HOUSING MARKET RIDING A WAVE OF CONSUMER OPTIMISM; LOW RATES BOOST REAL ESTATE SALES AND HOME CONSTRUCTION

The housing market continues to ride a wave of consumer optimism in the Cape Girardeau area.

"Things were a little slow for a while in January and February," said Carl Blanchard of Coldwell Banker Blanchard and Associates Realty. "But things have really picked up the past two months, and we're ahead of 1992 sales at this point."

"We never hit a slow point," said Martha Hamilton of Century 21 Key Realty. Hamilton, the president of the Cape Girardeau County Board of Realtors, said, "I was showing houses on Jan. 2, and have been busy since."

"We haven't hit a slow period either," said Herb Annis of Century 21 Ashland Realty. "We've been busy throughout the quarter."

Annis said all of the new homes in Greenwood and Ashland Hills subdivisions have been sold.

"As soon as the weather cooperates, we're going to be building more new homes," said Annis. "We've got buyers, and we can use new listings."

The real-estate and home-building industries continue to boast a strong growth in the area. Favorable financing conditions have pushed the housing affordability index to a high level and people are responding, say realtors.

That home building in Cape Girardeau has continued a recovery that started more than year ago is supported by figures obtained from the city building permits office for single-family dwellings.

A total of 20 permits were issued during the first quarter of 1993 in the amount of $2.1 million, for an average of $119,750. The new-home situation looks even better when April figures are tallied: a total of nine permits already have been issued this month for a combined total of $1,062,000, or an average of $118,000.

This compares favorably with the same period of a year ago, when 30 permits were issued during the first four months of 1992, with an average of about $102,000 a year.

Commercial construction and remodeling, which hit a record high in 1992 more than $11 million in projects during the first quarter dipped to about $2.3 million during the first three months of 1993. Included in that high figure of 1992 was a $7.2 million permit for Health Services Corporation of America for an office and professional complex on Mount Auburn Road. Construction on the HSCA complex was recently completed.

"The interest rates for home buyers are attractive," said Blanchard. "That, combined with available homes in most price ranges, give realtors an optimistic outlook for 1993.

"It's a seller's market," said Blanchard. "We have more buyers than sellers. Homes are selling quicker. There have been instances where we listed a home one day and sold it the next."

Hamilton agreed.

"I've never seen such a high demand for homes," she said. "We have homes in all price ranges, but we don't have the large selection in each range."

Hamilton said the "percentage of sale price to list price" has improved. "In other words, people are more apt to be paying the asking price," she said.

Cape Girardeau County Board of Realtors statistics show the average days that a home remains on the market has decreased from 119 to 92 over the past year.

Sales volume on homes, farm and commercial real-estate sales for Cape Girardeau County and parts of Scott and Bollinger counties has topped $10.5 million from Jan. 1 through April 14. Over $3 million of those sales have been within the past 20 days.

"The majority of the sales were for single-family residences," said Hamilton.

Listings in the same areas are down a bit from this time a year ago.

"Realtors currently have 684 residential listings in the Cape, Jackson and Scott City areas," said Hamilton. "A year ago on April 14, the listings stood at 837."

Why the continued activity?

"Homes are good investments," said Hamilton. "Interest rates are low and people are wanting to get in their own homes."

Like real-estate sales, home building activity was slow in January and February, apparently curbed by cold weather. Only 11 permits were issued for new homes in Cape Girardeau.

Activity picked up in March, when nine permits were issued in the amount of $912,000. There has been no letup in April. Through the first 22 days of the month, nine permits were issued, totaling just over $1 million dollars.

Nationally, housing starts fell about 4 percent in March, said the National Association of Realtors.

Starts of new homes were down in every region of the nation except for the West, where a large increase was posted.

The U.S. Commerce Department said construction of new single-family homes and apartments totaled 1.13 million at a seasonally adjusted annual rate in March, down from 1.19 million a month earlier.

"March housing starts were most likely distorted, as other recently reported data has been, due to the harsh weather during the month," said economist Marilyn Schaja in an article she wrote in Bond Market Weekly published by Donaldson, Lufkin & Jenrette Securities Corp. "We think that April starts, when released in mid-May, will show sharp improvement, as the weather normalized."

Analysts also attributed the 8.9 percent decline in January and a slower-than-expected 1.5 percent advance in February to adverse weather conditions. The February increase was smaller than the 2.5 percent advance in the department's initial estimate last month.

For the first three months of 1993, starts were down 7.3 percent from the same period a year earlier. But many analysts said construction that would have occurred during the first quarter merely had been postponed until spring.

Regionally, starts soared 17.9 percent in the West to a 296,000 rate, the largest increase since they shot up 39 percent in April 1991. But they fell elsewhere, including a 26.8 percent drop in the Northeast to a 90,000 rate. That was the lowest level since builders started homes at an 88,000 rate in February 1991, and the largest decline since a 27 percent drop last January.

Construction fell 13.9 percent in the Midwest to a 254,000 rate, down from 295,000 in February; and 5 percent in the South to 494,000, down from 520,000.