Is the housing market slowing down? Is Cincinnati’s pandemic housing boom over? Are prices finally going to drop? Is now the time for you to buy a house? Let’s talk about all that. My name is Eric Sztanyo from Keller Williams Realty and TeamSztanyo.com where we are helping you find your home and strengthen your family. You’ve may have been seeing what’s happening in the market the last few years, and you’re like, “Housing prices are outrageous. They keep going up and up and up. Should I wait for the market to drop out? Is it finally gonna end?” We’re gonna go over an article that just came out today talking about the data and the sales. Let’s look at actually the market value in Cincinnati, what are home sales doing, and what’s supply and demand doing. Let’s get into the data and check out the current status of the housing market in Cincinnati, OH.
Current The Data in The Housing Market
We’re gonna check out this article that just came out in the Cincinnati Business Courier talking about the housing market in Cincinnati, what’s the latest data showing? And also, I’m going to kind of pair that with what I’m experiencing out there on the housing market both with my current listings for sale for clients and for buyers.
This article is titled “Is Cincinnati’s Pandemic Housing Boom Over?”August Sales and Experts Point to Yes.” Let’s get really into that. I think everyone still wants to think that it’s gonna burst, like the bubble’s gonna burst like 2008. That’s not where we’re at, and I don’t think that’s what’s going to happen.
I’m starting out in this article: Cincinnati’s housing market was red hot during the bulk of the COVID-19 pandemic, but that boom appears to be ending as the pandemic flattens according to August data and several local experts.
Hamilton, Butler and Warren County home sales dropped 17.2% in August 2022 to 1,762 sales. According to a release from the Realtor Alliance of Greater Cincinnati.
We’ll keep going but that’s, is somewhat misleading.
In Southwest Ohio, home sales volume for August 2022 was around $571.2 million. It’s about 1.5% higher from July when sales volume was more than $462.6 million, but over $200 million less than the August of the past two years. Sales volume this August can be compared to August 2019 before the pandemic when sales volume was nearly $578 million.
All right. Let’s talk about those numbers real quick. The amount of home sales dropped 17%. It doesn’t actually say if that’s from July or if that’s from the previous August, so that’s a little bit misleading. The total dollar amount is actually up from July, but it’s down from the last two Augusts. So just a couple of things that you need to kinda keep in mind with that.
Number one, house prices have been going up, and, and inventory has been super low. So you can actually sell less houses, but if the sales price is higher, it kinda evens itself out. It’s not a huge change here. Let’s continue on in the article.
The apparent ending of the housing boom doesn’t necessarily equal a receding housing market, rather the housing market is decelerating.
I think that is the right term to use right now.
“It’s decelerating,” said CEO and founder of the Chabris Group, Peter Chabris. He also said more data is necessary to tell if the housing boom is truly over. But data does appear to signify the beginning of the end. Throughout the pandemic, home appreciation rates have been a wild ride Chabris told me, and they’re finally slowing down. Appreciation is still happening, but you might see it climb at a slower rate than in the past pandemic-ridden years. “We’re getting back to what a healthy appreciation looks like in Cincinnati,” Chabris said.
So guys, I think that’s actually the proper way to look at this is it’s not a boom. When you look at the headline of this article, is the boom over? When you think of the boom being over, you actually also think of a bubble bursting, or at least, I do from that headline. And I think it’s less of a bubble bursting or like, it’s all coming down, it’s all ending and more of a, it’s decelerating.
And that’s what I’m seeing in the housing market right now, as well. So back in April, May, June, if a house hit the market, if it was priced right, if it was in good condition, you might see 5, 10, 20, maybe even 30 offers if it’s in a really hot area. Right now, that same house in that same neighborhood might see 2 to 5 offers, something like that. So it’s still low inventory. There’s still high demand and low inventory, but it’s just not as crazy hot as it was in the spring and summer of 2022 as we’re heading into the fall.
Julia Wesselkamper of Coldwell Banker Realty told me she believes the home sales boom is over. Like Chabris, she said the housing market remains vibrant despite the boom ending with appreciation values still high, and an increase in housing inventory.
So what she’s really saying is we’re starting to see inventory rise a little bit. You’re still seeing appreciation going up, just not as fast, not the boom that we saw the last two years.
Median sale prices are also going up. Last year, the median price for a single family home was $250,000. It’s now $270,000, according to the Realtors Alliance of Greater Cincinnati. And if I were to do just some quick math on that, $20,000 increase in median sales prices shows an 8% growth in the median price for a single-family home over the last year.
