Buyers Are ‘Thinking Harder’ In Cincinnati
Reuters has this report from Cincinnati. “When Keith Gersin saw the perfect four-bedroom house in southern Ohio four years ago, he jumped to buy it before anyone else could snap it up. When he finally sold it last month, it went for $30,000 less than he had hoped, and that after seven months on the market.”
“In retrospect, the 41-year-old physician admits he overestimated the U.S. housing market, which has begun cooling. ‘I was naive,’ said Gersin, who sold his Cincinnati-area home in May to move to North Carolina with his wife and son. He made about $60,000 on the sale, but had hoped for better.’”
“‘Everyone thinks their house is the most beautiful in the world, so it comes as a bit of a shock when it doesn’t sell right away.’”
“The housing slowdown, sharp in some regions and more gradual in others, is seen by many economists as an inevitable and even healthy moderation to an overheated market. Even so, for many homeowners, real-estate agents and builders, the market’s new direction is not particularly welcome.”
“The rising supply of unsold homes makes it that much harder for homeowners to get the sale price they hoped for. ‘In our neighborhood, on our street, there were three houses that went up for sale within months of each other,’ said Gersin.”
“Cincinnati real-estate agent Jeff Schnedl has seen a shift in the market. ‘It is absolutely slower. Some areas are still chugging along but even those are chugging along more slowly than they used to,’ said Schnedl, who has been selling homes five years.”
“A drive down any street in Cincinnati, whose suburbs straddle Ohio, Kentucky and Indiana, turns up plenty of ‘For Sale’ signs, with the occasional ‘Price Reduced’ addendum slapped on top.”
“Schnedl said homes are staying on the market longer. ‘There is a lot more inventory on the market this year than last year, about 25 percent more. So buyers have more homes to choose from and that slows the sale cycle down. Plus with rising interest rates, people are thinking harder. That slows it down, too,’ he said.”
“The housing slowdown is also being felt by home builders. In Cincinnati, builders have felt the chill already. ‘It has slowed a bit, not to a screeching halt, but some momentum is not there,’ said Dan Dressman, of the Home Builders Association of Northern Kentucky, which represents about 1,280 building companies.”
“Dressman said job losses will come in about six months if the slowdown persists. ‘I haven’t seen where there actually have been layoffs but if there is a continuous downturn that is one of the likely results,’ he said.”
Input from locals is appreciated. BTW, receiving a lot of spam today, so things may run a little slow.
Hey, I’m a local! I find this article very interesting considering that less than 3 months ago the Cincinnati Enquirer ran an article stating there was “no housing bubble here” and that they expected appreciation of 8% or so this year (the forecast came from.. you guessed it… a realtor).
Anyway, what I’m seeing is that in my particular neighborhood, there have been 6 houses for sale since late winter and none have sold. That’s slow compared to last year. A friend of mine who is selling his house has received no offers and very few lookers in about 4 months. Compare that to last year when several people I know sold their homes in less than a week.
So when do they print an article about how frigging wrong they were and how listening to Realtors for advice is a really really bad idea ?
Only made a profit of 60,000!
Sellers never count the interest and fees. If he held it for a few years, how much did the loan cost him?
I agree, consider the rental of the same home over the mortgage payments for this duration. How much is the over payment?
On Central Ohio:
“Inventory, however, remains considerably higher than previous years, the board reported. With 17,973 homes for sale at the end of May, there are 27.3 percent more listings than the same time last year.”
“The rise in inventory is an advantage for local home buyers,” Reese said. ‘There are more homes on the market today than ever before, and sellers are coming to the bargaining table motivated to sell their home.”
‘The surplus of for-sale inventory knocked the average sale price of a home in May to $177,359, which is 2.4 percent lower than the year-ago price of $181,634, the board reported.’
Just back from a visit to the local barbershop. We started talking about the 100 degree heat today up north in Gilroy and then moved onto housing. He stated that his inlaws had bought three houses in LV (they live there) for investment and can’t sell them now even with incentives.
I have the perfect sound effect for you, unfortunately I can’t figure out how to post a direct link. Go here and click on the little speaker icon next to the “Listen:” text.
SO … what happens in a non-bubble market such as Cincinnati which has seen only mild appreciation (although good by historical standards) and then real estate prices take a dive? [I lived in N. Ky. for 20 years.]
Could people who have bought 10 years ago be underwater at some point?
We focus on the pain that will be felt on the coasts, but the real pain may be in the Midwest and South - very scary.
I do believe rental yields are higher in the Mid-West though which might buffer some of the pain.
That’s true in Dallas, at least in the inner city. It’s a standoff between renting and buying in many cases. The deciding factor in my mind is ease of selling when you have to or want to. After what I saw in the last bust, there’s no way I was willing to take that chance. Things are difficult to sell in Dallas even now, despite the bullshit you hear from realtors. You have to be practically giving something away to get any action.
txchick57-
Could I get your take on this report from KLTV:
http://tinyurl.com/mhdbz
Housing Bubble In East Texas?
Hunter Pirtle has been a Tyler real estate agent for 13 years. He says the market right now, is just about as good as it gets. Last year, the average sale price of a home was up 10 percent. This year, it’s up more than 11 percent and he doesn’t see it slowing down much.
