October Housing Market Update: Sellers Losing Control

Market Shift in Central Ohio

The housing market in central Ohio is undergoing a significant shift. It is moving from a strong seller's market to a more balanced market and, in some price ranges, even to a buyer's market. Despite this shift, the median home price in central Ohio remained near record levels at $325,000 in September, up about 5% from a year ago, according to the Columbus Board of Realtors data. While this suggests that we are far from a housing crash, there are signs that prices could soften in the upcoming spring buying season.

Transitioning Markets

Looking at the market status report for Central Ohio, we can see that many markets are transitioning from red (sellers) to blue (buyers). Demand has been impacted by higher interest rates over the last couple of years, and housing supply has remained low. However, as the supply has grown since early 2024, demand has not increased. In fact, buyers only closed on 1.6% more homes in September 2024 compared to September 2023, and sales are up only 2.6% year-to-date versus 2023. In summary, sellers are returning to the market, but buyers are staying on the sidelines.

Impact of Mortgage Rates and Election

Mortgage rates recently hit 6.68%, according to Mortgage News Daily, and the election has left many buyers hesitant to act. Homes priced over $500,000 in many areas, including Groveport, SW Licking, Johnstown, Heath, and Mount Vernon, now favor buyers, with supply outpacing demand. Particularly in Johnstown, there is an excess of homes available over $500,000, which is surprising given the anticipated demand surge from the nearby Intel One Gigafactory. Homeowners' reluctance to move up into more expensive homes, combined with higher rates, has caused a lot of higher-priced inventory to remain unsold.

Shift in Pricing and Demand

Lower-priced homes, while still in a technically seller's market (less than 4 months of supply), are shifting to a balanced market. Areas such as New Albany and Upper Arlington have shown more homes under $300,000 that have remained unsold in the last couple of months. This is a departure from the past, when homes in top school districts would sell immediately once they hit the market.

Future Outlook

As we move past the election, it remains to be seen if rates will decrease and more buyers will return to the market. Additionally, the impact of the Intel factory on housing demand has been less significant than predicted. If we continue to add inventory without a corresponding increase in demand, central Ohio may experience outright price declines.