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If you are thinking of Selling, NOW is the Time!

by The Cincinnati Team

If you are thinking of Selling, NOW is the Time!

Seasonality in Real Estate: How Weather and the Time of Year Affect Housing!

Weather and the time of year have a big impact housing activity, and in every housing market there are times of the year when fewer homes sell. For most, that time of year coincides with the winter months, and in much of the U.S., that’s the case right now.

But no matter where you live, it’s important to know how seasonality affects the housing market. So let’s look at the current housing numbers, how seasonality affects them, and what it means for you if you’re looking to buy or sell.

With few homes available, sellers are in pole position

Last year, limited inventory dominated the headlines for the real estate industry, and that trend looks to continue this year. According to the National Association of Realtors (NAR), inventory dropped 12.3 percent from November to December, falling to 3.8 percent lower than December 2014. That equated to just a 3.9-month supply of homes.

Generally speaking, a 6-month supply of homes (meaning it would take six months at the current sales pace to sell all the homes on the market) represents a balanced market, one in which there are enough homes to meet demand. For much of 2015, inventory remained well below a 6-month supply, and will likely remain so for 2016.

Why is inventory so constrained? Part of the sharp drop in December is due to the seasonal slow down in many states. Cold weather and holidays keep many buyers out of the market and many sellers waiting for demand to pick back up. Additionally, new home construction came to a standstill when the housing market crashed, so there are fewer new homes available. Existing home inventory is low as well. A combination of factors, such as locked-in low interest rates and a sense that home prices will continue to increase, are keeping current homeowners from listing their homes.

If you’re thinking of selling, this market is very much a seller’s market. When inventory is scarce, buyers are forced to compete over the few homes for sale. Homes are selling faster, and in many markets bidding wars drive home prices up well above asking. At the very least, you’ll be in a strong negotiating position.

Economic Conditions and Home Affordability Continue to Sideline Buyers

For buyers, the market is tough, and the low number of first-time buyers illustrates just how tough it is. In a separate study conducted by NAR, first-time homebuyers in 2015 made up the lowest share of the market in nearly three decades.

Many factors are keeping first-time home buyers sidelined. Despite a strengthening economy and job growth, wages have remained relatively stagnant. At the same time, rent prices have skyrocketed and continue to rise. Combined, these factors are preventing millennials from saving enough for a significant down payment.

At the same time, home affordability continues to suffer. Home prices have risen quickly over the last three and half years, again outpacing wage and job growth. Prices are expected to rise more modestly this year, somewhere around 4 to 5 percent.

These factors combined with limited inventory are making it difficult for buyers to find the home they want at a price they can afford. However, if you’re thinking of buying, it is important to start looking sooner rather than later…

Mortgage Rates& Increasing Finance Accessibility

In February, mortgage rates remain near record lows. According to Freddie Mac’s Mortgage Survey, the average mortgage rate for a 30-yr FRM was just 3.65%. Despite tough market conditions, these rates present an excellent opportunity if you’re thinking of buying.

In a piece of good news for buyers, it should be easier to get financing in 2016. Fannie Mae's fourth quarter 2015 Mortgage Lender Sentiment Survey™ shows that lenders expect to ease mortgage credit standards for GSE-eligible loans and government loans over the next three months, opening the door for more buyers to get financing.

If You’re Thinking of Buying, Act Sooner Rather Than Later

If you’re thinking of buying a home, it’s important to act sooner rather than later. As the year goes on, affordability will continue to suffer. With home prices expected to increased around 4 to 5 percent this year and mortgage rates expected to rise to around 4.5 percent, the longer you wait to buy, the less home you’ll be able to afford. Even small increases in mortgage rates and home prices can have a large impact on your future monthly mortgage payment!

April Housing Statistics

by The Cincinnati Team

CINCINNATI'S HOUSING MARKET IMPROVES

Kevin Kelly, Cincinnati Area Board of Realtors President, said "We continue to see home sales increasing and home prices continue to see positive momentum.  Fewer homes on the market and low interest rates continue to attract more buyers."

 

Closings for April were up 24% and the sale price is up 5.5%.  For the past 22 months, Cincinnati has seen increased sales.  The inventory of homes for sale has declined 15% over April a year ago.  This means that if priced correctly and in good condition, homes are likely to sell faster.

 

EXISTING-HOME SALES UP 9.7%

Existing-home sale activity is up 9.7 percent over the 4.53 million-unit level in April 2012, according to a recent report by the National Association of REALTORS (NAR). Existing-home sales, which include recently purchased single family, townhomes, condominiums, and co-ops are currently on pace to reach 4.97 million annual units, up from 4.94 million in March.

