Real estate market begins favoring sellers; foreclosures fall

With the economy constantly changing and interest rates increasing and decreasing, finding the best deal on a new home can be a challenge.

Right now, Cape Girardeau seems to be moving more toward a seller's market, said Rick Sinclair, president of the local Multiple Listing Service of the Cape Girardeau County Board of Realtors and a broker for Century 21 Ashland Realty.

Sinclair said he believes the housing market is moving in that direction because of positive economic activity.

"We're seeing new construction going up, and it's kind of a domino effect -- resale homes ... are going up, the amount of homes being sold, the prices are going up because, again, it's supply and demand," Sinclair said.

"So when you have more buyers and fewer homes, you see more people active in the market to buy homes because interest rates are a lot better. Even though they're starting to inch up, people are getting more interested in buying homes."

When Southeast Missouri was in the middle of the lending meltdown -- as Sinclair called it -- a few years ago, people were buying homes through adjustable rate mortgages they really couldn't afford. When the mortgage notes went up, they couldn't pay them and lost the home to foreclosure.

Since then, things have improved significantly. Jobs for large companies such as Pepsi and AT&T are entering the area, and foreclosure rates are decreasing.

From Jan. 1 to June 30, 42 bank-owned foreclosed homes have been sold in Cape Girardeau County, according to data from the Missouri Board of Realtors. Not all of these homes were listed for sale within that time frame.

The number of homes listed in those six months stands at 49 foreclosed homes. This does not include numbers from sellers who did not use a Realtor to sell their homes.

Sinclair said there is no exact number for the amount of foreclosures he sees a month because Century 21 does not handle all of the foreclosures in the area. But what he says he sees is an increase in the selling prices of homes and prices at which they are being bought.

"The market right now is going very well. The demand is going up, so we're starting to see more offers go up on one piece of property, and that's when it becomes a seller's market," he said.

The national rate of completed foreclosures in the United States has decreased from 52,000 in May 2013 to 47,000 in May 2014, according to CoreLogic, which provides financial, property and consumer information.

This is the 31st consecutive month with a year-over-year decline, CoreLogic reported. In May 2013, 2.6 percent of all homes with a mortgage were in foreclosure. In May 2014, that number was 1.7 percent.

Also, the quality of homes being foreclosed is changing.

"The foreclosures that we are seeing that have been on the market for awhile, we see those foreclosures as not necessarily the ones that are move-in-ready," Sinclair said. "In the early days of the foreclosure boom, a lot of the homes were move-in ready. ... People had financial difficulties and had to move, and they were foreclosed and people could get some good deals and move in. The foreclosures we see now, a lot of them are not necessarily those move-in-ready homes."

Sinclair said standards were put in place to make homes more marketable when they are foreclosed. When strapped for money, people often would strip foreclosed homes of items such as sinks, dishwashers, light fixtures and even cabinets. Now Sinclair said investors have to be aware of what they're getting into.

"They really have to be handy with a hammer, know what they're doing," he said. "It's not something [where] you're gonna move out of one house and into this one without some kind of work."

Sinclair said he sells houses priced from $30,000 to $3 million. He said the most popular price range is in the $100,000 to $200,000 range.

The average price of a foreclosed home in the Cape Girardeau County area is $75,500, with the average time on the market 82 days, according to information from the Missouri Board of Realtors.

But for people who don't want to buy, renting is always an option -- one Sinclair said he believes is becoming more and more popular.

"People have to live somewhere; that's a plain simple fact. And if people aren't buying a home, they have to rent a home; that's the only other option," Sinclair said. "When you have more demand and the supply is low, what we are seeing is the rental market price is going up because there's a bigger demand for rental property, and it has reached the point where people are paying more for a rental property than what it would be for them to buy a home."

Sinclair said although renting is a feasible option, all that accomplishes is paying someone else's mortgage. People sometimes can buy for cheaper than they can rent, with better tax incentives.

smaue@semissourian.com

388-3644