HOUSING MARKET CONTINUES STRONG IN CAPE GIRARDEAU

Cape Girardeau home buyers are beginning to feel more comfortable with home-buying conditions.

"The housing market is continuing to pick up," said Marta Green, president of Classic Real Estate Ltd. "The interest rates are attractive, there are a lot of homes available, and consumers are beginning to be more comfortable with the rates because they have stayed down for a long while."

Carl Blanchard of Coldwell Banker Blanchard and Associates Realty Inc. agreed.

"We've had good home sales this year," said Blanchard, "and it seems that we'll wind up the year on a good note. Sales thus far into December have been very strong."

Green and Blanchard attributed the good housing market here to "attractive interests rates."

Home buying and building are important for the entire area economy because they spurs other purchases such as home furnishings and building materials.

"When people build, it also helps the existing home market," said Green. "People who are building today will put their previous homes on the market, giving people a wider choice of existing homes."

People in Cape Girardeau are building new homes. A total of 71 new-home permits have been issued through mid-December. Although the total is less than the 82 permits issued in 1990, new-home-construction costs surpassed last year's total by almost $2 million.

"With home-buying conditions as they are, people are building more expensive homes," said Blanchard. "This is also true in existing homes; over the past few months we've had a number of sales on $100,000-plus homes.

"If people are serious about buying, now is a great time to buy," said Blanchard. "The current home-buying conditions feature the lowest interest rates in years."

Adjustable rates may be obtained now for as low as 5.9 percent for one-year adjustable loans and for as low as 8 percent on a 15-year fixed loan. If a buyer opts for a shorter mortgage period, a 7.3 percent rate may be obtained on a five-year fixed loan and a 7.6 percent rate may be obtained on a seven-year fixed loan.

"The rates are attractive," said Green, "and we're hearing reports that the good conditions will continue into the new year. Housing rates have been good now since late August, and that is spurring buyer confidence."

Dale Myers, senior vice president in charge of the residential real estate department at Mercantile Bank of Cape Girardeau, said: "We're seeing a lot of refinancing activity. We've been extremely busy here because of the new rates, which are at a level we haven't seen in many years.

"We're finding that people are looking at the lower rates as a means of getting shorter terms," said Myers. "A lot of people are looking at 15-year loans now instead of the traditional 25- to 30-year mortgages."

Larry Miller, president of 1st National Bank in Cape Girardeau, said that with current rates a lot of people were looking into refinancing. "Some good rates are available," Miller said. "A lot of people are taking advantage of them."

"Now is a great time to buy a home," said Barbara Baker of Town and Country Realty. "I haven't seen the affordability factor this good in 20 years."

The National Association of Realtors, in its monthly report, said the Housing Affordability Index has climbed to its highest level in almost 15 years, surpassing the record level established in September.

The index, which measures the ability of a family earning median income to purchase a median-priced resale home, was 116.1 in September. It since has jumped past 119, the highest since March 1977, when it was 120.7.

The index reflects that a family earning the national median income of $36,473 had 119 percent of the income needed to qualify for conventional financing covering 80 percent of the home prices at $99,200, the median existing-home price.

NAR President Harley E. Rouda said the current affordability conditions, namely low interest rates, are the best they have been in 15 years.

"Objectively speaking, home-buying conditions couldn't be better," said Rouda. "And, as mortgage rates continue to fall, more buyers will be drawn into the market."

New-home sales increased during the final half of 1991 in the Cape Girardeau area. This is evidenced in home permits issued by the city over the last half of the year.

Only 30 new-house permits were issued the first half of the year. Twenty permits were issued during the third quarter and 21 have been issued during the fourth quarter, for a total of 71 for the year.

They also reflect that people are building more expensive homes.

Several permits for 1991 have topped the $100,000 mark and a few of them have been for more than $200,000.

A year ago, the 81 new-home permits issued listed total construction costs of $6.2 million, for an average of about $75,000. That average soared in 1991, with the 71 permits topping $8 million, for a $112,000 average.

John A. Tuccillo, chief economist for the National Association of realtors, said the typical family in the Midwest had the most purchasing power of all regions.

"A family earning the median income in the Midwest $37,636 had 158.9 percent of income needed to purchase the median-priced home there $76,800," said Tuccillo.

The highest median-priced homes were in the West, with a price tag of $147,600.

A family in the West earning the median income there $37,910 had only 82.8 percent of the income needed to buy the median-priced home.

"Most regions have shown signs of improving housing-affordability conditions," said Tuccillo.

Tuccillo said, however, that home construction was down nationally in November.

"Housing starts jumped 7.1 percent in October," he said. "But the Commerce Department reported that applications for permits to build new homes in November fell 3 percent. A total of 948,300 new-housing units were started nationally."

Following are new-home-construction figures in Cape Girardeau for the past five years.

1991 - 71 new houses at costs of $8,000,500 (average $112,755), through Dec. 15.

1990 82 new houses at costs of $6,176,051 (average $75,300).

1989 78 new houses at costs of $6,586,000 (average, $84,436 each).

1988 105 new houses at costs of $8,267,292 (average, $78,736).

1987 84 new houses at costs of $6,398,725 (average, $76,175).