COLUMBUS (WCMH) — The Columbus real estate market continues to set records in 2021.
Earlier this year, housing inventory hit an all-time low.
Now, in its May report, Columbus Realtors said that the sell rate for homes is now at its fastest point on record, with listed homes taking an average of 14 days to sell.
“I’ll be frank with you, it’s a little stressful because we’re at over 9,000 members right now at Columbus Realtors, which is also historic, and we have only 1,700 homes that are on the active market for sale,” said Michael Jones, president of Columbus Realtors. “That becomes difficult in and of itself, in being able to manage expectations and help to support our members throughout this process as well as consumers.”
“When you’ve got homes that are coming on the market and within three hours, you’ve got 15 offers, that’s just nuts,” said Andrew Show, a buyer’s agent with Buyer’s Resource Realty Services.
While inventory levels have improved somewhat since their record low two months ago, they still remain a far cry from what they used to be.
According to Columbus Realtors, there were 17,603 homes for sale in May 2011, 8.5 times more than today. Despite that, home sales are also 50 percent higher now compared to then.
“We have a lot of millennials aging into prime buying years that are buying their first house right now,” said Nicole Bachaud, an economic data analyst with Zillow. “We have a lot of baby boomers that are downsizing right now and are also transacting in the market and so those demographic factors are just coming in all at once and creating this huge demand and there’s not enough supply.”
According to Columbus Realtors, between May 2020 and May 2021, the average sale price of a home jumped 21.8 percent to $315,127 and the median sale price rose from $233,000 to $275,000, an increase of 18 percent.
But the biggest jump came from homes with bigger list prices.
“We look at 10 years ago where we had maybe 13 homes for sale in the over $700,000 price point,” Jones said. “We sold 137 just last month and they sold within 27 days. So that’s huge. That’s 592 percent greater than we had before. Yet we look back 10 years, that same time period, those that were priced under $350,000 dollars, those have decreased. That market share has decreased by 25 percent.”
Despite those shifts upward, Columbus has still managed to keep its competitive edge in price and attractiveness to buyers.
“Compared to more expensive markets, Columbus is relatively more affordable,” Bachaud said. “It is lower than the median home price in the U.S. overall, at around $250,000 for the typical home in Columbus, even as prices are increasing there.”
However, the low inventory has made buyers more competitive, increasing their offers and even cutting corners to win a bidding war.
“You’ve got buyer-agents out there that are telling the buyers ‘waive your inspection’ or ‘waive the appraisal,’” Show said. “That’s a recipe for a lawsuit. You should always get an inspection done. Doesn’t matter how much or how little the home is. Doesn’t matter where the home is. You should always get an inspection done. Even a new home is going to have issues.”
That’s why they say it’s important to have all of your financing in order before entering the market.
“Making sure you’re not hitting the top of your budget right off the bat, leaving a little bit of wiggle room in case you get into a bidding war,” Bachaud said. “That way, you’re not losing out on your dream home just because you’re getting outbid. If you’re going to sit around and wait to go and figure out if you can afford that, it’s going to be gone by the time you get your answer. So, it’s really important to make sure you understand your financial situation before seriously considering buying.”
“If you have extra savings, have that ready or be on hand,” Show added. “Assess what your down payment is going to be and do you have any other sources of down payment.”
Show acknowledged that, for some, that’s not possible.
“For first-time buyers, for disadvantaged buyers, for minority buyers, FHA, VA…unless you’ve got 10, 20, 30,000 left in the bank after your down payment, you can’t compete in this market,” Show said. “We have noticed a decrease in the number of buyers just in the last four to five weeks. It’s like the buyers have just given up. It’s not that there aren’t qualified buyers. It’s just that they can’t make up the difference, and they’re leaving the market because they’ve had to renew their lease and so now they’re going to wait and try to save up more money.”
But it could be a while before balance returns to the market.
“If we continue on our current trajectory, I’m going to guess, personally, 3 to 5 years before we see a healthy balance,” he said.