KINGMAN - New data from the Kingman/Golden Valley Association of Realtors suggests that 2009 may well be the year the local housing market finally started to turn around.
While the market may never again resemble that of the mid-2000s boom, there are indications across the board that the worst of the housing bust is now behind us. Units sold through October of this year have already surpassed the dismal totals for 2007 and 2008, with 718 single-family homes sold throughout the KGVAR's coverage area, which includes Kingman, Golden Valley and various outlying communities including Butler, Chloride, Meadview and Peach Springs.
This year has seen an average of 72 homes sold a month, compared to just 54 for 2008 and 53 for 2007. If the trend holds through the end of the year, 2009 will see approximately 860 homes sold, the most since 2006's 1,058.
The inventory of homes has also fallen precipitously in 2009, continuing a trend from last year. October ended with just 522 homes on the market, the lowest level since March 2006 and less than half the available inventory seen during the bust's nadir in Oct. 2007.
Likewise, the amount of time homes are spending on the market is also dropping, even to pre-bust levels in some months. In October, the average home spent 111 days on the market, compared to 190 in Dec. 2007 and 116 in Aug. 2005, which was the biggest sales month of the final pre-bust year.
Kathleen Murray is the president-elect of the KGVAR and a sales agent at Realty Executives Mohave. She said while she's not yet willing to declare an end to the housing bust, she did feel a good deal of optimism for the coming year, thanks in part to numerous government initiatives, such as the $8,000 first time homebuyer's tax credit, which have contributed a great deal to the resurgence in home sales. "I am very positive about where we're going in 2010 because of that tax credit, because the interest rates at this point are remaining steady, and because of what I'm seeing each week with the number of units sold and closed. It seems to be holding steady," she said. "We're seeing buyers again, and the buyers are excited, and there are new financing tools to help them."
Tax credits help
Murray said one of the most important developments in the last several weeks was the government's decision to extend the first-time homebuyers credit from November through April. In addition, the government has increased the maximum income thresholds to receive the credit, and is now offering another $6,500 to existing homeowners as well.
"I think the most exciting news is the extension of that tax credit to people who are currently in homes," Murray said. "The fact that Congress and the President extended that tax credit was important to our industry and very important to price stabilization."
Price stabilization will be a key factor to watch out for next year, since prices have continued to fall throughout 2009; and while the decline has been slowing, a clearly defined bottom has yet to be reached. In fact, the total dollar amount for homes sold in 2009 is projected to fall slightly below the $103.5 million in sales last year, despite this year generating more than 200 additional sales.
That's because the selling price of the average home in 2009 fell by more than $14,000, to just $113,285 in October. It's not as sharp a drop as that of 2008, when home prices dropped a whopping $50,000 from January to December, but it's still a drop, and neither inventory nor tax incentives has been able to stop it just yet.
But Murray said the drop actually has stopped in certain price ranges, particularly the $100,000 to $119,999 range, where she said several homes have actually sold for more than their listed price, with multiple bids.
"We are, at certain price ranges, seeing multiple offers which end up in the home being sold above listed price, and that's something we haven't seen in quite a while," she said. "Instead of bidding down, they're bidding up in price."
That fact, combined with the steady flow of home sales Murray is seeing each week, suggests the beginning of a resurgence in prices, at least at that end of the spectrum. But Murray warned that there's still a large inventory on the higher end that, while starting to come down, still has a ways to go.
Calling the shots
She said that until foreclosures are flushed out of the market, buyers will continue to call the shots over pricing, meaning any price rebound could be gradual if it happens at all, provided existing homeowners are still defaulting on their debts. And with local unemployment climbing toward 11 percent, that's not an unlikely scenario.
All the same, Murray said she remains positive, especially since the numbers she's seeing have been in step with projections from the state and national Realtors' associations.
"We have followed what they have predicted all along, which is good news," she said. "They are predicting a continuation of a positive trend, and there is no reason for us to think that we won't see a similar or better market going forward in 2010."