Columbus OH Housing Market Report – June 2016

Central Ohio homes are a hot commodity

The average sales price of a home in central Ohio during the month of June climbed to a new record high of $216,379, a 5.4% increase over June 2015 and a 1.2% rise over the previous month, according to the Columbus REALTORS® Multiple Listing Service. The median price in June was $180,000 a 4.7% increase from the previous year.

The average sales price is the total volume divided by the number of homes sold. The median is the midpoint — half the homes sell for less, while half sell for more.

Central OH Homes that are properly prepared for market and listed according to their market value continue to sell quickly. Investing in a home is one of the smartest decisions you can make. And with the lowest interest rates we’ve seen in three years, it’s even more astute.

There were 3,250 central Ohio homes and condos sold during the month of June, a 5.1% increase over May, a slight dip of .6% from the same month a year ago however, this is due to a lack of inventory as opposed to a lack of demand. In fact, the number of homes and condos for sale in central Ohio in the month of June inched up to 5,914, a 5.8% increase over the previous month, however, inventory is down a whooping 22.8% from June 2015!

There were 4,013 central Ohio homes and condos added to the market during the month of June, a 4.4% increase from May and a .5% increase from the same month a year ago.

Again the challenge for this market continues to be a lack of inventory and a shortage of available homes for sale, and this is what’s retraining this market and holding back sales totals. In June, the number one obstacle to making a purchase, as reported by 40% of buyers on realtor.com, was simply finding a home that met their needs.

During the month of June, homes spent an average of 35 days on the market, which is 12 days shorter than June 2015, nine days shorter than May, and the lowest on record.

With the lack of inventory, central Ohio buyers aren’t wasting anytime and they are moving quickly on new inventory and rushing out to see newly listed homes as soon as they hit the market.

Home building rates accelerated in June, surpassing expert forecasts for the month. According to the Commerce Department, housing starts rose 4.8% from a month earlier to a seasonally adjusted annual rate of 1.189 million in June.

However, while both permits and starts improved on a month-to-month basis, the total permits represented a decline of 15% compared to last June, and the total number of starts represented a decline of 1% compared to last year.

“These headline numbers seem encouraging, with monthly increases in new construction, but the construction of multi-family housing is slowing and we are still not seeing the growth needed to address inventory challenges,” says REALTOR.com Chief Economist Jonathan Smoke. “The June data points on new construction show little change from what we have already observed during the spring and summer. We are continuing to see that new construction is failing to keep up with household formation, so the low vacancies in rentals and the dearth of homes for sale will continue to provide a solid foundation for rising rents and home prices.”

Demand for housing, coupled with a lack of choices for buyers, continues to drive home values. Many owners are electing not to list their current homes out of concern for finding a home to purchase and timing their transactions (If you are one of these owners call us today to learn how we can assist you in locating a home to buy before you sell, and possibly a buyer in place to purchase your home once we’ve identified your new home!), which is holding back available inventory for both first-time and move-up buyers. With values and on the rise and mortgage interest rates hovering near historic lows (which is driving demand), now is an ideal time to sell – especially in some of Central Ohio’s hottest markets where owners could get more than they expected.

With inventory low and prices high, it’s an exceptional time to list and sell your Ohio home. While mortgage interest rates remain low, the Fed is expected to raise rates in July, and again in December and buyers have a brief window of time to locate a home and lock in these historically low mortgage rates. Despite rising home prices, the cost of a home remains near historic lows due to these once in a lifetime interest rates.

Additional Insight on Interest Rates and Their Impact

• This year has seen a mortgage rate reduction of more than 50 basis points, which gives potential buyers more purchasing power. A a 50 basis point reduction cuts down monthly payments by nearly $50 per $100,000 in home price.
• Income needed to qualify is also reduced by around $1,000 due to this type of mortgage rate reduction.
• Using recent median home price data, this also comes out to a $2,500 reduction in the income needed to finance a home with a 20 percent down payment.

Current housing report – June 2016

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