The unadjusted median home price for October was $64,000, down 8.6% from $70,000 in September. This trend is bucking the national trend where we have seen home prices inch upward since the end of the tax credit. However, the MVHR is ahead of nearly all national surveys by at least 30 days. Expect national home prices to fall as well in the near future.
Our inventory problems just won't go away. October set another record for this report when the Active Monthly Inventory (SAI) climbed to an adjusted 4,236, the fourth monthly increase in a row for the Absorption Rate Index (ARI) (an indicator of how long it will take to sell all the houses currently on the market) which now sits atop a new high of 14.1 months. The good news in all of this is that the unadjusted SAI did fall another 3.4% when compared to September. the second such drop in as many months. Therefore, look for the adjusted SAI to change direction in the first quarter of 2011.
Actual homes sold in October (252) was very disappointing, down 20.0% from September (315). Even adjusted for seasonal differences the 12 month Transactions Per Month Index (TPM) (a twelve by twelve month moving average of homes sold), continued its seemingly perpetual downward slide to 279. Last year in October the TPM stood at 309.
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 October, pending homes stood at 446. This is virtually unchanged from September's 458, therefore expect November closings to be on a par with October..
Said Jack Pearce Broker, RE/MAX Valley Real Estate, "The drop in home sales this summer was disappointing but not unexpected as the tax credit had the effect of bringing so many sales forward last spring. We also anticipated that the massive amount of inventory on the market due to REO listings would put a lot of downward pressure on home prices. However, we are still encouraged by the stability of signed contract activity that bodes well for some stability in home sales in the coming months."
"Interest rates are still hovering at record lows, but indications are that they will rise in the near term and on into 2011. Buyers, who have been waiting for a bottom to the interest rate slide should consider moving off the fence. There is also some indication that the tight grip on money from lenders may loosen in the opening months of 2011."
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"No one sells more real estate than RE/MAX."
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