Is the Real Estate Market Good or Bad?

Real estate is local.  Everyone understands that.  Yet, with all of the national media attention on the “National Housing Market” it is easy to lose site of how local real estate actually is.  I agree with Jonathan Miller that There is No National Housing Market and it is more important to focus on the market where you live and/or where you will be moving.

In the end, an actual good or bad market is determined by the collective confidence of the local consumer that lives or wants to live in that area.  In other words, do people have confidence that purchasing a home in that area is a good investment.  The concept of consumer confidence on a real estate micro market can be determined by many factors such as home price trends, governmental trends, building trends, schools, crime, proximity to amenities, etc.

In the Greater Cincinnati area we have seen a slow down in the number of monthly real estate transactions occuring this year versus 2007.  According to statistics compiled by the Ohio Association of Realtors, the Greater Cincinnati Area has seen an 11.6% decline in number of properties sold in the period of January - October 2007 versus the same time period in 2006.  Even though this is a significant decline in inventory turnover, the average selling price for the area has only dropped by 2.6%.  This has lead to a large increase in the number of properties for sale on the market and therefore longer days on market for a seller to sell their property.

In the micro market of Indian Hill the situation has been reversed this year.  For the same period of January through October there has been a huge 31% increase in total number of properties sold and yet a significant decrease in the average and median sales prices.

This is good news for those looking to buy in Indian Hill and bittersweet news for the sellers.  For Buyers it is an obvious opportunity to find a property at a good price.  For property sellers this means that indeed properties are selling at a good pace…but expectations of the value of their property should be adjusted downward.

So, back to the original question of a good versus bad market.  The data suggests that it is a good time to be a buyer of property in Indian Hill while sellers who don’t have to sell may wish to consider waiting until demand increases.