Recent housing reports are generating some incredibly positive headlines and prompting many to wonder, has the housing market hit bottom? Before we attempt to answer this complex question we should note that market bottoms, like market peaks, are not clearly definable or easily apparent until long after they have passed. Furthermore, real estate is highly local and national trends are not reflective of all markets, therefore what constitutes the bottom for the country is likely meaningless for those looking to buy and/or sell homes in their own local communities and neighborhoods (also bottoms often occur across different price points at different times).  While there’s widespread belief that a market bottom is something that comes and goes, and if you’re not jumping into the market at the bottom, it’s to late, this isn’t always true.

With that said let us first define what a market bottom looks like. A housing market bottom is a trend highlighted by a combination of two distinct factors, increased sales volume and stabilizing home prices.

Up until recently the signs pointing to a recovery in the housing market were largely limited to an increase in volume and a slowing in price declines. While a recovery in volume is significant, and wildly important to the future short-term strength of the housing market, in and of itself it does not represent a market bottom.

The most recent national housing data is more encouraging however, and provides evidence that not only have pending home sales risen for the past 7 straight months (a pattern not seen in the history of the index), but the S&P Case-Shiller index of home prices has seen three straight months of gains (the only three times index has risen in the past 3 years and a trend which is further articulated by the Federal Index). While three months of gains can hardly be considered a trend, this evidence does point to an upward turn from the bottom and is highly encouraging as national trends and consumer confidence are important factors as in the short-term prices will be driven by both macro-economic as well as psychological factors. However, as mentioned real estate is local and we must also closely examine our own local market.

Locally, homes sales dipped slightly in August while inventory, average sales prices and days on the market all showed important signs of improvement. Home sales for the month of August were off by 7.9% year over year, and 3.06% month over month. The average sales price however, was up 1.08% in August to $168,873, compared to $167,039 in July (prices are down just 3.8% from August of 2008). Inventory levels are also coming down, as in August there were 14,554 homes on the market (7.3 month’s supply meaning that if no new homes were added to the market it would take 7.3 months to sell all remaining inventory), marking a 14.2% decrease year over year and resulting in decreased in the number of days homes are staying on the market, an average of just 92 days in August, the lowest point since July of 2006.

The Federal Index reports nationally home prices rose .3% in July (and were down .6% in August to $177,700) while inventory levels decreased 16.42% year over year to an 8.5 month supply. Distressed properties continue to downwardly distort the median home prices both locally and nationally as they generally sell for 15-20% less than traditional homes sales.

While the market does appear to have stabilized and appears to be in recovery, especially here in Columbus which is faring significantly better than the national market, sustained price increases in home prices aren’t likely and expectations are this recovery will be one in which volume continues to lead the way with values continuing to improve over the next 12-24 months.

But for now, the market recovery does appear to be underway and if you’ve been sitting on the fence wanting desperately to get into a home, or to move up to a larger home in a better community, now is the time! With prices down and interest rates near record lows, there has never been a better time to buy a home!

For information specific to your community, or to request a free, no obligation valuation of your own home please call us at 614.332.6984 or email us at theoplandgroup@gmail.com.

If you, or someone you know is considering Buying or Selling a Home in Columbus, Ohio please contact The Opland Group. We offer professional real estate advice and look forward to helping you achieve your real estate goals!

The Opland Group Specializes in Real Estate Sales, Luxury Home Sales, Short Sales in;  Bexley  Columbus  Delaware  Downtown  Dublin  Gahanna  Grandview Heights  Granville  Grove City  Groveport  Hilliard  Lewis Center  New Albany  Pickerington  Polaris  Powell   Upper Arlington  Westerville  Worthington