The Cincinnati Area Board of Realtors just released their statistics for November of 2009.  The number of sales made in November 2009 increased by 33.4% when compared to November of 2008.  It was the sixth straight month of increased sales compared to the same time last year.November 2009 Number of Home sSales

Why?  Low interest rates and the push to get in on the home buyer tax credit program sponsored by the government as part of the stimulus plan can be credited for the increase in home sales.  Because the credit was set to expire at the end of November, pending sales increased in October, trying to reach closing before that November deadline.

Of course, now the credit has been extended to included homes with purchase contracts signed by April 30, 2010 and closed by June 30.  It was also expanded to include homeowners who have lived in their homes for five consecutive years during the past eight year.

Mortgage rates averaged 5.07% for a 30-year fixed mortgage in November compared to 5.25% in 2008.  However, last year we were in the worst of the credit crunch and all loans were difficult to get.key in lock

Inventory is also one way to look at the strength of the housing market.  Last year in the Cincinnati market, there were 12.5 months of inventory.  At the end of November 2009, there were 7.99 months of inventory.  That improvement shows an overall improvement in the market.  However, since the National Association of Realtors indicates that six months is a balanced market, there is still pricing pressure on sellers.  This should be looked at carefully for each local area, since it varies from neighborhood to neighborhood.

 Looking Forward

1. The Federal Reserve has signaled that they will soon stop holding down interest rates.  Even a small increase in rate will lower your mortgage qualification amount.

2. The supply of homes is decreasing, making it harder to find the perfect one.

3. The April 30th deadline for a purchase contract is not really very far away, when you consider the time it takes to find a home you love.  Do you want to risk losing the $8000 or $6500 tax credit you may qualify for?

4. The Federal Housing Administration is indicating that they will probably raise the down payment requirement from 3.5% to 5% sometime in 2010.  Since this is the most commonly used loan program, the impact could be significant, requiring you to save more money and stay in rental housing even longer.

Our Recommendations

  • Now is the time to meet with a loan officer to check you credit and find out what kind of mortgage could work for you.
  • Sit down with Mary or Saralou to learn all about the purchase/sale process.
  • Start researching neighborhoods that might be possibilities.

Now...is a Great Time to Buy a Home!