Stalled Luxury Home Sales

A few months ago I gave you information about the upscale housing market in the Greater Cincinnati area.  Those areas included Butler, Warren, Hamilton and Clermont counties.  We discussed the Jumbo Mortgage Market, and how tight control on the interest rates for the luxury home market may be slowing the housing market, at the “grass roots” level.

I just put together an update with closed sales stats through November 15, 2009.  I thought you might like an update.

Single Family Sales: Butler, Warren, Hamilton and Clermont Counties.
Source: Greater Cincinnati Multiple Listing Service

It’s possible that once the current 23 pending sales do close, that we the “Over $700k+” sales will not come to the anticipated 138 total.  We will just have to see if those homes, in this buyer driven market, that are priced close to the $700,000 list price, do indeed sell over $700,000

More Cincinnati real estate information can be found at RealCincy.com

Our "leaf lawn"

Did you see that gorgeous full moon last night?  It was a beautiful sight.  I love the chilly nights and cool days.  The leaves are everywhere! I have to confess:  We don’t do a great job of raking at our house. Never have and probably never will. We just like the look of the scattered leaves. I am glad to see that several of our neighbors do too.  We aren’t the only house on the block with a “leaf lawn”.

Are you ready to take the time to look at year to date numbers? Let’s see how this year, through October 31, 2009, compares with the last few years, back to 2005.  These stats are, of course, from The Greater Cincinnati Multiple Listing Service. January 1 – October 31, single family closed sales, no auctions. The stats include the Hamilton, Clermont, Butler and Warren Counties.

                                                             January 1 – October 31 

See any trends here?  So far this year, closed single family dwelling sales are 394 units down from last year, but a whopping 5,476 from the 2005 high.  The list to sale ratio continued dropped with a “thud”, as buyers drove hard bargains. Combine the buyer’s “upper hand” approach to negotiations with sellers who are still over-pricing, and the L/S ratio widen.   The back story on these numbers you don’t see, are the number of homes that had to have 2 or 3 price reductions before a buyer wrote an offer that resulted in a closed sale.

If you want more detailed information about your specific neighborhood or price range, let me know! The RealCincy Group would be glad to prepare your personal report.

More Cincinnati real estate information can be found at RealCincy.com

Currently, there are 3 loan categories. Loans under $417,000 are considered conforming. Loans $417,000 – $729,500 are in the conforming jumbo category. Loans over $729,500 are considered super jumbo.  Jumbo loans remain quite costly compared to the interest rates for conforming loans.  Jumbo buyers with outstanding credit and plenty of available cash for a down payment are being viewed as higher risk borrowers than those seeking a loan with lower credit scores and minimal down payment funds.

Nationally, sales above $750k are down. A month’s supply of luxury home inventory, a.k.a, the absorption rate, continues to rise. This trend is occurring both nationwide, and in the Greater Cincinnati area. Check out these numbers, by year, sales over $700,000. All stats, of course, from The Greater Cincinnati Multiple Listing Service:
               2000 – 118          2005 – 334  ** Peak of the housing bubble**
               2001 – 141          2006 – 327
               2002 – 200          2007 – 288
               2003 – 211          2008 – 209
               2004 – 283          2009 – Nearly ½ way through the year, “drum roll please”!    29 !!

Overall, precious few of us will ever need to obtain a jumbo or super jumbo mortgage, so you might wonder if this affects us. The answer is, of course, absolutely.  As these jumbo mortgages become increasingly difficult to obtain, many luxury buyers are forced to liquidate their assets to make the home purchase. The rest of us call that “paying cash”. Even though paying cash for a $1,000,000 plus home may be “do-able”, many are reluctant to do so when they should be able to find long term, low interest debt like the rest of us, and keep the cash right where they have it now. Presumably, making more cash.  The reluctance is obvious, as the shear volume of luxury sales has plummeted.

Jumbo Loans are Difficult to Obtain

This current scenario is doing its part to slow our economic growth, and certainly is inhibiting the “chained cougar” known as the Housing Market. The Housing Market is ready, willing, but not quite able to lead us out of our current economic situation. Unleash the “chained cougar”, and history tells us the Housing Market will start running toward recovery, and most of the rest of the economic sectors follow.  The ability to not just purchase, but to re-finance the high rate jumbos into lower rate loans would certainly help to give a kick in the seat of the pants of this sluggish economy.  If these jumbo borrowers were able to reasonably re-fi and save an estimated $6000 – $15,000 yearly on interest payments, well, wouldn’t they?  Money then free to be spent on vacations, education, clothing, and re-investment, potentially jump-starting and feeding other areas of the market.

The National Association of Realtors is doing there part to stir the pot on this issue.  The NAR has proposed that Congress and the White House take a close look at making permanent some rules that have been temporarily put in place recently to loosen the jumbo market. We’ll see how it goes. In the meantime, it’s back to window peeking.

More Cincinnati real estate information can be found at RealCincy.com

There have been several key changes to the First Time Homebuyer Tax Credit; here are some of the highlights:

• The amount eligible for the tax credit is lesser of 10% of the cost of the home or $8,000. This is an increase from the July 2008 provision of $7,500

• Any single family residence will be eligible, as long as the homebuyer will be using it as his or her primary residence

• The tax credit reduces, or eliminates, the income tax liability for the year of the purchase. Any unused amount of tax credit is refunded to the homebuyer

• Be aware that there are income limits. The full amount of credit is available for individuals with adjusted gross income of no more than $75,000 annually. For those filing a joint return, the adjusted annual gross income can be no more than $150,000. This phases out above those caps at $95,000 and $170,000

• First time homebuyer (and homebuyer’s spouse) may not have owned a primary residence in the 3 years prior to purchasing the home in 2009

Here are some significant revisions to note:

• No repayment of the tax credit is required for home purchases on or after January 1, 2009 and before December 1, 2009.  This is a major difference from the tax credit offered to first time homebuyers in 2008

• If the home is sold within 3 years of the purchase, the entire amount of credit is recaptured on sale. This will apply only to homes purchased in 2009

• Home buyers can use state and local bond funding and still take advantage of tax credit

• All revisions are effective as of January 1, 2009

As always, it is essential to discuss your potential or impending home purchase with your tax advisor.

There are many fantastic reasons to purchase your first home – now you can add another one to the list: a sensible tax credit!  So give us a call or shoot us an email, and we will refer to you a mortgage consultant that will help you to assess your purchase power. Then, let’s get out there and boost the economy!

More Cincinnati real estate information can be found at RealCincy.com

What our GSP does:

• It does relieve you of the burden of owning 2 homes
• It does relieve you of the frustration of writing a contingency offer that the seller promptly rejects
• It does relieve you of the worry that someone else is living in “your home”.  You’ve combed through the homes on the market, you found “the one”. Now, it won’t get away from you!
• It does keep you from having to take out a bridge loan, or tap into a line of credit to buy the home you really want
• It lets you Relax. Your home is SOLD!    Get some sleep.

No Application Fee!  You Always Get Market Value, Maybe More!

• 120 Day Buy-out
• No Carrying Costs After the Sale.  If we buy it, we own it! No money held back from you.
• No Seller contribution. That means the seller of your new home doesn’t bump up the cost of sale to you!
Sounds Good Doesn’t It?  So, here’s the “fine print”:
What our GSP doesn’t do:

• No multi-family homes or farms. No modular or distant rural homes.
• No homes that are not served by public utilities
• No homes outside of our market area
• No short sales or homes that are heading toward foreclosure.

Case by Case, we will consider condo, townhomes, and homes with pools.

