New house construction and home sales rose in August both year-over-year and compared to the previous month. According to the statistics sales of existing homes rose 7.8 percent in August from July and were 9.3 percent above the pace of August 2011.
And all of these gains accompany an overall increase in average home prices according to the WSJ. While the median existing home price gained 9.5% year-on-year to $187,400, there should be a big asterick next to that set of numbers. Homes did not gain 9.5% in value, rather the average home price rose – mostly driven by pricing mix. Fewer foreclosure sales are most likely responsible for the positive gain in the average sale price. The percentage of distressed sales was 22%, the lowest since the NAR began tracking the data in Oct. 2008.
To compliment that sales number new housing starts are up as well. Builders started work on 2.3 percent more homes in August than in July, a seasonally adjusted annual rate of 750,000 single-family homes, apartments and condominiums vs. 733,000 in July according to the US Census Bureau.
This is good news for our Cincinnati housing market!
Increased movement and a normalization of sale mix helps to stabilize and increase prices and drive a balanced market that is neither ‘a buyer’s market’ or a ‘seller’s market’. All of these numbers are based on data prior to the QE3 bond buying program. This may have further positive impacts on our local housing market.