Midwest housing recovery cools off

The Midwest housing recovery slowed in January, according to one of the first national studies out on last month's sales.

But Real Trends, a Colorado-based real estate analyst, shows that closed sales still increased 9.6 percent in January over a year ago, and average prices were up 2.6 percent.

The January report from the Sedgwick County Multiple Listing Service and the Wichita Area Association of Realtors should be out later this week.

It's a continuation of late-2009 trends, said John McKenzie, president of Wichita's Coldwell Banker Plaza Real Estate.

"More properties selling in the lower price points, driven by the first-time homebuyer credits," McKenzie said.

Some of the city's brokers say sales were largely flat in January, depressed somewhat by the extension and expansion of the tax credit.

New sales must be written by April 30 and closed by June 30 to take advantage of the credit, but a possible extension — once considered unlikely — is again getting some discussion in Washington, D.C.

"Closings in January were awful, but we were up 7 percent from last year," said Gary Walker, residential general manager for Wichita's J.P. Weigand & Sons.

"It's not a surprise at all. We knew November and December's written business was down, and that's the way our market works. When a month is flat or down, it means business was down a month or two earlier."

Nationally, sales were up 8.6 percent last month over January 2009, while the average price of a home sold jumped 7.9 percent for the largest year over year gain in nearly three years, according to Steve Murray, editor of Real Trends.

However, sales were up 17 percent year-over-year nationally in December, 19.2 percent in the Midwest.

"While the results for January 2010 were down somewhat from December 2009, the fact that every region showed improvement in housing sales over the same month in 2009 indicates that housing is slowly but surely on the road to improvement," Murray said in an e-mail.

Walker said the late-2009 sales flurry was driven by the possibility that the tax credits wouldn't be renewed.

As a result, the tax credit renewal has left the market "without a sense of urgency," Walker said.

"But I think we're starting to see a little of it, even though there's still a bunch of time left," he said. "I've said all along that three-fourths of this year's business will get done in the closing months of April, May and June — unless the credits get extended again."