Monday, December 28, 2009

November sales provide some sense of relief

Cincinnati's market activity spiked upward in November reflecting a push by many buyers to close on homes before the original tax credit deadline of Nov. 31. The same trend was seen nationally as existing home sales managed to post considerable gains and even managed to eke out a small tick up in prices.

Click for November's Charts

Some of the key stats from November:
  • Local inventory rose modestly to 8 months worth of active homes compared to 12.6 months in Nov. 2008. (Inventory usually has a slight rise during the winter months.)
  • The local average sales price went up to 146.6K vs. 144.7K last year.
  • Local sales came in at 1,570 for the month. A whopping 33% increase over Nov. of '08. The national figures were even higher at 44% over '08. Looking back through 1998, however, would suggest this figure is more in line with historical averages.
For a while, the yearly sales figures for 2009 looked like they would be worse than 2008. With the increase in sales rates over the past few months, we are just a hair behind total '08 sales and might even exceed it when December's numbers come in.

The one area that still reflects pressure: new home construction, down 11.3% from the previous year. While the construction industry has been hit hard, this continues an important step in the market correction and will ultimately help clear the overhang of inventory.

Projections for housing remain uncertain as foreclosures are expected to continue their upward climb. The upward curve we saw in house sales through 2005 is now mirrored in foreclosures with a seeming 5-year lag - about the duration of many adjustable rate mortages! While home prices have stabilized for the most part, many housing economists suggest that prices will remain under pressure through 2010 and, at best, will likely stay flat. One other interesting sign of the times - a recent Wall Street Journal article illustrates how homebuyers are taking longer and looking at more properties before purchase.

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