US housing shows signs of recovery
Monday, July 07, 2008
Housing is back in demand in the US - especially when homes can cost only £10,000, writes James Quinn
Other than being home to cereal giant Kellogg's, the town of Battle Creek is little known outside the Michigan bible-belt in which it sits.
Set on the western side of the "Great Lakes State", the 53,000-person municipality appears to have seen better days. Take a look at the Battle Creek Enquirer. Squeezed between small-town stories about flash floods are bleak economic tales. The local school board has voted to lay off 17 teachers from the start of next term as it tries to find $1.5m (£760,000) in savings due to a string of budget cuts, and residents are complaining about the state of "crumbling roads".
This is just one town in a state which has been in recession for the past five years, where unemployment is running at 10pc, and which in March was ranked at number six in a nationwide state-by-state foreclosure league table.
But Battle Creek is different. Home sales here are rising.
In May, the town saw a 13pc increase in existing home sales - against a 2pc rise nationally.
Although local records have not yet been compiled for June, there is no suggestion sales have slowed.
Matt Davis, of Rosemary Davis Realtors in the town, said: "I think that people are finding fair and good deals that suit them. Maybe that's an indication that people have a bit more confidence."
Mr Davis, president of the local realtors' association, added: "A lot of the problem in the housing market is negative perception. People's psyche gets affected."
The sales numbers in Battle Creek show that people's psyche is beginning to turn, albeit spurred on by low prices. The number of low-end sales has doubled in the past year, with houses offered at a staggering sub-$20,000 (£10,000) being the most popular. One house price was so low the purchaser used a credit card to buy it.
According to Lawrence Yun, chief economist at the National Association of Realtors, other towns experienced higher sales activity in May - the most recent month records are available for - including Sacramento and parts of the San Fernando Valley in California, and Sarasota in Florida.
Dennis Lockhart, president of the Atlanta Federal Reserve, believes the US housing market might finally be healing: "There are early and tentative signs that a bottom may be forming in some housing markets."
Before the green shoots of recovery are able to sprout, however, the economic landscape must be fertile enough to encourage growth.
Story continues at The Telegraph online
Other than being home to cereal giant Kellogg's, the town of Battle Creek is little known outside the Michigan bible-belt in which it sits.
Set on the western side of the "Great Lakes State", the 53,000-person municipality appears to have seen better days. Take a look at the Battle Creek Enquirer. Squeezed between small-town stories about flash floods are bleak economic tales. The local school board has voted to lay off 17 teachers from the start of next term as it tries to find $1.5m (£760,000) in savings due to a string of budget cuts, and residents are complaining about the state of "crumbling roads".
This is just one town in a state which has been in recession for the past five years, where unemployment is running at 10pc, and which in March was ranked at number six in a nationwide state-by-state foreclosure league table.
But Battle Creek is different. Home sales here are rising.
In May, the town saw a 13pc increase in existing home sales - against a 2pc rise nationally.
Although local records have not yet been compiled for June, there is no suggestion sales have slowed.
Matt Davis, of Rosemary Davis Realtors in the town, said: "I think that people are finding fair and good deals that suit them. Maybe that's an indication that people have a bit more confidence."
Mr Davis, president of the local realtors' association, added: "A lot of the problem in the housing market is negative perception. People's psyche gets affected."
The sales numbers in Battle Creek show that people's psyche is beginning to turn, albeit spurred on by low prices. The number of low-end sales has doubled in the past year, with houses offered at a staggering sub-$20,000 (£10,000) being the most popular. One house price was so low the purchaser used a credit card to buy it.
According to Lawrence Yun, chief economist at the National Association of Realtors, other towns experienced higher sales activity in May - the most recent month records are available for - including Sacramento and parts of the San Fernando Valley in California, and Sarasota in Florida.
Dennis Lockhart, president of the Atlanta Federal Reserve, believes the US housing market might finally be healing: "There are early and tentative signs that a bottom may be forming in some housing markets."
Before the green shoots of recovery are able to sprout, however, the economic landscape must be fertile enough to encourage growth.
Story continues at The Telegraph online
Labels: Battle Creek, James Quinn, property analysis, US house prices
