Did the recent tax credits have an impact on home sales in the beautiful rural community of Oldham County, Kentucky? The numbers tell an interesting story:
Compiled from the Louisville Multiple Listing System, I compared single family homes that SOLD from January 1, 2010 to May 5, 2010 to homes SOLD from January 1, 2009 to May 5, 2009.
The percent of change is pretty dramatic in the lower price ranges. Homes priced under $100,000 saw a 42.85% increase in numbers of homes SOLD.
There was a 15.38% increase in numbers of homes SOLD that were priced between $100,000 and $149,999.
Interestingly, the numbers of homes SOLD that were priced between $150,000 and $250,000 actually fell when compared with the same time period in 2009, but homes priced between $250,000 and $299,999 spiked a full 40% .
Numbers of homes priced between $300,000 and $349,999 jumped a whopping 425%: from 4 homes SOLD from January 1 to May 5 in 2009 to 21 homes SOLD by May 5, 2010.
Homes priced between $350,000 and $399,999 saw an 80% increase.
This is where the positive numbers STOP.
Homes priced between $400,000 and $449,999 have decreased: from 10 homes SOLD by May 5, 2009 to 7 homes SOLD by May 5, 2010. From $500,000 to $549,999: 3 homes SOLD to 1 home SOLD. From $550,000-$599,999: 3 homes SOLD to 2 homes SOLD. For both 2009 and 2010 year-to-date (May 5): there was only 1 home SOLD each year. From $700,000 to $900,000: 2 homes SOLD by May 5, 2009, and thus far no homes have been recorded as SOLD in 2010.
Both years reported no homes SOLD by May 5 that were priced at $1,000,000 or above.
It seems obvious to me that homebuyers seized on multiple opportunities during first quarter 2010: The first and repeat homebuyer tax credits, low interest rates, and competitive pricing.
So now what? Well, it totally depends upon which newspaper you're reading or which news channel you're watching. Predictions are all over the board.
Many predictions are that the housing market will dip again in mid 2010 before making a slight come-back toward the fourth quarter. National Association of Realtors chief economist Lawrence Yun said, "Later in the second half of the year, and into 2011, home sales will likely become self-sustaining if the economy can add jobs at a respectable pace, and from a return of buyer demand as they see home values stabilizing."
Yun went on to say, "Another encouraging sign is the improvement in the availability of jumbo and second-home mortgages. As bank balance sheets strengthen, it is just a matter of time before lending of non-government-backed mortgages steadily opens up."
Of course there are very realistic obstacles still in the way of a truly robust real estate market. Rising foreclosures will push more inventory onto the market, putting additional downward pressure on home prices. And many lenders are concerned about the threat of rising interest rates.
But here's what we have on our side: We live in an area of the country that has weathered every real estate storm very well. And most particularly, we live here in Oldham County, where demand for affordable housing, great schools, and an incredible quality of life is still very high.
Challenges still ahead? Absolutely. But I remain your eternal optimist!