Ohio Real Estate - Resurgence & Reality
A huge sigh of relief but with tenuous underlying anxiety would be loose description of how many Ohio Realtors feel heading into 2015, 6 years after the worst financial collapse since the 1930's but with the strongest rebound rates of quarterly growth in over a decade with the U.S. now outpacing much of the globe.
I believe we are headed for a strong year for the Ohio real estate industry. You may agree if you're paying attention to a lot of little signals at local, state and national levels and with mortgage rate forecasts estimating a cool 5% through 2015. There are however, some more pessimistic views but when stepping back to look at it all, growing fast can be a recipe for another disaster. I'll take slower and steadier instead and feels as though this is our current path.
Earlier last week, the U.S Department of Commerce reported the economy did expand at a healthy 5% for 3rd quarter, and created one million new jobs in the last four months. They also reported the economy expanded at a brisk 5 percent pace in the third quarter and except for January 2014, 200,000 new jobs a month were added during the year. Here in Ohio we saw unemployment drop to 5.3% down from a height of 10.6% back in February of 2010. Columbus Ohio real estate benefited from the best Ohio unemployment rates.
I came across an article on The Dayton Daily News by Jack Torry - Washington Bureau and he did have some excellent points;
- Combined with tumbling gasoline prices, which allowed Americans last month to dramatically increase spending on a wide range of consumer jobs, and the fact that the Dow Jones Industrial Average last week shattered the 18,000-point barrier for the first time, economists are confident that next year the U.S. economy will continue to expand and produce jobs.
- "Finally, we're out of the recession," Ned Hill, a professor of economics at Cleveland State University, said with some exaggeration.
- Jim Glassman, a senior economist at Chase in New York said "we're coming into the sixth inning. It's all setting up well for 2015. Is it a boom? It's sure a whole lot better than it's been."
- Yet even as President Barack Obama and Gov. John Kasich are both pointing to the faster growing economy as vindication for their economic policies, there are a number of signs that worry economists.
- The housing market remains sluggish as sales of new homes dipped by 1.6 percent last month. Although the gross domestic product expanded at a healthy rate in both the second and third quarters, the economy's expansion for the year will be close to 2.5 percent.
- Even though non-farm payrolls have increased in Ohio by about 200,000 since February of 2010, the state's labor force of 5.7 million remains less than the 5.9 million people recorded in 2006. Ohio's median household income in 2013 was $48,081, just a small increase from 2012.
- "It's maybe better than what we were doing, but this is closer to a dud than a boom," said Ken Mayland, president of Clearview Economics, an economic forecasting firm in suburban Cleveland. "If we got really good economic growth, we would be producing 400,000 to 500,000 jobs a month. Then I would say we're back to boom times."
If you have some time, you might enjoy the full article, not too terribly long but an interesting read.
Ohio Real Estate - Millennial Talk
I've seen a bushel of posts and articles about Millennials and how they will drive Ohio real estate's markets. I've seen two bushels of posts about student loan debt holding them back. As the economy continues stretching and warming up, I expect this to be less of a factor, probably towards entering or into 2016. I also expect a rise, not an overly large rise but notable increase in Millennial first time home buyer activity, and more dual income households forming.
I expect it anticipating more jobs, better pay, some costs like gas going down (and groceries, thank goodness) and money in pockets for down payments and closing costs. Rate forecasts I've looked at project 5% or so perhaps later in 2015, higher but still low; I remember folks in Silicon Valley that were once thankful for 11% and showing my age here.
We as a state, have overcome a lot of obstacles and won numerous small but important victories as with the Dayton - Cincinnati manufacturing designation and a huge anti-trust criminal law suit for price fixing and bid-rigging in the auto-parts industry that shut Ohio business and Ohio workers out.
All in all, it feels like Ohio real estate has life in it once more and like a discharged patient, it took a while to get home, rest up, and start getting back to one's normal self. One reason I think Ohio real estate rebounded as strongly as it has as we were one of the worst-hit states. I'm personally optimistic Ohio real estate, especially with Central Ohio and Columbus real estate along with Dayton and Cincinnati real estate when I combine what I see and the trends I follow. Some communities still continue to suffer, but signs of healing are everywhere, and even the bad have done better.