Housing Market Update

Jim Weiker writes in The Columbus Dispatch that recent trends continue: home shortages, increased home prices, reduced time on the market, and declining home sales. Why is the imbalance between buyers and sellers so persistent? Weiker reports that roughly 20% of central Ohio homeowners still owe more than the value of their home.  Others are worried that their house will sell too quickly, that they won't have anywhere to live when it does sell, and that interest rates (despite being relatively low) are not as good as the ones they are currently sitting on. Another problem is minimal new home construction. According to Lawrence Yun, the chief economist with the National Association of REALTORS, claims that new-home construction needs to increase by at least 50 percent in order to create a balanced market. Is this market the new normal, or is it just facing a slow recovery? Columbus REALTORS reports in a recent article that the number of central Ohio homes and condos sold in July 2014 increased by 11.4% from June 2014, but is still slightly down from June 2013 (by 3.3%). Promisingly, inventory is up 5.5% from May 2013.  Unfortunately, price increases usurp inventory gains: the average sales price of a home rose by 9.1% since just this May.

Overall, it's impossible to predict the housing market. It seems that gains have been made in past couple of months, but that the market is not as healthy (as of June 2014) as it was one year ago (June 2013), when central Ohio sales were 3.3 percent higher (2,952 compared to 2,856), the median price was 3.8% lower ($159,400 compared to $165,500), and the average number of days on the market was 16.7% higher (72 compared to 60). Despite a market that tends to favor sellers, 100% of central Ohio REALTORS classify the housing market as moderate to strong, and expect it to remain so over the next six months, according the latest Housing Market Confidence Index.