Regional number of home sales show promise

Posted on by Listify Me

By Chelsey Levingston,

Staff Writer

9:42 PM Wednesday, March 21, 2012

A pick-up in home sales and fewer foreclosures coming to market are leading to new lows in the supply of homes for sale, and that has helped stabilize home prices, said realtors and real estate experts.

The change is one of the more positive signs in the housing market in recent months, said National Association of Realtors spokesman Walter Molony. Until now, prices had failed to recover from the housing slump and have contributed to lower property values, Molony said.

The Cincinnati Area Board of Realtors said more new homes were put up for sale in the first two months of the year, compared to the same time last year — an increase of 3.5 percent in new listings submitted to the board’s Multiple Listing Service.

Due to a 18.5 percent sales increase, that put the supply of unsold houses at the end of February at 9.6 months, the estimated time it would take to sell all the available houses at the current sales pace, according to the Multiple Listing Service of Greater Cincinnati. A year ago in February, the inventory represented a 13.3 month supply.

A total 2.43 million homes were available for sale in February nationwide, down approximately 19 percent from a year ago. Unsold listed inventory has trended down from a record 4.04 million in July 2007, according to National Association of Realtors.

“A year ago, very much a buyer’s market. Today it’s much more in balance,” Molony said. “That speaks well for the future.”

A balanced housing market is considered to have enough supply of homes for sales to last six months. At that point, demand better matches the supply, Molony said. In 2004 and 2005, the housing market had too many buyers for the houses available, which increased sales and prices above sustainable levels, Molony said.

The housing market is important to a local economy because as the market stabilizes and prices stabilize or pick up, that builds homeowner wealth, said Mekael Teshome, an economist with PNC Financial Services. Ohio is one area for which Teshome does economic forecasting.

Homeowners with more equity are more likely to consume, Teshome said.

“Overall what we are seeing is the inventory of homes for sale is shrinking,” he said. “We look at that as a precursor, a necessary step, for homebuilding to pick up.”

The risk that there could be more foreclosures on the way is combated by provisions of the $25 billion foreclosure fraud settlement reached with the nation’s top five lenders in February, he said. Part of that deal was for lenders to look for ways to avoid foreclosures.

“That risk is contained,” he said.

Tom Hasselbeck, a Fairfield Realtor and president of the Cincinnati Area Board of Realtors, said “unless we have an abundance of new listings, I think it (inventory) will continue to decrease. The demand is certainly there.”

In February, 1,154 single family homes and condos were sold in the Cincinnati area, including Butler and Warren counties, up 18.5 percent from the same month last year when 974 homes were sold. Average sales prices were down 9.1 percent to $130,001, according to Ohio Association of Realtors.

February is normally a slower sales month.

Total listings submitted during the full year 2011 reached 35,905, down 10.3 percent from 40,046 in 2010, according to the Multiple Listing Service of Greater Cincinnati. Nationwide sales of 4.59 million in February were higher than a year ago of, seasonally adjusted. Total U.S. supply currently represents 6.4 months.

Contact this reporter at (513) 705-2551 or clevingston@coxohio.com