Ohio Housing Price Increases Lag Rising Sales

The Ohio housing market is one of the strongest in the country. According to the National Association of Realtors (NAR), housing sales this spring were the highest in ten years. The market is currently one of the strongest in the country, but price increases are still lagging the national average.

Housing Demand Surges investment-propertythroughout Ohio

Stronger job growth has significantly boosted demand for housing units across Ohio. Lawrence Yun, the national economist for the NAR, said that the revitalized housing market is a symptom of a more robust economy.

“Buyers have come back in force, leading to the strongest past two months in sales since early 2007,” said Yun. “This wave of demand is being fueled by a year-plus of steady job growth and an improving economy that’s giving more households the financial wherewithal and incentive to buy.”

Other temporary factors could be driving growth as well. Yun pointed out that mortgage rates have been increasingly slightly in recent months, which may have spurred some buyers to start looking early while they can still find affordable loans. The trend could reverse if the Federal Reserve decides to raise rates further, but Yun and other experts are confident that growth will remain stable for the duration of the year.

Will Prices Increase With Demand?

Three weeks after releasing its first report, the NAR stated that housing prices in Central Ohio have risen slower than the national average. Analysts stated that median the housing price in the second quarter was $172,000, which was a 5.8% increase from the prior year. Throughout the rest of the country, housing prices increased by 8.2% over the same time interval. The median housing price is only slightly over $225,000, which is far lower than the national average. Housing prices are even fairly low in Columbus and other large Central Ohio cities.

Jill Rudler, a representative of Keller Williams Realty, said that the modest price increases were still encouraging, since they outpaced previous years. “Our gains are normally 3 or 4 percent a year, so 5 percent is huge,” she acknowledged. “We also haven’t seen the losses that other markets have seen over the years.”

Experts are still unclear about the long-term direction of housing prices. Rising demand could be a leading indicator that prices will increase in the coming months. However, it’s also possible that demand could stagnate, but Realtors remain optimistic about the long-term direction of the Ohio housing market.

Slower Job Growth Unlikely to Affect Central Ohio Housing Market

The National Association of Realtors (NAR) has ranked the Central Ohio housing market as one of the 20 strongest in the country. A number of factors could be driving the market, but job growth appears to be the most significant. However, some economists fear that the job growth engine could be sputtering, which raises some concerns about the long-term direction of the housing market.

Job Growth Concerns Overstated

A recent report from PNC Financial Services Group Inc., sales-risingfound that the job growth is expected to slow slightly in 2015. They reported that the number of jobs in Central Ohio increased 2.3% in 2014, but expect that figure to drop to 2.2% this year.

The figure is not very significant, but still raised some concerns among economists and real estate agents. Some fear that deceleration in the job market is a leading indicator that the economy is losing steam, which would threaten the direction of the housing market.

However, experts from PNC doubt that there is anything to be worried about.  Mekael Teshome, an economist with PNC, responded to this question with stark optimism. “No, not at all,” Teshome said. “I think one of Columbus’ advantages is it’s not a boom-and-bust economy. Settling into a normal rate of growth is not entirely bad, especially with the unemployment rate fairly low. It’s really actually a good thing – we’re at cruising speed.”

Teshome acknowledged that job growth declined slightly in the third quarter. However, he said that slower growth was expected. He also pointed out that job creation was actually stronger than PNC predicted earlier this year.

“Columbus will remain among the growth leaders in the Midwest, even as the region’s economy settles into its long-term growth rate,” read the PNC report, which bodes well for the direction of the housing market as well.

Housing Market Likely to Continue to Rise

The housing market could face a setback if job growth decline too much, but a fallout in the job market doesn’t appear to be on the horizon. The NAR believes that housing demand will continue to rise for the foreseeable future and nothing in the PNC report indicates otherwise.

While job growth may decline slightly over the next few months, it’s likely to still surpass the national average. Housing demand will probably continue to rise if it continues to outperform neighboring states, especially if more people relocate to Ohio for better career prospects.

