Housing market? It remains red-hot
No one needs to tell Mike and Suzy Johnson that the Columbus housing market is hot.
Within a day of listing their Orient-area condominium, they had five offers — all above asking price.
“We weren’t anticipating that quantity that quickly,” said Suzy Johnson.
Such tales are common in central Ohio, where the realestate temperature has never been higher.
The latest evidence: Columbus is one of the few cities outside of the West Coast to land among the nation’s 10 hottest housing markets in new studies by Realtor.com and Trulia.
The rankings are compiled differently but they tell the same story: Job growth, population growth and other factors have combined to create extraordinary demand
for homes in the Columbus area.
“I’ve been an agent 24 years and I’ve never seen a market like this,” said Brenda Bradford, who represents buyers for Keller Williams Excel Realty in Westerville.
Columbus was the nation’s fifth-hottest housing market in June, according to Realtor. com, which bases its list on the number of times shoppers search for homes and how long homes remain listed before selling.
Shoppers checked out central Ohio homes on Realtor.com 2.6 times more than they did in other cities. In addition, Realtor.com found that central Ohio homes sold in an average of 37 days, far below the national average of 60 days.
For its ranking, Trulia looked at how many homes remain on the market longer than two months.
Nationally, almost half of homes listed on April 1 were still listed two months later. In Columbus, however, only 32.8 percent remained unsold after two months, the ninthlowest figure in the country. Columbus was the only city east of the Mississippi to crack the top 10.
“Columbus looks like the odd person out on that list,” said Trulia Chief Economist Ralph McLaughlin.
“But when you look at some of the demographic and economic components of Columbus, it doesn’t look like the odd one out. Columbus is home to (one of) the biggest (universities) in the U.S., there’s a lot of young people there, a lot of educated young people, and the types of employers in the Columbus area tend to Columbus-area home prices have risen while the number of homes on the market has fallen since 2011. be employers that pay decently and provide very stable employment, such as Ohio State, JP Morgan Chase, Nationwide and Honda.”
The Columbus area added more than 20,000 residents over the past year, more than 20,000 jobs and more than 11,000 households. In all those areas, which are key drivers of home demand, central Ohio outperformed national averages.
Builders added about 7,000 apartments and homes in the Columbus area over the past year, not enough to meet the need. On top of that, the number of homeowners who put their home on the market has actually shrunk this year.
The result: Demand far exceeds supply, driving up prices and pushing down the number of homes remaining.
Central Ohio home prices rose about 6 percent over the past year, more than twice the historic average, while the number of homes for sale dropped to a record low of 4,606 at the end of May. (Just five years earlier, buyers could have chosen from more than 10,000 homes.)
Finding low-priced homes in particular is all but impossible.
According to Trulia, the number of central Ohio “starter homes” on the market has fallen 39 percent over the past year. The number of “move-up” homes has fallen 46 percent.
Sellers like the Johnsons find shoppers lining up the moment a home opens for showing — and can then choose from a handful of bids.
“For sellers, you need to go through all these offers,” said Clintonville HER Realtors agent Michele Cleary. “Just because someone offers $50,000 above asking, it doesn’t mean it’s the best offer.”
For buyers, the taste isn’t so sweet. They are often faced with an expensive choice: engage in a costly bidding war or offer well above the asking price the day a home is listed.
When Bradford took clients to a recent showing in Gahanna, she got there right when the home opened but wasn’t the first to arrive. In the short time she was there, 15 more agents toured the home with their clients, she said.
Buyers not available to see the home in person are especially handicapped.
Jorgelina Vergara, who is temporarily living in Brazil, spent last week furiously shopping for a condominium while she was home in Columbus. She put an offer on a Brewery District unit Monday after missing out on some that had sold by the time she arrived in town.
“The inventory is moving just so fast,” Vergara said. “Things I saw just a few weeks ago were gone.”
If buyers do a find a home, they should expect to throw in some concessions.
Offers now frequently include provisions that for years were unthinkable, such as a “no remedy” clause, in which the buyer agrees to accept the home as is, or an appraisal clause, in which the buyer agrees to pay the difference between the contract price and the appraisal, if it is lower.
In May, the greatest shortage of homes was found in Clintonville, Gahanna, Obetz, Pickerington, Reynoldsburg and Westerville. All those neighborhoods had less than one month’s supply of homes on the market. In other words, all homes listed would be sold within a month if no new homes were added.
Unfortunately for buyers, experts don’t foresee the market easing anytime soon.
In Nationwide’s latest “Health of Housing Markets Report,” all signs are positive for Columbus.
“As long as people keep coming here and jobs keep forming, we think it should be sustainable,” said Nationwide Senior Economist Ben Ayers.
For him, the situation isn’t simply academic. He and his wife, Katie, lost bids on several Worthington homes before finally succeeding in buying one in what Ayers calls “outer Dublin.”
“The first four homes we bid on, there was an average of eight bids, with winning prices of at least $10 grand over asking,” Ayers said. “There are too many people looking for too few homes.”