Cleveland Heights Home Sales Rise during last 90 days

Sales of Cleveland Heights have risen in the last three month compared with the previous three months. Of those single family homes that sold in the last three months, all of them were $55,000 or less, so this may reflect bank-owned homes, foreclosure, distressed properties, or homes whose owners just had to lower the price to get them sold. In any case 131 homes were sold or pending in the last 90 days compared to 121 sold or pending for the previous three months. The down side of this is that there were 410 homes for sale during the last 90 days and only 89 for sale the previous 90 days. This may reflect people taking homes off the market for the Christmas holiday. So, more homes were sold but more came on the market the last three months, so the absorption rate has dropped for single family homes, from 45% to 11%. The same goes for condomiums. We had more sales in the last three months- 9 units compared to 3 the previous 3 months, but there were 67 for sale the last 90 days compared to 12 the previous three months. Thus the absorption rate dropped from 8% to 4%

The figures:

Last 90 days:

Single Family Homes

410 for sale
131 sold or pending (43.67/month)
Monthly Absorption Rate = 11%

Condominiums

67 for sale
9 sold or pending (3/month)
Monthly Absorption Rate = 4%

Previous 90 days (previous 4-6 months)

89 for sale
121 sold or pending (40.33/month)
Monthly Absorption Rate = 45%

Condominiums

12 for sale
3 sold or pending (1/month)
Monthly Absorption Rate = 8%

It seems that the net effect is that we did not really increase the rate at which homes are selling, so we're not out of the woods yet, but we are gradually working through the inventory. Let's see what the spring market of 2009 brings us!

New Tax Credit for First-Time Home Buyers

As part of the American Recovery and Reinvestment Act, Congress is now giving a substantial gift to first-time home buyers! If you purchase a home between now and December 1st, 2009 you will receive a tax credit against your income tax due in the amount of 10% of the purchase price of the home. The maximum credit available is $8,000. The biggest change from the previous $7500 tax credit is that the new credit DOES NOT have to be repaid to Uncle Sam! The income limits are $75,000 adjusted gross income for individuals and $150,000 for those filing jointly. The credit is reduced above these limits until they are eliminated for those filing as an individuals whose adjusted gross income is $95,000 or over and $170,000 for those filing jointly. You also need to keep the home three years or you will be subject to recapture on the tax credit.

One of my clients just bought a home and will have a $8000 reduction of his 2009 income taxes. He may even be due a refund! What a help in buying new carpets, decorating, or paying off Mom and Dad for helping with closing costs or the down payment!! This is a boon to buyers and seller alike and I think it will go a long in helping to reduce housing inventory, and therefore reducing the downward pressure on home prices

Call me if you have any questions about this change in the law. REMEMBER, it is only available until December 1, 2009.

Median Home Prices Have Declined. Buyer, get your pre-approvals!

Click on the link below to see the story about how the median price for non-foreclosed homes has declined 4% in Cuyahoga County.

http://blog.cleveland.com/metro/2009/01/cuyahoga_countys_median_price.html

Buyers, make a decent offer so as not to alienate the seller. Trying to time the market and waiting for the "bottom" doesn't work because when you are sure the market has bottomed, prices have already risen and you miss your chance at buying at the "bottom". Prices are substantially reduced already and you can rest assured that you are getting a good discount on most homes! Stay tuned for pending legislation that could provide more tax credits for first-time home buyers!

Heights Real Estate Year End Report

Here is my end of year real estate report for the Heights. These are the latest statistics extracted from the Northern Ohio Multiple Listing Service:

These figures represent the MONTHLY average of sold homes in the last three months...

Cleveland Heights- total for sale at present- 433

Solds/month Absorption Rate/month

$0-$99,999
26 5.9%

$100,000-$199,999
10 2.2%

$200,000-$299,000
2 .4%

$300,000-$399,999
2 .4%

$400,000+
.33 (1 in 3 months) .1%

University Heights- total for sale at present- 125

$0-$99,999
8 6%

$100,000-$199,999
3 2%

$200,000-$299,999
.33 0.3%

$300,000-$399,999
0 0%

$400,000+
0 0%

Shaker Heights- for sale at present- 286

$0-$99,999
10 3.5%

$100,000-$199,999
7 2.6%

$200,000-$299,999
4 1.5%

$300,000-$399,999
2 0.7%

$400,000-$499,999
1 0.3%

$500,000+
1 0.5%

Clearly homes below $100,000 are selling the quickest with homes ranging in the $100,000-$200,000 following behind.

