According to Zillow, the U.S. housing market is expected to plummet along geographic lines with most of the decline happening in the sun belt.
East of the Mississippi River, the Midwest is becoming one of the country’s hottest markets.
We’re looking at the central Ohio real estate market during this hour of All Sides.
Guests:
- Qiana Jones, secretary, Columbus Realtors
- Nate Kinkopf, producing branch manager, Neighborhood Loans
Transcript
This transcript is generated with AI. To ensure its accuracy, review the audio file.
Amy Juravich: Welcome to All Sides with Amy Juravich. The real estate website Zillow is reporting a surge in home sales in the Midwest. Here in central Ohio, home values are on the rise as inventory expands. Nationally, home prices went up about a half a percentage point, but in central Ohio that increase was more like 6%.
As homes cost more, inflation goes up, and interest rates remain above 6%, we're looking at what this all means for the local real estate market. And joining us this hour to talk about Columbus real estate is Qiana Jones, Secretary of the Columbus Realtors Board of Directors. Welcome to All Sides, Qiana.
Qiana Jones: Thank you for having me.
Amy Juravich: And we also have Nate Kinkopf, Producing Branch Manager for Neighborhood Loans. Welcome back to All Sides, Nate.
Nate Kinkopf: Great to be here.
Amy Juravich: So, with Columbus being considered one of America's hottest housing markets, what would you say the status of real estate in central Ohio is right now? Kiana, is it still red hot? Are we really still a red hot market? It's moderate.
Jones: At Lehigh.
Juravich: You know. OK.
Jones: Yeah, are we lukewarm now? Well, no. I mean, we kind of slowed down over the winter time months, which is normal. But we are definitely bouncing back with more inventory for buyers right now.
And multiple offers are starting to come back. So prices are still going up, but everything else is kind of leveling out as far as pricing for some homes. But some of the really popular homes are going really fast. So. Some may say that it's still a hot market. It definitely has not switched to a buyer's market at this time. Some concessions are being given at this time, but mainly most of the homes are going closer to full price at this time.
Juravich: Okay, so if it's more of a seller's market, Nate, then that means people coming to you are in need of money, right? So that they can compete and make a good bid. What are you seeing? Do you feel like Columbus is in a red hot or a lukewarm market now?
Kinkopf: Yeah, I think it definitely depends on who the buyer is and where they're looking and what they're look for. So if we are looking at homes in very competitive price points on the first weekend they're on the market, I see anecdotally a lot more multiple offers, which pushes prices higher in order to win an offer. And so in that situation, the buyer's trying to be as competitive as they can be with their offer, with how fast they can close, with different terms they can put into their offer.
On the flip side, if you're a buyer who's willing to look. Maybe at houses that have been on the market for a week or two, or not that first weekend, you're gonna experience a whole different home search process because you're not going to be in that competitive situation as much, and you may be able to make an offer on a home closer to list price rather than going over.
Juravich: Okay, so what Nate was just saying, if the home has been on the market for a week or two, is that an indication that it's not perfect, maybe? Or like, what's the indication there?
Jones: No, and I mean, we are out of the days of 2023, where homes are going in 15 minutes. With 20 offers, right? Yeah, we're not in those days right now. The average time that's on the market is actually 39 days now.
Speaker 1: Oh, wow.
Jones: That's more than I thought. Okay. Yeah from from list to close So it's you have to temper the expectations of the buyers and also the sellers to understand that it's not a bad home If it does not go into contract within the first 15 minutes It's just the fact that there's more inventory coming on the market now Which gives buyers more options and so they have the opportunity to look maybe over one or two weekends before making a decision
Juravich: Oh, a whole one or two weekends, right? Wow. Okay. So, so this, this all sounds like relatively good news though for Columbus where like Columbus is a, is a popular market. People want to live here. People are looking for houses, looking to put down roots. Is there a downside right now? And Nate, would you say, is there a down side?
Kinkopf: I think the only downside financially to buying a home is if, well, two parts. If you don't understand the true cost of ownership, which is that you will have to pay for things and fix things and it's not all perfect all the time, as you probably know. The other thing, though, is how long you plan on being in the home. And that's something we talk about, what someone's time horizon, what their plan is.
We know plans change all the times. But if you plan to be somewhere for five to seven more years, based on the numbers you've referenced earlier, based on what we've seen for the last 10 to 15 years, it will probably be a good decision to buy financially. If you don't know that you'll be there more than a year or two, it may not be financially the best decision as far as being able to make money or get your money back in that home.