“Tyler is still a market that we’re seeing a growth rate in. Tyler’s projections are big. Outlying areas, Whitehouse and Bullard areas are projecting growth, so yeah, I think it’s positive for everybody,” Pirtle says.
Longview is starting to see prices go up as well. In 2005, prices were up 5%, which is about average, but this year the average sale price of a home is up by almost 8%.
Those who work in the real estate market say a lot of people from the metroplex are looking to East Texas for more affordable housing, because the average home here is about 60 thousand dollars cheaper than in Dallas.
Lauren Glass is the Vice President of Mortgage Operations at Southside Bank.
She says, “There are a lot of people retiring to East Texas, moving into Tyler that cannot afford housing in Dallas, and what we’re seeing is just increased demand.”
There’s good news on the interest rate front as well.
“We’re in the high 6% range for the 30 year fixed mortgages. It’s our thought that maybe we’re at the end of the interest rate increase cycle,” says Glass.
They’re hopeful interest rates won’t go up again and optimistic they might even go down, making it cheaper to get into the home of your dreams.
TYLER? LOL! It’s a nice little town but ain’t nuttin there. Redneck city though. I used to take my dogs to a vet there who was great. 2 hours plus each way in the car.
But the salient point is that Dallas is overpriced and expensive. Maybe not by Clownifornia standards but by the standards of any rational person.
I am very interested in this topic too — the effect on the mid-west. I moved here (Ozarks) 6 months ago from N. CA. Locals here who are aware of the housing bubble in the rest of the country say it won’t affect prices here — which have gone up about 20% in the last two years (my guess here, no real facts, numbers hard to come by). There is a steady stream of coastal refugees moving in buying real estate — in the 6 months I’ve been here I’ve met people from MA, CA, and NV, about 10 different households. All of them came here because of the lower cost of living; all but me immediately bought here almost without regard to price (it all looked cheap to them). The locals seem to think there will be a steady stream of coastal escapees to buy their houses, and there’s lots of building going on too in the “suburbs” and farming areas (the “big city” of Springfield MO actually had a population decline so the growth appears to be elsewhere).
I don’t feel I have a strong argument to make that the market will go down here too. What people say is 1) housing is inexpensive so everyone can buy, 2) population is growing, 3) even though the markets are slowing in the rest of the country the people that want to will still be able to sell and they will bring their equity here where it is less expensive to live, and of course, the classic hack of, believe it or not, 4) “everyone wants to live here”.
None of the new real estate websites cover this area so there’s no real info except what the realtors and the MSM spout out.
Is it possible that the people who get desperate in the bubble areas will make a mad retreat to the cheaper midwest? If yes, what will they come with (besides the clothes on their backs) and where will they live? Will rents go up here? Or will they all stay put and move into homeless shelters? I’m really mystified by what is going to happen to the supposed hordes of people who some expect to become “homeless” by the housing bust.
Hey Saratoga, Whereabouts in the ozarks are you located? I’m currently east of the Branson, MO area and have the same questions/observations you have.
Hi Auger-Inn,
I’m halfway between Springfield and Joplin.
I’ve been looking to buy for 6 months but this board keeps me sitting on my cash. I don’t know if that is good or bad. After all, prices are a lot less expensive here than in CA
Buyers Are ‘Thinking Harder’
Actually buyers are just beginning to think, period.
Most people don’t think. They get hold of an idea — not a line of reasoning, just a “sound bite” of an idea — and continue to hold on to that idea as long as material circumstances seem to reward them for holding to that idea. When material circumstances change and they begin to get punished for holding to that idea, they let go and get hold of another idea. This is not thinking. Maybe this is what Marx meant by dialectical materialism. (As a true-blue patriotic American capitalist, I wouldn’t know.)
It’s like Lemmings following each other off a cliff……..
Two legs good, Four legs better…
Ah, you just beat me to it…
They do say doctors are terrible investors.
I read “made $60,000″ as cash cleared after realtor fees, etc. A nice hunk of change for just sitting on a property for a few years, IMHO. When did $60,000 become a pittance?
When did $60,000 become a pittance?
When a 40 year old shack became worth $800,000 ?
the damn herd mentality. when will people ever learn and be independent thinker and judge the situation based on facts instead of feelings? never. sad but true. haha. that’ s how the rest of us can profit from them. haha.
>>it went for $30,000 less than he had hoped
This is irrelevant. What profit did he actually ended up with? $100k, $200k. Not getting what was hoped for did not mean prices are down. He might have very high hope.
“‘Everyone thinks their house is the most beautiful in the world, so it comes as a bit of a shock when it doesn’t sell right away.’”
What a narcissist. For the record, I don’t think my house is the most beautiful in the world.
Along the lines of “no one really needs to move”, I’d like to see individual circumstances of these sales. What was the immediately prior use? Was it a rental previously? Was it an “investment”? Relocation? Move-up to a larger home?
Not that it matters all that much, but around where I live, I see a lot of listed houses with no furniture in them, but a new kitchen–what percentage of existing, liveable homes are currenly lived in? What is the occupancy rate of consumer owned homes–and what has it been?
That would be very interesting information . . .