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 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 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.
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.
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 stronger 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.
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 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.
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 unemployment 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.
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