Nationwide, housing prices are falling and foreclosures are up, which could be scaring some potential buyers away in the Mohawk Valley. But real estate experts say the market here is stable, and housing prices are rising.
As housing prices continue to plummet nationwide, the Mohawk Valley's real estate market so far has managed to avoid the crisis, local real estate agents say.
Real estate agents and experts say the fact that prices in the region never boomed as they did in other areas of the country now benefits the local market. The region also lacked the “crazy lending practices” and mortgage rates popular in other areas.
The number of homes sold has declined, but prices here have remained stable or even risen, housing records show.
Consider these facts from a recent report from the Greater Utica-Rome Board of Realtors:
- Rising prices: Between 2001 and 2007, the average sales price for a single-family home in the Utica-Rome area jumped about 50 percent, from $79,000 to $119,900. During the past year, the average cost continued growing — by about 2 percent.
- Popular areas: Homes in South Utica, Whitesboro and Sauquoit are selling the quickest — often in less than three months.
- Affordability: Houses listed at between $60,000 and $79,000 are purchased in about three months, while homes between $260,000 and $500,000 often sit on the market for more than 20 months.
“This is one of the strongest markets in the nation,” said Keith Vincelette, a realtor with Coldwell Banker Prime Properties.
Elsewhere in the country, the huge run-up in home values in recent years was followed by drastically declining prices because of what many realtors called “crazy lending practices,” in which institutions sanctioned loans to people with poor credit.
Nationwide, housing prices fell so much that the median home price stood at $195,000 last month, down 8.2 percent from $213,500 in February 2007, according to the National Association of Realtors.
But in the Mohawk Valley, a traditionally conservative banking structure protected the local economy from being subject to a high number of foreclosures and plummeting prices.
“We handle foreclosure properties,” said Jerry Orsaeo, broker/owner of Weichert Realtors. “The percentage that you are hearing in the news media has no bearing in our area.”
The impact of the nationwide crisis, however, has not escaped the Mohawk Valley.
Sales of single-family units dropped by about 7 percent for the period ending Feb. 28, compared to one year ago, according to the report by the Greater Utica-Rome Board of Realtors.
That's mostly because people are nervous about the mortgage crisis and may not want to invest in real estate, local real estate agents said.
“Some buyers are reluctant,” Orsaeo said. “Interest rates are excellent. They should take advantage of it. They see gas going up. The state of the economy scares them.”
For associate broker Lori Hamlin of Coldwell Banker Faith Properties, there's a reason to be optimistic about the local real estate market.
Hamlin has been in real estate for 23 years and feels the Mohawk Valley is a stable market that attracts out-of-town buyers.
“There's more home for less,” she said.
But some local buyers say affording a home when prices are rising can be a struggle.
Just last week, Hamlin showed a single-family home to Zehrudin Sarace. But the house on Niagara Street with a price tag of $79,900 was a bit much for Sarace.
In 2003, Sarace, a Bosnian refugee, bought a two-family house on Mary Street that he shares with his brother for $28,000. In just four years, prices should not be going up so much, he said.
A housing expert said the Mohawk Valley might not be able to sustain an increase in housing prices for too long.
“There will be a leveling-off point,” said Mike Colpitts, editor of Housing Predictor.com, an independent Web site that forecasts more than 250 housing markets nationwide. “But it won't be drastic. It is a historical cycle.”
“Utica won't have severe depreciation, but it will begin to slow down toward the end of this year,” he said.
Kevin Noggle, who bought a house in Whitesboro last month, agreed prices may be a little bit too high.
Noggle, who said it took him about six months to find a house that fit his budget and needs, paid about $150,000, but said the kitchen and the roof need reworking.
“For some reason in the area, they don't take that into consideration,” he said. “I think everybody seems to think their houses are still worth more.”