Ohio Governor John Kasich made affordable housing in his state a priority long before his presidential bid. He is taking new measures to follow through on this promise. The Ohio Housing Finance Agency recently announced that it will be providing $3 million in funding to affordable housing programs in the central part of the state. This initiative will be helpful for Columbus and other communities with limited housing for low income citizens. Read more
The Columbus housing market has been showing signs of stabilization after several years of stagnation. The Columbus Dispatch reports that the southern side of the city is making the strongest rebound after years of deterioration and tepid job growth. However, policymakers have remained concerned about the lack of affordable housing options for many low income residents. They have recently passed several new measures to address the problem, which should commence shortly. Read more
The Central Ohio economy is finally beginning to show some signs of life. Crain’s Cleveland Business reported that job growth is trailing the rest of the country, but still accelerating from its pace in 2014. The Ohio Department of Taxation has also shown tax receipts have increased, which means that economic activity is starting to pick up as well.
New data shows that the commercial sector is growing faster than originally expected, which suggests that job growth will pick up as well. This report indicates that the economy is starting to grow more rapidly. Recent reports on rising commercial loans corroborate this prediction.
Commercial Loans Indicate Columbus Economy on the Upswing
Columbus businesses have been expanding more rapidly over the past year. According to Fifth Third Bank, the number of commercial loans it received in 2015 has increased 12% since the prior year. Jerry Kelsheimer, the CEO of the bank’s headquarters in the northern part of the Ohio, said that the number of loans in that region is growing over twice as fast as other markets it serves.
The rising number of loans isn’t the only factor demonstrating that the economy is becoming more robust. The Federal Deposit Insurance Corp. has released data showing the average dollar value of each commercial loan is rising by 8%, which means that the total value of all commercial loans has risen 50%.
The rising number of commercial loans indicates that businesses are expected to grow much faster over the coming year. This suggests that the Ohio economy is going to be much stronger in the coming year.
Housing Market Will Rise As Private Sector Jobs Are Created
There is a strong correlation between private sector job growth and housing sales. New commercial loans indicate that private sector employers are looking to expand. They will probably need to hire new staff to meet their needs as they strive to penetrate new markets and reach more customers.
Stronger job creation will ultimately lift the housing market. Realtors throughout Northern and Central Ohio are confident that housing sales will boom as hiring picks up. Demand for housing may increase even more rapidly if out of state residents are drawn to Central Ohio seeking jobs.
Homeowners that are interested in selling their properties should be aware of this trend. They should pay close attention to changes in the job market, because they will likely be followed by a rising demand for new housing in the area.
The Columbus housing market started to show new signs of life over the past year. While the market is surging, some experts worry that new housing construction may be insufficient to meet growing demand. They are calling on lawmakers to increase housing starts to avoid a housing shortage.
Housing Sales Climb, Albeit at Slower Pace
Housing sales in Columbus have continued rising over the past year. The Columbus Association of Realtors said that new sales decelerated in the summer, citing figures showing that the growth rate was half that witnessed in the first half of the year. While the market is growing at a slower rate, it is still gaining traction.
Since demand for housing in Columbus and adjacent community is rising, price increases are also. Median home prices in the region rose 5% in September.
“The market is hotter than previous years and both buyers and sellers have really gotten that message,” said Kathy Shiflet, president of the Columbus Association of Realtors.
Most experts expect that the market will keep growing for the foreseeable future. Price increases will likely follow, especially if the supply of new housing isn’t sufficient to serve the growing number of people relocating to Central Ohio.
Housing Starts Decrease from Previous Year
The Commerce Department recently announced that the number of new housing starts in Central Ohio decreased 16% from 2014. This contrasts with the national average, which shows that the housing starts rose 6.5% over the same time period.
Declining housing starts and rising demand could be setting the stage for a perfect storm for a housing shortage. This could lead to a couple of problems:
- Rapidly rising prices that most consumers wouldn’t be able to afford.
- A cooling housing market as many customers grow frustrated looking for housing in Columbus.
These problems could be avoided, but local officials must recognize the challenges. They are going to need to make creating new housing units a priority as demand continues to rise.
