Yes, the inventory of new homes for sale is sinking compared to year-ago levels. For-sale inventory of single family homes and condominiums in Greater Cincinnati shrank 10 percent in April from the year before to 8,295 listings last month, the most recent information available, according to the realtors group.
But last year, and for several years before that, the market was still cleaning up the glut of foreclosed and bank-owned homes for sale in the midst of a financial crisis.
The number of homes for sale over the last decade peaked in 2007 with over 16,000 listings on average that year. Fewer property owners — including homeowners and banks — have been placing sale signs in their yards since then. Inventory averaged 13,820 home listings in 2010 in the region including Butler, Clermont, Hamilton and Warren counties, an amount that has since declined to 9,315 listings on average in 2014.
Before that, in the lead up to the Great Recession that began in December 2007, was the culprit behind the crisis: a boom of new home construction and sales that drove prices upward, causing some people to borrow more than they could afford to purchase real estate. Inventory also steadily climbed every year from 2001-2007, a growth rate topping 100 percent during that time, according to the MLS statistics.
Inventory levels today in the range of 8,000 listings available in Greater Cincinnati are on par with levels last seen in 2001 and 2002.
“There is no such thing as normal in the housing market,” said Mark Meinhardt, president/broker of Star One Realtors Inc., with offices in Fairfield, West Chester Twp. and Cincinnati.
“Either you’re a buyer that can’t find a house that you want because there’s not enough inventory, or if there’s too much inventory, you’re a seller that can’t get their price or can’t sell their house because there’s too much,” Meinhardt said.
Shrinking inventory has helped raised the average price across the region for about 2,006 homes sold to $172,143 in April. The price increased 3.4 percent from the year before. And the sold price has grown year-over-year for 38 consecutive months in the Cincinnati market.
Inventory has averaged 7,936 listings year-to-date. In April, it was less than the five months supply of homes that realtors consider a balanced market.
But inventory isn’t the only factor affecting prices.
Also helping lift the sold price is the units that are selling are less distressed, meaning there are fewer foreclosures and short sales selling and discounting the price, Meinhardt said.
“It’s a good thing if you’re trying to sell right now because lack of inventory tends to create urgency for the buyers and also it helps the sales price increase,” Meinhardt said.
Inventory levels, and competition among buyers and sellers vary from community to community as well, said Tim Skinner, vice president and home lending sales and service manager for Huntington National Bank in the Cincinnati area. As a lender, he’s seeing more competitive offers in the southern Dayton and northern Cincinnati suburbs such as Springboro, than other neighborhoods.
“It’s not a consistent low inventory, high competitiveness in every part of the market,” Skinner said.
Due to these current housing market conditions, buyers are advised to get pre-approved for a home loan, he added.
“More and more lenders are requiring potential buyers get pre-approved so they know what they can afford… and so they can act quickly,” he said.
“We’d like to see a little bit more inventory so it’s more expansive of an overall market,” he said. “I definitely don’t think the market’s too overheated where it’s negatively affecting appreciation as a whole.”
Meanwhile, tax and mortgage foreclosures in Butler County sank to a more than 10-year low in 2014. Last year, 1,482 homes were foreclosed across the county, according to the Butler County Clerk of Courts Office. That’s down 53 percent from the 3,165 homes foreclosed in 2010 following the Great Recession. In 2004, there were 1,953 foreclosures.
In April, 393 homes sold in Butler County alone for an average price of $166,051, according to the realtors association.
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