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Columbus Housing Market On The Mend?
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While the country’s housing market continues to reel from financial disaster, some cities seem to have hit a relative bright spot…real estate experts say the markets bottomed out. Columbus appears to be one of them. WOSU reports on the city’s path to recovery.
It remains a home buyer’s market in Columbus. The average sale price in Franklin County last month was $128,000.
Home prices in Central Ohio are about the same as they were nearly 10 years ago. If not even a little lower.
So where’s the good news in that, you ask? If the lyrics “how low can you go” come to mind, well you’re probably about right. Some real estate experts say Columbus has hit bottom…it’s about as bad as it can get. There’s nowhere to go but up.
“I think if we just keep this steady, gradual increase, not going backwards, then eventually we’ll be very stabilized here,” said Sue Lusk-Gleich, a long-time Columbus realtor and past president of the city’s Board of Realtors.
The statistics paint a confusing picture. Last year, sale prices in Franklin County were up some months and down others compared to 2009. And sale prices for the first part of this year are lower than the start of last year. Despite this, Lusk-Gleich maintained things are stabilizing and the rate of sales has evened out.
“We’re only seeing a decline in closings of 1.3 percent. So that’s a really good indicator that things are getting better, because if you remember last year this time we had the tax credit. So now the market is recovering on its own strength and there’s no incentives behind this recovery,” Lusk-Gleich said.
And the number of homes that are “in contract” right now is up 12 percent over this time last year…without that up to $8,000 federal home-buyer tax credit. Another sign, Lusk-Gleich said, that the market is evening out.
The number of mortgage defaults also has declined. According to the Franklin County Clerk of Courts office, the number of foreclosed homes so far this year is down 16 percent from 2010. And 2010 was better than the year before.
Ken Danter is CEO of The Danter Company, a national real estate research firm in Columbus. He thinks the Columbus housing market is at the bottom. The gap between the number of home listings and the number of home sales is closing. But he said as more homes come on the market, prices will remain low.
“When you have a declining number buyers and an increasing number of sellers, it’s going to be difficult to maintain values,” he said.
Danter said he does not think the housing market will ever be like it was in six years ago when Central Ohio builders were building 10,000 new homes a year. Even then, he said, that was not normal. The norm was considered about 40 percent fewer homes than that.
“I don’t think we’re going to get back to 6,100 new units a year. I don’t think that’s the new norm. It’s going to be some place between 3,000 and 4,000 units a year in terms of a stabilized norm. I think a number of things are going to impact that. Certainly lending standards and underwriting standards is going to be different in the future. And I think it will be more difficult for people to finance a home even prior to the year 2,000,” Danter said.
As far as existing homes, Danter predicts values to remain low. He does not expect them to get back to where they were in 2005 when the average sale price in Columbus was nearly $180,000. While this may not be good news for sellers, he said for future buyers, the best deals will be on existing homes rather than new constructions.
No one knows when the housing market will turn up again. Analysts and those working the market, like Sue Lusk-Gleich, think it is still a few years out.
“I really don’t have a prediction of when that might be. I think, on a personal level, I think it will be slow. And it will take us a few years to get us back on steady ground,” she said.