The data shows that housing construction across the country is starting to peter out. However, construction in other areas is still rising, even though at a slower pace than in 2014.
Fortunately, new solutions have been proposed, which could make a big difference in the months to come. Fifteen organizations including Community Development for All People have started investing in the Housing Strategy Project, which will increase the number of housing units available to working and middle class residents. Katelin Hansen and other residents in South Columbus are pleased with the new project and confident it can solve the housing needs of many local residents.
Real estate professionals are also encouraged. They feel that creating new affordable housing will reduce pressure on the housing market to allow for sustainable growth.
The Central Ohio housing market has been one of the fastest in the country over the past year. Experts have debated whether the regional housing market would continue to rise for the months to come. A recent report from Nationwide Mutual Insurance suggests that the market is poised for further growth, is encouraging for the growing population.
Housing Outlook Remains Optimistic
The Central Ohio housing market was recently recognized by the National Association of Realtors (NAR) as being one of the fastest growing in the country. The NAR reported that sales fell 2.1% in 2014, but forecast that they would rise 8% in 2015. Sales data from local brokers suggests that these figures may actually exceed these predictions.
Nationwide Mutual Insurance tries to predict the direction of the housing market for at least a year. They have given the Central Ohio housing market a score of +2 in their third quarter report, which indicates that they expect the market to remain resilient for the next 12 months.
The scale used to rate housing markets is ranked on a -4 to +4 continuum. Nationwide uses several metrics to determine the direction of the market, which include:
- Job growth
- Demographic changes
- Access to financing
- Acceleration and deceleration of housing prices
These factors show that the market may have another record year in 2016. Only 12 regions received a higher ranking of +3, while 156 tied Central Ohio for a +2 ranking. No housing market in the country received a ranking of +4.
The rest of the country’s housing market isn’t performing quite as well, although it is still experiencing healthy growth after freefalling during the recession. A number of local factors are affecting demand for housing at the regional level. For example, the economies of a number of smaller communities are heavily dependent on their energy industries, since they are home to coal, gas and other energy producing resources. These markets received lower rankings, since energy prices have fallen in recent months.
Rising sales from the past few months appear to corroborate these predictions. The Columbus Realtors group presented data showing that Central Ohio housing sales increased by 9.8% in August. Their data shows that twice as many home sales took place over the past 46 days as average. The report also stated that housing prices have risen much more slowly, which suggests that the market may have plenty of room to grow.
The Central Ohio housing market may be growing at a record pace, but there is still a lack of affordable housing options for low income families. Policymakers have discussed some of the ways that they can address these problems. One of their options is by replacing some of the abandoned houses that are falling apart around the state.
New Report Shows Need to Replace Abandoned Housing
Policy Matters Ohio recently published a report that showed the problems with the state housing market. The report said that many foreclosed properties have fallen into disarray. These properties have been held by lenders since the foreclosure crisis took hold nearly a decade ago. They probably won’t be sold anytime soon, since they are in dire need of repair.
Policy Matters Ohio said that these properties should be replaced. Their presence could threaten prices of other properties, which could derail the state’s otherwise stellar performing housing market.
The question is what to do with the land if these buildings are torn down. Some groups recommend replacing these buildings with units that would house low income families, since there is a great need for that.
Replacing housing units would also benefit the state taxpayers. The number of residents receiving assistance for public housing has been elevated in recent years. In fact, a recent report from the U.S. Housing and Urban Development Inspector General showed that nearly 400 families are receiving housing aid that they aren’t eligible for. Some of these families are generating six figure household incomes, which means that they are taking up spaces that are needed by people without the resources. Local housing officials are given discretion over enforcing these policies, but many of them have been reluctant to take action.
While some of these families are actually making high incomes, the shortage of available housing units in many parts of the state is a driving factor. The state recognizes the need to increase the supply of housing for middle and working class families, but has yet to release any substantive proposals to address the issue. The state legislature is currently discussing a new bill (HB 134) that would expedite the process of acquiring, destroying and transferring properties, but some details may still need to be ironed out.
Many policymakers will likely be swayed by the recent report and may consider trying to purchase foreclosed units to develop new affordable housing programs.
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