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Local home prices inch upward

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Posted: Sunday, October 3, 2010 12:00 pm | Updated: 9:19 am, Thu Aug 16, 2012.

By Andrew D. Brosig

Killeen Daily Herald

A national tracking service report released last week showed home prices across the country inching upward slightly for most of the first half of the year, a trend that's reflected around the region and across the state.

The Standard & Poor's/Case-Shiller home price index, announced Tuesday, indicated a 0.6 percent increase in its home price index from June to July. The changes are based on a three-month moving average for May, June and July, according to an Associated Press report.

The S&P/CS index tracks median home prices in 20 major metropolitan markets across the country. Home prices in 12 of the cities showed price gains, while seven cities reported prices dropped. In only one of the cities, Cleveland, did the average price of a home remain flat, the report stated.

In the Killeen-Fort Hood area, median home prices posted a smaller June to July increase of 0.35 percent. But the good news is the median price jumped almost 7.4 percent from July 2009 figures, said Jose Segarra, owner of Exit Homevets Realty in Killeen and past president and spokesman for the Fort Hood Area Association of Realtors.

Median sale price for July 2009 was listed at $121,000, while the median for this year was $129,900, according to market numbers prepared for the FHAAR.

"July is usually the busiest month, as far as home sales go," Segarra said. "This year, it was heading downhill. The busiest month was April."

The unusual slowdown in sales came on the heels of the end of the federal home buyer tax credit program, designed to spur economic recovery through home sales. Nationally, home prices have increased about 7 percent since hitting a low point in April 2009, according to the S&P/CS report. But prices are still averaging almost 28 percent less than the peak which occurred in July 2006.

More stability

What could be considered uncertain news in other parts of the country is not so bad for the Central Texas region, said Rodney Shine from Shine Team Realty in Harker Heights. Trends that hit other states and other areas hard don't typically have as severe an impact here, he said.

"Prices have been more stable here than in other places," Shine said. "My belief is the reason we don't see severe downturns or dramatic upturns is we have a high percentage of (Veteran's Administration) loans."

VA housing loans base home appraisals on local market activity from the previous six-month period, Shine said. That helps keep the local market more consistent, he said.

"They don't allow prices to escalate dramatically," Shine said. "If you don't get dramatic escalation, you don't get dramatic corrections."

Mark Campbell, vice president for sales with Coldwell Banker United realty office in Copperas Cove, agreed. It was that same stability which locally tempered the impact of economic problems experienced in other parts of the country, he said.

"Historically, being we do so many VA loans here compared to other parts of the country, property values never got as out of hand as they did in other states," Campbell said. "There was never this huge upswing in perceived home values. And we never really experienced the dramatic drop in prices."

Across the region, the number of homes sold started out sluggish, with 156 sales in January and 178 in February, according to statistics from FHAAR. Sales numbers peaked in April, when 274 homes changed hands, before beginning to slowly slip back down.

"There's no way in the moment to look at it and say, 'This is what happened,'" Shine said. "But it did appear there was a significant decrease after the home buyer tax credits expired."

Too soon to tell

It's still too early to make any predictions how the home market will close out the year, said John Gormley, vice president for communications for the Texas Association of Realtors in Austin. But steady increases in sales volume, tracked through the end of the second quarter in June, could be positive for Texas agents, he said.

Gormley called the home buyer tax credit an "artificial entry into the market," meaning it prompted people who might have waited to buy a home to push their purchases forward. The results of that have yet to be seen, he said.

"We're not sure what kind of a long-term effect it will have," Gormley said. "We're seeing it did contribute to a boost, but we're just not sure where that graph is going to go."

Sales of single-family homes across Texas did increase by 14 percent in the second quarter of this year, compared to the same period in 2009, he said. A variety of factors contribute to both that increase and the overall stability of the state's real estate market compared to other places.

"Generally speaking, we have a lot of really good things going for us," Gormley said. "Texas is the most moved-to state for the past five years running.

"We also benefit from incredibly low mortgage interest rates. Put that on top of good housing prices and people will keep moving here. We're affected by national trends, but we're insulated for different reasons than other states."

Contact Andrew D. Brosig at abrosig@kdhnews.com or (254) 501-7469.

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