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.