What the nation is experiencing in the housing market is truly historic and Central Ohio is no exception. The onset of high interest rates from record-low levels had many economists and housing experts predicting prices would crash. Instead, we have witnessed a continued increase in prices. As of June 2024, the median sales price for homes in Central Ohio rose by 3%, reaching $335,000. This marks the fifth consecutive month of increases in the median sale price, reflecting ongoing demand and competitive conditions in the market.

Absorption Rate and Market Conditions

The absorption rate, a key indicator of market health, stands at 1.68. This figure indicates that if homes continue to sell at the current pace, the existing inventory will be depleted in just over 1.5 months. An absorption rate below 3 is generally considered a strong seller’s market, underscoring the current competitive environment where demand outstrips supply.

New and Active Listings: A Mixed Bag

June saw a 3.3% increase in new listings, contributing to an 8.5% rise year-to-date. This influx of new listings provides a much-needed boost to the available inventory, although it varies significantly by price segment. Active listings for homes priced under $300,000 are up 9% year-over-year, while those over $300,000 have surged by 22%.

However, the inventory situation is starkly different for homes priced under $200,000, where active listings have decreased by 10% compared to 2023. In contrast, homes priced over $200,000 have seen a 24% increase in active listings. This disparity highlights a growing trend: the market is seeing more high-priced homes coming onto the market, while the availability of affordable housing remains constrained.

The Lock-In Effect

A significant factor influencing these trends is the "lock-in effect." Homeowners with affordable mortgages are reluctant to sell and trade up to more expensive homes, especially given the higher interest rates and increased monthly payments that would accompany such a move. This hesitation contributes to the limited supply of affordable homes, exacerbating the challenges for first-time buyers and those looking for lower-priced options.

Sold Listings: A Decrease in Activity

Despite the increase in median sales prices and new listings, sold listings were down 9% for June and have only increased by 1.8% year-to-date. This decrease in sales activity could be attributed to various factors, including affordability issues, higher mortgage rates, and the overall economic environment.

Affordability Challenges

The rising median sales price, combined with higher mortgage rates, continues to impact affordability in Central Ohio. Potential buyers, particularly first-time buyers, are finding it increasingly difficult to enter the market. The scarcity of homes priced under $200,000 further exacerbates this issue, pushing more buyers to consider higher-priced homes or remain renters for longer.

High-End Market Dynamics

In contrast to the challenges faced by the lower end of the market, the high-end segment is experiencing growth. The 22% year-over-year increase in active listings for homes priced over $300,000 suggests that there is a robust supply of luxury homes. This trend may be driven by homeowners in higher-priced brackets looking to capitalize on favorable market conditions or relocate for various reasons.

Market Status by School System

Very few Central Ohio school districts are in a buyer’s market. The exception is Johnstown and Mt Vernon, both showing large amounts of inventory and lower demand for homes priced over 500k. My detailed Market Status Report gives a breakdown by school district.

Download the latest Market Status Report Here

In assessing the current market status, our focus lies on the absorption rate, also known as months of supply. This key metric is derived by dividing the available inventory by the number of closed sales for a time period.

Market Categorization:

• Strong Sellers Market: An absorption rate below 2 indicates a strong seller’s market.

• Sellers Market: Having 2 to 4 months of supply falls under a seller’s market category.

• Balanced Market: Falling within the 4 to 5 months of supply range signifies a balanced market.

• Buyers Market: A market with 5 to 7 months of supply is classified as a buyers market.

• Strong Buyers Market: The scenario where there are 7 months or more of supply represents a strong buyers market.

Segmentation for Analysis: To provide a comprehensive market status report, the absorption rate breakdown is conducted based on price categories and school districts. This approach allows for a detailed understanding of the dynamics within different segments of the real estate market in our area.

By regularly monitoring and dissecting the absorption rates across various segments, we are equipped to offer informed insights and guidance to both buyers and sellers navigating the ever-evolving real estate landscape. Regardless of the chart results it is important to consult with a realtor and do your own research when buying or selling real estate. Markets move fast and it's important to check the latest inventory figures and comparable sales.

All data referenced from the Columbus Board of Realtors