Juravich: Oh, I couldn't imagine going through the whole whole home buying process and only staying for a year that you just nodded your head. People do that. Yeah.
Jones: It happens. Life happens. There are some people that got caught up in the low interest rates and paid 20 and $40,000 over list price that are having difficulty selling their homes right now. So I think that's kind of holding back our inventory just a little bit, because some people are not in a position to be able to sell or make the money that they desired. Prices are up, but they're not rising as steadily as they were a few years ago for people to recapture that.
Juravich: You're not going to make an extra hundred thousand dollars or something. Yeah. OK. Well, we'll dig more into that in a moment. But Keanu, what do you think is driving the popularity of Columbus? What makes Columbus a a warmer, hot real estate market?
Jones: You know, Columbus is just clicking on all cylinders, and it's been doing that for quite a few years now. The job market has been steadily bringing new jobs to Columbus with Intel and Andrel and a lot of large names that are bringing individuals. And Columbus is relatively affordable compared to other cities that have grown across the country that offer the same amenities that Columbus offers.
So a lot people really want to come to Columbus on top of Ohio State. Retaining a lot of their graduates. When I attended Ohio State, a lot of them graduated and dispersed to other areas of the country. Many of them are staying because of the job market that's here. So it's just desirable on so many different levels for people to want to move to Columbus. Nate, you agree?
Kinkopf: I do. You're nodding. Yeah, I'm biased. I love Columbus, but I see it myself. I mean, I was at the Joint Industry Forecast, which is an annual event here in real estate where they talk about what's going on in our market and what's affecting, what could set the tone in the future. And since 2010, over 670 companies have either started or expanded here in central Ohio.
Juravich: Well, that's a fun statistic, okay, yeah.
Kinkopf: That naturally leads to job growth, opportunity, the university, and then with the home buying market in particular, the median age in Columbus is right around 33, which happens to be when a lot of people start to look to buy a home based on household formation. So you combine those things, it makes our housing market, as referenced in that article, stronger locally than maybe in the national averages look like.
Juravich: Well, yeah, you just led me to my next question, because I wanted to know some demographics of what a first-time homebuyer looks like. So you said the median age is 33 years old, but what else do they look like? Are they from out of town? Have they lived here for a while? What do you know about a first time homebuy?
Kinkopf: Yeah, it's a great question. A lot of different types. Quite honestly, that's not a one size fits all. Very often for us, it people in W2 type wage earner jobs, a lot of times it's two borrowers, almost always. It's not gonna necessarily be just one person looking to buy. And to qualify, they're asking all the same questions. What kind of benefits can I get as a first time buyer? What sort of opportunities do I have?
What's gonna happen to home prices in the future? For me, and I think for Kiana, obviously as well, the earlier people can have a conversation around what this looks like, the better they're going to do. And that's just, it all comes back to that because they learn what they can afford versus what a lender will give them. And those are often two different numbers. But as far as what that first time buyer looks like it's somebody in that age bracket who's ready to be around here for a while and put down roots.
Juravich: Okay, so, Kiana, talk to me about that median age of the first time homebuyer being 33. What does that mean to you? Well, it's, it...
Jones: Shifted over the years. I believe maybe affordability and some other factors and some people not knowing the true value of homeownership. It used to be in the 20s that people would purchase a home and now it has shifted a little bit older. People want some savings to have for affordability reasons and also just to lay roots somewhere.
So to me the first time homebuyer runs the I've run into all types of first time home buyers from age. And it may be shifted because actually a lot of my buyers are seniors that have never purchased a house. Like senior citizens have never purchased a home? Yeah, they've never purchased a home before. So it's really an interesting dynamic when you're working with so many different people and what they're looking for with regards to a home and their price range.
Juravich: Are those seniors getting mortgages or are they able to buy in cash?
Jones: They're getting mortgages. They're giving mortgaged. I have one that I want to say he's 73 years old. He's never purchased this very exciting time for him. I don't know how 30 years.
Juravich: Mortgage works out, but I think that's your question. So would you give a 30 year mortgage to a 73 year old?
Kinkopf: I would give a 30 year mortgage to anybody who qualified. Okay. That's my job, but no, I think.
Juravich: Well, I'm just doing the math, right?
