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.

Co-Signing a Mortgage? Beware

Jim Weiker, writer for The Columbus Dispatch, warns against the danger of co-signing a mortgage. The co-signer assumes all the risks of the loan but receives none of the benefits. The lender is just as responsible, and this can amount to taking on a second mortgage. A co-signer is responsible for making a payment if the other person defaults. Ask yourself if you can afford that—as many as 3/5 co-signers end up paying the loan as reported by the Federal Trade Commission.

Even worse, some theorize that co-signers are pursued when lenders face delinquent funds. A lender could sue you, especially if you have better credit than the other signee. Thus, it could limit the co-signer’s ability to borrow money him/herself.

Finally, co-signing for a friend or family member could put a strain on your relationship. Would you judge they way someone spent that money that you co-signed for? If you want to financially help someone you care about, consider giving money towards the down payment (up to $13,000/year without paying a gift tax, or $26,000 filing jointly).

So before you co-sign a mortgage, think twice before you agree. Read the full article here.

How to Avoid Buyer's Remorse

Jim Weiker, writer for The Columbus Dispatch, shares some survey results that could provide valuable lessons to buyers. A Trulia survey was issued this spring to 2,130 Americans. Here are the results:

52% of those surveyed expressed some regrets about their current residence

34% wish they had bought a bigger home
27% wish they had done more remodeling
22% wish they had known more about the home before deciding to buy it
18% wish they had put more money down
16% wish they had been more financially secure before buying.

Concerned about buying the right home? Contact me to see how I can help!

Local Builders Dominate Central Ohio's Market

The Columbus Dispatch writer Jim Weiker revealed on Sunday how Central Ohio's residential construction is dominated by big and aggressive local firms, to an "unusual degree." More than 12,000 of the approximate 13,000 apartments under development in Central Ohio are being built by companies based in the area. M/I Homes and Dominion Homes account for over half of all homes built in Central Ohio. Jim Hilz, executive director of the Building Industry Association of Central Ohio comments that for two companies to have that amount of market share is unprecedented. All but three of Central Ohio's other big home builders are based in the area. Aside from Ryan Homes, based in Reston Virginia, none of the nation's largest builders even operate in Central Ohio. Many have tried to establish themselves (Beazer Homes, Toll Brother, and Centex Homes) but have failed to do so. Central Ohio's local companies such as Bob Webb and Romanelli & Hughes continue to thrive thanks to their strong roots and good reputations with residents, customers, and landowners. A local company's established arrangements with subcontractors, experience with customers who may wish to remain with the same firm, and connections with land-owners and developers all benefit local companies.