Monday, September 29, 2008

Cincinnati housing follows national trends in August

August real estate activity for the Cincinnati area looked very tough if you were on the sell side of things. Market activity was down across the board relative to August of '07 and the previous month. Notably, August usually sees a bit of an uptick from July. The fact that we didn't see that suggests consumers overall are very nervous about the economy. However, when you compare the number of homes sold to historical trends, you can see in the following charts that sales activity is similar to "pre-bubble" levels.The catch is the inventory levels remain high and several months above a "balanced" market. At least the trend on inventory is moving down.

I'm often asked what is selling now. Well, there are two kinds of properties that seem to be moving in this market: 1) "showcase homes," or those are well updated and look immaculate, and 2) those that are priced as "bargains."

One thing I've seen with regular occurrence is prospective buyers that are seemingly surprised at the price of homes. Listening to the media makes some think that every house for sale is bargain priced. Not true! Prices in Cincinnati have come off their peak, but we are not seeing huge drops in most cases. The sale price of area homes has averaged approximately 94% of the final list price. Granted, many homes are priced too high when they are first listed and will see some reductions, but if the sellers are realistic about what they can get, then their homes will eventually sell. The lesson here is that if you don't have to sell right now, then you should probably stay off the market.

Homes that are truly bargain priced are actually getting multiple bids and selling quickly. I've seen foreclosures that are in good shape and priced low sell in a matter of days. Cash buyers and investors are picking off the best of the bunch. The downside? A lot of homes have been left in very poor shape and you may have to go through quite a few before finding that diamond in the rough.

No comments: