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

Let’s talk about sticky locks and keys that barely work. I hate sticky locks.  Most homeowners come in through the garage, and rarely use the front door.  Many people don’t even carry a front door key. I will suggest that if your home is on the market, and you are one of those never carry a key people, you might want to start. I’ve had buyers lock the door between the garage and the house, and the sellers couldn’t get back in.  I love getting that call….NOT!

Standing at the front door, before we even enter a home, the buyers are quickly forming an impression about what they will see once I get that door open. If I’m standing there struggling with a sticky lock, they have time to assess the cobwebs, faded paint, dirt smudges, and bad landscaping. Your showing starts with my buyers at the front door. We can form a quick opinion about what we expect to see before entering the foyer. If I am standing in the cold, uttering bad words under my breath, while struggling with the lock, that doesn’t reflect nicely on either of us.

First impressions count. I have buyers make up their mind about a home in the foyer. I have buyers that formed an opinion on the porch, either good or negative, and ultimately, what we see inside backs it up.

Let’s start off on the right foot with your showings. Buyers, in any price range, are precious right now. Don’t loose them over a few cobwebs.

• Paint the front door a color with a little “punch”.  Red, Black, Green. A little contrast. Not too “matchy-matchy”.  Wood stained doors are attractive too if it reflects the rest of the homes décor.
• Replace the hardware. No sticky locks. Check the door knocker and kick plate. They should be fresh and welcoming. Check the condition of the porch light fixtures. Make sure they are not weather-aged and full of dead bugs. Ick.
• Mailbox. Is it attractive? Place flowers around the pole. The house numbers should be clear.
• Plants. Holiday Wreaths. Flowers on a small table on in pots. Get some color at the door! Make us want to come in!
• Kill the cobwebs. Knock down those bugs. Sweep the walk. It’s dark early now so consider installing solar power lighting system so we aren’t tripping over the cat.

Remember….buyers have more than enough homes to choose from right now. Don’t send us to the next home with cobwebs in our hair!

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

With homes on the market for 6 months, a year, even two years, you may have started to hear talk about the market in terms of “Absorption Rate”.  The absorption rate is the time it takes to “absorb” an individual home into the market.  Another way to state the same concept is that the absorption rate is the answer to the question of “how many months of inventory is currently on the market?”  It’s simply a mathematical representation of supply and demand.  The computation can be simple or complex.  I’ve seen absorption rates calculated a couple of different ways.  You can have variables in time, or by zip code, by price range, or by subdivision.  Simply put: The total number of available homes, divided by the total number of sales the previous month, results in the absorption rate.

I think that for the best overall view, to have real meaningful results, we start a little wide, looking at the general area.  We then look at your neighborhood and price range.

The Greater Cincinnati Multiple Listing Service states that a “Balanced Market” is 4 – 5 months of inventory.  A seller’s market is a 1 – 4 month absorption rate.  A buyer’s market is a 7+ months of inventory.

Let’s take a look at the current absorption rate for a couple of Greater Cincinnati’s communities, with information current as of this writing.
Starting with the Union Township and Eastgate area in Clermont County:
Total number of available homes: 269
Total number of homes under contract in the last 30 days: 27

Absorption Rate: 269 / 27 = 9.96 months

Let’s take it to a neighborhood of homes valued about $175,000 – $220,000.
Total number of available homes: 45    45 Homeowners competing for the same buyer!
Total number of homes under contract in the last 30 days:  5   

Absorption Rate: 45 / 5 = 9 months  Definately a Buyers Market!

Driving up and around I-275, to I-75 checking on homes located in the Mason School District to compare.
Total number of available homes:  379
Total number of homes under contract in the last 30 days:  40

Absorption Rate: 379 / 40= 9.48 months

Let’s take it to a neighborhood of homes valued about $350,000 – $450,000
Total number of homes available: 37
Total number of homes under contract in the last 30 days: 5

Absorption Rate: 37 / 5 = 7.4 months  Still a Buyers Market!

Carefully considering the absorption rate for your area, combined with information about “DOM”, pricing strategy, & market exposure, your home will sell in a timely manner.  Now is not the time to “just see” if the precious few buyers will meet your price, IF your asking price is not supported by market statistics.  So, do the math. Are you willing and able to make 6, 8, 14 more house payments, or delay your move by  7, 9, 15 months?

If you have any questions about your specific neighborhood, just let me know. I would be happy to obtain that information, and forward it to you. The Real Cincy Group can assist with your sale in both Ohio and Kentucky.

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