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Home prices up, sales down in Springfield area

Posted November 28, 2007 10:00 pm

Tim Landis

Springfield-area home prices continued to rise last month - 11.5 percent to be exact - even as statewide prices fell slightly and prices nationwide were down by a record amount for the month of October.

It's a trend that's continued through much of the year, though local homes sales have slowed, including a 19.1 percent drop in October compared to last year, and the number of homes on the market is unusually high.

"It really has to do with where you are. The Midwest, in fact, has remained the most affordable region. It didn't see the big, double-digit gains during the price boom. Prices did not run away from income, and those areas are doing better now," said Walter Moloney of the National Association of Realtors.

While midsized markets in the Midwest such as Springfield did not see the 20-percent-plus increase in home values during the real-estate boom, he said the areas have avoided the kind of price slumps that have occurred on both coasts.

"It's always been a very balanced market, where you don't have the wide swings in demand you do in California or southern Florida," Moloney said.

Figures released by the Capital Area Association of Realtors on Wednesday showed the median sale price of a local home - half selling above and half below that price - has continued an almost uninterrupted climb since 1994.

The annual median broke through $100,000 for the first time in 2005.

But the double-digit increase from October 2006 to October 2007 was a little surprising even to association executives. Association president Phil Chiles said he believes buyers still in the market are able to buy "more home" at current interest rates.

"Six months ago, they could afford $90,000; now, they can afford $95,000, so they are stepping up a little bit. The banks have the money to lend if you have good credit," said Chiles, adding that homes in the $90,000-to-$100,000 range remain the most popular for local buyers.

"It isn't the high-price homes (driving up the median)," Chiles said.

National Association of Realtors economist Lawrence Yun even suggested in a report released Wednesday that homes are somewhat undervalued in the Midwest because of the drag created by the nationwide slowdown.

"The housing market correction is clearly focused on volume and not in home prices. All real estate is local - conditions vary from one city to the next," Yun said.

The 5.1 percent drop in median home prices nationwide for October was the biggest year-to-year drop on record. Home sales also were down for the eighth month in a row nationally.

Tim Landis can be reached at (217) 788-1536 or tim.landis@sj-r.com.

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