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Business & Economy

Tight inventory, rising prices characterized central Ohio real estate market in 2023

A realtor's sign sits in front of a two-story house in Granville, Ohio.
Allie Vugrincic
/
WOSU
A realtor's sign sits in front of a home for sale on Elm Street in Granville in May.

The central Ohio housing market has had an eventful year.

In February, the Mid-Ohio Regional Planning Commission projected that the region would grow by three million people over the next 25 years. By March, the Federal Reserve Board started rapidly hiking interest rates to cool inflation. And in June, central Ohio set a record for a median sale price for homes.

“We are a hot market, so there's no economic indicators that the housing market is going to fall or that, you know, prices will decline,” said Sue Van Woerkom, a realtor with Keller Williams Capital Partners and the immediate past president of Columbus Realtors.

Van Woerkom pointed to big projects from Intel and Honda that are driving up demand for houses in the area.

The average sale price of a central Ohio home rose about 5% this year, though the increase was much more in some areas.

Prices rose through the first half of the year, hitting an all-time high in June when the median sale price stood at $322,000.

“We are a hot market."
Columbus Realtors Past President Sue Van Woerkom

The housing market in 2023

“At the beginning of this year, we were still very brisk, and we had the low interest rates, and the market was running very quickly,” Van Woerkom said.

Then came a series of rapid interest rate hikes from the Federal Reserve Board. Mortgage rates jumped to more than 7.5% by October.

With the rate increases, some people were pushed out of the market, leaving less competition for buyers who remained, Van Woerkom said. There had been 15 or 20 offers on a home, but that dropped to a more “manageable” two or three.

As the year ends, interest rates are slowly starting to fall, but Van Woerkom warns they won’t go back to the lows of 2, 3 or 4%.

“We're hoping that they'll settle somewhere in the sixes next year, and that's going to bring in a few more buyers,” she said.

Inventory

Housing inventory in central Ohio remained tight throughout the year. It crept up from 2,471 homes on the market in January to about 3,817 homes in October. Inventory dropped in November, though only by 23 listed homes, a Columbus Realtor’s monthly housing report shows.

Houses stayed on the market on average about 23 days. They were selling the fastest in July and August, at 17 and 18 days respectively, though they weren't selling as fast as the same months in 2022, when homes stayed on the market for just two weeks.

As the year wound down in November, the median sale price slipped to $295,000, which was still higher than January’s median of $262,750.

Van Woerkom said when she hears a prospective buyer say they plan to wait, she wants to ask, "What are you waiting on?"

“Because the joke in the real estate industry is when's the best time to buy? Well, 10 years ago,” Van Woerkom said.

"The joke in the real estate industry is when when's the best time to buy? Well, ten years ago."
Columbus Realtors past president Sue Van Woerkom

First-time buyers

The National Association of Realtors in its annual Home Buyers and Sellers Profile, says the typical first-time homebuyer this year was 35 years old.

First time buyers made up 32% of the market. That was an increase from the year before, but lower than the historic average.

Buyers typically searched for 10 weeks and looked at about seven homes, viewing four of those only online.

Van Woerkom said many people who hold off buying worry that they need a large down payment. She points to private incentive programs offered by communities, employers and some lenders.

For example, the new Ohio Homebuyer Plus Savings program launching in January will allow Ohio residents who are 18 years or older to open special tax-advantaged savings accounts.

The accounts will offer above-market interest rates. Borrowers will not pay state taxes on contributions, but the money can only be used for a down payment or closing costs on an Ohio home.

“So again, there's a lot of different ways and we want you to own a home,” Van Woerkom said.

Allie Vugrincic is a reporter for 89.7 NPR News. She comes to Columbus from her hometown of Warren, Ohio, where she was a reporter, features writer and photographer for four years at the Tribune Chronicle and The Vindicator newspapers.