Existing Home Sales By Region

NAR chief economist Lawrence Yun said the market is in full recovery. "The robust housing market recovery is occurring in spite of tight access to credit and limited inventory. Without these frictions, existing-home sales easily would be well above the 5-million unit pace," he said. "Buyer traffic is 31 percent stronger than a year ago, but sales are running only about 10 percent higher. It’s become quite clear that the only way to tame price growth to a manageable, healthy pace is higher levels of new home construction."

Current existing-home sales are at their highest pace since November 2009, when the home buyer tax credit was available. Total monthly sales have improved over their year-ago levels for 22 consecutive months, while prices have risen 14 consecutive months over their year-ago levels.

Ohio Home Sales for February, 2013

by The Cincinnati Team

Ohio Sales Activity Continues to Show Improvement       

The number of homes sold in Ohio jumped more than 10 percent in February, as the market posted gains in activity for the 20th consecutive month, according to the Ohio Association of Realtors. According to OAR President Thomas Williams, "Buyers are taking advantage of the ideal conditions prevalent in today's marketplace, with historic low interest rates and attractive pricing."

Additionally, inventory of homes for sale remains at all-time lows and the number of days on the market continues to shrink.  Locally, the number of listings is down -6.25% and the median list price is down -3.57%.

Housing Outlook for 2012

by The Cincinnati Team

The most common question we are asked is “How’s the Cincinnati housing market?”  We are constantly keeping our ears to the ground and want to provide you with both the macro and micro view of the economic issues of housing.  If you are looking to buy or sell, remember that all housing is local, so it is most important to understand the sales picture in your immediate neighborhood.

 
It seems as though the housing statistics are pointing to the end of the housing downturn and that the market is about to turn the corner.  Why do we say that?  Major economic statistics are exhibiting a level of stability and positive trends are showing up:
 
Households are gradually paying off debt.
Credit is more accessible.
Consumer confidence has rebounded significantly since June 2011.
Employment trends appear to be improving.
Builders are seeing increased demand to build new homes
Affordability is rising because of rock-bottom interest rates and housing price declines.
 
Indications show that the broad economy and the housing market are both moving towards positive growth.  Some issues still affect the outlook…slow global economic growth, possible recession in Europe, and fiscal and political uncertainty here at home.  However, overall we see improving prospects for 2012.
 
Statistics are positive for buying here in Cincinnati.  The latest analysis was produced by the National Association of Homebuilders. Assuming a 10 percent downpayment and mortgages at "today's mortgage rates", 75.9% of all homes sold nationwide were affordable to home buyers last quarter. Even better, Cincinnati homes were affordable by 88.4% of Cincinnatians.earning the area's median income.
 
The outlook indicates gradual, but steady, improvements in the economy and the housing market because of the low interest rates and brightening job market.  Inventories have been going down.  Contact the Cincinnati Team directly and we will research the micro view of your homes’ neighborhood. Mary Elsener and Saralou Durham are here to meet your housing needs and wants!
 

April Housing Market Results Reported

by The Cincinnati Team

Existing-Home Sales Report                                              

Existing-home sales slowed slightly during the month of April according to a recent report by the National Association of Realtors (NAR). Existing-home sales, which include recently purchased single family, townhomes, condominiums, and co-ops, fell by 0.8 percent to a seasonally adjusted annual rate of 5.05 million units nationally.

Existing Home Sales By Region

Lawrence Yun, NAR chief economist, believes the market can do better. "Given the great affordability conditions, job creation and pent-up demand, home sales should be stronger," he said. "Although existing-home sales are expected to trend up unevenly through next year, unnecessarily tight credit is continuing to restrain the market, along with a steady level of low appraisals that result in contract cancellations."

Total housing inventory increased 9.9 percent by the end of April to 3.97 million existing homes for sale. This represents a 9.2-month supply at today's current sales pace. Freddie Mac reported the national commitment rate for a fixed-rate conventional 30-year mortgage was 4.84 percent in April, unchanged from the month before.

Good Homes will Go Fast!

by The Cincinnati Team
Good Homes Go Fast                                               

Cincinnati homesEven in a challenging market, good homes go fast! Smart sellers are realizing that a proactive selling strategy can go a long way in getting their home sold, even when inventories are high. Here are three tips for today’s sellers:

  1. Price your home right. Markets change, so don’t be influenced by last year’s selling activity and home prices. Buyers will evaluate your home based on what others are selling for today, so make sure you know the market and price your home accordingly.  Every neighborhood has its own local response to prices...rely on an expert, not a friend for pricing.
  2.  
  3. Make your home shine. Buyers like to envision a home they can move right into. Clean carpets, fresh paint, and a nicely landscaped yard can go a long way to make perspective buyers feel at home.  Selling a home is like being part of a beauty contest today...make yours the most beautiful.

Anticipate the selling season. Many sellers wait for the market to pick up before they place their home for sale, but smart sellers anticipate these seasonal adjustments and list their homes early in the sales cycle. Give yourself the best opportunity by placing your home on the market before everyone else does!

