Centre County less affected by housing slump; affordability a concern

COLLEGE TOWNSHIP — Problems in the national housing market have yet to hit a low point, but while Pennsylvania is not immune to the down market, the impact here hasn’t been as severe as in much of the rest of the nation, an official with the state Builders Association said Wednesday.

The housing market should continue to bottom out until at least mid-2008, said David B. Martin, executive vice president of the association, told members of the Centre County Chamber of Business and Industry Wednesday.

“This year’s going to be a tough one,” he said. “Penn State is a huge influence here. It’s propping (the real estate market) up.”

Some communities have enough available housing to supply demand for two years, but the national average is between nine and 11 months.

Pennsylvania has between a six-and nine-month supply, he said.

“The supply and demand is pretty balanced, so we’ll be all right, I think,” he said.

Lower interest rates combined with low unemployment has helped create a buyer’s market and may help draw new homeowners into the market, said Jerry Wettstone, president of the Centre County Association of Realtors.

People saving to buy a home should also be encouraged by prices increasing slightly, Wettstone said.

He said the average sales price climbed just 1 percent between 2006 and 2007 in the State College Area School District, to about $242,500. The number of homes sold fell 3 percent.

Prices in the county’s other school districts climbed by 6 percent in that period to more than $156,500. The number of homes sold in those areas climbed 12 percent.

Countywide, the average sale price was up 1 percent.

These numbers do not account for new home sales that were a direct sale from builder to buyer — something that may factor into appreciation figures, he said.

Wettstone told chamber members that rising costs are putting homes out of reach of many buyers, pushing people who serve the community’s needs every day out of the real estate market.

The median price of a home in Centre County was between $96,000 and $97,000 in 2000. In 2007, it was $190,000, Martin said.

“You like to live where you work and work where you live,” he said. “It’s still affordable, but I think the steep climb is something to really be worried about.”

Based on median home sale prices from the Pennsylvania Association of Realtors, homes in Centre County appreciated 10 percent during the last two years — down from a 10 percent climb in 2005. Those figures are based on the median home sales price, not the average price.

“It’s slowing down,” Martin said.

Median home prices across Pennsylvania are up 2 percent, compared with a 15 percent decline being seeing in some areas across the nation.

Foreclosures are up in Centre County, with about 300 filed in 2007, according to the Centre County Prothonotary’s Office. That’s 115 more than in 2005 and 45 more than in 2006.

The market should begin to rebound by early 2009, Martin said. He said he expects there to be an uptick in existing home sales, followed by increased sales of new construction about six months later.

The number of new home construction fell in 2007, as the number of building permits issued for single-family homes fell to just shy of 28,000 — more than 13,000 less than 2004.

That’s comparable to conditions in 1980, Martin said.

Single-family home building permits in Centre County dropped from 404 in 2006 to 229 in the first 11 months of 2007.

Jennifer Thomas can be reached at 231-4638.