The hottest issue and discussion of the real estate market in recent weeks concerns the spring-summer buying season. This issue is gaining momentum among real estate market professionals and may really interest you if you are a realtor in Cleveland Ohio, or just a buyer.
Will prices continue to go up and up? Agencies, data, and statistics say so.
Market laws are quite stable and static. Most potential and actual homeowners are likely to plan their next move during the busy spring-summer sales season. According to this, most visible and hidden signs indicate that home prices will continue to rise.
Even though the extremely low-interest rates were seen during the COVID-19 pandemic, average sale prices increase in real estate are getting more and more common in the entire region of Greater Cleveland.
At the same time, influential causes such as the lack of new constructions as well as the lack of houses for sale shake the real estate market even harder, as realtors in Cleveland, Ohio noticed.
Carl DeMusz, Chief Executive Officer at MLS, says that he is worried about the real estate market, and he is extremely cautious about calling it “normal.” “I would certainly say this is a market that’s filled with anxiety for the buyers,” – he adds.
Most realtors in Ohio agree with Carl DeMusz, stressing that lack of inventory is perhaps one of the most common and spread problems.
Despite the fact that the hikes in interest rates are expected, it is unlikely to change the current situation in the market. The major part of prospective homeowners realizes that even if the increased interest rates drive listing prices down, the real payment amount for them will remain the same.
To cut a long story short, the ongoing trends do not seem to change in the near future.
Telling the facts, home sale prices were going up before the COVID-19 spread.
2010 United States foreclosure crisis was the cornerstone of the entire market and the way it functioned. Not only does the crisis influence the past, but as well it determines the present. For some areas, especially suburbs, decades were needed to return to the starting position, where they used to be in the mid-to-late 2000s.
According to cleveland.com and The Plain Dealer from the Ohio REALTORS trade association and MLS, average home sale prices were rising in the period from February 2020 to February 2022. Such figures apply to Greater Cleveland and the entire state in particular.
A different picture was seen in Geauga, Portage, and Summit, where prices were occasionally lower in contrast to the same period last year.
As for price fluctuations in Cuyahoga County, which have been observed for the last two years, the situation depends on the socio-political and economic conditions of the state in general.
Real estate hunting is a common reality for most residents of such cities as Rocky River, Solon, and Parma, who receive countless phone calls from realtors asking whether they are selling their homes and what their price is.
In such tense conditions, buyers are getting more and more willing to agree to unfavorable terms. They often forgo the inspection or pay the fee associated with the house selling.
Agents, residents, and stakeholders agree that the heating of the real estate market started in 2020 at the peak of the pandemic and the constraints caused by it.
As more and more people wanted to find a private place to be safe in, demand in the real estate market grew stronger and stronger. As claimed by Freddie Mac, last month, a 30-year fixed mortgage amounted to 3.76% in contrast to 2.68% in December 2020.
Now prices have risen, breaking the usual price limit in the spring-summer season sales. A striking example of this is the sale of real estate in Cuyahoga County, where the average price used to be approximately $177,516. Now prices have reached a record amount of $213,795. Similar trends are observed throughout the six other Greater Cleveland counties.
Another important indicator of the state of the real estate market is the period during which the property was sold. Here the conclusions remain identically synonymous, pointing to fierce competition within the market.
The overall situation in Ohio is incredibly similar, comparing the average home price of $235,359 last month to $187,375 at the exact time two years ago. And although realtors in Ohio emphasize the market stabilization prospects, prices continue to rise.
It’s not time yet
Taking into account all available information and statistics, it does not look like the real estate market will cool down in the near future.
Even though the Federal Reserve is set to raise interest rates to counter inflation, the overall situation is going to look no different for the average buyer. Such government action may have some effect on the market situation, but at the same time, it is unlikely that such changes will be tangible in the short term. As for inflation, it will hit the real estate market at a slower pace rather than at a high speed.
Most real estate agents, realtors in Ohio, and industry professionals are aware that rising interest rates will offset the destruction of prices, which in turn leads to a zero-sum game.