Central Ohio Home sales generate $3.7 billion – just the tip of the iceberg
The housing market in central Ohio is a slightly different ball game than it was three to four years ago. Lower inventory has often resulted in multiple offers and same day contracts. Trying to get clients a ‘home run’ is keeping everyone on their toes!
For the first three quarters of 2014 – home sales totaled over $3.7 billion! Although that’s the direct impact Columbus REALTORS® are responsible for, it’s really just the tip of the iceberg.
According to an National Association of REALTORS® report released in April 2014, when a home is sold in Ohio, the additional income generated is $10,656 from real estate related industries and $4,429 – for consumer items such as furniture, appliances, and remodeling.
The report also indicated there is greater spending at restaurants, sports games, and charity events. The size of this “multiplier” effect is estimated to be $7,241.
Home sales also induce additional home production. Typically, one new home is constructed for every 8 existing home sales. Therefore, for each existing home sale, 1/8 of new home value is added to the economy which is estimated in the state to be $14,800. This brings the total income derived from the sale of a home in Ohio to $37,126.
|Total economic impact of a typical home sale in Ohio|
|Real Estate related industries||$10,656|
|Additional expenditure on consumer items such as on furniture, appliances, and remodeling||$4,429|
|Greater spending at restaurants, sports games, and charity events||$7,241|
|Additional home production||$14,800|
(Bureau of Economic Analysis; NAR)
According to the September 2014 housing report, there were 3,035 central Ohio homes and condos listed for sale in September 2014, which is up almost 7 percent jump from September 2013. The additional inventory brought the total number of homes and condos for sale to just over 9,400.
“Traditionally, activity starts to slow when kids are back in school and temperatures begin to dip,” said Columbus REALTORS® 2014 President Milt Lustnauer. “But last month, we saw more homes listed for sale than we’ve seen in the month of September for the last several years.”
The average sales price of a home in September was $179,306, an increase of 2.5 percent from last year, marking the seventh month in a row for record high prices.
As a result, the average sale price of a home in central Ohio is $183,944 – up 5.2 percent from the first nine months of 2013 – and a record high.
There were 2,349 central Ohio homes and condos sold in September 2014, an increase of 1.3 percent from September 2013. However at 20,432, year to date home sales are still trailing 2013 by 4.4 percent.
“I think we could all agree that, home sales are down because inventory has been down this year, ” Lustnauer said. “But with the increase in inventory last month, we’ll see if that bumps our fall sales a bit.”
2013 was the 2nd highest year on record for home sales – – 2005 was the highest.
Lustnauer said if the housing market stays on track, 2014 will likely be the third highest on record – despite the lack of inventory.
According to a recent Housing Market Confidence Index (by the Ohio Association of REALTORS®) 89 percent of central Ohio REALTORS® describe the current housing market as moderate to strong and 87 percent expect housing prices to rise over the next year. Fifty three percent of central Ohio REALTORS® are seeing more interest from first time home buyers and 59 percent report an increase in multiple offers.
The distressed market has turned a corner as well.
In the third quarter, REO, HUD, VA, short sale, and foreclosure listings were down to 9.7 percent of the market. A year ago, distressed inventory made up almost 10.6 percent of the inventory, down from 25 percent four years ago according to the 3Q-2014 Lender Mediated Properties Report.
Distressed sales last quarter accounted for just over 13 percent of all sales – down almost 41 percent from one year ago.
“To give you an idea of how far we’ve come, back in early 2011, almost half of the homes sold were distressed,” Lustnauer said. “One year ago one in four homes was distressed. But during the third quarter of this year, only one out of every eight homes sold were distressed.”