What’s the latest news from our Northwest Ohio market?
Five or so years ago, we saw our market go from bad to better, from slow to fast, and prices stopped declining. Interest rates also went down, and the economy finally improved. Our overall outlook went from ‘bad’ to ‘positive’ because your income and my income rose. As taxes were cut and income increased, home values went up. The market was good, and everyone thought it couldn’t get any better.
Well, things went from ‘good’ to ‘great’ as we entered 2020. Everything was selling, and the market was humming on all cylinders. As rates continued to decline, prices continued to rise. Then, unforeseen by everyone, a black swan moment arrived in the form of a pandemic. Some of us had an idea of what would happen next (especially if you watched the movie ‘Contagion’ like my wife and me), and everyone assumed that the market would crash. However, it didn’t crash. Instead, we saw a giant influx of cash that led to more sales, higher prices, and greater demand. People couldn’t travel or do much of anything, so they improved their old houses and/or bought new ones. In short, 2020 was a boom year for real estate in northwest Ohio.
Now it’s 2021, and that great market has turned red-hot. If you’re a buyer, it can be a terrifying experience. The home you want to buy, whether it’s in ____, _____, or ____, is probably gone. There were probably 30 showings for it the day it came on the market, and it probably fielded upwards of 20 offers, so remember that you’re in a dogfight. Prices are accelerating week by week, so if you’re looking to sell and buy at the same time, that’s like threading a needle while riding a motorcycle over the I-75 Maumee River bridge.
Right now, there’s less than a 90-day supply of homes on the market, which is an all-time low. In the entire northwest Ohio MLS, there are just 2,500 homes available—another all-time low. Homes are selling for 99.5% of their list price, which is an all-time high. In one sense, it’s a great time to buy because your income is (presumably) high, taxes are low, and can get a loan for a 30-year fixed mortgage for as low as 2.25%, but as I alluded to above, it’s hard to find a house to begin with.
There’s another risk to consider as March begins: The Biden administration is getting ready to dump another $2 trillion into the economy. This is money that doesn’t exist (i.e., it’s printed money) and it needs someplace to go. Where is that place? It’s not the stock market—that’s played out. What about the housing market? That will push prices into the stratosphere, and it creates a real danger that the residential market will lock up, with sellers refusing to sell because there’s nothing for them to buy afterward.
This has already happened in other markets like Denver and Phoenix, and it can happen here. There’s no solution for it, but if you’re moving, you better get ready and go. If you’re renting, you better get ready and buy. We’ve never seen that kind of money poured into a low-interest rate environment like this, and it’ll be interesting to see how everything works out.
If you have questions about any of these developments or would like help buying or selling a home, give me a call. With the experience helping buyers get the best deals possible and sellers the homes of their dreams, I’d be happy to put my skills to work for you. Talk to you soon!
