impact, 18 percent expected a moderate or partial effect, and 19 percent expected a minor impact or no impact.

“That majority group believes that what is happening nationally is happening to the same degree locally—or will eventually,” Carter said. “They described their intended consumer behavior as being guided by that perception. The second group was very strong in their belief that our local community will not be affected by a national economic crisis.”

But Carter said that even if a strong economic recovery is under way at the start of next year, “it is probable that local reluctance to participate in the housing market will continue until the spring-summer of 2009, unless the county population receives thorough and accurate economic information at the local level that contradicts negative indicators at the national level.”

For more information on the survey and the report, contact Horizon Research Services at 874-1333 or visit www.horizonresearch.com.

Know your neighbors? Take the CBT-Real Estate Edge Quiz

1. What are the most popular areas to live in Columbia?

2. What are the most common goals for the coming year?

3. Who are Boone County’s best-known builders and developers?

4. Guess the percentage of people in Boone County who answered “yes” when asked whether they are waiting for the outcome of the presidential election before considering buying or selling their homes.

• The respondents were asked to mention the first thing that came to mind when hearing the words “the economy.” When the comments were categorized, 58.5 percent were deemed negative, 4.3 were positive, and the rest were either neutral or in the “don’t know” category.

• Respondents were then asked to identify sources that most influence their views of the economy. Nearly 70 percent of the perceptions had to do with the media; 12 percent pertained to personal experience, observations and/or conversations; and about 11 percent were related to the respondents noticing higher prices.

• Of the media sources, television was mentioned the most frequently—followed closely by print media—and only 10 percent of respondents mentioned either radio or the Internet.

• When asked about events with a financial impact on them, 18 percent of respondents said they experienced a loss of income in 2007, and 11 percent cited having a large medical expense not covered by insurance (78 percent of respondents had full-time jobs).

• Asked about the degree to which national events regarding the local economy would affect the local economy, nearly 50 percent indicated they expected a significant negative impact, 18 percent expected a moderate or partial effect,
and 19 percent expected a minor impact or no impact.

“That majority group believes that what is happening nationally is happening to the same degree locally—or will eventually,” Carter said. “They described their intended consumer behavior as being guided by that perception.
The second group was very strong in their belief that our local community will not be affected by a national economic crisis.”

But Carter said that even if a strong economic recovery is under way at the start of next year, “it is probable that local reluctance to participate in the housing market will continue until the spring-summer of 2009, unless the county population receives thorough and accurate economic information at the local level that contradicts negative indicators at the national level.”

Answers:
1. The southwest was named by 33 percent of respondents, followed by south (26.4 percent), north (13.8 percent), central (8 percent) and southeast (5.7 percent).

2. The answers, ranked by number of times mentioned by respondents: increase income (30 percent); reduce debt or eliminate debt (24 percent); maintain or regain health (12 percent); move to, buy or build a new home (12 percent); save money (10 percent); finish school (10 percent); take on home-improvement projects (9 percent); lose weight (5 percent).

3. Respondents were asked to name the first company or name that came to mind when the term “builder” or “developer” was mentioned. Ranked by number of mentions: Wilcoxson Custom Homes, C&C Construction, Herigon Construction, Kliethermes Homes & Remodeling, The Kroenke Group, Septagon Construction.

4. 11.7 percent (88.3 percent said “no”)