Saturday, February 27, 2010

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.

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