  

Northern Ohio Condos Sales Increase Nearly 12% in June

The Ohio housing market has been growing rapidly over the last few years. Demand for condos in the northern part of the state has been especially strong. According to Michelle Jarboe McFee, condo sales increased 11.6% between January and June, but could rise even higher before the end of the year.

Northern Ohio Housing Market Continues to Accelerate

The housing market throughout most of Ohio has been home-salesstronger in 2015 than any other year since the beginning of the recession. However, the market has been particularly strong in Northern Ohio. Data from the Northern Ohio Regional Multiple Listing Service shows that sales have risen five times faster in the northern region than the rest of the state.

The report may be surprising after recent data detailed the strength of the Central Ohio housing market. Realtor.com recently reported that Columbus has the fifteenth strongest housing market in the country. However, while the market for homes in Central Ohio is particularly strong, the market appears to be growing much faster in the northern parts of the state.

Economists are confident that the economy will continue to grow through 2015. They believe that the stronger job market and increased business activity in Ohio will lead to a stronger housing market before the end of the year.

Condo Market is Particularly Resilient

The demand for condominiums and single family homes is poised to grow even faster than demand for other units in 2015. There are probably several factors that are affecting demand for condos and other smaller properties in the area:

  • A growing number of millennials are choosing not to have children or are waiting longer before starting families.
  • The strong job market appears to be drawing recent college graduates from other states to Ohio.
  • Many families chose to downsize during the recession and have become more adjusted to living minimalist lifestyles. They may prefer living in smaller homes.
  • Debt remains a concern for many Ohio homeowners. According to a recent report, a growing number of Dayton homeowners are underwater with their mortgages. These families may also want to live in smaller homes to save money.

Demand for all forms of housing is expected to continue to rise throughout the rest of the year. The market should prove especially strong as the job market and other sectors of the economy grow. However, the market for condos in Northern Ohio is one of the most hottest in the state.

 

Zillow Report Predicts Ohio Housing Market Growth to Double in 2016

The Ohio housing market had been growing tepidly between 2008 and 2014. However, recent reports from Zillow shows that the market is finally starting to recover. Experts from Housing Predictor feel that local real estate investors should be optimistic about the long-term direction of the market.

Zillow Expects Growth to Double in 2016housing-market

Zillow reports that demand for housing in Ohio increased by 1.7% in 2015. This is stark improvement over prior years, while the market had been stalling. Zillow’s research also predicts that the market will grow by 2.6% between May 2015 and May 2016.

There appear to be a number of factors that are fueling the local housing recovery. The strengthening job market is probably one of the biggest reasons for the turnaround. The unemployment rate in Ohio was about 10% in 2010, but has since dropped to 5.6%. The state could reach full employment by the middle of next year if the economy continues to improve at the current pace.

Demand for housing will continue to grow rapidly as the job market continues to improve. Ohio has proven to be home to one of the strongest economies in the country, so growth is expected to continue through the next year.

Some temporary problems may hamper the state economy to some degree, which could curtail housing market growth. Precipitation has been heavy this summer, so the farming industry hasn’t been as productive as possible. Economic growth may accelerate if weather patterns change before the fall, which could spur the housing market for the future.

The Cleveland Index shows that housing demand in the Cleveland area has grown more rapidly than most other areas in the state. The demand for housing in

Construction and Sales of New Homes Still Menial

The housing market as a whole is proving to be rather robust. However, demand has primarily increased in areas with older housing units. Construction and sales of newer homes have failed to increase to nearly the same degree.

Housing starts could pick up in the coming year if prices rise faster than originally anticipated. Many experts have raised concerns about affordability as prices rise with demand. However, David Blitzer, chairman of the index committee at S&P Dow Jones Indices said that prices will eventually begin to taper out, although he didn’t specify whether the deceleration would be driven by increased supply.

“Over the next two years or so, the rate of home-price increases is more likely to slow than to accelerate,” Blitzer wrote.


Source: Zillow

Central Ohio Real Estate Market Starts to Boom After Years of Stagnation

The housing market in Central Ohio was stagnant for several years after the recession. However, recent reports indicate that the market is starting to gain traction. The Columbus REALTORS® Multiple Listing Service (MLS) showed that the number of new homes and condos on the market increased 15.2% between March and April and 7.4% year-over-year. Many experts are confident that the market is going to continue rising for the foreseeable future.

