Last year, over 21,000 homes sold in Central Ohio – just over 14,000 of them in Franklin County. While it’s true that real estate sales have suffered in some parts of Columbus, by no means is our entire city at the mercy of the current economic crisis enveloping the country and dominating headlines.
Real estate is local. Very local. That means if you live in Clintonville, you saw homes sell in an average of 78 days but if you live in Olde Towne East, you witnessed homes over $50,000 linger on the market for more like 145 days and many others not sell at all.
The short answer to what to expect in 2009, then, is that it depends on what neighborhood you want to buy or sell in. In general though, here are my thoughts:
- Homebuyers will buy homes. Lured by historically low interest rates, a good number of choices, and the possibility of last year’s $7,500 tax credit becoming a true credit and extending to year’s end, Columbus area Homebuyers will buy homes.
- The best time to buy anything is when it is on sale. I think some parts of town are not so much depressed as they are undervalued. There are too many well priced homes on the market to pass up. Those comfortable in their current home with savings and good credit may consider purchasing an investment or vacation home.
- It’s my opinion that homes in communities like Bexley, Upper Arlington and Worthington have, over the last 12 months or so, been priced at levels much more realistic and on par with true value right from the beginning. Some neighborhoods, like the Short North, German Village and Grandview have taken longer to get the correct pricing message but movement is being made. I’m not talking about negative appreciation as much as I am fair value. In still other areas like the Near East, incredible historic homes with great proximity to downtown are available at half what the previous foreclosed owners paid for them (which may have been too much but we’re still talking half–banks don’t want to own houses).
- Because it’s harder to secure a mortgage than it was a few years ago and because homebuyers now must save up 3.5% or more, those buying homes will be legitimate, stable buyers. The Sellers of the homes they buy will become buyers at higher price ranges and so on. The very top of the Columbus market has been stagnant of late, ditto the downtown condos. I don’t see that changing too much in 2009 except that as the logjam begins to break open a little, those waiting to sell their suburban home before moving downtown will be able to do so. Also, by year’s end, most condo projects that aren’t already will be FHA ready, enabling a much broader pool of buyers to consider them as an option. Meanwhile, a percentage of the folks who moved here last year or the year before and are renting downtown or close by will take the plunge and either purchase their units or get something in a downtown village now that they know the city better.
- As the rest of the country continues to lose thousands of job every day, Columbus’ not-so-blue collar economy will help keep people employed and the housing market competitive. However, because Columbus has a somewhat transient population in both the young and the mid-level executive types, those people (really anyone who doesn’t feel comfortable committing at least 3-5 years in their new home) still won’t -and shouldn’t – purchase.
As a microcosm, the Short North saw 25% fewer homes sell last year than in 2005 (widely considered to be around the top of the out-of-control bubble nationwide) those homes sold for just over 15% more on average. (Every community has contributing factors and Harrison Park would be one here). The point I’m trying to make is that I bet most people would have thought the Short North market was steady at best compared to three years ago and may be surprised to see average prices continuing to increase.
Bottom line, it’s OK to buy a home in Columbus. Do your homework and be aware of the neighborhood’s recent history. Buyers know this and they are out there already this year. Sellers with homes that show well and are priced right are reaping offers and moving up to their next home. It will be a year similar to 2008 and we won’t see a leveling of the buyer’s market-seller’s market see-saw until Spring of 2010ish.
–all figures taken from the Columbus MLS and deemed to be accurate at time of publication.