Northeast Ohio Homes Prices Outpace Income Growth
Bittersweet news is always hopeful and disappointing at the same time. Homes sales rose in October for Northeast Ohio, even as national economists observed a housing-market slowdown caused by higher prices, depressed construction and limited listings. Keep in mind, real estate has been and always will be a highly localized phenomenon. In some regions of Ohio, builders are still racing to keep up, and despite recent setbacks, homes sales across Ohio are continuing to exceed last year's levels.
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Focusing on Northeast Ohio, however, we see Regional sales of new and previously owned homes jumped from September to October, according to data from Northern Ohio Regional Multiple Listing Service even taking into account the Fall seasonal adjustments.
This last November, Lawrence Yun, the chief economist for the National Association of Realtors, drew attention to the fact that home prices are climbing faster than household incomes.
"The erosion in buying power is dampening home sales," he said in a written statement. "Moreover, low inventory is holding back sales while, at the same time, pushing up home prices in most of the country. More new home construction is needed to help relieve the inventory pressure and moderate price gains."
Even with this, and other recent setbacks, Ohio homes sales activity has still outpaced the previous year, month and after month. But again, bittersweet news. The majority of buyers cannot afford to make the purchase, slowing housing sales, otherwise, we would be seeing some truly remarkable, even unheard of activity. Still, the outlook is fair, and the Ohio real estate market still continues to march forward. Across 15 Northeast Ohio counties, sales of single-family homes were up 14.9 percent in October, when compared with a year before. Condo sales were 10.4 percent higher, according to listing-service data.
The Ohio Association of Realtors said that statewide sales posted an 8 percent annual gain, reaching their highest level since 2006. Less inventory means higher prices, and disappearing deals, though, if you're working with a professional buyers' agent you can still expect to get a reasonable discount on fairly priced homes. All of this activity since 2012 points to Ohio moving solidly towards a balanced market which is best overall with normal ebbs and flows. Fewer home owners are underwater, fewer foreclosures are being reported, and there are much less distressed "basement bargain properties" on the market. The bitter is that more would be buyers are being shut out of the market with income not keeping pace with rising prices.