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Yellow Springs real estate—Market still strong, but some suffer

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As economists talk about the U.S. taking a dive toward recession, the housing sector in Yellow Springs, by many accounts, seems little impacted. According to Greene County government officials and local realtors, the local pace of turnover and the price of homes is relatively steady, and in some ways has grown in recent years. But according to several people who lost or nearly lost their homes in the last two years, for those already on the edge, the recent increase in the general cost of living has profoudly affected their ability to live here.

The market assessment

The cost of housing in Yellow Springs is steady to higher than expected, Greene County Auditor Luwanna Delaney said in an interview last month. Because this is a reappraisal year, and the new valuations won’t be approved until August, she hesitated to be specific. But an early estimation showed that property values have not changed in the last six years, she said, and in some cases, homes she would expect would sell for less because of their state of disrepair, are selling for higher than their appraised value.

“So far I’m seeing sales that are not as high as they were in the beginning of 2007, but are still higher than the 2005 tax year, and the values will probably go up some, based on the sales we’ve looked at this year,” she said. “Yellow Springs is unique, people want to live in Yellow Springs, and they are willing to pay astronomical prices for older homes — they’re willing to pay whatever it takes.”

That impression was shared by Greene County Treasurer James Schmidt, who said that due to growth at Wright-Patterson Air Force Base, the positive reputation of the village school system and the farmland that is holding its value, property values in Yellow Springs remain stable.

“Most people have been hearing in the media that housing prices are dropping, but I’m afraid they’ll find real estate values have gone up for tax purposes,” Schmidt said.

Longtime Yellow Springs realtors Chris and Rick Kristensen with Re/Max Resources had a similar but more nuanced impression of the local housing market. It’s true, they said, that homes have been selling in higher numbers in recent years because people really want to live in Yellow Springs. In 2004 the average number of homes sold per year was 30 to 35. But in 2005, the number of homes sold in Yellow Springs topped out at 58, and stayed just over 50 the following two years, Rick Kristensen said. So far this year, 28 homes in the village have sold, which puts the village on schedule to sell about the same number as last year, he said.

“The person that wants diversity, culture, nature, this is the place, and if Antioch stays open, it’ll just be a shot in the arm on top of those things,” he said.

Prices, however, appear to have adjusted down about 8 to 10 percent in the last two years, based on cost per square foot of all the homes sold in Yellow Springs, Chris Kristensen said. The glut of homes on the local market, which averages about 40 now, in addition to the nearly 50 lots for sale in Birch III, Stancliff and Thistle Creek developments, have managed to chip away at prices, she said. The higher rate of foreclosure outside of the village, which has lowered home values in surrounding areas, has also held down prices in the village, she said.

Though interest rates are extremely low, buyers know that rates have been low for a long time, and they don’t seem to be rushing to purchase for that reason, she said.

“It is a buyer’s market, but the buyer’s mentality is to think that they could get a good deal if they wait — they’re a little more cautious and they’re taking their time,” she said. “Our market is more stable than other areas.”

The homeowners’ assessment

For some residents, Yellow Springs has been a particularly tough place to keep a home when local property taxes keep rising while other external costs, such as food, gas and utilities, are on the rise and jobs are relatively scarce. Seven Yellow Springs houses went to Greene County Sheriff’s sale in the last year and a half, and four more were scheduled for foreclosure but were either purchased or refinanced before the home was seized.

While the annual foreclosure rate in Greene County has gone from 254 in 1997 to 668 in 2007, the relatively low number of foreclosures in town seemed typical for Yellow Springs, according to both Delaney and the Kristensens. And the reasons for those who agreed to be interviewed about losing their homes varied. But the common theme among them was that more than a fickle economy, the increase in Village property taxes and housing prices over the past 10 years especially have most affected their ability to own a home in Yellow Springs.

One Yellow Springs native, who preferred to remain anonymous, lost his home last year due to the increasing cost of the adjustable interest rate loan he used to purchase a home for his family in 2002. He purchased the house through a Kettering realtor, who referred him to a national mortgage company when he had trouble securing a loan. As the house payments rose, his mortgage was passed from American Mortgage, Inc. to GMAC Mortgage Company. And because the income for his single-earner household wasn’t keeping pace with the mortgage payments and other bills coming in, he said, the family was forced to sell to avoid foreclosure. He and his family now rent in the village because they haven’t found anything they can afford to purchase.

Local resident Ronald Gaines lost a second house on Livermore Street, which he was using an a rental property, because he couldn’t find tenants who would pay the rent necessary to cover the cost of maintaining the house, he said. The cost of keeping the house with increasing utility bills, property taxes, and fuel costs on a relatively fixed income put him over the edge, he said.

“The village needs to bring in more commerce to help pay more of our tax base,” said Gaines, who has lived here for almost 70 years. “You have to bring in businesses to help the town grow because people can’t afford to live here anymore — those days are gone.”

Less affluent residents are more vulnerable to the rising cost of living in the village, and the economy doesn’t help, according to villager Brian Harris. He and his wife Joan purchased their home on the northwest end of town for $79,000 in 1995, while comparable homes on his street have sold for nearly twice that amount in the past two years. “If we tried to move here now, we couldn’t afford it,” he said. Several of his neighbors, such as Yellow Springs native Stacy (Lucas) Scott, have moved out of town due to increasing difficulty affording a home in the village.

As a single mother, Scott purchased her first house ever on Suncrest Drive in 1996 with the help of a USDA rural housing loan she fought hard to secure, she said. But as part of the agreement, her house payments would rise with her income, and as she found better jobs, she fell behind on her payments. Because of a lack of jobs in Yellow Springs, she left town to find work elsewhere, and ended up defaulting on her loan and filing for bankruptcy.

Still, the Kristensens only know of two villagers who came close to foreclosing, one due to a divorce and the other due to a job loss.

“Yellow Springs lenders have done a good job of not putting people in homes they couldn’t afford,” Chris Kristensen said. Realtors can also have a hand in feeding buyers to unscrupulous lenders, and the Kristensens have been careful not to engage in such practices, they said.

But the downturn in the U.S. economy has affected at least some part of the rental market in the village. According to John and Sigalia Cannon, who have rental property in town, rents have not kept up with inflation, and as property owners, they have absorbed some of the costs to keep their places occupied. Inflation in housing expenses is balanced somewhat by cheaper construction materials provided by the global market, which is a painful comfort, they said, as they would prefer to work with American made products.

The good thing is that new people are coming from the greater area to live in the village now. “That is a bright spot as far as the Yellow Springs economy is concerned,” John Cannon said.

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