Ohio sees surge in home prices during pandemic
More evidence emerged this week that the pandemic shifted home-buyer attention away from big, expensive cities to smaller, more affordable ones, including Dayton and others in Ohio.
Whether such a shift lasts is another question.
According to Federal Housing Finance Agency data, homes appreciated the most in 2020 in second-tier cities, while former hot spots languished. The figures are the latest in a string of data showing COVID-19 dampened buyer demand in big, costly cities while more modest cities boomed.
“Price appreciation has slowed in some areas that we think of as tech hubs, and areas that are major urban centers,” said Danielle Hale, chief economist with the listing site Realtor.com.
“You see an even bigger effect in rent because renters are more flexible. That’s where we’ve seen the biggest impact, with rent declines in Boston, San Jose, Seattle and San Francisco.”
For home price hikes, none of those big-time destinations could hold a candle last year to Boise, Idaho, where prices leapt 23.4% from the fourth quarter of 2019 to the fourth quarter of 2020, according to the FHFA.
Following Boise in the top 10 were Tacoma, Washington (16.3%), Salt Lake City (15.9%), Phoenix (14.8%), Camden, New Jersey (14.7%), Albany, New York (14.5%), Worcester, Massachusetts (14.3%), Cleveland (14.2%), Bridgeport, Connecticut (14.1%) and Seattle (14%).
All Ohio metro areas on the FHFA list of Top 100 cities beat the average U.S. price growth of 10.8%, although none fared as well as Cleveland. In Akron, home prices rose 13.1% from the fourth quarter of 2019 to the fourth quarter of 2020, in Columbus 12.3%, in Dayton 11.2%, and in Cincinnati 11.1%.
On the bottom rung was San Francisco. For years one of the nation’s most expensive metro areas, the City by the Bay saw home prices rise a modest 2.4% from the fourth quarter of 2019 to the same period in 2020.
Other large or expensive metro areas to see below-average price growth from the end of 2019 to the end of 2020 were Honolulu (2.9%), New York (8%), Chicago (8.6%), Philadelphia (9.3%) and Washington, D.C. (9.5%).
The FHFA data reflect similar figures from other sources.
The widely-watched S&P CoreLogic Case-Shiller Index, for example, found that home prices in the Cleveland area rose 11.5% last year, better than in New York (9.9%), San Francisco (8.7%), Chicago (7.7%) or Washington D.C. (10.3%).
Part of this is driven by simple affordability. With a median sales price of $1.14 million, San Francisco, for example, is out of reach for many mortals.
Hale expects San Francisco and other big cities to boom again once the pandemic ends, although she believes it may depend on how flexible employers are with allowing workers to stay home.
“When cultural amenities and other big attractions start to reopen, we will see cities becoming more attractive,” she said.
“A lot’s going to depend on whether the pandemic shifts people’s behavior for the long term or whether things revert back to normal soon,” Hale added.
“A lot remains to be seen, but I do expect the cities to bounce back.”