The number of homes sold in March soared past February’s mark by 35.7% and was up 6% from March of 2009. This puts the Transactions Per Month (TPM) Index at 308, up one tick from last month. This month on month increase, which was to expected given the sour weather the Valley experienced in February, is still tempered by another year on year decrease in the Transaction Per Year (TPY) Index. Couple this with an ever increasing Active Monthly Inventory (SAI) and we’ve got a market that can only be called fragile.
The sore spot for the Mahoning Valley continues to be it’s stratospheric absorption rate. Raw figures for March showed a 3.9% increase over February to 13.8 months. This put the Absorption Rate Index (ARI) at 13.1 months, another all-time high for the index which a year ago sat at 12.0 months. There appears to be no end in sight as a new wave of foreclosures is expected in the coming year or so.
A very bright spot, however, does shines in March’s pending homes figure of 479. This is 156 units over the pending homes sales in February, an increase of nearly 33%. A high pending sale figure is usually seen as an indicator of increased future sales. We don’t know from our data, however, how many of those pending sales are ‘land contract’ sales which won’t close for a year or so, or ‘pending short sales,’ which may never reach the closing table.
Many economists believe our reviving housing market is skating on very thin ice. The federal tax credit program will end at the end of April, the Federal Housing Administration is tightening the screws on its minimum standards, and the Fed plans to end it’s 1.25 trillion dollar mortgage-bond-purchase program in just a few days. This perfect storm of lower incentive to buy, tighter credit, and increasing interest rates may be a looming disaster for our effete housing market here in the Valley.
Other economists think, however, that the psyche of America’s consumer has changed. Gains in the stock market and elsewhere have made them feel that the recovery is under way and it’s safe to go out and spend again. Even here in our own Valley we have seen a net gain of over 4,500 new jobs since January 1, with more on the horizon.
Will improved consumer confidence and lower unemployment be enough to see us through? Stay tuned!