Driven by tight mortgage market conditions and rising unemployment, weak consumer confidence is heavily impacting the number of home sales in Missouri as the region struggles economically.
The foreclosure crisis is putting a crimp on Missouri housing markets after the federal tax credit for home buyers expired slowing sales. The fall off is triggering an additional slowdown in home values, which had seen an increase in some parts of the market in St. Louis, battered by high job losses in manufacturing and the industrial sector. Existing home sales tumbled as a result of the expiration of the tax credit, which provided no long lasting effects.
The slight rise in home prices in St. Louis is expected to be off-set by a further weakening in the economy in 2011, despite improving employment conditions for many workers in the area. However, increased hiring by employers should provide the avenue for better economic conditions and more home purchases but that isn’t expected to develop for sometime with the fragile economy and hard hit housing market.
Discount priced foreclosures and bank assisted short sales should provide the inventory of homes needed to spur the market forward in St. Louis, which should experience more home sales by summertime. Average home prices are forecast to deflate 7.2% for the year.
Government assisted programs targeted to help communities devastated by the foreclosure crisis have aided the market in Kansas City, where scores of homeowners have fled their homes as a result of mortgages they could no longer afford. Upside down mortgage holders are getting assistance from
the White House Hardest Hit Fund but only unemployed and underemployed residents who qualify for the program are seeing any aid.
Kansas City is projected to experience a slow return to better home sales after more employees go back to work, especially in industries related to farming and real estate. Until then home sales are expected to remain soft with average housing deflation forecast to be 5.8% in 2011.
In Springfield, where the housing market had slowed after experiencing the largest growth spurt on record the sale of existing homes are expected to be the last part of the market to show strength after new home builders are applying for more permits to construct homes at the highest rate in more than three years. The slowdown in sales is projected to equate to lower home prices for the year, and are forecast to decline an average of 4.5%.
In Central Missouri, where residents site the economy as being the most important subject these days in a handful of consumer opinion polls home sales are sluggish in Columbia and mortgages are tough to get for all but the best of credit worthy home buyers. Sales are anticipated to be slow over most of the year on forecast average home deflation of 4.2% in 2011.