Evansville Real Estate Market Records 7% Increase in Homes Sold
Posted by remaxservices on February 18, 2010
Evansville Real Estate Market Records 7% Increase in Homes Sold
January 8, 2010
In December the local real estate market recorded a 7% increase in homes sold this year over last year. Homes sold in 2009 are down less than 2% from home sold in 2008. 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. December 2009 closed sales of 235 homes fell short of December 2008 sales of 253 homes by 7% and was down 8% from November 2009 sales of 256 homes. In December 2009 the number of homes on the market was 2028 homes – which was down 155 homes from November 2009. January 2009 home sales are expected to be down from December 2009 home sales based on the number of homes that are reported to have accepted contracts. This can be attributed to the typical holiday season slow down. The average unit selling price for December 2009 of $128,176 was up 4% from 2008’s average of $122,786 and up 11% from December 2008’s average price of $114,963. 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 December 2009 which indicates some discounting of list price in December. The factor that has the greatest impact on the market is the number of homes that are for sale. In December 2009 there were 2028 homes on the market. December 2008 had 2223 homes in inventory and the average for 2008 was 2491 homes. In December 2009 the absorption rate was at 8.2 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 140 homes were sold in December 2009 which is down 17% from December 2008 sales of 168 homes and down 16% from November 2009 sales of 166 homes. The average sales price for December 2009 was $117,184 which was up from 2008’s average of $110,091. Sell price to list price ratio was 93.5%. Again the big factor is the number of homes on the market. December 2009 had 1326 homes for sale compared to 1400 for December 2008 and 1456 for November 2009. December 2009’s absorption rate was at 9.5 months compared to 14.7 months in January 2009 and 11.6 months in December 2008.
Newburgh and Warrick County
December 2009 home sales of 60 homes were up 13% from December 2008 home sales of 53 homes and up 3% from November 2009 home sales of 58 homes. The average sales price for December 2009 was $165,011 compared to 2008’s average of $172,481. The sell to list ratio was 95.1%. December 2009 home inventory is at 373 homes compared to December 2008’s inventory of 484 homes and November 2009’s inventory of 393 homes. The December 2009 absorption rate was 6.2 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 December 2009 of 25 homes were up 67% from December 2008 sales of 15 homes and up 39% from November 2009 sales of 18 homes. The average unit sales price for December 2009 was $107,786 compared to 2008’s average of $95,500. The list to sell ratio was 94.1%. December 2009 home inventory is at 186 homes which is down from December 2008’s home inventory of 208 homes and equivalent to November 2009 home inventory of 187 homes. December 2009’s absorption rate was 7.4 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 December 2009 of 10 homes were down 41% from December 2008 homes sales of 17 homes and down 13% from November 2009 home sales of 14 homes. The December 2009 average unit sales price was $112,020 compared to 2008’s average of $112,715. Posey County’s home inventory for December 2009 of 143 homes is up from December 2008 home inventory of 131 homes but down from November 2009’s home inventory of 147 homes. The absorption rate in Posey County for December 2009 is at 14.3 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.)
