Homes prices across Springfield are up and foreclosures have dropped compared to 2013, signs of a slowly strengthening housing market that took a big hit in the country’s economic downturn.
Home prices in February 2014 increased by 5.8 percent from February 2013, according to data released this week by CoreLogic, a property information, analytics and service provider.
The stability and strength of the housing market works hand in hand with the amenities and services a community can offer to homeowners, said Mike McDorman, president of the Greater Springfield Chamber of Commerce.
“This is what we need as we look forward to growing our community and hopefully that trend will continue into a better period of economic growth,” he said.
Between Feb. 1 and March 1, 29 houses sold in Springfield — down from the 37 sold in the same month last year. But the average sale price shot up more than $10,000 to $64,530 for that same time frame, according to data collected by the Springfield Board of Realtors.
The price increase is because home sales are bouncing back after a period of depreciation caused by the Great Recession, experts said, and listing prices of homes have climbed.
“As the spring home-buying season kicks off, house price appreciation continues to be strong,” said Mark Fleming, chief economist for CoreLogic. “Although prices should remain strong in the near term due to a short supply of homes on the market, price increases should moderate over the next year as home equity releases pent-up supply.”
Between January 2013 and January of this year, the section of the city with the highest average home sale price was the northeast section of Springfield, with an average sale price of about $121,450, according to Springfield Board of Realtors records. The area with the lowest sale price was the southwest district of Springfield with an average sale price of about $22,040.
In the past several years the community has seen a new downtown hospital and surgical hospital, Clark State has made several improvements to its campuses and the National Trail Parks and Recreation District has built a new ice rink. All of these additions are attractive to a homebuyer and pull them into the community, McDorman said.
The number of Springfield homeowners filing for foreclosure and the mortgage delinquency rate for January have both dropped since 2013, according to CoreLogic.
The rate of mortgages foreclosed in Springfield was 2.47 percent in January 2014, compared to 3.85 percent in January 2013. Similarly, homeowners behind on their mortgage payments more than 90 days dropped 1.56 percentage points from 2013 to 6.19 percent.
Although a decline in foreclosure rates is a good sign, it still remains worse than the national average and local housing experts said the numbers don’t exactly match what they are seeing with record numbers of homeowners seeking help from their office.
“When we hear that foreclosures are going we down, we always raise an eyebrow because our experience is that we are assisting delinquent homeowners at an all-time high,” said Tina Koumoutsos, executive director of the Neighborhood Housing Partnership of Greater Springfield.
“We’re still getting calls and requests for assistance; people are still losing jobs,” said Kerri Brammer, HomeOwnership Center manager with NHP. Those going through a divorce, experiencing a death in the family and underemployment are other circumstances that affect homeowners who need financial assistance.
Counselors at NHP also question what will happen when mortgage interest rates gradually increase over time and government foreclosure assistance programs come to an end.
“We have to be careful when we make an assumption that the foreclosure problem in Springfield is over, because it’s not,” Koumoutsos said.
But the pair said they have seen an increase in home ownership because of the increased affordability of houses on the market in the Springfield area.
“We’re seeing that through people coming to home-buyer education and credit-counseling classes because there are great opportunities to buy,” Brammer said.
Assistance and classes offered by the partnership give current homeowners and future buyers help them through any step of the home-buying experience, from credit counseling to foreclosure assistance. The office encourages anyone who thinks they need help, even if they’re only having trouble paying one month of their mortgage, to not be afraid to seek help.
“This is an economic problem and not a personal failure,” Koumoutsos said. “There’s people that never thought they were going to need assistance and as time has gone on they realize they are not the only ones in this predicament.”
In-depth coverageSpringfield News-Sun reporters dig into economic issues in the Springfield area, including the housing market and home finance trends.
By the numbers
5.8 percent: Increase in home prices from February 2013 to February 2014
1.38 percent: Decrease in area foreclosures from January 2013 compared to January 2014
2.47 percent: Average foreclosure rate in Springfield in January 2014
1.97 percent: National average foreclosure rate in January 2014