Traverse City Record-Eagle

Grand Traverse County

March 31, 2010

Local home sales saw increase in February

By BILL O'BRIEN

TRAVERSE CITY -- Area home sales perked up in February, and local real estate professionals hope the trend continues into spring.

The Traverse Area Association of Realtors reported 122 residential home sales last month in the 5-county region. That's up 31 percent from January's totals, and more than 35 percent from February 2009. It's also the highest February sales total in four years.

"A lot of people think the market has bottomed, and this is the time to get in," said Kim Pontius, executive vice president of TAAR.

The strong showing in the Traverse City area countered national sales numbers that declined slightly in February, according to data from the National Association of Realtors. Existing home sales fell less than 1 percent last month, but ran about 7 percent ahead of February 2009 sales. Sales were up almost 3 percent in the Midwest and also increased in the Northeast part of the country, but dipped slightly in the South and West.

Pontius also said local real estate agents are experiencing a busy March.

"It's crazy nuts right now," Pontius said. "They've got a lot of activity; a lot of showings."

Pontius pointed to a variety of factors for the early spring surge, including the extension and expansion of a home buyers tax credit to April 30, and the early arrival of springtime weather that typically coaxes more buyers to the market.

"I still think we're seeing the effect of the tax credit," he said.

Agent Bob Weaver of Real Estate One in Traverse City agreed that buyer incentives like the tax credit and low mortgage rates are boosting sales, along with cheaper home prices, since real estate values plunged during the recession.

"It very definitely made a difference last fall, and now there's no question about it," said Weaver, who's spent more than 40 years in local real estate sales. "I haven't seen some of these prices for a long, long time."

But challenges remain. Pontius said the state is bracing for another wave of home foreclosures created by jumps in adjustable mortgage rates. That could further drive down sales prices and fatten the inventory of unsold homes that could stall a recovery.

Sale prices also remain low because of the impact of distressed sales such as foreclosed properties. The average February sales price in the 5-county area totaled $133,398, down almost 24 percent from January. The $111,000 median sales price is unchanged from January.

The national median sales price totaled $165,100 in February, as distressed home sales accounted for 35 percent of all transactions last month.

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