Inside of I-270 last year, 6,416 residential properties sold. Despite 1/3 of 2010 including months where numbers were artificially inflated by federal tax credits, that was down about 11% from 2009, 17% from 2008 and an incredible 32% from 2005 – the year many consider to be the height of the housing boom.
In addition to the number of homes sold inside I-270 being down from 2009, the average sale price of those homes that were in Columbus proper also declined by just over 2% though the Average $105,586 sale price (remember that inside I-270 is about a 55 square mile radius) is up slightly from 2008.
Locally, 2011 will bring more of the same.
Fewer homes sold: With no first time home buyer and similar stimulus funds available this year, fewer homes will sell in 2011. Additionally, some buyers who would have bought this year jumped in early to get the tax credits. Last year Worthington saw about a 5.5% decrease in the number of homes sold over 2009 and almost 1/3 less homes sold there in 2010 than in 2005.
Flat sales prices: Even in Clintonville, a neighborhood many consider forever stable, both average sales prices and price per square foot were pretty much flat year over year. Look for more of the same.
More homes on the market: In Franklin County at the beginning of January there are 8,033 homes active on the market; approximately an 8.5 month supply. I predict that at this time next year that will look more like 10,000 and a 13 month supply.
Longer Days on Market: A direct result of there being fewer buyers and more homes on the market, those homes will linger on the market. Even in a neighborhood like Bexley (where fewer homes sold in 2010 than 2009 but for about 3.5% more) days on market of those homes increased about 13% compared to the previous year.
Long neglected neighborhoods close to downtown will ever-so-slowly begin to be seen as good places to buy a home: The King Lincoln District, Franklinton, East and South of Children’s Hospital, Milo Grogan and Weinland Park will begin to be thought of as more than viable places to live. The injection of private and public funds combined with >$3.00/gallon gasoline and the playing out of local housing and development policy combined with that age old mantra of real estate sales- location, location, location- will form a perfect storm of sorts where affordability, location and civic pride will intersect.
2011 outlook in the real estate industry in general:
Interest Rates will go up: But not too much. Throughout the year I’m guessing rates will be in the 5-6% range which is still very low historically. This will have little effect on most buyers but we’ll see fewer refinances.
Many of the knucklehead real estate agents will continue to leave the market: The heyday of the mid 2000s brought out scores of new agents thinking they’ll spin money out of straw. With a considerably tighter market, a smarter public and real work to be done, they’ll be moving on to something else.
More new housing in Columbus – but not much more: Because lenders aren’t giving away mortgages any longer, builders can get more people into more new build homes through their own financing. Everyone has learned their lesson though and it still smarts so they still won’t be letting just anyone who walks in the door purchase a home.
An even more informed home buying public: For generations the real estate industry has guarded their information like it’s top secret. Over the last decade though, both local and National groups are acknowledging that information is public and an informed public is good for everyone. Columbus has been slow to step up but Buyers and Sellers crave information and increasingly their finding that information online.
The beginning of the end of the Mortgage Interest Deduction: I don’t know if it’ll happen this year, in fact I bet it won’t happen under this federal administration, but the once sacrosanct mortgage interest deduction, charging in the wake of a more general malaise regarding the concept of home-ownership in general, will be taken away or changed significantly.
More outside the box industry thinking: Locally, downtown condos that were once stiff on their pricing now have lease and lease to own options. New Home builders across the country are devising ways to take over the care and administration of Buyers old homes so they can purchase the new ones without having to sell the old ones. Virtual and boutique brokerages are popping up more and more across the country because they can leverage inexpensive technology to offer as much as the big box brokerage but with greater degrees of flexibility in both policy and expense.
More information on Columbus Real Estate News from Joe Peffer can be found online at ColumbusHomesBlog.com.