Everyone can talk about the housing bust that affected all of us during the years 2006 through approximately 2009. We all have or know of horror stories where friends or family lost their homes to foreclosure. Due to the drop in prices/value, many of those folks could not sell and clear their mortgages, and opted to just walk away. How far have we come since those years, and does the market continue to rebound? The overall answer to that question is YES! Mind you, it will take more time before we ever recover to those all-time high price levels, but we are steadily improving.
Recently in Columbus at the Ohio Association of REALTORS® Winter meetings, Paul Bishop, PHD, the VP of Research of the National Association of REALTORS®, gave an exclusive presentation entitled Five Forces Driving the Real Estate Market in 2016. According to NAR, the statistics from 2014 to 2015 show that housing starts are up 11%, new home sales are up 14%, existing home sales are up 2% and median existing home prices grew by 4%. However, mortgage interest rates went from 3.9% to 4.3%.
The Ohio Association of REALTORS® report that “sales during December reached the highest level for the month since OAR began tracking their data in 1998.” They also report that there was a 3.8% price gain and a 9.6% gain in the number of units sold.
So, what is happening locally? In Stark County, 4918 units were sold in 2015, an increase of 8% over 2014 and 26% over 2011. In both 2014 and 2015, single family residential properties sold, on average, for 90% of the original list price. Average days on the market was 48 days in 2015 and 45 days in 2014. In 2015, the average sale price was $127,839, a 5.6% increase over 2014 and a 20% increase from 2011!
What can we take away with this information? Sellers can expect a slight improvement in a final sales price over 2014, but should realistically price the home so it does not languish on the market too long. If no showings are being requested or there are a lot of showings and no offers, the home is most likely priced too high. In the same fashion, buyers should not severely discount the asking price and expect the seller to accept their offer. This is assuming, of course, that the seller or buyer’s agent has thoroughly researched the market to come up with a realistic asking price or offer price. And keep in mind interest rates are on the rise! For every quarter percentage point interest rates go up, the pool of buyers able to purchase that home also goes down. The end result is simply this….in order to attract the next pool of buyers, the price must also go down.
Lack of new home sales seems to be the biggest concern in the real estate industry, as new starts have most definitely not kept up with demand, determined by statistics of new adults moving into the single-family dwelling market. In recent years, financing has been difficult for this segment of the industry. Hopefully, that can be corrected in the next few years so supply can keep up with demand.
In the meantime, get those homes on the market! Spring will be upon us before you know it and buyers are looking!
As appearing in The Canton Repository 2-5-16