Home construction in Cape Girardeau County slows down

The real estate slowdown, continuing nationwide according to the latest figures from the National Association of Realtors, is also having an impact on home sales and construction in Southeast Missouri.

Cape Girardeau, Jackson and Cape Girardeau County figures all point to a slowdown in new home construction. Leaders of two area associations confirm it is more difficult to sell an existing home and that fewer new homes are being built in the area.

"It is a lot slower than it was last year," said Sheila King of Realty Executives, president of the Cape Girardeau Board of Realtors. "But the media blows it out of proportion here. What happens in California isn't what is going on here, but it is a buyer's market."

The national figures show that sales of existing homes fell in June for the fourth consecutive month, down by 3.8 percent to an annual rate of 5.75 million units. That is the slowest sales pace since November 2002 and a continuation of the worst housing slump in 16 years. Economists attribute the decline in part to the rapid rise in prices as interest rates fell during the first years of this decade. They also blame the troubled market for loans to home buyers with spotty credit histories that has resulted in an increase in foreclosures and decreased profits for lenders.

Last year, a home in the area sold in an average of 90 to 120 days, King said. But that time period is getting longer, she said. Lower-cost homes are selling better, she said, noting that only three homes in Jackson with a price of $175,000 to $185,000 have been sold this year.

New homes have a big advantage right now, she said. "People would rather have something brand new," she said. "No one has lived there, and they can do their personal thing with it."

But the number of permits being issued for new home construction and the number of new subdivisions being recorded at the Mapping and Appraisal Office of the Cape Girardeau County assessor's office shows that the new home market is weak as well.

In Cape Girardeau, the city has issued 53 building permits for new single-family homes since Jan. 1. That compares to 101 for all of 2006 and 128 for 2005.

In Jackson, figures supplied by the Inspections and Permits Office indicate that 2006 was a down year but figures have not been compiled for the first six months of 2007, said Janet Sanders, building and planning administrator. In the first six months of 2006, 24 single-family home building permits were issued, compared to 38 in the same period of 2005.

County figures show that in the first six months of 2007, developers have recorded 19 subdivisions with 139 lots. That compares to 65 subdivisions with 701 lots in 2006 and 59 subdivisions with 793 lots in 2005. Figures show a similar trend in the creation of new parcels, where a property owner sells off a portion of their land.

"It is slower than it has been during the past three to five years," said Ann Brookman, president of the Southeast Missouri Homebuilders Association. "There are still homes being built, and there are still spec homes being built, but they are not turning as fast as they were in the last three to five years."

A "spec" home is one constructed by a builder on speculation that it can be sold for a profit instead one of being built to suit a particular customer.

The difference now, said Brookman, the owner of Edgewater Glass, is that interest rates have risen and priced some people out of the market. "Three to five years ago, everything was selling and selling quickly," she said. "The question was, how low can the interest rates go? People would get in and sell quickly."

The market in the region is actually more rational now, with enough work to keep contractors and subcontractors busy without causing irritating delays in completion, Brookman said. "What we can see here as a subcontractor is that it has made our life easier," she said. "In the past, there was someone always waiting, someone always upset and screaming."

The national figures showed that median prices climbed slightly in June to $230,100, 0.3 percent more than a year ago. It was the first price gain in 11 months.

Locally, King said, prices are about 2 percent lower now than for comparable homes a year ago. "A buyer doesn't hesitate to look at something that is not close to the sale price just to see what they can get it for," King said. "The sellers have to be a little more negotiable."

The decline in sales was felt in all regions of the country, the national Realtors' association reported. It was worst in the Northeast and West, where sales rates fell 7.3 percent and 6.8 percent, respectively, and mildest in the Midwest and South, where the declines were 2.8 percent and 1.7 percent.

The Associated Press contributed to this report.

rkeller@semissourian.com

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