Local housing market stable, Wolverton predicts growth
The housing market in Columbia and Boone County continues to lag, with first quarter home sales down 12 percent from the same period last year and housing starts down again in March.
There are a few positive indicators, however. Median and average price of home sales rose in the first quarter, and the months of inventory, also known as the absorption rate, was down in March. The number of foreclosures dropped significantly, and the latest sales tax report from the city shows revenue from the construction/home improvement sector is up 5 percent in the first four months of the fiscal year.
Rob Wolverton, president of R. Anthony Development Group, said in his annual analysis of the local housing market that the new construction single-family detached home market has improved since 2009 and is stable.
The number of building permits for single-family detached homes in the city increased from 280 in 2009 to 310 in 2010, a 10 percent increase.
“These figures indicate to me that we have absorbed the overage in the new construction home market that we had a few years ago,” Wolverton wrote. “The light at the end of the tunnel is no longer an oncoming train.”
As Landmark Bank’s Jeff MacLellan pointed out in his review of 2010, Wolverton said the market fundamentals are “remarkably stable” — 30-year mortgage rates are holding around 5 percent, unemployment is down, and household incomes are stable
Wolverton said, however, the condominium market “continues to suffer,” and the commercial real estate market “continues to slog through the mud.”
“I had hoped the cleansing of the commercial real estate market would be completed in 2010,” he wrote. “However, it appears that has not been the case, and there is more cleansing ahead. I predict a harsh correction in the commercial market just as we experienced a harsh correction in the residential market in 2008. I do not know if this will happen in 2011, but it is coming.”
Wolverton’s specific predictions for 2011:
• The addition of new jobs with the opening of the IBM service center and job growth at 3M, and additional employers who are coming to Boone County will result in an increase in home sales of 8 to 10 percent, with total sales of 1,500 single-family detached homes in the Columbia Public School District.
• Of the new home sales, 75 to 80 will be additional new construction demand. The remainder of this demand will be filled by homes that were built three to five years ago and were rented due to the inability to sell.
• Building permits for single-family detached homes will increase from 310 in 2010 to 350 in 2011.
There are a few positive indicators, however. Median and average price of home sales rose in the first quarter, and the months of inventory, also known as the absorption rate, was down in March. The number of foreclosures dropped significantly, and the latest sales tax report from the city shows revenue from the construction/home improvement sector is up 5 percent in the first four months of the fiscal year.
Rob Wolverton, president of R. Anthony Development Group, said in his annual analysis of the local housing market that the new construction single-family detached home market has improved since 2009 and is stable.
The number of building permits for single-family detached homes in the city increased from 280 in 2009 to 310 in 2010, a 10 percent increase.
“These figures indicate to me that we have absorbed the overage in the new construction home market that we had a few years ago,” Wolverton wrote. “The light at the end of the tunnel is no longer an oncoming train.”
As Landmark Bank’s Jeff MacLellan pointed out in his review of 2010, Wolverton said the market fundamentals are “remarkably stable” — 30-year mortgage rates are holding around 5 percent, unemployment is down, and household incomes are stable
Wolverton said, however, the condominium market “continues to suffer,” and the commercial real estate market “continues to slog through the mud.”
“I had hoped the cleansing of the commercial real estate market would be completed in 2010,” he wrote. “However, it appears that has not been the case, and there is more cleansing ahead. I predict a harsh correction in the commercial market just as we experienced a harsh correction in the residential market in 2008. I do not know if this will happen in 2011, but it is coming.”
Wolverton’s specific predictions for 2011:
• The addition of new jobs with the opening of the IBM service center and job growth at 3M, and additional employers who are coming to Boone County will result in an increase in home sales of 8 to 10 percent, with total sales of 1,500 single-family detached homes in the Columbia Public School District.
• Of the new home sales, 75 to 80 will be additional new construction demand. The remainder of this demand will be filled by homes that were built three to five years ago and were rented due to the inability to sell.
• Building permits for single-family detached homes will increase from 310 in 2010 to 350 in 2011.