June brought little improvement to the Active Monthly Inventory (SAI) or the Absorption Rate Index (ARI). The Valley had 4,138 units on the market compared to 4,265 a year ago. The Twelve Month Moving Average stands at 13.2 months for the second month in a row. The absorption rate indicates how long it will take to sell all the houses currently for sale. A six month rate is considered balanced.
The Transactions Per Month Index (TPM) (a twelve by twelve month moving average of homes sold), retreated step for step from its May advance when it reached 310 homes sold to 306 in June, exactly where it was in April. The June raw TPM of 349 homes sold showed virtually no month to month gain over May's 347 units, and was well short of the 386 homes sold posted in May 2009. The April and May boost obviously driven by the Tax Credit, has clearly waned in June.
The expiration of the Tax Credit will also explain June's '"Pending Home Sales" (homes under contract but not yet sold) which is considered a leading indicator of future sales. June PHS is 393, 31.4 percent less than May's 573 (27% less than April's 540 and 17.9% less than March at 479). Virtually these same PHS numbers have been recorded across the nation. This despite the fact that mortgage rates have set new record lows the past three straight weeks. (At the time of this publication Freddie Mac reported the 30 yr. fixed-rate mortgage averaged at a record 4.58 percent, and the 15 yr. fixed-rate mortgage was the lowest ever on record at just 4.13 percent.)
Ed.: If the first six months of 2010 have proven anything, we now know that the engines of a solid housing market clearly are not fueled by artificial stimuli and low interest rates. That leaves us with jobs, or without jobs as the case is made in the Valley. Yes, the job picture in the Mahoning Valley is improving. But when our politicians, both local and national, are finished taking credit for reducing the Valley's average unemployment rate to 11.8 percent, (Mah.-11.4%, Trum.-11.9%, Col.-12.3%) maybe they'll realize that's it's still 11.8 percent - two full pints above the national average. It's time to quit treating the symptoms of our diseased economy, and remedy the cause.
►Read full Mahoning Valley Housing Report for June, 2010
