Rachel Quade
Could it be that the Geist real estate market is starting to improve? It would appear so. While the number of homes sold did decrease by 2.8% from 2008 to 2009, closer inspection shows signs of hope. Fourth quarter of 2009 sales showed a staggering 38.8% improvement over the same period for 2008.
Two factors that contributed to the impressive fourth quarter results include the $8000 first time homebuyer tax credit and the low interest rates available on home mortgages. The Geist areas with homes under $200,000 saw the greatest fourth quarter sales gains, although all Geist areas enjoyed improved numbers. While the $8,000 tax credit obviously helped sell homes in the $200,000 and under price segment, the 30-year fixed mortgage rate which hovered around 5% during the fourth quarter of 2009 helped sell homes in all price ranges. The average interest rate in fourth quarter of 2008 was 5.85%.
Although the median price of Geist homes decreased in 2009, there are indicators pointing to an increase in 2010. While the number of homes sold has started to go up (somewhat dramatically as evidenced by Q4, ’09 numbers), the amount of available homes on the market has decreased. The number of Geist area homes on the market in January of 2010 is 14% lower than the amount of homes available in January of 2009. Greater demand with a lower supply should impact home prices positively. Economics 101 at work!
The good news for the Geist real estate market is less evident for the homes on the water. While the number of homes sold has risen, the average sales price of these homes has fallen. The amount of available distressed homes on the water made it difficult for non-distressed homes to sell for what their owners had hoped. To clarify, distressed homes are homes that are bank-owned or short sales (pre-foreclosures). Some of these distressed homes actually sold for close to 40% less than the owners built them for less than 5 years ago.
One positive sign for people who are hoping to sell their homes on the water in 2010 is that there are fewer distressed homes available today than there were one year ago. Of course, many potential buyers have heard of the deals that others have been getting on the water in the last year, and this mindset will be difficult for sellers to overcome.
While last year’s tax credit was primarily for first time homebuyers, the new $6,500 tax credit is for homebuyers who are “buying up.” This new tax credit should help the Geist market, given that much of the area’s home prices are out of reach for many first time homebuyers.
It’s reasonable to assume that the positive numbers seen during the fourth quarter of 2009 for the Geist real estate market should continue into 2010. Enticingly low interest rates and the expanded homebuyer tax credit should help. Homeowners looking to sell may finally have a reason to smile. Many disgruntled homeowners believe it’s about time!