More “fine print”:
• The RealCincy Group assists you in the purchase of your new home. We can help you in both Ohio and Kentucky
• We all agree, in writing, to our first offering list price, subsequent price reductions.
• Your home is purchased, after 120 days, at 95% of agreed market value, minus normal seller expenses.

“Why would I agree to that?”  Because, if WE buy your home at that price, that mean no one else in the open market would.  You have, in effect, “won the lottery” and come out ahead! WE carry the home and all the expenses. WE do the painting & maintenance on the empty house after you move into and are enjoying the new home! WE take on the risk of marketing the home….You’re Done!

If you would like more details, give us a call! We will show you our 120 Point Comprehensive Marketing Plan. Combining this Revised and Updated Marketing Plan for today’s real estate environment, taking advantage of the Serious Seller’s Satisfaction Package, with the security of the Guaranteed Sale Program, you can stop worrying  ……… and start packing!

More Cincinnati real estate information can be found at RealCincy.com

To help get you comfortable with the Greater Cincinnati and Northern Kentucky area, The RealCincy Group with RE/MAX Unlimited would like to offer to you the latest copy of The Insider’s Guide to Cincinnati. This up to date, 400 + page book is full of really good information about the area that other incoming buyers have found extremely helpful! You’ll find information about shopping, local attractions, health care, senior services, and nightlife, where to find the libraries, tips on getting around town, and yes, plenty more. Go to our home page and place your secure order. IT’S FREE! And No Worries! No one but The RealCincy Group will see your information.

It’s a well known that most homebuyers, about 90%, begin their home search on the internet. Many homebuyers also find their trusted real estate advisor on the internet too. That number just keeps growing as time goes on! We want you to be comfortable with selecting the members of The RealCincy Group to assist you with your move to our city. Take the time to look through this website. Read the articles on Home Buying, Home Selling, Market Information, and see what we have to say about different areas around town. Use the links to read about what the city, and different suburbs, have to offer. You’ll get to know us as you read the articles. We can talk, in person, about your specific needs, the type of homes you prefer, whether you like a more urban or suburban setting, and anything else that concerns you.

Schools are a priority to many parents moving into the area. Understand that we want to be helpful. We can provide sources of information to you, so that you, as a parent, can decide if one system or another is “good” for your child.

You also probably want to make sure that we have experience taking care of incoming, relocation buyers. We have been trusted to work with Greater Cincinnati and N. Kentucky employers, large and small.

• Kroger • Procter & Gamble • Western & Southern Life Insurance • General Electric • Ford • Lens Crafter • Hill-Rom • Delta Airlines • Chiquita

This is just the start of a long, long list of companies that will read as a “Who’s Who” of Cincinnati employers. We’ve worked with Cendant Relocation, Wiechert Relocation, Sirva Relocation, Prudential, and Lexicon Relocation too. Don’t see your company here? That’s ok. We can meet or exceed ANY criteria that they would require. YOU DO have the right to request our services. We have never, ever, had requests for any of us denied.

Wouldn’t it be nice if you could just move the home you love here? Put it on a truck and bring it with you? Probably not going to happen right? So, it’s time to see what Cincinnati homes for sale look like.

You found our Real Estate search site to look for homes on your own at accesscincymls.com. That’s good….But we can do better than that!!  We can create your own personal “Market Monitor”, direct from the Greater Cincinnati or Northern Kentucky Multiple Listing Service that will show you all homes in the price range and areas of town that might interest you. You will have good, detailed information on each of the homes, including photos and a mapping function. The system will alert you via email when new listings enter the market, or if there are any price reductions. You can save the homes you like, and may want to tour. You can reject the homes you don’t like. Interesting???  You bet!  If a home happens to go under contract, once the sale is complete, you get to see the final sales price immediately! Just like we do! You will be a VERY  informed home buyer. Ready to get started? Give us a call, or send an email. We can talk about what type of home you may be looking for, and create your personal “Market Monitor”.

More Cincinnati real estate information can be found at RealCincy.com