Housing Experts Surprised by Sudden Turnaround

The Central Ohio housing market didn’t fare well after the recession. Part of the reason may have beendue to the fact that the state unemployment rate was higher than the national average for several years. However, recent data from the Bureau of Labor Statistics shows that the benefit-from-housing-marketunemployment rate in the state is now on par with the rest of the country. This could be one of the factors that is driving the recent housing recovery.

Regardless of the driving factors behind the sudden uptick in housing sales, housing experts throughout the state are highly encouraged by the recent developments.  Kathy Shiflet, President of Columbus REALTORS®, is among the optimistic experts.

“Central Ohio sellers have gotten the message that it’s truly a great time to put your home on the market, which was made apparent by the significant number of new homes listed in April,” Shiflet stated on her company’s website. “It’s clear the central Ohio housing market is really beginning to heat up!”

Both housing prices and sales have clearly risen. If job creation and other stimulus efforts are continued, then the trend will probably be sustainable for the near future.

Recovery Benefits Sellers Over Buyers

While the housing recovery is encouraging overall, sellers are ultimately the ones benefiting from it. The average home price rose 4.4% from the previous month, which limits opportunities for prospective buyers that were seeking a bargain.

Many real estate professionals report that the recovery has led to bidding wars between buyers, which could create frustrations for people that are trying to find a new home. According  to the Columbus Dispatch¸ the bidding wars are most concentrated in Central Ohio cities such as Upper Arlington and Clintonville.

Ken Wightman, an agent for Berkshire Hathaway, acknowledged that sellers and their agents are ultimately the beneficiaries of the new trend. “When we put a property on the market now, we’ll get multiple bids — that’s automatic,” he said.

Sellers realize that they are the ones holding the cards in the current market. They are giving buyers a deadline to give their best offer.

The Paradox of Expensive Rent for Low Income Ohio Residents

The economic recovery is finally starting to gain traction in Ohio. However, the turnaround isn’t benefiting everyone equally. The prices of rent in low income communities are rising rapidly, although the incomes of those residents have remained tepid. Many housing experts, economists and policymakers argue that this trend underscores the need to create more affordable housing units in Central Ohio.

Average Resident Struggles to Afford Local Rent

The National Low Income Housing Coalition recently released the 2015 Out of Reach Report, which studied the number of residents that could afford a two bedroom apartment. The report showed that the highest wage needed to afford such an apartment was $14.13 an hour. This actually made Ohio the 10th most affordable housing market for low income families. On the surface, this sounds like Ohio residents are faring better than their counterparts in other parts of the country, but this analysis only factors one side of the equation.

The problem is that median wages in Ohio are lower than 34 other states.  Wages for low income residents are even more problematic. The state has a minimum wage of $For-Rent-Yard-Sign8.10 an hour and an average wage of $12 an hour, which is over $2 less than needed to afford an average two bedroom.

Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio (COHHIO) said that the situation is fairly grim for many low income workers. “”Everyday in Ohio, people are having to make the tough choice between food and rent,”” said Faith. ““These are people who have served our country during wartime, people with disabilities, senior citizens, and people who are working multiple minimum wage jobs and still not making ends meet. So while Ohio is far from the most expensive housing state in the country, it’s unreasonable to have to work 70 hours per week to put a modest roof over your head.”

The situation may not be as dire for the average worker as Faith and some advocates argue. It fails to take into account that most people renting two-bedroom apartments are sharing with spouses or roommates, which means that they will multiple streams of income to help make the unit more affordable. However, even many of these people may struggle to pay housing with additional bills that arise. It also shows that single parents are struggling to pay for an apartment that accommodates themselves and their children.

Need for New Housing Units

The real solution to the problem will be to create new housing units for low income families. The problem will eventually correct itself as prices decline to reflect a larger supply of housing for working families. Governor Kasich established  Ohio’s Housing and Homelessness Collaborative to help rectify the problem, which is expected to show results in the coming year.