A new year brings about new change, and there’s no better place to look than across our urban landscape and into communities where people choose to live their lives in Central Ohio. We asked several local real estate and development experts for their opinions, insight and predictions about what 2012 will hold for urban development and the local real estate market. Here’s what they had to say:
To Rent or Not to Rent. That is the question
The average rate on a 30-year fixed mortgage recently dipped to a record low of 3.91 percent, a level not seen since the 1950s. With rates so low, homeownership is a very attractive option right now, but that doesn’t necessarily make it a bad time to rent either.
“We will still see a renters market in 2012 with potential homeowners being very cautious,” says Katie McCartney, real estate consultant with Cam Taylor Co. Realtors. “People who want to eventually be homeowners will continue to rent to save money for down payments.”
DeHays agrees, but sees the rental market changing as the year progresses.
“Rent rates will continue to rise due to the competitiveness of the rent market caused by the increased rental demand,” he says. “Yet as unemployment remains high, we will notice the ability to pay the increased rent will go down. It will be more important than ever for landlords to thoroughly screen their applicants.”
The flexibility of renting is something that appeals more strongly to certain populations, such as young professionals.
“There are a lot of 20 and 30-something professionals that are on the fence about buying,” LaFontaine says. “They continue to extend their leases, waiting for the right time to jump into home ownership.”
Once again, a reflection on the trends of previous years can help shed light on what to expect this year. In 2011, Franklin County saw 3,586 foreclosure sales, which was a 15 percent increase over 2010.
“Those one-time homeowners have to live somewhere,” Peffer says. “Additionally, helping to push the notion of renting, there seems to exist a malaise regarding the one-time American Dream of homeownership as buyers see their friends and co-workers complain that their investment isn’t appreciating.”
From a personal standpoint, McCoy agrees that the title of homeowner has lost some of its significance, but the numbers are telling a different story on paper.
“The bottom line is home ownership is not for everyone,” McCoy says. “That being said, we are also in a market where, for the most part, it fiscally makes more sense to purchase than lease. I’ve worked with many buyers this year who are now owning a home that would have cost them $500 more per month had they leased the same property.”