Slumping home sales creating glut
If you don’t have to sell your home now, it might be wise to hold off until the market improves, according to the president of the Cincinnati Area Board of Realtors.
Tom Steele said the supply of homes for sale far outnumbers the demand, creating a backlog of inventory that won’t be corrected until the sales pace accelerates.
“Our message right now is that if you don’t have to list, you might want to wait,” said Steele, who runs Steele Real Estate Services in Cincinnati and acknowledged that his message might not be popular with people who sell Real Estate for a living.
“We have to get the supply and demand into some sense of normality,” Steele said Monday, hours after the Board of Realtors and its counterpart in Northern Kentucky released July numbers showing home sales in the region slumped badly when compared to the same month of 2006.
Steele said his argument about excessive inventory is supported by a look at the market four years ago.
In July of 2003 - one of the best years on record for home sales - there were 9,900 single-family homes and condominiums for sale in Cincinnati, its Ohio suburbs and a slice of southeast Indiana, Steele said.
But four years later, nearly 18,000 homes and condos are listed for sale, Steele said.
“Consult a professional and see if this is the right time for you to be in the market - whether you’re buying or selling,” Steele said.
Sales in July fell by 8.2 percent in Ohio and 13.3 percent in Northern Kentucky, an overall decline of 9.3 percent for the region.
The Greater Cincinnati numbers were just slightly worse than the national numbers, which saw the sales pace for July decline by 9 percent when compared to a year earlier. The National Association of Realtors said Monday that it now expects 5.75 million homes to sell this year.
Although the number of sales dropped in Greater Cincinnati, prices increased. The average price edged up a little less than 1 percent in Ohio to $192,560 and 4.7 percent in Kentucky to $164,070.
Steele and Janie Wilson, president of the Northern Kentucky Association of Realtors, both said falling sales have had little impact on the number of people selling homes on both sides of the river.
For the first seven months of the year, total sales are down about 10 percent in Northern Kentucky to $582.4 million and 11.5 percent in Ohio, where the Board of Realtors said more than $2.4 billion worth of homes were sold from January through July.
“If their backs were really against the wall, I think you would see a huge decline in the number of members of the board,” Wilson said.
Instead, there were just 17 fewer members last month then there were a year ago, Wilson said.
Steele said his organization as well as the state-wide Real Estate organization had predicted that the number of agents would drop by 5 to 10 percent this year as the market declined. But that hasn’t proven to be true, he said.
The Greater Cincinnati organization has grown by 7 to 6,021 members, Steele said.
The sales volume is nearly $380 million less than it was a year ago in Kentucky and Ohio, meaning that real estate companies and their agents are making less.
“There’s a smaller pot being split by more members,” Steele said.