Wednesday, July 20, 2011

Real estate, building markets struggle through first half of the ...

LAS CRUCES - No less an authority than Fed Reserve Chairman Ben Bernanke has recently admitted that the economic recovery has been frustratingly slow.

Here in the Las Cruces area, the statistics for the first six months of 2011 show that the housing market reflects that frustration. In fact, instead of "slow," the actual sales data released by the Las Cruces Association of Realtors shows that the market has actually taken a step backward and has experienced the worst first half a year in the past four years.

Through the end of June, 544 homes have sold in Las Cruces. Last year, 668 homes sold in the same time period while in 2009 584 homes sold. During the first half of the year in 2008, 711 homes were sold.

As for the building industry, permit data shows that the construction industry has taken as step back as well. According to the City of Las Cruces, 1,325 building permits have been issued through the end of June for a total valuation of about $71.4 million. That is down from 1,596 permits issued for the same time period last year and down from 2010's total valuation of $76.4 million through the first six months of 2010.

New Mexico State University economist Jim Peach said there are some areas of concern for the economy going forward, including struggling home sales.

"Two things worth being concerned about are: The labor market has not recovered from the last recession; the housing markets have not recovered from the last recession. Both of these factors

are an indication of a less-than-strong economic recovery," Peach said.

Las Cruces Realtor Kaye Miller said that, from what she sees, the local market is keeping its head above water.

"We're holding steady and compared to a lot of other place, for an area to be doing that, is good," said Miller, with Steinborn & Associates Real Estate. "We're lucky here that our pillars of strength have stayed consistent. We have our university and White Sands (Missile Range) and our retirees. You just have to be careful in pricing."

Positive signs?

The National Association of Realtors believes signs of life have been seen across the country.

"Some markets have made a rapid turnaround, going from soft activity to contract signings rising by more than 30 percent from a year ago," said Lawrence Yun, NAR chief economist. Although he did admit that, "The job market has sputtered recently, and because variations in local job creation impact housing demand, markets will recover unevenly around the country."

In addition, the number of homes foreclosed in the first half of this year fell 30 percent compared with the same 2010 period.

That news, though, is not as good as it sounds. Foreclosures are still pending, but there have been delays in foreclosure processing. Banks seized 421,212 homes in the first six months of the year, down from 529,633 between January and June last year, foreclosure listing firm RealtyTrac Inc. reports.

The decline reflects lenders taking longer to move against homeowners who have fallen behind on their mortgage payments. The banks are working through foreclosure documentation problems that first surfaced last fall and an ensuing logjam in some state courts. Lenders also have put off on taking action against delinquent borrowers as U.S. home sales have slowed this year.

This could actually retard the real estate market.

"The best-case scenario is we don't get back to normal levels of foreclosure activity until 2015, which means the housing market recovery gets delayed by at least a year," Rick Sharga, a senior vice president at RealtyTrac, told The Associated Press.

Brook Stockberger can be reached at (575) 541-5457


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