Sellers will find they need to be more accommodating with buyer’s requests for inspections, time to shop other listings, and be flexible on the buyer’s needs. Alliance President Kay Edwards in a release. “Expect longer days on market and negotiations around price. This isn’t last year’s housing market. Buyers have more power than they had even just three months ago.”
Now, I can tell you by being out in the field both, again, on my listings and with my buyers, that this is true. It has cooled. I would say it’s still a seller’s housing market, and that the inventory is still low, but you can’t just throw anything out there and expect to get 5, 10, or 15 offers. Even just like, a month ago, it seems like it’s really cooled down a month or two ago. Now, we’re finding “look, you’ve got to price a little bit more reasonably.” You might not get over asking like you were back in April and May, June of this year. Everything was over asking price. If you wanted to win something as a buyer, you almost had to waive the inspection, you almost had to put in an appraisal gap. Like, it was crazy.
And so I almost had to coach a lot of you guys, like, look, if you want to win right now, here’s what you got to do, ’cause you’re fighting against 20 other offers. You’ve got to be the best. If you want this, great. If you want to sit out, fine. But if you like this house and want it, here’s what we need to do.
That has kinda chilled right now. Like, it doesn’t mean that you won’t find yourself in multiple offers, but you might not need to be as intense, waiting for inspections, doing appraisal gaps, going $10, $20, $30, $40,000 dollars over the asking price. It’s starting to level out a little bit.
So let me explain what that means. Balanced inventory of 5 to 6 months, that’s a normal housing market. Meaning if no other new homes came on the market, that inventory would sell in five to six months. Currently, it’s at about 27 days. So. where was in the peak of this, it was down to two or three weeks. So there was, like, no inventory. That’s why everything was going into multiple offers ’cause there just was all this demand and no inventory.
While buyers do have more power, the market still isn’t in their favor, and it’s also not balanced. A balanced market is about five to six months of inventory, Chabris said. Inventory has been as low as two to three weeks during the housing boom. The active inventory in August 2022 rose 3.7% with about a 27-day supply of inventory of single-family residences.
Now it’s creeping up, but it’s still not a balanced market. We’re still at that one-month level of inventory versus the five to six months of a normal balanced market. So translated, what does that mean? It’s still a seller’s market, but it’s starting to level off a little bit. So you as a buyer, you can start to look for things that might be on the housing market, hey, more than 1 or 2 or 3 days.
In that case, if you want to go see a house that’s been on the housing market, say, 5, 6, 7, 10 days, 14 days, what we do for Team Sztanyo, if you want to put an offer on a house, we’re always gonna reach out to that listing agent for you and say, “Hey, where are we at from an activity standpoint? Do you have any other offers,” because that is gonna dictate so much the strategy of our offer. Do we need to be more aggressive and beat out other offers, or is there nothing else on the table? You can come in at list price or maybe even possibly below the list price, which was something that was unheard of earlier in the spring and summer.
All right, guys. So there is your housing market update. We are starting to cool off for sure, but the housing boom might be over, but we’re definitely not at a bust right now, right?
It’s still a seller’s housing market. Inventory’s still low, but it’s starting to get a little bit more balanced where buyers have just a little bit more power than they did just a few months ago. It’s not uncommon for me to get a call from some of you guys, and saying, “Hey, I want to time it. Is now the right time to buy?” I always say this guys. If your family needs to buy a house, then it’s the right time to buy a house.
If you try to time the market in terms of prices, in terms of appreciation, in terms of inventory, in terms of interest rates, it’s like trying to time the stock market, right? Dollar-cost averaging is usually a much better way to go when you’re investing in the stock market than if you just try to time it exactly right, ’cause no one really knows what’s gonna happen for sure.
So if you are looking for a house and you’re ready to buy, let’s figure out the best strategy for the current market we’re in. That’s why I like to do these market updates so you guys get a feel and understanding of if you’re looking to buy or sell, what should you expect?
I’ll just give an example of the interest rates. A lot of people are talking about interest rates. They’re like, “Oh, my gosh. It’s at 4%, it’s at 5%, it’s at 6%.” Well traditionally, just go back a couple of decades. Everything was at 6% or higher, right? Back in the late 70s, early 80s, it was up at, like, 15% , 16% , 17% , 18%. So traditionally, you’re still doing great even if the rates are higher than obviously they were a few years ago where a lot of people got at 2% , 2.5% , 3%. If those rates come back down, you can always refinance. And so don’t let the interest rate stop you from getting a home if it’s time for your family to get a new home.
Help in Buying or Selling a House in This Current Housing Market
All right, guys. Whether you’re looking to buy or sell, we would love to be your agent of choice. We would love to be the team that helps you in that process. Call us at Team Sztanyo, 513-813-6293. Thank you and we’ll see you next time.