Whether you’re looking to sell today or are thinking of selling tomorrow, please feel free to call and ask for a computer analysis of our recent market activity. We would be more than happy answer any questions you might have.  Be sure to ask us about the information we have that will help you stage your home to sell.

Cincinnati Named One of "America's Most Undervalued Cities"

by The Cincinnati Team

Local Market Monitor, a North Carolina firm that provides investors with analysis on local conditions, has named Cincinnati to its Most Undervalued Cities List. Interestingly, we are one of five Ohio cities on the list of 15 that are undervalued.

The company looks at economic and population growth, construction costs, vacancies, household income and interest rates.  Employment and job sector growth figure into the equation heavily.  They also evaluate metropolitan areas where buyers would tend to pay more for homes because it is considered a more desirable location.  San Diego, because of weather and ocean-side location, would have such a buyer's premium.

Two cities received their worst possible rating, "Frankly Dangerous".  Those were Las Vegas (home prices down 52%) and Orlando (home prices down 39%).  The other eight overpriced markets were Anaheim, San Jose, New York City, Suffolk-Norfolk (Long Island), NY; Los Angeles, Portland, Edison, NY; and Poughkeepsie NY.

Las Vegas is undervalued by 28% and the most undervalued market, but bad news on its employment picture and overbuilding causes it to be rated as the worst market. 

Cincinnati has been undervalued by 15%, but our employment expectations and mix of job concentration ranks it as as a good value, with prices undervalued.  Good news for us! 

Cincinnati Housing Affordablility Rankings Released

by The Cincinnati Team

Home Affordability Rankings Released                             
Good News Cincinnati Buyers...more that 72 percent of homes sold between April-June, 2010 were affordable to families earning the national median income.  This data tracked by the National Association of Home Builders indicates that this is the second highest reading in the survey's history.

Be glad you don't live in the highest priced areas...10 out of 13 of which are located in California.  The highest markets are in New York City, White Plains, NY and Wayne, NJ. There, only 20% of homes are affordable to families eaning the local median income. The lowest priced markets are Monroe, MI; Bay City,MI; Mansfield, OH; Springfield, OH and Syracruse, NY.

You may be wondering how they determine these numbers.  The home affordability index is calculated based on the combination of home prices and mortgage rates.  And, of course, it makes your home more affordable.

Cincinnati is especially affordable as well.  We currently rank 46th nationally.  88.4% of our homes are considered "affordable"...meaning that the family earning the median income can afford to buy a home.

Cincinnati Housing MarketA North Carolina firm, Local Market Monitor recently evaluated real estate markets with over 200,000 residents.  They were measuring the potential for price appreciation for conservative investors. It looked to identify the best metros where prices are stabilizing.  It also looked at markets that are still falling and that were dangerous for conservative investors.

Covering over 300 housing markets throughout the U.S., Local Market Monitor provides the complete home price forecast you need to evaluate risk for your real estate portfolio.  Whether you are looking to invest, sell or just manage your current portfolio, Local Market Monitor makes it easy to identify which housing markets are over or under valued and what is projected to happen to home prices over the next 12 months to 3 years.

Cincinnati was named number 8 in their evaluations of Most Promising Areas for Conservative Investors.  The top city was Tulsa, Oklahoma, followed by Oklahoma City, Oklahoma, and San Diego-Carlsbad-San Marcos, California. Of the top 10 most dangerous areas for investment, 6 cities were in Florida.

Update on Hyde Park East Classification in Multiple Listing Service

by The Cincinnati Team

The Hyde Park East Committee is on the agenda for the Oakley Neighborhood Council meeting on Tuesday, August 3 at 6PM at the Oakley Community Center in Hyde Park Plaza...do we all realize how intertwined these neighborhoods are anyway...meeting at the Oakley Community Center in Hyde Park Plaza, oh, my!Hyde Park East

So what's the beef?  In the Fall of 2009, the Multiple Listing Service of Cincinnati began classifying most streets in Hyde Park East as being located in Oakley.  Hyde Park Neighborhood Council had always considered the area as part of Hyde Park and for 40 years, the MLS had classified the area as Hyde Park.  Residents have 400 signatures on a petition to bring their area back under Hyde Park in MLS and with the Neighborhood Council.

How did this happen?  MLS started to enforce the areas using CAGIS(Cincinnati Area Geographic Information Service) maps.  CAGIS says that they did not change the boundaries, but followed the Cincinnati Community Council Boundary Map.  In the research done by the Hyde Park East Committee, the area is always shown as Hyde Park.  If you want to see the video they put together for the Oakley meeting, go to www.hydeparkeast.com

The committee under the leadership of Jeff Orschell, Ward Smith, Terry Eschmeyer and Mike Mathias, have carefully researched the history of the area.  They have been given time to make a presentation at the Oakley Community Council meeting.  Show your support by going to the meeting...a strong turn out will let them know how important this issue is to the residents of the area.

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