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Putnam real estate protected, but still a buyers market
Angela Book just put her house on the market Sept. 10. Like many home sellers right now, a tight budget is the driving force behind the sale.
"We need to sell like, now," Book said. "I just want to get back what I owe. It's priced a little higher than that, but that's just because people like to bargain.
Book's desire to sell fast is indicative of real estate throughout Putnam County and the entire United States -- across the board, it's a buyer's market.
Despite that, Gary Lemon, an economics professor at DePauw, says that Putnam County offers some protection from the turbulent national market.
"The nice thing about Putnam County or rural areas like ours is that there was never a bubble," Lemon said. "They had huge bubbles in Las Vegas and Miami and San Francisco and they burst. They've had price declines up to 50 percent in Vegas."
Bob Evans, the owner of Collins/Evans Real Estate in Greencastle said that business has remained stable for him.
"It's not bad," Evans said. "I've certainly seen it a lot better and would like to have it a lot better... But that's the nice thing about being in a small market and a small office. We don't get the bubbles and we don't get the bursts," he said.
Teresa Adams, the president of the Putnam Board of Realtors agreed.
"I don't think we've been hit as hard as some areas, like Florida," she said.
Though better off than realtors in larger markets, the past two years has still seen the number of realtors in Putnam shrink from 140 to around 125.
"Part of that is having to do one sale a year just to keep up on your licenses," Evans said. "They're not cheap."
Despite that insulation against peaks and valleys, July was a particularly bad month for home sales, both nationally and locally.
Putnam County saw half as many closed sales in July of 2010 as it did in 2009, going from 34 closed sales to 17. July was the most recent month for which sales data was available.
Part of that decline is because the First-Time Homebuyer Tax Credit was set to end at the end of June. Although the deadline to finish closing a sale for the credit was extended until the end of September, many sales were rushing to finish at the end of June.
"You had so many people that were rushing to be ready with their paperwork to make sure they got that credit," Adams said.
For the year, Putnam County is slightly ahead of its 2009 numbers, with 178 sales closed through July this year and with 175 closed for June.
Part of what's driving the strong buyer's market is the poor economy and lack of jobs, Lemon said.
"The unemployment rate is 10 percent," Lemon said. "Even if you made a good investment and it hasn't gone down much, the mortgage now may look like you can't afford it, because you don't have a job. It's not easy right now for some people."
That hard economic reality is what's pushing Book onto the market.
"We have to sell because of work," Book said. "It's hard to find work right now, it's hard to keep work and if you have a job it's hard to get paid a fair amount.
"I think a lot of people are like us, they just want to be free without ruining their credit," she said. "That way, in a couple years when the economy is hopefully better, they can get a home again."
The job market is also causing foreclosures to turn up around Putnam County.
Evans of realtors Collins/Evans also said he's seeing a split market in home sales right now, between conventional homes and foreclosed properties.
"We have a ton of foreclosed properties on the market, and more coming every day," he said. "In some cases I've seen values on those properties go down to 1970 level values.
"There's the other market, which is business as usual," Evans said. "If you have a $250,000 house that you put on the market, you might get $240,000. Values are down a little bit, but basically they're selling."
"It just blows my mind, I've never seen this dynamic before," he said.
Those two markets can both be a benefit to a first time home owner.
"The really good news is that if you're a first time homebuyer you can probably get a pretty good price and interest rates are just unbelievably low," said Lemon. "If someone asked me three or four years ago if you can get interest rate under 5 percent, I'd have said 'not in my lifetime,' but you now can."