Thegatewaynews.com - Will home prices rebound in 2010? Local real estate agents say it's possible

by Bob Gaetjens

Editor

Streetsboro -- Several area real estate agents and developers hope the home market bottoms out, then gradually begins recovering, in 2010.

Home sales prices generally fell in area communities from 2008 to 2009, according to real estate statistics, and they fell further in Streetsboro than other suburbs.

But people close to the industry say the trend may slowly reverse course in 2010, as the recession loosens its grip on the area.

"We're optimistic that 2010 is the year we reverse the trend," said Cindy Mustafa, a Streetsboro Area Chamber of Commerce member and real estate agent. "There are less homes on the market this year than last year, so that tells me that the period of correction is here."

Developer Dan Neff, a member of Streetsboro Land Group which is developing lots at Meadowview which is located on Route 43 south of Route 14, said sales in the fledgling Streetsboro development are not fast.

"Streetsboro's not unlike a lot of communities," he said. "Everyone has seen major slowdowns in construction. We happen to be moving some product in the south end of town with Ryan Homes down there."

Mustafa said new home sales are slower than existing home sales.

"New construction is struggling because there's just a lot of deals out there," she said. "With the short sales and bank-owned sales, there are some tremendous price reductions."

Flagship Chief Executive Officer Paul Goldberg, which developed lots in Hannum Crossing, said "most people's predictions" are for flat sales in 2010.

"Activity is picking up a little right now very slightly, but we are getting some calls," he said. "That's the way things begin."

ReMax Real Estate Agent Barbara Kachenko said a large amount of new home construction in recent years in combination with easy financing caused homebuyers to buy beyond their means, resulting ultimately in foreclosures, bankruptcies and lower property sales prices.

"Streetsboro grew a lot faster from 2002 to 2006; prices increased to unbelievable home values at their peak; and then the decline started," she said.

One important element to recovery of the housing market is job growth, said Goldberg.

"It ain't going to turn up unless there are jobs," he said. "Everything gets back to jobs."

Neff agreed.

"Our unemployment rate has not gone down; it's gone up," he said. "That's a very scary thing to look at."

Both Neff and Goldberg said they believe the $8,000 tax credit for first-time homebuyers has helped keep the market moving.

But Neff said he sees another potential danger, in addition to stagnant job growth: Inflation.

And he said he's concerned the Obama administration is committing "very grave mistakes" in dealing with the economy.

Schools and property value

According to real estate statistics from the Northeast Ohio Real Estate Exchange, Streetsboro's home prices fell further as a percentage from 2008 to 2009 than other communities, including Hudson, Aurora, Twinsburg and Stow.

From 2008 to 2009, Streetsboro's sale price per square foot fell from $79 to $64, an 18.98-percent decrease. The other towns' percent changes ranged from +2.4 percent to -9.72 percent.

Streetsboro resident Todd Teitel said he believes the school district's financial instability in recent years is partially responsible for the relatively larger decrease in sales prices.

He said he believes school systems are among the first things prospective homebuyers research when considering a home purchase.

"The levy boils down to a lot more than what you're going to pay in taxes," he said.

Kachenko said schools are generally the first priority of homebuyers, followed by city government and location.

"Unfortunately, both schools and city government are lacking compared to the other areas like Aurora and Hudson," she said. "Schools continue to ask for additional tax levies to pass, there's constant negative press and the city is [nearly] in the red financially."

Mustafa said she's pleased with the district's recent progress on the Local Report Card issued by the state and said low sales prices cannot be attributed to one cause.

"So many school districts are in the same situation," she said. "Look at Twinsburg now that they've lost Chrysler. They're in a mode of desperation."

Superintendent Linda T. Keller did not return a phone call by press time.

She said Streetsboro residents may have to contribute to the district in other ways than through their pocketbooks to improve it. Through volunteering, creation of service organizations, networking and "working together," they may be able to help the schools without emptying their wallets.

"I really think that we're going to come out of the recession and that we need to band together while we're in it," she said.

E-mail: bgaetjens@recordpub.com

Phone: 330-686-3941