Cincinnati Real Estate Market – Is It Good or Bad?

How is the Cincinnati Real Estate market?  This is a complicated question – but for the most part it depends on who you are.

Life is good for first time home buyers who have good credit and a down payment.First time home buyers now represent about 46% of new and existing homes buyers according to HouseHunt’s “Current Market Conditions” random survey of member agents.   This is 7 points higher than the fourth quarter of 2007.   This makes sense, because first time home buyers do not have to sell a home to buy a home.  In addition, price declines and lower interest rates have made homes more affordable. 

Life is ok for Cincinnati home sellers when their home is properly priced (yes a lower price than just last year) and it is in good condition.  In Cincinnati we continue to see homes that are in very good condition with a good price sell quickly.   It is a buyers market, but buyers are buying homes.  

Life is rough for new home builders and for sellers who can not afford to reduce their price.

The good news in the Cincinnati Real Estate market is the inventory of homes for sale continues to drop. In April of 2007 there were 16,347 homes for sale in Cincinnati.  In April 2008 there were 15,519 homes for sale in Cincinnati.  So there was a 5% drop in the number of homes for sale.  This is a good trend and it will hopefully lead us into the market bottom. Many sellers are just pulling their listings from the market and waiting it out.

The bad news is the number of homes sold also continues to drop.   January to April of 2007 there were 1,968 homes sold in the Cincinnati market.   January to April of 2008 the number of homes sold in Cincinnati dropped to 1,635.  This is a 16.9% drop in the number of homes sold – ouch.   There are many reasons why there are fewer buyers.   Common reasons include:

• Buyers can’t sell their existing home to buy a new home
• Buyers are waiting till the market turns around.  Human nature is to sell when the market goes down and buy when the market is going up.   Yup – not very smart, but it is the way the world works.
• Credit is still tight or non-existent for people with poor credit and no down payment
• Foreclosures continue to weigh down the market

I will post May’s numbers as soon as I get them.

All the Cincinnati Real Estate market number are from the Greater Cincinnati Multiple Listing Service Monthly and Yearly Updates.