PAGE: LOCAL NEWS
Housing study: Triple hit
By Justin R. Lessman (January 07, 2010)
While the value of residential home sales in Jackson continues to fall and new construction slows to a crawl, the number of local home foreclosures is on the rise.
Findings of a new regional housing study show Jackson has not escaped the triple whammy slamming the nationwide housing industry. It’s just taken longer to reach this neck of the woods.
Since the October 2008 stock market slide that sent the nation’s economy into a tailspin, Jackson saw its number of house sales fall by more than half and the median sales price of those homes reduced by nearly 10 percent. Also in 2008, construction of new single-family housing slowed to a trickle and the number of home foreclosures countywide jumped by nearly 50 percent over 2007.
The study, titled “Southwest Minnesota Comprehensive Housing Study,” is an analysis of the overall housing needs for the cities of Jackson, Pipestone, Redwood Falls and Worthington. Commissioned by the Southwest Minnesota Housing Partnership and conducted by Community Partners Research of Faribault, the study uses demographic data and analyses of current housing stocks and inventories to determine gaps or unmet housing needs, predict future housing trends and provide a market analysis for housing development.
Results and findings of the study were recently presented to the Jackson Economic Development Authority.
Home sales
Things were going great guns in the Jackson housing market through much of the first decade of the new millennium.
In 2005, the Jackson County Assessor’s Office recorded 60 “qualified” sales — that is, sales on the open market, excluding certain transactions such as sales between relatives, forced sales, estate sales and foreclosures. The median sales price of those 60 transactions was $65,500.
The number of qualified sales fell slightly from October 2007 through September 2008, to 48, the study reports, but the median sales price increased to $69,000.
Then, the bottom fell out.
From October 2008 — the month of the market crash — to June of this past year, only 19 qualified house sales made the books and the median value of those sales slid by more than $5,000, down to $63,500.
Though median sales prices decreased during the three study periods, average sales prices actually increased, from $71,200 in 2005 to $75,600 in the 2008-2009 study period.
Ranges varied as well, with the lowest-priced home in 2005 selling for $13,500 and the highest for $215,000; in the 2007-2008 study period, the lowest-priced home was $11,000 and the highest was $227,000, while the 2008-2009 study period notched a low of $14,000 and a high of $183,000.
New home construction
From 2000 to 2008, 40 new single-family homes were constructed in Jackson, according to city data collected, compiled and reported by the research team.
Researchers termed distribution of that new home construction “relatively consistent,” though data indicate a steady slide in the construction of new single-family housing since 2005. From 2000 to 2004, Jackson saw an average of slightly more than four units constructed per year. That number grew to seven in 2005, but fell to five in 2006, four in 2007 and just three in 2008.
The data on the slide in new-home construction come as a blow to Jackson, which last year at this time was seeing a level of unprecedented new home construction in the west-edge Sunset View Subdivision. At that time, four houses were under construction and two more subdivision lots had just been purchased.
Local economic development officials Kent Bargfrede and Sue Pirsig credited the spike in new construction to stability of employment and plummeting construction costs. However, since then, Jackson’s industrial park tenants — which account for the bulk of the city’s employment base — have felt the pull of the recession, with many adjusting staffing levels and compensation arrangements accordingly.
As it turns out, researchers found, the homes being constructed in the midst of the mini-housing boom a year ago were essentially the extent of new home construction for the year.
Home foreclosures
Though the stock market did not nosedive until October 2008, early reports of the troubled housing industry that brought it down began to surface in 2007.
Researchers recognized that “starting in 2007, many national reports began to surface about the growing number of home foreclosures. Initially this was linked to the popularity of adjustable rate mortgages and the expansion of subprime mortgage lending. However, as many housing markets cooled and the national economy moved toward a recession, the foreclosure crisis spread to broader segments of the market.”
And Jackson was not untouched.
From 2006 to 2007, the number of home foreclosures in Jackson County more than doubled, researchers found, from eight to 18. The county sustained another hike from 2007 to 2008, from 18 to 26, a 44 percent jump.
Researchers hesitated to predict foreclosure activity in 2009 or beyond, but said it is possible the number could continue to rise.
“While tracking current foreclosures is relatively easy, predicting future foreclosure activity is difficult,” they wrote. “Delinquent borrowers have a number of different procedural steps that must be met before actual foreclosure occurs. Our research indicates that current foreclosure activity in Jackson County has been limited, but we cannot predict the future foreclosures that may occur.”
To put the number in perspective, researchers compared Jackson County’s foreclosure rate to the other counties in the state. For the year 2008, Jackson County ranked 62nd of Minnesota’s 87 counties in the total number of home foreclosures and 50th in the largest percentage of home foreclosures, with an estimated rate of 0.56 percent.
