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April 4, 2010

Anonymous The Joplin Globe Sun Apr 04, 2010, 07:20 AM CDT

By Wally Kennedy

wkennedy@joplinglobe.com

If you are building a house, buying a house or fixing one up in the Joplin market, you might rest easier knowing that in this economy your house is likely to retain its value, and even increase in value.

Among more than 300 metropolitan areas in the United States, Joplin ranked 12th last year in terms of house price appreciation, according to a recent report from the Federal Housing Finance Agency.

Joplin showed an increase of 1.1 percent in house prices when compared with 2008, but, while modest, most metro areas lost ground in 2009, and some continued to depreciate at double-digit rates.

The Joplin metropolitan area is defined as Jasper and Newton counties.

John Gardner welcomed the information that his house in Newton County is holding its value, if not gaining.

“That definitely is good news,’’ said Gardner. “We’re adding a sunroom and new deck to our house to expand it a little bit. We have two kids who are in their teenage years, so we need the extra space.’’

Gardner was shocked when he was told that some places, such as Las Vegas, saw housing prices fall by as much as 19 percent in one year.

Bend, Ore., saw housing values drop by more than 20 percent and led the decline last year. Cities in Arizona, Florida, Utah, California and Maryland weren’t far behind.

“We’ve lived here about six years. I think we can say we’ve made a good investment,’’ Gardner said.

Also in the top 20 in terms of housing appreciation were several other Midwest cities. Tulsa, Okla., came in third in the nation, with appreciation of 1.91 percent; No. 4 ranked Fort Smith, Ark., reported a 1.84 percent increase, and No. 5 ranked Jefferson City had a 1.83 percent increase.

Top spot

The top spot in the nation in 2009 for housing appreciation was Terre Haute, Ind., which saw housing values gain 3.11 percent in 2009.

Overall, U.S. house prices fell by 0.1 percent in the fourth quarter of 2009, according to the Federal Housing Finance Agency’s purchase-only house price index. For all of 2009, the index fell by 1.2 percent.

The index is calculated using 35 years of home-sale price information from Fannie Mae- and Freddie Mac-acquired mortgages. It measures average price changes in repeat sales or refinancings of the same properties.

Fannie Mae and Freddie Mac are the largest mortgage finance institutions in the United States, representing 40 percent of total outstanding mortgages.

Lori Lanier, broker/owner with Executive Realty, of Joplin, and president of the Ozark Gateway Association of Realtors, was not surprised when she heard that Joplin housing prices were holding steady, if not improving.

“We never get hit as bad here as in other parts of the country,’’ she said, noting that Joplin’s strength in maintaining house values is an important part of the pitch to prospective homebuyers.

“Still, if you buy now, you would have to wait three years before you would notice any improvement in the value of your house,’’ she said. “If you can’t stay in it for three years, you wouldn’t notice enough of a change.’’

Business also is picking up for local real estate agencies, she said.

Phones ringing

“Everyone I’ve talked to within the last two weeks, well, their phones are ringing off the hook. We’ve seen a big increase in interest,’’ Lanier said. “A lot of it is first-time homebuyers who are using their income-tax returns as money for the closing costs when they buy.

“It’s a relief for all of us. It’s still a buyer’s market,’’ she said. “But don’t think a seller will take anything that is offered to them. That is not true.’’

Statistics from the Missouri Association of Realtors, she said, confirm the findings of the federal house price index.

“We’re holding steady,’’ she said. “There’s a positive vibration throughout the real estate community. You see it at state meetings. They all are predicting positive things for this year. You could not say that last year.’’

Connie Hoover, Jasper County assessor, also said housing prices in the area are remaining stable.

“We do reassessments in odd-numbered years. We will do that in 2011 so we’ll know more then. But we feel house values remained pretty steady in 2009.’’

Schools relieved

House values are important to the bottom line of local school districts, which receive more than half their total revenue in the form of property taxes.

Paul Barr, chief financial officer of the Joplin School District, said last week: “Yes, it is good news for our school district if house prices remain stable or are slightly increasing. It sounds consistent with what our county assessors have told us and from our discussions with people in the real estate business.

“We hope house prices remain stable because of our property tax, which is the largest money stream for us. We get over 50 percent of our revenue from property taxes.’’

Barr also said the district is grateful for that stability because other components of the district’s budget are more uncertain.

“We do not see the dramatic increases that some parts of the country see in housing prices. The flip side of that is that we do not see the dramatic decreases either,’’ he said. “One can imagine how difficult it would be to have to climb back from a 7 to 10 percent decrease in house prices.’’

The stability of Joplin’s housing prices also is helping companies that specialize in home improvement projects. That’s because people are not reluctant to invest in their house if they feel it will hold its value, if not improve in value.

Rod Haynes, sales manager at Home Pro, of Joplin, said: “We have seen an increase in business here at Home Pro. The tax credits for energy-efficient windows, doors and siding have enabled people to do money-saving improvements to their homes. The tax credits have given them the incentive to do so.’’

Haynes said the company is preparing to launch a “Go Green’’ campaign to help home owners save money and improve the value of their properties by improving energy efficiency.

State comparisons

The Midwest appears to be faring better than other parts of the country in terms of house-price appreciation. Oklahoma had a 3.53 percent increase in house prices in 2009. Arkansas had a 1.52 percent increase and Kansas had a 1.48 percent increase. Missouri showed a meager increase of .03 percent in 2009. Of all states, only 19 showed an increase in house prices.

According to the Federal Housing Finance Agency, the hardest hit states in 2009 were Nevada, with a 17.29 percent decrease in house prices; Hawaii, with a 13.09 percent decrease; Arizona, with a 12.74 percent decrease, and Florida, with a 8.18 percent decrease.