January market gets the Winter blahs

Local sales activity seemed to take a vacation in January. While there were a few good things that suggested the market continues to stabilize such as increasing prices and a lower percentage of distressed sales, the activity level dropped off significantly from last January.

Here's a look at some of the key local statistics: (Click to see January charts)

• Local sales fell 7.8% from last January, while national sales saw an 11.5% increase from last year. This is an unusual disparity between Cincinnati and national statistics.
  
• Average sales price for January 2010 - $150,558; an 18.5% increase from January 2009's average of $127,018
  
• Last January, over 49% of sales were distressed properties, this year the percentage fell to 35.11%
• The absorption rate (ratio of sales to listed homes) jumped to 14.4 months - about the same as last January, but a big increase from December.
  

Nationally, new home sales fell 11.2% to an all-time low annualized rate of 309,000. However, many viewed this as something of a positive as it may suggest that the a needed clearing of inventory is taking place. New construction activity is likely to stay weak for a while longer. We could see a pop in February for buyers trying to take advantage of the tax credit, but fall off after that given that builders may not be able to guarantee completion before the credit expires.

It's certainly not unusual to see sales drop off in Winter months and it is difficult to know how much can be attributed to weather. Given the amount of snow and cold weather we saw in February, I'm anticipating that we will see another drop when those statistics come out. I know many looking to move soon are hoping for warmer days ahead.

Latest home improvement study shows buyers focus on curb appeal

Remodeling Magazine released its latest evaluation of home improvements and the biggest returns suggest buyers are focused on the exterior curb appeal.

The current online report includes results nationally, by region, and you can also narrow down to the Cincinnati area specifically (see Cincinnati stats here).

One question someone might have is why they would make an improvement before they sell their home if it only gets a portion of the money back. Well - the big reason is the ability to sell the house quickly in a market like we have today. Buyers are expecting homes to be in near-perfect condition or will otherwise expect the price to be steeply discounted. Those who try to get full market value when the house is dated end up staying on the market longer, making more price reductions, and taking a lower price when they finally sell.

I would note that this report tends to focus primarily on major "cosmetic" elements with remodeling of a home as opposed to structural and mechanical updates (such as a new furnace or appliances). I'll keep a lookout for similar studies and point them out when available.

A hybrid water heater? Really?

I recently received an e-mail touting the all-new "Hybrid Water Heater" from GE. You may have seen these advertised during the Olympics too.

Well - I had to do a little research on this. First off - what the heck is a "hybrid water heater"? Beyond that, my question is always - does it save money? If so, how does it compare to other types of water heaters?

The "hybrid" water heater is essentially an electric water heater that utilizes heat pump technology to achieve high efficiency. I would say that's a pretty clever approach. I'm not sure about the "hybrid" label, but GE didn't get where they are because of bad marketing. I did find on the Energy Star site that this is a fairly recent technology and that there are a handful of these systems available from major plumbing suppliers.

It takes a little bit of digging, but according to the research so far the operational savings are real and compare favorably to other types of high-efficiency water heaters that operate via natural gas (or propane) - even tankless water heaters.

The upfront cost are a little higher though. The GE version retails for about $1600 and others appear to fall in the same range. When you factor in installation costs, you'll probably run a tad higher than a tankless system and maybe 1/2 the cost of a solar water heater (which, of course, has no operational cost unless a backup system is used).

Generally speaking, this technology looks like it could be a promising option for many homeowners, particularly if they do not have gas service to their home. I would certainly recommend any of my clients consider it if they are building a new home or when replacing an older system.

You can check out a couple of these new water heaters at the following websites:

GE "Hybrid" water heater
RUUD heat pump water heater