Boardman, September 2, 2010
- RE/MAX Valley Real Estate in its monthly Mahoning Valley Housing Report
for August, 2010 reports that post tax credit, the MVHI Median Price Index (MPS)
( a 12 month moving average of the monthly median price) for a home here in the Valley saw a decline in August for the second month in a row. The decline, however, was modest, just -0.5 percent to $64,565 from $64,898 in July. The unadjusted median price of $58,000 actually increased over the unadjusted median price of $54,200 in July. Prices, therefore are holding their own.
The decline is explained in part by the number of homes currently active in the market which saw new MVHR highs. August saw the Active Monthly Inventory (SAI) climb to an adjusted 4,181 homes currently for sale. The unadjusted data, however, set new highs. August's inventory of homes for sale was 4,784, an increase of 1.7% over July's 4,702, and 14.3% higher than August of 2009. The Absorption Rate Index (ARI) which is an indicator of how long it will take to sell all the houses currently on the market continued its climb to a new high 13.7 months. This is the highest monthly rate ever recorded by the MVHR for the second month in a row. Likewise, the unadjusted data for July saw an absorption rate at a whopping 16.5 months, a 3.9% increase over July and the highest raw rate ever recorded by the MVHR.
Homes sold in August (286) outdistanced July (248) by a heady 15.3 percent. It wasn't enough, however, to keep the Transactions Per Month Index (TPM) (a twelve by twelve month moving average of homes sold), from falling slightly to 292, a -2.0 percent slip. Last year in August the Valley sold 359 homes.
Pending Home Sales (PHS) can now be seen on the MVHR Data Summary along with the Transactions Per Month Index. Homes under contract but not yet sold are known as 'pending homes', and are considered a leading indicator of future sales. In July, pending homes surged to 520, 35.8 percent more than the 383 reported in July. This is good news and points to more closed sales in September, and possibly a reduction of the number of homes on the market.
Looking Forward: Last month we said that an increasing numbers of foreclosures and the economy's failure to produce jobs will likely exert downward pressure on home prices and home sales for some time to come - despite record low mortgage rates and home prices. This situation has not changed and is unlikely to change in the near future.
It's interesting to note, however, that housing, which has lead the way out of nearly all past recessions is lagging so far behind in this one. It has always been housing and its ancillary industries that have provided the jobs to move the economy forward. Just in the construction sector alone, 2,275,000 jobs have been lost since January of 2007. Without a strong housing market the unemployment rate of 9.5% will remain the 'new norm.'
It's also interesting to note, that when the homebuyers tax credit was in full gear the GDP the first quarter was up 3.7 percent. Without the tax credit it fell to an anemic 1.6 percent the second quarter. Clearly the incentive to buy homes in the first quarter had a dramatic effect across the whole of the economy. Locally, we saw nine straight months of significant median home price increases until the month of July when the credit ended.
As our Congress is gearing up to pass its $Billion 'Jobs' bill which we know from past experience will have little or no effect in creating jobs that provide for real growth, perhaps it would make more sense to bring back the homebuyers tax credit instead, which we know had a very positive effect. Although, it can be argued that commodities such as housing, should be left alone to seek their own level, if we're going to 'waste' billions of dollars trying to invent unproductive jobs, a homebuyers tax credit would provide taxpayers with a greater return on their investment by again allowing housing to put America back to work.
►See full Mahoning Valley Housing Report for August, 2010
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About the Mahoning Valley Housing Report
The Mahoning Valley Market Report is a monthy presentation of the latest housing statistics for the Mahoning Valley of Ohio (Mahoning County, Trumbull County, and Columbiana County) as measured by our market report indexes (MVHI's). The six MVHI's are twelve x twelve month moving averages of each key indicator. These indices are provided on a best-efforts as-is basis as a free service. The statistics contained in the MVHR are derived from data obtained from the Northeast Ohio Real Estate Exchange, an Ohio Association of REALTORS® Multiple Listing Service to which RE/MAX Valley is a subscriber. The MVHR is not audited and may may not be free of statistical, estimation, or omission errors. RE/MAX Valley Real Estate, Boardman Ohio makes no claim regarding the usefulness or implications of the indices.
About RE/MAX Valley Real Estate
RE/MAX Valley Real Estate, located in Boardman, Ohio, is an independent, locally owned, and locally operated franchise of RE/MAX Int.. It was founded in 2000 by top producers for top producers. Their agents rank number one in the Mahoning Valley for average associate production and average volume of sales. RE/MAX Valley services the real estate needs of the Mahoning Valley, Trumbull, Mahoning and Columbiana Counties. "No one sells more real estate than RE/MAX."
For more information please visit www.OurValleyHomes.com.
RE/MAX was founded by Dave and Gail Liniger in 1973, who still manage the company’s day to day operations. From a single office in Denver, Colorado, RE/MAX has grown to be a global network of nearly 100,000 Sales Associates in more than 70 countries.
Remax.com offers consumers all home listings in thousands of U.S. cities and towns and is consistently ranked among the most visited real estate web sites.
RE/MAX has been honored as the leading real estate franchise for nine of the last ten years in the oldest and most respected ranking, “The Franchise 500 Survey,” published by Entrepreneur Magazine.
RE/MAX International is proud of its Premier Community Citizenship, which has raised over $100 million for deserving organizations like Susan G. Komen for the Cure, Children’s Miracle Network and The Sentinels of Freedom Foundation.
For more information please visit www.remax.com or www.joinremax.com