Why Housing is Still Hot On The Western Front

Why Housing Is Still Hot On the Western Front
By Lauren Baier Kim

Here's a look at what's new in real-estate markets across the U.S. from around the Web.

Hot Western towns

A handful of small to midsize cities are outpacing the rest of the housing market, and in some cases are showing double-digit home-price appreciation, says an Associated Press article posted by Yahoo Finance. Among places that showed significant increases in home prices between the first quarters of 2006 and 2007 were: Salem, Ore. (13.4%), Boise City/Nampa, Idaho (14.5%), and Grand Junction, Colo. (16.8%). U.S. housing prices rose only 0.5 percent from the fourth quarter of last year to the first quarter of this year, the Associated Press says. Boosting these towns' residential real-estate markets are population and job growth, plus the fact that these locales were passed over by the housing boom, the article says.

Tough times for first-timers

Home buyers looking to purchase their first home are facing the most difficult real-estate market since the early 1990s, according to USA Today article. To get a foothold, many in this group are using extreme measures to come up with a down payment, such as raiding retirement accounts, moving in with family and taking on extra jobs. Many can't come up with a down payment -- about half of all first-time buyers didn't make a down payment last year and about one in 10 raided their retirement accounts to place one, the article says. Adding to the negative outlook for first-time buyers is a stricter mortgage industry. "I'm turning away 50% of my first-time home buyers," the paper quotes ones loan officer as saying. "They just can't qualify."

Big demand for lakefront properties

There was a time when the average middle-income consumer could purchase a vacation home on one of New York's Finger Lakes, but not so anymore, thanks to increased interest from out-of-town buyers from places like New Jersey and Philadelphia, says the Democrat and Chronicle of Rochester, N.Y. In the past five years, lakefront prices on lakes Keuka and Canandaigua have doubled, while lakes Seneca, Conesus and Honeoye have also seen significant price appreciation, the newspaper says. Last year, Keuka Lake saw an average price of $481,000, whereas the average price in 2002 was $245,000, while prices on Canandaigua Lake rose from $340,000 to $619,000, the article says. Meanwhile, on Conesus Lake, the average price has gone from $180,000 in 2003 to nearly $238,000, and Honeoye Lake has seen prices appreciate 15% to 20% in the past five years, the paper says.

Beach community sees increased development

Overall, Michigan's housing market has been weak, but for New Buffalo, Mich., a lakefront community on Lake Michigan, residential development is booming, making the community the strongest real-estate market in the state, according to a New York Times article. Known as "Harbor Country," the area, which soon will be home to a 220,000-square-foot casino, hotel and six restaurants on 50 tribal acres, has seen construction of $245 million worth of new homes, or 400 residential units, since 2005, the newspaper says. Eighty percent of those homes are being utilized as second homes, the Times reports.

Weeds threaten real-estate sales

In Southwest Florida, rising weeds are hurting real-estate sales in some neighborhoods, as a growing number of properties sit vacant, according to a News-Press of Fort Myers, Fla., article. Here, homes are remaining empty for months, sometimes a year, the newspaper says. The same problem is echoed across the U.S. as a record 1.4 million new housing units are vacant, the article says. Some Florida homeowners are allowing their unused homes to fall into disrepair, leaving uncut lawns and poorly maintained swimming pools. "When people look at a street and they find foreclosures and uncared-for vacant properties, it decreases the value of surrounding homes," the New-Press quotes one local real-estate agent as saying. The article offers tips on what to do if your neighborhood seems to be falling into neglect -- such as approaching home sellers of vacant properties directly about the situation, filing a complaint with the local municipality or contacting the homes' listing agents.

-- Ms. Kim is a senior editor at RealEstateJournal.com.