August 2009 Homes Sales Statistics

Posted: 9/24/2009

Columbus Board of REALTORS®

Home sales, pricing and inventory remaining consistent
Average sales price increases slightly from July, down just 3.8 percent from ‘08

Home sales dipped slightly in August while inventory, average sales prices and days on market all showed important signs of a healthy housing market, the Columbus Board of REALTORS® said today.

August home sales were off by 7.9 percent compared to August 2008, with a total of 1,994 sold, while inventory and the average days on market both declined.

The average sales price crept up in August to $168,873, from an average of $167,039 in July and was down only 3.8 percent compared to August 2008.

“Affordable pricing, historically low interest rates and incentives including the $8,000 first-time homebuyer tax credit are all positively impacting the central Ohio housing market,” said Gary Parsons, president of the Columbus Board of REALTORS®.

“Pricing has remained consistent this summer while inventory and the length of time homes are for sale is trending downward, illustrating how competitively-priced homes are keeping central Ohio’s housing market balanced,” Parsons said.

With 14,554 homes on the market in August, it marked a 14.2 percent decrease from August 2008 and a 26.4 percent decrease from August 2007, illustrating the market’s continued correction

New listings were down 20.9 percent compared to last August.

The number of days homes are staying on the market has decreased significantly. At an average 92 days, it is at its lowest point since July 2006, which was also at an average of 92 days.

“The average sales price is down less than 4 percent compared to last year, while homes are, on average, selling quicker,” Parsons said. “These factors, combined with a dramatic drop in inventory have helped stabilize prices, and hopefully restore consumer confidence.”

The month’s supply number for August continued to remain favorable at 7.3, meaning that if no new homes were added to the market, it would take slightly more than seven months to sell all remaining inventory. A market is typically considered balanced with around a 6.5 to 7 month supply.

 

With just three months to go until the $8,000 first-time homebuyer tax credit expires, REALTORS® are making the final push to fence-sitters.

Now is the time to buy in order to have enough time to close by the Nov. 30 deadline and be eligible to receive the tax credit!
To be eligible, buyers may not have owned a home in the last three years, they must meet income requirements ($75,000 maximum for single filers and $150,000 for those filing jointly) and they must close by Nov. 30.

Buyers receive a credit of up to 10 percent of the home purchase price, up to $8,000. The credit does not have to be repaid and is available regardless of whether the purchaser owes taxes. For example:

• If you owe $3,000 in taxes and claim the $8,000 credit, you will receive a $5,000 refund.
• If you are due a refund of $1,000 and claim the $8,000 tax credit, you will receive a $9,000 refund. 
• If you owe nothing and are not due a refund, but claim the $8,000 tax credit, you will receive an $8,000 refund.

Where the tax credit stands now
While bills have been introduced in the U.S. House of Representatives to expand and extend the first-time homebuyer tax credit, possibly making it available to all buyers, those are not likely to be considered until next month.

Due to other legislative issues, including healthcare reform, congressional leaders have indicated they will not take up expiring provisions until later this year.

“Thus, extension and possible expansion of the $8,000 tax credit are unlikely to be considered until about October.

NAR encourages its members to complete pending transactions as soon as possible because of the potential for uncertainty as the Dec. 1 expiration date approaches,” a July 6 NAR update states.

The bills introduced so far include:
 

• H.R. 2562: Ron Kind (D-WI) and three bipartisan cosponsors. The bill extends the tax credit through Dec. 1, 2010, but limits the extension to individuals who served for three months or more in the military during 2009.
• H.R. 2606: Eddie Bernice Johnson (D-TX). The bill expands the credit to all purchasers, not just first-time purchasers and extends the credit through Dec. 31, 2010. Her bill also eliminates the repayment feature that applies to the $7,500, 2008 tax credit. 
• H.R. 2619: Kenny Marchant (R-TX). The bill makes the credit available to all purchasers and also extends the credit through June 30, 2010. The bill also provides a temporary $3,000 tax credit that has the effect of refunding the closing costs associated with refinancing a mortgage, so long as the refinanced amount was no greater than the outstanding balance on the mortgage being refinanced.

