Two steps forward, one step back. That’s how the 2014 housing recovery went in central Ohio as well as most local U.S. markets. It was another recovery year but not without its hurdles – some new, some familiar. Metrics like sales price and percent of sold price to list price showed improvement, while inventory and new listings didn’t quite meet expectations.While that data confirms that recovery is still underway, it also suggests that the 2014 recovery was not as strong as in 2013. Inventory losses meant less robust – yet still mostly positive – price growth. Since prices have risen, the affordability picture isn’t what it was in 2012 or 2013, though affordability remains above its long-term average.Factors such as inadequate mortgage liquidity, stagnant wage growth and student loan debt have served as impediments to both first-time and move-up buyers.Home sales ended the year at 26,655 trailing 2013 (27,235) by 2.1 percent making 2014 the fourth highest year on record for home sales in central Ohio.
Of note was the uptick in sales during three of the last four months of 2014 and overall pending sales increased 2.5 percent to 27,823 for the year.
Columbus, Beechwold/Clintonville, Dublin, Gahanna, Grove City, Hilliard, Olentangy School District, Pickerington, Westerville and Worthington saw the most home sale activity throughout 2014.
“Interest rates remained lower than most expected which helped fuel buyer activity, said Kathy Shiflet, 2014 Columbus REALTORS® President. “However sales still fell flat due to the lack of inventory which plagued the market during most of 2014.”
Seller activity decreased 3.9 percent to 35,919 new listings. With 7,170 active listings as of the end of 2014, consumers had 27.3 fewer options at the end of 2014 than in 2013.
“Persistent price gains meant once-underwater sellers could finally list their homes,” added Shiflet. “But sellers are still looking for the extra confidence needed to sell.”
Those shopping for homes saw their searches return more homes and listings of higher quality as the Lender-Mediated market continued to shrink.
Due to the lack of inventory during 2014, more home sellers experienced multiple offers and same day contracts.
In 2015, watch for stronger seller activity to increase inventory levels, which could alleviate shortages in certain areas and segments
Prices in most areas enjoyed another year of gains. The overall average sale price of a home in central Ohio rose 5.1 percent to $183,099 for the year. Moreover, this is 2.9 percent higher than the average home sale price of $177,078 in 2005 during the height of the housing boom.
Central Ohio homes sold for 94.0 percent of the original list price during 2014. More importantly, homes sold for 96.9 percent of last list price.
“Pricing your home right from the start is the key to a timely transaction,” said Shiflet. “My advice is to pay attention to the comparable sales and follow the advice of your real estate professional.”
According to the latest Housing Market Confidence Index (by the Ohio Association of REALTORS®) 67 percent of central Ohio REALTORS® expect the local housing market will improve at a moderate to fast rate and 31 percent believe it will continue at its current rate.
In almost every community, foreclosure and short sale activity is declining and is near multi-year lows. That’s a good thing, since these distressed product types sell at a steep discount to their traditional counterparts. In 2014, the percentage of closed sales that were either foreclosure or short sale fell 37.6 percent to 16.4 percent.
If the economic tailwinds stick around as they should, housing will get a boost in 2015. Qualified first-time buyers need good jobs and access to mortgage capital. Watch for movement on housing finance reform. Rates should be stable until mid-2015, when the Federal Reserve is expected to raise the key federal funds rate.
By almost all measures, the economic landscape has improved. Recent gross domestic product growth is rising at a 5.0 percent annual rate. The national unemployment rate is under 6.0, down from a 10-year high of 10.0 in October 2009, and stocks are reaching all-time highs.
The deficit is down by two-thirds, gas prices are at multi-year lows and we’re in the midst of the largest stretch of job gains on record. Given all that, 2015 should hold much promise.
Columbus REALTORS® is comprised of over 6,500 real estate professionals engaged in residential sales and leasing, commercial sales and leasing, property management, appraisal, consultation, real estate syndication, land development and more.
The Columbus REALTORS® Multiple Listing Service (MLS) serves all of Franklin, Delaware, Fayette, Licking, Madison, Morrow, Pickaway and Union Counties and parts of Athens, Champaign, Clark, Clinton, Fairfield, Hocking, Knox, Logan, Marion, Muskingum, Perry and Ross Counties.