Growth in Lansing-area Home Values Not Keeping Up

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Many in mid-Michigan see their homes as their biggest investment. Now it seems the potential returns on those homes aren't keeping up with national averages.

"Appreciation wasn't as high as we expected," according to Greater Lansing Area Realtors Association President Jeff Thornton.

Median home prices in Ingham, Clinton and Eaton counties were up roughly 2.5 percent in the last year. That's compared to an increase of 7 percent nationally.

National experts say the modest growth doesn't mean the supposed housing bubble is bursting. Still, other indicators show the past year hasn't been a particularly strong one for Lansing's residential real estate market.

"A little longer marketing time for each house," Thorton said.

Thornton says homes in Williamston -- where he does much of his business -- are taking longer to sell. It's the same story in the city of Lansing -- where homes are spending about 10 days more on the market than they were in 2004.

Sale prices in Okemos are up about the same as the tri-county average. It's same story for DeWitt -- prices are up about two percent. Homes in Holt and Mason are selling for just slightly more than they were back in 2004.

"It's a little softer than what we've seen for the last 20 years," Thornton said.

Perhaps the softest spot in the three-county real estate market is right here in East Lanisng, where the numbers show the average home sold for less in 2005 than it did the year before.

The 2005 average is only slightly less than the prior year's -- but it does show a clear lack of growth. So, why the soft market?

"The main culprit is oversupply of homes and fear of what the economy is doing," Thornton said.

The overbuildilng phenomenon isn't unique to Lansing. One California researcher says the nation is building two and a half new homes for every new household.

Although the Lansing-area may be seeing an oversupply problem, one strength of the region's housing market is the generally reasonable prices.

"We're one of the most affordable markets in the country," Thornton said.

He says that means the recovery should be quicker.

But in the meantime, Lansing definitely looks like a buyers' market.

-- in Lansing, Tony Tagliavia, News 10.