Price trends- comparing the last three months with the July-August-September period

Cleveland Heights- down 2%
University Heights- down 42% (ouch...)
Shaker Heights- down 23%

Obviously Cleveland Heights is holding up better or perhaps its biggest price drops occured earlier. That would require more research.

If you are a buyer, this is a great time to purchase a house. Prices have come way down and mortgage rates are as low as they ever have been. As you can see, there are 844 homes for sale in the Heights so there is a wide selection of properties to choose from!

If you are selling, contact a realtor regarding advice on how to prepare your home to put it in it's best light, thereby increasing your chance of selling it in this incredibly competitive market. Don't forget- EVEN IN THIS MARKET PEOPLE NEED TO SELL AND BUY HOMES!

Due to low mortgage rates, it's a great time to refinance your present mortgage if you have one. Whether is purchasing or refinancng, contact your realtor for more information!

Let's look forward to better days ahead with a positive attitude and I wish you a very Happy New Year!!

Scott

Howard Hanna Smythe Cramer-Realty One Merger

It's been a busy few weeks since Howard Hanna Smythe Cramer and Realty One merged into Howard Hanna Realty. This merger brings the strongest aspects of each company under one roof with a combined total of 2400 agents and the lion's share of the Cleveland market. I'm very happy to be a Howard Hanna agent and I'm looking forward to an improving real estate market in the next few months! The old Realty One office on Warrensville is now the Shaker Heights-Gold office of Howard Hanna. It will probably take a year or so to decide which offices will merge, close, or move. For now I'm still at 20515 Shaker Blvd. in Shaker Heights.

I hope your Thanksgiving was a joyous one with family and friends!

To see my listings go to www.scotthaigh.howardhanna.com or www.scotthaigh.com

GOOD NEWS FOR FIRST-TIME HOME BUYERS!!

On July 30, 2008, President Bush signed H.R. 3221, the Housing and Economic Recovery Act of 2008, a major housing bill providing a tax credit up to $7500 for first-time home buyers. This is for purchases between April 9, 2008 and July 1, 2009. Note that this is a tax CREDIT, not a deduction. Anyone who has who has not had an ownership interest in a principal residence in the previous three years is eligible, up to certain income limits. Those limits are $75,000 for single tax filers and $150,000 for joint filers. The credit is 10% of the purchase price of the home with a maximum credit of $7500. For example, if you purchased a home for $65,000 your tax credit would be $6500. This amount would apply both to single and married taxpayers. If your income exceeds the limits then your credit would be reduced by a formula set by statute. Call me for details. If income exceeds $95,000 (for singles) or $170,000 (for joint returns) then no credit will be allowed. Also, people who obtain financing through mortgage revenue bond (i.e. through a tax-exempt bond-related program offered by a state housing agency) are not eligible. Here’s the rub… this tax incentive must be paid back over 15 years. I.E. 6.67% of the credit must be paid back each year. For a taxpayer receiving the full $7500 credit the yearly payback amount would be $502.50.

If you receive the full $7500 credit and your tax bill is less than $7500, would receive a refund. For example, if your tax bill was $6000 and you purchased a home for $75,000 or more you would receive a refund of $1500.

The only down side of this legislation is that this credit will not be useable as part of a downpayment, since you cannot claim the credit until you file your 2008 taxes in 2009, and the credit is only available for purchases up to July 1, 2009 (That means title transfers before July 1, 2009. So as a practical matter unless you get a tax refund in time to apply it to a downpayment and close on a purchase before July 1st, you won’t be able to use the credit for a downpayment.)

On balance I think this is a wonderful help to first-time buyers and it should be taken advantage of. Ask your realtor about it!

Tips on finding lender..

Here is some good advice when searching for a mortgage....

http://www.realliving.com/Data/1/extra/5_steps_lender.pdf