Market recovery helps restore some homeowner equity
Nearly all of the articles I’ve written on housing have been
bad news – foreclosures, depressed prices, lack of affordable homes and
rentals. But the housing market is beginning to brighten and that’s good news
for working families who usually count their home as their most valuable and
important asset.
Zillow.com shows a sharp jump in Charlestown home values,
continuing a trend that began in the last half of 2012. Average home value in
Charlestown grew to $304,700 and, for the first time in a while, we show a
positive year-to-year growth 1%.
That 1% uptick is modest, especially when compared to the hottest local real estate market – Ashaway, where home values grew by 5.9% over the past year. But our 1% is good news nonetheless, since the trend in Charlestown homes value has been running in the red for nearly the entire recession.
GoLocalProv
recently reported that, statewide, housing sales are starting to move
sharply higher and prices are rising as there are fewer distressed properties
on the market dragging prices down.
Fourth quarter sales around the state were up by 25% over
2011, despite the impact of Hurricane Sandy. Sales are up very sharply for
existing single family homes.
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| Yellow are bank-owned. Red are due to go to auction |
I doubt if the good numbers are going to make anybody in
town go crazy with joy. I think there’s a “new normal” that will put a damper
on any temptation to go back to living a pre-recession lifestyle of borrowing
against home equity to buy luxury goods. Even if homeowners wanted to do that,
credit is still very tight.
After all, Charlestown still has a 9.7% unemployment rate
and homeowners still have a very long way to go to recover their lost homeowner
equity. By the way, Charlestown’s unacceptably high unemployment numbers are
still much better than they were in January 2012 when our unemployment rate was
14.3%.
But, baring reverses in local employment or another national
or international economic tsunami, it does look like we’re really coming back. Knock
on wood. We’ve just got to make sure we improve job opportunities and don’t
listen to the austerity freaks who want to strangle our economy.
It is schizophrenic to want houses to be both highly valued and affordable. Houses are for people to live in. They are consumption items, not investments. The housing bubble was exceedingly harmful in that it created this idea that houses were investments, or, as some have said, ATMs. House values should go down, as they have been. As they do so, people will be able to afford houses again. It is unfortunate that there are people caught "underwater", but that is what happens when an economic bubble bursts, as it always will, sooner or later.
ReplyDeleteBeth Richardson
On the contrary Will, as of the latest Zillow report of January 12th, my Charlestown house was still dropping. Down 0.4% ($1,140.00)per Zillow. Also, my house in South Kingstown which is a stones throw from the ocean dropped 2.8% ($10,093.00). I used to save all the Zillow emails but when it got too depressing, I deleted all but the latest... I too, am waiting for positive change!
ReplyDeleteCTown Resident
Sorry, but January 12th wasn't the latest Zillow data. My article was based on the numbers as of January 29.
DeleteI published screen shots of their graphs to illustrate their data.
I just double-checked to make sure what I reported was accurate, and it is. You had me worried for a minute.