Since early 2009, Housing prices have stabilized and valuations and affordability of homes have improved. This stabilization is primarily attributed to government housing policies, such as the home buyer tax credit, the federal government’s purchase of mortgage-based securities, and temporary mortgage modifications through the Home Affordable Mortgage Program. However, many economists believe that the housing market will experience another down turn in 2010 and into 2011 because of excess supply, increasing mortgage delinquencies, and the expiration of the temporary government housing policies which provided the housing market with a much needed boost.
The average listing price for homes in Cincinnati is down for the first week in June but not significantly. The median sales price in Cincinnati is up 2.3% over last year and the number of home sales increased 5.1%.
In my neighborhood, many homes are currently listed. While this is to be expected during the busy summer months, there is an excess supply of available homes, which is contributing to the depressed valuations. There is movement, however. The market appears to have picked up. Homes are selling. Some of them are selling quickly and at close to asking price (although asking price is still much lower than the peaks we experienced in the first half of 2006). Other homes, however, are languishing on the market for months in spite of aggressive reductions in price.
It is still a buyer’s market. Sellers are expected to have their homes updated, in top condition, and staged if they want to sell. Sellers often provide incentives to buyers such as home warranties and the payment of closing costs to further entice buyers. It is likely to remain a buyer’s market for quite some time.
Overall, the economic recovery appears to be moderating. The US economy faces several challenges in 2010 and 2011: weakness in labor and high unemployment, fiscal challenges at the state and local levels, vacant homes and unused industrial capacity, limited credit, uncertainty from the European crisis, slower growth, and further declines in housing prices. We have a way to go before things will improve. If you are a buyer the market remains favorable; if you are a seller be flexible and open minded as your first offer might be your best offer !