Good news on housing for a change

Market recovery helps restore some homeowner equity

By Will Collette

Nearly all of the articles I’ve written on housing have been bad news – foreclosures, depressed prices, lack of affordable homes and rentals. But the housing market is beginning to brighten and that’s good news for working families who usually count their home as their most valuable and important asset.

Zillow.com shows a sharp jump in Charlestown home values, continuing a trend that began in the last half of 2012. Average home value in Charlestown grew to $304,700 and, for the first time in a while, we show a positive year-to-year growth 1%.

That 1% uptick is modest, especially when compared to the hottest local real estate market – Ashaway, where home values grew by 5.9% over the past year. But our 1% is good news nonetheless, since the trend in Charlestown homes value has been running in the red for nearly the entire recession.

Charlestown values bottomed last August when, as of August 1, average Charlestown home value was only $295,000. Charlestown’s all-time peak was hit on March 1, 2006 at $395,000.

GoLocalProv recently reported that, statewide, housing sales are starting to move sharply higher and prices are rising as there are fewer distressed properties on the market dragging prices down.

Fourth quarter sales around the state were up by 25% over 2011, despite the impact of Hurricane Sandy. Sales are up very sharply for existing single family homes.

Yellow are bank-owned. Red are due to go to auction

Overall, Charlestown has fewer homeowners who are under water (where their mortgage balances are higher than the value of their homes) and fewer foreclosed and distressed properties. A check on RealtyTrac.com’s database confirms the sharp drop-off in Charlestown distressed properties.

I doubt if the good numbers are going to make anybody in town go crazy with joy. I think there’s a “new normal” that will put a damper on any temptation to go back to living a pre-recession lifestyle of borrowing against home equity to buy luxury goods. Even if homeowners wanted to do that, credit is still very tight.

After all, Charlestown still has a 9.7% unemployment rate and homeowners still have a very long way to go to recover their lost homeowner equity. By the way, Charlestown’s unacceptably high unemployment numbers are still much better than they were in January 2012 when our unemployment rate was 14.3%.

But, baring reverses in local employment or another national or international economic tsunami, it does look like we’re really coming back. Knock on wood. We’ve just got to make sure we improve job opportunities and don’t listen to the austerity freaks who want to strangle our economy.