The four main types of homebuyers in Northwest Ohio’s housing market.
Who is buying all the Toledo area homes and why? Unlike some other areas of the country, homes in Northwestern Ohio are still selling relatively quickly and at high prices. This begs the question: Where is all this demand coming from? In my opinion, there are four main groups buying up Toledo area homes:
1. Normal homebuyers. The majority of homes are being bought by normal homebuyers; in other words, people who already own a home but have outgrown it want to move to a different area or prefer one-floor living. This group makes up about 50% of the current market. These are healthy; homeowners moving up or down, often paying with cash because they have paid off a lot of their debt.
2. First-time buyers. The next largest group, almost equal to normal homebuyers, are first-time homebuyers. They are waiting longer to buy, spending more money overall, and putting down larger down payments to reduce monthly payments. They are a key part of the current market but are sensitive to interest rate pressures, which are high but haven’t yet discouraged a ton of buyers.
3. Real estate investors. Investors in Northwest Ohio, both local and from other regions, are another significant part of the market. These investors love cities like Columbus, Cleveland, Akron, Canton, Dayton, and Toledo because they have large populations but cheaper prices. They are buying, holding, and renting out properties. Servicing these clients is a big part of my business.
4. Institutional buyers. The newest and most important buyer cohort consists of institutional and international investors. Often flush with cash, these sophisticated investors are buying up 20% to 25% of homes. They are typically not interested in selling but in renting them out. Even if they lose money on one purchase, they continue buying because our prices are low compared to other markets, where even a shed or garage space can cost over $1 million. They love the returns and monetary power they gain here.
This influx of institutional international investors is significantly impacting our market, driving prices up. If you’re a seller, this is good news. However, if you’re a buyer, be prepared to compete with them as they have more cash and financing options.
The real estate market is constantly changing, and we do things today that were impossible 20 or 30 years ago. We are always adapting to the market to give the best service possible. To buy or sell, just call, send us an email, or visit our website. My team and I look forward to hearing from you!
