Housing market takes a dip

Published 12:00 am Tuesday, July 31, 2007

From April to June, the year’s second quarter, some 36 houses in Franklin and Southampton County were sold through real estate agents, according to the Multiple Service Listing, which counts housing sales.

That’s the lowest quarterly total in eight years, and nearly one-fourth of the total sales counted from two years ago.

That’s the sign of a housing slump, right? Not necessarily, say those familiar with the local housing market.

&uot;I wouldn’t call it a slump,&uot; said Reney Olson of William E. Wood Associates, which has offices in Franklin and Smithfield. &uot;I think we’re going back to a normal market.&uot;

&uot;The prices [of homes] are correcting themselves,&uot; said Angela Denson of the Franklin office of Century 21.

The housing market boomed earlier this decade, beginning in 2002, according to the MLS findings. Home sales routinely were near or topped the 80-units per quarter plateau. In 2004 that number reached 90 homes per quarter and in 2005, the high-water mark for sales, 90 sales were closed in three of the four quarters.

The market, &uot;goes around in a circle,&uot; said Olson. &uot;We are back in a normal market.&uot;

&uot;Things went nuts&uot; during that period, Denson said. &uot;We couldn’t keep up. We saw acceleration clauses like we had never seen before. That was something you’d see in places like Suffolk and Portsmouth. I guess everyone got used to that pace.&uot;

An acceleration clause creates a bidding environment favorable to the seller: Offers are written so that prospective buyers permitted the price to increase if another buyer makes a higher offer.

What was a sellers’ market just two years ago has reversed itself.

Because demand for homes in this area outpaced its supply, properties were being sold at &uot;artificial values,&uot; said Bob Petty, CEO of Bronco Federal Credit Union, which lends money for mortgages and for builders.

That trend has shifted full circle, experts say.

&uot;The sellers’ market isn’t there any more,&uot; Olson said.

&uot;Things are a little slower this year than last year,&uot; said Century 21’s Denson. &uot;But things have been picking up [recently] in this office.&uot;

Petty, of BFCU, said: &uot;From our standpoint, we continue to see growth.&uot;

Even if the market is getting back to normal, the environment today is different.

&uot;I remember the Franklin market from a few years ago,&uot; said Olson, &uot;when houses stayed in the market [unsold] much longer.

Then in the middle of the decade, she said, homes that were appraised and selling for $250,000 or more moved quickly during the heyday two and three years ago.

&uot;They were selling quick, quick, quick,&uot; she said, and houses were getting &uot;multiple offers on those a couple of years ago.

&uot;A lot of investors were buying up properties and flipping them,&uot; or selling them again for a quick profit, Olson said.

No longer.

In fact, &uot;appraisals are going down because of the abundance&uot; of listings, Olson said.

In that backdrop, though, things seem quieter today.

Still, Olson says she believes the future of the housing market remains bright, despite the most recent numbers. Buyers in Hampton Roads are looking further west for bigger parcels at a lower price. They don’t seem to mind the added commute, Olson said.

&uot;People can’t afford Suffolk any more&uot; she said.

&uot;We’ve sold a lot of property out here to people who work in Suffolk and Portsmouth,&uot; Denson said. &uot;People have said, &uot;At least we get to drive instead of sitting in traffic.’&uot;

Olson also predicted the &uot;Route 58 Corridor&uot; that follows U.S. 58 from Suffolk to the west, will be a favorable destination for home-buyers, She pointed to growth along Armory Drive, particularly the construction of Lowe’s Home Improvement and Farm Fresh markets as enticing draws for buyers.

People from Norfolk and Virginia Beach, BFCU’s Petty said, &uot;find their commute from here is no worse than it is from there.&uot;