Click here to read the overview of the multi-county housing study.
Click here to read the housing study's Jackson analysis.
Findings of a new regional housing study show Jackson has not escaped the triple whammy slamming the nationwide housing industry. It’s just taken longer to reach this neck of the woods.
Since the October 2008 stock market slide that sent the nation’s economy into a tailspin, Jackson saw its number of house sales fall by more than half and the median sales price of those homes reduced by nearly 10 percent. Also in 2008, construction of new single-family housing slowed to a trickle and the number of home foreclosures countywide jumped by nearly 50 percent over 2007.
The study, titled “Southwest Minnesota Comprehensive Housing Study,” is an analysis of the overall housing needs for the cities of Jackson, Pipestone, Redwood Falls and Worthington. Commissioned by the Southwest Minnesota Housing Partnership and conducted by Community Partners Research of Faribault, the study uses demographic data and analyses of current housing stocks and inventories to determine gaps or unmet housing needs, predict future housing trends and provide a market analysis for housing development.
Results and findings of the study were recently presented to the Jackson Economic Development Authority.
Home sales
Things were going great guns in the Jackson housing market through much of the first decade of the new millennium.
In 2005, the Jackson County Assessor’s Office recorded 60 “qualified” sales — that is, sales on the open market, excluding certain transactions such as sales between relatives, forced sales, estate sales and foreclosures. The median sales price of those 60 transactions was $65,500.
The number of qualified sales fell slightly from October 2007 through September 2008, to 48, the study reports, but the median sales price increased to $69,000.
Then, the bottom fell out.
From October 2008 — the month of the market crash — to June of this past year, only 19 qualified house sales made the books and the median value of those sales slid by more than $5,000, down to $63,500.
Though median sales prices decreased during the three study periods, average sales prices actually increased, from $71,200 in 2005 to $75,600 in the 2008-2009 study period.
Ranges varied as well, with the lowest-priced home in 2005 selling for $13,500 and the highest for $215,000; in the 2007-2008 study period, the lowest-priced home was $11,000 and the highest was $227,000, while the 2008-2009 study period notched a low of $14,000 and a high of $183,000.
New home construction
From 2000 to 2008, 40 new single-family homes were constructed in Jackson, according to city data collected, compiled and reported by the research team.
Researchers termed distribution of that new home construction “relatively consistent,” though data indicate a steady slide in the construction of new single-family housing since 2005. From 2000 to 2004, Jackson saw an average of slightly more than four units constructed per year. That number grew to seven in 2005, but fell to five in 2006, four in 2007 and just three in 2008.
The data on the slide in new-home construction come as a blow to Jackson, which last year at this time was seeing a level of unprecedented new home construction in the west-edge Sunset View Subdivision. At that time, four houses were under construction and two more subdivision lots had just been purchased.
Local economic development officials Kent Bargfrede and Sue Pirsig credited the spike in new construction to stability of employment and plummeting construction costs. However, since then, Jackson’s industrial park tenants — which account for the bulk of the city’s employment base — have felt the pull of the recession, with many adjusting staffing levels and compensation arrangements accordingly.
As it turns out, researchers found, the homes being constructed in the midst of the mini-housing boom a year ago were essentially the extent of new home construction for the year.
Home foreclosures
Though the stock market did not nosedive until October 2008, early reports of the troubled housing industry that brought it down began to surface in 2007.
Researchers recognized that “starting in 2007, many national reports began to surface about the growing number of home foreclosures. Initially this was linked to the popularity of adjustable rate mortgages and the expansion of subprime mortgage lending. However, as many housing markets cooled and the national economy moved toward a recession, the foreclosure crisis spread to broader segments of the market.”
And Jackson was not untouched.
From 2006 to 2007, the number of home foreclosures in Jackson County more than doubled, researchers found, from eight to 18. The county sustained another hike from 2007 to 2008, from 18 to 26, a 44 percent jump.
Researchers hesitated to predict foreclosure activity in 2009 or beyond, but said it is possible the number could continue to rise.
“While tracking current foreclosures is relatively easy, predicting future foreclosure activity is difficult,” they wrote. “Delinquent borrowers have a number of different procedural steps that must be met before actual foreclosure occurs. Our research indicates that current foreclosure activity in Jackson County has been limited, but we cannot predict the future foreclosures that may occur.”
To put the number in perspective, researchers compared Jackson County’s foreclosure rate to the other counties in the state. For the year 2008, Jackson County ranked 62nd of Minnesota’s 87 counties in the total number of home foreclosures and 50th in the largest percentage of home foreclosures, with an estimated rate of 0.56 percent.
Click here to read the overview of the multi-county housing study.
Click here to read the housing study's Jackson analysis.