Cincinnati Real Estate Market Update
Number of sales up 1.3% and average sale price up 6.8% for the Greater Cincinnati area. We are contending with a unique supply and demand issue that we are left with after the slow real estate market from 2008-2012. For several years, would-be buyers stayed on the sidelines, unwilling or unable to buy a home. That pushed rents higher. Homeowners, who might have wanted to move up, also stayed put. Now demand is finally surging again, thanks to higher rents and a slowly improving economy, but supplies of homes for sale are at an all time low. The lack of homes for sale has pushed the average sale price up further than the typical 3% appreciation for the Cincinnati area. We are not yet seeing the inventory gains that we expected, in order for the absorption rate to return to a healthy level.
May home sales in Greater Cincinnati continue to climb, up + 1.3%, compared to a year ago. Homes sold (closed) last month were 2,308 compared to 2,277 in May 2014. The number of listings under contract is up over last May, which is good. There appears to be a slight backlog of listings waiting to close, which may be a result of changes to lending policies and government restrictions. Even though our housing market is strong, later this summer we may begin to see a slowdown in the reporting of sales and an increase in the time it takes to close on a property due to these lending restrictions.
The May average home price set new records climbing to $195,110 vs. $182,630 a year earlier, a + 6.8% increase. The average price has increased year-over-year for 39 consecutive months. At the same time, the inventory of homes for sale, as of May 31, continued its year-over-year declining trend to 8,679 from 9,554 a year ago, down – 9.2% Local home mortgage rates in May averaged 4.00% for a 30-year fixed rate loan. The rates were higher at 4.13 a year ago. At these fixed rates, the monthly principal and interest payment on a $100,000 home loan with no money down would be approximately $478.
The fact that the May average price is at record levels is a result of a few things: the inventory is at record lows, interest rates remain low, and homes are selling quickly. However, we believe that this type of market will not last. We sell over 100 homes per year, which helps us to have an accurate pulse on the market. In June, we are already seeing a slight slowdown in market activity and urgency from Buyers. Experts are predicting that interest rates are going to start going up by September. This is why if you are thinking about selling your property, do not wait to contact us to get current information so that you can make the best decision for you and your family.
Finn Team | 513.560.6513 | firstname.lastname@example.org | www.Finn-Team.com