For more resources on the first time homebuyer tax credit, including frequently asked questions, legislative updates, marketing and information materials and more, visit the NAR first-time homebuyer site here.
 

Pending Home Sales on a Record Roll

Washington, September 01, 2009

Contract activity for pending home sales has risen for six straight months, a pattern not seen in the history of the index since it began in 2001, according to the National Association of Realtors®.

The Pending Home Sales Index,¹ a forward-looking indicator based on contracts signed in July, increased 3.2 percent to 97.6 from a reading of 94.6 in June, and is 12.0 percent higher than July 2008 when it was 87.1.  The index is at the highest level since June 2007 when it was 100.7.

Lawrence Yun, NAR chief economist, said the housing market momentum has clearly turned for the better.  “The recovery is broad-based across many parts of the country.  Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit,” he said.

“Other buyers are taking advantage of low home values before prices turn higher.  Nationally, the typical mortgage payment now takes less than 25 percent of a middle-income family’s monthly income to buy a median priced home, with payment percentages so far in 2009 being the lowest on record dating back to 1970.  As long as home buyers stay within their budget, mortgage payments will be very manageable,” Yun said.

NAR estimates that about 1.8 to 2.0 million first-time buyers will take advantage of the $8,000 tax credit this year, with approximately 350,000 additional sales that would not have taken place without the credit.  Buyers have little time to act because they must complete the transaction by November 30 to qualify for the credit.  Unless extended, contracts signed but not completed by that date will not be eligible – it is taking approximately two months to complete home sales in the current market.

The Pending Home Sales Index in the Northeast declined 3.0 percent to 78.8 in July but is 4.7 percent higher than July 2008.  In the Midwest the index slipped 2.0 percent to 88.1 but is 8.1 percent above a year ago.  In the South, pending home sales activity rose 3.1 percent to an index of 103.8 in July and is 12.0 percent above July 2008.  In the West the index jumped 12.1 percent to 112.5 and is 20.0 percent above a year ago.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said Congress needs to keep the momentum going.  “Even with a good recovery taking place, the market is not yet back to normal.  With a gradual absorption of inventory, we are on the cusp of a general stabilization in home prices,” he said.

“To ensure that housing has a broad stimulus to the overall economy and stays on sound footing, we’re encouraging Congress to extend the tax credit into 2010, and to expand it to all buyers of primary residences.  The faster we stabilize home prices, the fewer families will face foreclosure and the quicker credit can be extended to other sectors of the economy,” McMillan said.

NAR’s Housing Affordability Index² stood at 158.5 in July, below the peak set in April but is still 36.0 percentage points higher than a year ago.  The HAI is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income.

Yun expects existing-home sales to rise through the fourth quarter.  “Unless the tax credit is extended, no one should be surprised to see home sales drop in the first quarter of next year,” he said.  “However, the fundamentals of the housing market and the economy are trending up, and we expect home sales to generally pick up in the second quarter of 2010.  The buyer psychology may be shifting from, ‘Why buy now when I can purchase later,’ to ‘I don’t want to miss out on a recovery’.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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¹The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales.  In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months.  There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

²The Housing Affordability Index is a relative index where a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced existing single-family home, taking into account the relationship between median home price, average effective interest rate for loans closed on existing homes, and median family income.  The higher the index, the better housing affordability is for buyers.

The calculation assumes a downpayment of 20 percent and a qualifying ratio of 25 percent of gross income for mortgage principle and interest payments.  The index is a general gauge with conditions varying widely around the country.  Affordability conditions are lower for first-time buyers with smaller downpayments and less income.

Monthly publication of the index began in 1981 with annual data calculated back to 1970.

Existing-home sales for August will be released September 24; the next Pending Home Sales Index will be on October 1.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section.  Statistical data, tables and surveys also may be found by clicking on Research.