Central Ohio Apartment Construction Skyrockets Alongside Rental Rates

The current market in Central Ohio is geared towards renters: last year, for the first time in two decades, more apartments were built than single family homes, at 3,037 and 2,903, respectively, according to The Columbus Dispatch. This stands in stark contrast to 2006 to 2012, during which time the number of apartments built was fewer than 5000, or about 833 a year. Percentage wise, the number of rental households in Central Ohio rose 8.7 percent between 2009 and 2013 while the number of owner-occupied households dropped 9.3 percent, according to the National Association of Realtors. 

Part of this can be attributed to inadequate finances following the recession; part of it can be attributed it to changing preferences and demographics. Young people are getting married and starting families later in life; so too are they delaying buying their first home. On the other end of the spectrum, there is an increasing rental demand from empty nesters looking for low-mainitence lifestyles. Both cases have resulted in an increased spread of luxury apartment buildings offering things like granite countertops, walk in closets, high ceilings with crown molding, wood floors, and prime locations walking distance to restaurants  bars, shops, and parks. The Short North, Downtown, German Village, Victorian Village, Italian Village, and Brewery District are popular areas. Of course, this all comes at the expense of soaring rental rates. One bedrooms of this sort are rare for less than $1000 and two bedroom units can cost as much as $3000 per month. 

Aston Place is one of many newly constructed apartment complexes in the Short North

As a result, homeowners can find some strong incentives to buy, including historically low interest rates and tax incentives. Not to mention, when you buy a home, you benefit from building equity and property appreciation. You can update or modify your home as you please and don't have to abide by silly rules ("no candles"), and forget paying an extra $30/month for having a pet, and another $80 for parking your car. Use Realtor.com's Rent vs. Buy Calculator to see which option would make more financial sense for you, or contact me to see how I can help. 

Experts expect apartment construction to slow down within the coming year, as the best locations are purchased and developed. 

Investors Withdraw From Housing Market

In August, many investors withdrew from the housing market, possibly resulting from the Federal Reserve's signal that interest rates will be rising. It is no surprise then, that the portion of all cash buyers has dropped. At only 23%, cash transactions represent the lowest share since December 2009.

 First-time home buyers, who account for 30% of transactions and often rely on mortgage financing, will benefit from reduced competition with all-cash offers, fewer bidding wars, and increased inventory.  Another side effect of investor withdraw is the 1.8% decline in existing home sales from a seasonally adjusted 5.14 million in July to 5.05 million in August. This marks the first dip following four months of consecutive gains.

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The Best Time to Buy a Home

The real estate market is cyclical, moving up and down. Still, seasonal variations affect buyers and sellers alike.

The spring is the most common time to buy a home, as most home sales occur between April and July. Buyers like buying at this time because they have more vacation time, better weather, and don't have to take their kids out of school should they change school districts. This is good news from an inventory standpoint, but bad from a price perspective. Sellers who have just listed their homes in the spring will be less willing to negotiate the price than sellers who have withstood less favorable conditions. Increased competition means buyers risk losing a home if they do not act quickly.

Contrarily, buyers can generally expect to find less inventory but better prices in the fall, winter, and summer (the "off" season), when competition is reduced. Realtor.com suggests buying a home between Thanksgiving and New Years, as home prices are typically at a 12-month low in December. Also during the colder months, some mortgage lenders forgo some of their fees in order to attract customers, who in turn get good mortgage deals. Realtor.com also lists early spring as a good time to buy, just as sellers are listing their properties and determining an asking price.

Interest rates and related economic factors are also important to consider when starting your home search. Ultimately, though, the best time to buy varies from person to person, based on personal factors. Beware: waiting for the "perfect" time to buy a home may result in a lost opportunity, given the unpredictable timing of the real estate market.

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The Importance of Having a Realtor

With mobile apps and Internet sites such as Realtor.com, it's easy for house hunters to form an idea about what type of home they want and how much they want to spend. But that doesn't mean that Realtors are no longer necessary! Following is a list of reasons why it's critical to have a Realtor when buying, selling or leasing a property.

• Realtors have an up-to-date, high level of knowledge about the real estate market. This is important because real estate transactions are often the biggest investments of one's life.

• Realtors can help determine how much you can afford to spend, as well as how much you should spend.

• Realtors can refer to you to the best qualified lenders. They can also find qualified home inspectors to generate written reports. 

• Realtors have access to exclusive resources, such as the MLS (Multiple Listing Service). This may show available homes that are not openly advertised. For example, Realtors know from the MLS  and from fellow Realtors when new homes are listed before the general public knows.

• Realtors can provide information and evaluation when viewing homes, and can also offer objective input. Realtors are especially helpful for local community information, including utilities, zoning, and school districts. 

• Relators are expert negotiators, working to get you the best possible price. 

• Realtors serve as marketing coordinators and distributors to other agents and networks. They can host marketing campaigns such as open houses.

• More then 50% of real estate sales are cooperative sales, meaning a real estate agent other than yours brings in the buyer. This proves how important it is to take advantage of the connections real estate agents have with one another. 

• Finally, Realtors can guide you through the closing process, helping you understand and work through the legalities and paperwork involved.

Looking for a Realtor? I work with buyers, sellers, and renters. I encourage you to read my client testimonials and contact me!