Central Ohio Home Prices Rose Almost 17 Percent In April
The uncertainties caused by the COVID pandemic kept many homeowners from listing their properties last year.
At the same time more buyers than ever started to look for a new home, hoping to take advantage of the lowest interest rates ever.
This created the perfect storm for an unprecedented real estate boom which has completely depleted inventories giving buyers no option but to pay more than asking price to secure one of the few homes listed for sale.
The latest housing stats show that the boom continues … but may be slowing
Average Sales Price Continues to Rise
Home sale prices in central Ohio have of course been on the rise for the last several years (due in great part to low mortgage interest rates, combined with increased demand and reduced supply) and in April they continued their ascent, posting record gains.
The average sale price of a home in Central Ohio was $291,900 in April, indicating a year-over-year gain of 16.6 percent which is the highest on record for any single month.
A recent study by the National Association of Home Builders found that regulations (imposed by all levels of government) on new homes account for $93,870, or 23.8 percent, of the current national average sales price ($397,300).
According to the Building Industry Association of Central Ohio, the average cost of a new home in April was $378,850. Applying the same formula suggests that our local builders are dealing with roughly $90,000 in regulatory expenses per home.
Rising lumber and other material costs over the past 12 months have further contributed to raising construction costs.
Locally, one of the primary causes of our housing shortage is local opposition to new development.
Given that we are experiencing unprecedented demand for housing in Central Ohio, and that each new home built adds 2.9 jobs and $130k in tax revenue, it is in our best interest to work together to reduce the regulatory burdens on our builders.
Buyers Continue to Pay Above Ask
Once again the average sales price exceeded the last list price. On average homes sold 2.9% above their asking price in April. In this market, many buyers decided to pay $10,000 or even $40,000 above list price, with appraisal gap coverage to secure a property.
Appraisals often fall short of the higher contract price. With appraisal gap coverage, buyers agree to bring cash to closing to cover some portion of the difference between the appraised value and the contract price.
Homes Continue to Sell Quickly
Even with increased pricing, homes sold in an average of 16 days which is also a record low.
The time it takes a home to sell is based on several factors including location, condition, and price. For instance, homes under $350,000 sold in an average of 13 days. Homes sold between $350,000 and $500,000 took about 19 days to sell. Homes sold between $500,000 and $700,000 sold in an average of 22 days and homes over $700,000 took an average of 45 days to sell.
Inventory Levels on the Rise
Housing inventory ticked up in April. There were 3,619 homes listed for sale in April, up 17 percent from March, and 32.9 percent from last year. In reaction, home sales increased 23.1 percent from last year and 12.5 percent from the prior month and contracts increased 18.2 percent year over year.
April ended with just 1,939 homes listed for sale, down 41.6 percent from a year ago and not far off the record low set in February of this year.
Year to date (January through April), new listings are now up 3.1 percent and sales are ahead of 2020 by 8 percent. While homeowners are beginning to realize that now is an exceptional time to sell, many continue to express concerns over finding a replacement property and timing their transactions. If you fall into this
Window of Opportunity for Buyers
While March or April are busy months for home sales (a time when most buyers are aggressively looking for a new home), we are now entering the summer season a time when consumers are preoccupied with other activities (graduations, weddings, vacations, cook outs and family reunions, athletics and sporting events, etc) and they don’t spend as much time house hunting.
What this means for buyers is fewer buyers to compete with! Less competition creates a window of opportunity to secure a home at a reduced price while locking in today’s low mortgage interest rates.
Buyers who have been priced out of the market, or those who have been looking and lost out on properties in the past should seize this opportunity as mortgage interest rates will not stay this low much longer and home prices will continue to rise.
April 2021 Home Stats
- Closed Transactions – 2,804 – UP 23.1%
- Pending Contracts – 3,547 – UP 18.2%
- Inventory for Sale – 1,939 – DOWN 41.6%
- New Listings – 3,619 – UP 32.9%
- Days on Market – 16 – DOWN 46.7%
- Average Sales Price – $291,900 – UP 16.6%
If you’re interested in selling your Central Ohio home we’d encourage you to give us a call so we can show you the market conditions in your neighborhood and help you to get the most exposure and the most money for your home!
If you, or someone you know is considering Buying or Selling an Investment Property in Columbus, Ohio please give us a call and we’d be happy to assist you!
The Opland Group Specializes in Real Estate Sales, Luxury Home Sales, Short Sales in; Bexley 43209 Columbus 43201 43206 43214 43215 Delaware 43015 Downtown Dublin 43016 43017 Gahanna 43219 43230 Grandview Heights 43212 Galena 43021 Hilliard 43026 Lewis Center 43035 New Albany 43054 Pickerington 43147 Polaris Powell 43065 Upper Arlington 43220 43221 Westerville 43081 43082 Worthington 43235