Morgan County is riding a national trend of increasing new-home sales, but managing to avoid the trend of falling prices.

Marianne Scott, managing broker at ReMAX Platinum, has no doubt: The difficult economic times are coming to an end.

“Absolutely,” she said Monday. “I have listed more houses this spring and summer than ever in my career. My sales are way up.”

That’s good news, locally and nationally, for an economy that collapsed under the weight of devalued homes.

Nationwide, new home sales rose last month at the fastest clip in more than eight years as buyers took advantage of bargain prices — a clear sign, economists said, that the real estate market may be finally bouncing back.

Interest rates, tax credit

Low interest rates and a federal tax credit for first-time homeowners helped push home sales to their highest level since November, the Commerce Department reported Monday.

While home prices are still falling around the country, sales have now risen for three months in a row. Construction of new homes is at the busiest level since last fall. And home resales rose in June for the third straight month.

The bubble in housing prices that infected the nation never made it to Morgan County, and the county is not feeling the sharp drop in sales and valuation that is traumatizing other regions.

Scott said there are 59 new houses on the market in Morgan, and 41 new homes have sold since the year began.

“We haven’t seen prices falling as much as we’ve just seen a longer market time,” Scott said. “We have not seen the big, big dip, or the foreclosures, that you’ve seen in other parts of the country and even other parts of the state.”

Scott said the economy and employment rates are more stable in North Alabama, and that creates a better housing market.

“Our market has definitely improved,” Scott said. “The last part of last year, there was a marked decrease in activity. Buyers’ confidence was down.”

Since February, Scott said, sales have improved. Not to the levels of a few years ago, she said, but well above last year’s levels.

Morgan County is benefiting from expansion of Redstone Arsenal in Huntsville, she said, but it also took a hit from overbuilding in advance of the Base Realignment and Closure transfers that are increasing North Alabama’s population.

“That’s on the horizon now,” Scott said. “Next year and the year after that, we’ll be seeing a lot more buyers.”

For real estate sellers, local problems have been entwined with more pronounced problems in Virginia. Those trying to follow BRAC to the Huntsville-Decatur area could not do so because they could not sell their homes in northern Virginia.

Scott said the national optimism is beginning to affect the depressed Virginia market, which means potential BRAC buyers are more interested in buying Alabama homes.

“Sometimes people coming from a distressed market come here and want to negotiate, want to make up their loss,” Scott said. “But our market is not down, and our sellers are not in that situation. It takes a little bit of education when you have a buyer coming from a marketplace that’s very depressed.”

Nationally, the improvement in sales is modest. The pace of sales for new homes in June was still 72 percent below the peak of four summers ago, and there is still an enormous inventory of homes lingering on the market.

New home sales for June clocked in at a seasonally adjusted annual rate of 384,000, blowing past the expectations of economists surveyed by Thomson Reuters, who were looking for 360,000.

The figure is up 11 percent from May, and May’s number of 346,000 was higher than previously thought. The increase is the largest since December 2000, when investors scarred by the tech-stock bubble were looking for more stable places to put their money.

Sales were strongest in the Midwest, where they jumped 43 percent from May’s total. Sales climbed 29 percent in the Northeast and 23 percent in the West. They declined slightly in the South.

The median sales price was $206,200, down from $234,300 a year and $219,000 from May. Economists expect home prices to continue falling until the competition from low-priced foreclosures ebbs sometime next year.

In addition to lower prices, buyers are rushing to take advantage of a federal tax credit that covers 10 percent of the home price or up to $8,000 for first-time buyers. Home sales must be completed by the end of November for buyers to take advantage.

Although the real estate market appears to be starting a recovery, that doesn’t mean it will instantly become a powerful economic engine. Construction is weak because builders still have too many unsold homes sitting vacant.

At the current sales pace, there are enough new homes for sale to last nearly nine months. That’s slightly less time than in May but still much longer than the six-month mark that indicates a balanced market.

The Associated Press contributed to this report.

Copyright 2009 THE DECATUR DAILY. All rights reserved.
AP contributed to this report.