Evansville Real Estate Market Records 20% Increase in Average Home Sales Price
Posted by remaxservices on February 18, 2010
Evansville Real Estate Market Records 20% Increase in Average Home Sales Price
February 5, 2010
In January 2010 the local real estate market recorded a 1% increase in homes sold this year over last year. Buyer activity, especially among first time home buyers deciding to take advantage of the $8,000 tax credit and low interest rates, continued to be very active. The first time home buyer incentive has been extended through April 30, 2010 for a contract date with a June 30, 2010 close date. In addition there is now a $6,500 tax credit for repeat buyers who purchase a new principal residence within the same time frame and have lived in their principal residence for five of the last eight years. January 2010 closed sales of 146 homes exceeded January 2009 sales of 145 homes by 1% and was down 38% from December 2009 sales of 235 homes. In January 2010 the number of homes on the market was 2032 homes – which was equivalent to December 2009. February 2010 home sales are expected to be up from January 2010 home sales based on the number of homes that are reported to have accepted contracts. The average unit selling price for January 2010 of $126,110 was up 4% from 2009’s average of $121,782 and up 20% from January 2009’s average price of $105,027. While the average unit sale price is an indicator of home values, there are other factors which must be considered such as the mix of sales between higher priced homes and lower priced homes. Another item of note is that the list to sale price remained in the 94% to 96% range in January 2010 which indicates some discounting of list price in January. The factor that has the greatest impact on the market is the number of homes that are for sale. In January 2010 there were 2032 homes on the market. January 2009 had 2212 homes in inventory and the average for 2009 was 2204 homes. In January 2010 the absorption rate was at 13.9 months compared to previous highs in January 2009 of 15.1 months and in December 2008 of 12.6 months. There are several important factors that buyers and sellers need to be aware of when considering future real estate transactions. Consumer confidence continues to be low but is improving. The government continues to take aggressive steps to stabilize the economy, unemployment rates are starting to level off, the stock market continues to recover, mortgage interest rates continue to be low but are expected start a gradual increase, and home inventories are down-especially well cared for, updated, move-in ready homes.
The real estate market is truly a product of supply and demand. The changes in supply and demand create what is referred to as a Buyer’s or a Seller’s market. The absorption rate is often used as a measure of what is currently being experienced in the real estate market. Absorption rates below 6 are generally considered a Seller’s market and above 6.5 a Buyer’s market. The absorption rate calculates how long it would take the market to absorb or sell all the homes currently for sale at the current sales rate. Prior to 2008 the absorption rate for the four county area was 6 or below. The average for 2007 was 7.8 months and the average for 2008 was 9.2 months. REMEMBER ALL REAL ESTATE IS LOCAL IN NATURE.
Let us now go a step deeper and look at what is going on in each of the four counties as each county has its own story to tell.
Evansville and Vanderburgh County
In Vanderburgh County 84 homes were sold in January 2010 which is down 11% from January 2009 sales of 94 homes and down 40% from December 2009 sales of 140 homes. The average sales price for January 2010 was $112,963 which was up 1% from 2009’s average of $112,170. Sell price to list price ratio was 91.4%. Again the big factor is the number of homes on the market. January 2010 had 1319 homes for sale compared to 1392 for January 2009 and 1383 for December 2009. January 2010’s absorption rate was at 15.7 months compared to 14.8 months in January 2009 and 11.6 months in December 2008.
Newburgh and Warrick County
January 2010 home sales of 36 homes were up 9% from January 2009 home sales of 33 homes and down 41% from December 2009 home sales of 61 homes. The average sales price for January 2010 was $199,500 compared to 2009’s average of $161,887. The sell to list ratio was 95.3%. January 2010 home inventory is at 382 homes compared to January 2009’s inventory of 479 homes and December 2009’s inventory of 373 homes. The January 2010 absorption rate was 10.6 months compared to January 2009’s absorption rate of 14.6 months and December 2008’s absorption rate of 13.0 months.
Princeton and Gibson County
Gibson County home sales for January 2010 of 14 homes were up 27% from January 2009 sales of 11 homes and down 44% from December 2009 sales of 25 homes. The average unit sales price for January 2010 was $67,255 compared to 2009’s average of $91,715. The list to sell ratio was 95.6%. January 2010 home inventory is at 193 homes which is down from January 2009’s home inventory of 206 homes and up from December 2009 home inventory of 186 homes. January 2010’s absorption rate was 10.6 months compared to January 2009’s absorption rate of 18.3 months and December 2008’s absorption rate of 16.2 months.
Mount Vernon and Posey County
Posey County home sales for January 2010 of 12 homes were up 71% from January 2009 homes sales of 7 homes and up 20% from December 2009 home sales of 10 homes. The January 2010 average unit sales price was $66,637 compared to 2009’s average of $107,933. Posey County’s home inventory for January 2010 of 138 homes is up from January 2009 home inventory of 135 homes but down from December 2009’s home inventory of 143 homes. The absorption rate in Posey County for January 2010 is at 11.5 months compared to February 2009’s absorption rate of 23.3 months and December 2008’s absorption rate of 24.0 months.
What does all of this mean to buyers and sellers? Buyers remain in an excellent position to purchase. However, Buyers need to be aware of what homes are in inventory, especially well maintained, and competitively priced homes. The current trend points toward a continued tightening of saleable homes. The first time home buyer incentive of $8,000 tax credit has created demand for housing. The first time home buyer incentive has been extended through April 30, 2010 for a contract date with a June 30, 2010 close date. In addition there is now a $6,500 tax credit for repeat buyers who purchase a new principal residence and have lived in the previous residence for five of the last eight years. Interest rates are at the lowest they have been in many years. Mortgage programs have seen some tightening of requirements but are plentiful for buyers with acceptable credit scores. Mortgage rates are tied to 10 year treasury bills and not the overnight Fed rate which gets all the media attention. Sellers need to make sure that their homes are in top condition and well priced to attract a buyer. Those homes that are not in top condition and are not well priced are helping those sellers whose homes are in good condition and are appropriately priced to get their homes sold. Remember buyers purchase homes based on location, price and condition. Sellers have control of the condition of their home and with so many homes on the market; condition becomes a major deciding factor with buyers when making an offer to purchase.
(Detailed statistical reports were generated from data supplied by the Evansville Area Assoc. of Realtors which is available upon request. Send your request to info@evvareahomes.com.)