Kinkopf: Right when that's all factored into the pricing of what how the back end of the market works is prepay speeds It's all kind of averaged out Just just to clarify what I said earlier 33 is from is the the median age of just Columbus in general And so that oh, that's why I think we have a lot more homebuyer demand because we're a younger ish city Yeah, typically the first time homebuyers has been a little even older than that. Unfortunately, so
Juravich: Okay, so you're saying the median age in this city is 33. And so is that the median age of the homebuyer or you think it might be a little bit older than that? It's older than. Yeah. Okay. Yep. Okay, this is All Sides on 89.7 NPR News. And we are talking about the local real estate market with Kiana Jones, Secretary of the Columbus Realtors Board of Directors, and Nate Kinkoff, producing branch manager for neighborhood loans. So I mentioned at the beginning of the show that nationwide home prices are up. About a half a percent from last year, April to April. But in Columbus, prices are like something like 12 times as much, they're 6% higher. Now 6% isn't a huge percent. I mean, I'm not trying to make this sound bigger than it is, but 6% is a lot higher than a half percent. So, Keanu, what does that mean for Columbus being so much higher than the national average that our home prices went up by 6% over a year?
Jones: Well, I will tell you that the 6% is less than what it's been. We're actually leveling out. If you look back to 2021, our home prices were up 23% over the previous year. Okay, that's a lot of percent. Yeah. Okay. So that put a lot a worry for, again, our first-time home buyers being worried about being able to purchase, and if not this year, what does next year look like for them?
So the fact that it's just a steady increase, of course, they're not aligned with incomes increasing. Inflation is going up, but the prices are leveling out in our pan 6% is not as bad. We were 9% I believe 11% in 2022. Okay, so it's starting to level out a little bit But the reason that again the demand is still there Columbus is still one of the hottest markets in the country And so the demand there we'd like to see our inventory come up a little more It is starting to increase. It's up from April almost 8% So as the inventory increases, we think the prices will level out to allow more buyers to get into the home buying market.
Juravich: So if someone has owned their home for a long time, like I have, I've owned my home for almost 20 years, so I saw that, so my home value went up this 23%, right? And so, and then it did it also, like it's not like fluctuating, did I keep that 23% and now it's worth even 6% more? Is that how the percentages work? Absolutely. Okay, I need, I didn't get an MBA. Yeah, I'm house, I am house rich, okay. There's nowhere for me to move to though, so that's the thing. That's an issue. That's the thing. All right, so I did read, Nate, I read also that it's hardest for a low to middle income person to find a home in their price range right now. So with someone making maybe like $75,000 a year, is it hard for them to find a home and their price?
Kinkopf: Yes, just based on what's happened the last three or four years here. Typically, somebody can afford roughly four times what they make. That's usually what they can qualify for. So that person, in theory, could qualify for something in the $300,000 price range. Then the question becomes, number one, do they like anything that's in that price range? And there are expectations where they can get something they want.
And number two, even if they can't, I think this is the bigger question, even if can get a loan for that, are they comfortable with what that payment does to their budget? And that's the type of conversation that is free to have as much as they want with any lender or anybody. But I think that's what we're focusing on. And then we can get into strategies of how do we manipulate a lower payment? How do we help with great realtors, put together offers that can help get that rate lower? But yeah, it's definitely more challenging in those income buckets than it would be for the higher income.
Juravich: And is that an inventory issue? We don't have as many houses in that $300,000 range.
Jones: That is an inventory issue also with building altogether. Building is behind in central Ohio. But are we also, we're building bigger homes, right? We are, just the cost of building alone has increased the prices. So with builders, they don't reduce prices. You don't see price reductions, they just stop building. And that's what happened in the late 2009, 2010. They just stopped building, which put us behind once the market started accelerating again. Back in 2020
Juravich: So I read, and you can correct me if I have the wrong number, but Columbus's median home price is about 341,000. Do you have that-ish?
Jones: Yep, median is 346.
Juravich: Five right now, as of April. All right, I'm going to write that down, 346. Numbers are really hard on the radio, so I'm repeating it multiple times so people can have it sink in. So Columbus's median home price is 346,000, but the national median home prices is around 404, is what I have, does that sound right? So, you know, 50 some thousand more. What does that mean, that we're below the national average of home price?
Kinkopf: It means we still have room to run as far as where prices will probably go.
Juravich: Room to run.
Kinkopf: As far as prices continue to increase. That 346 is likely to, from last year, if we're talking 6%, that was in the 322, 324 range. So that same house that you looked at for 320,000 a year ago is going for 346 today. And in a year, if we have a similar four or 5%, which is typical, it'll be another 20,000 roughly.
So I think that means that A, we have relative to the national market, more opportunity because our houses are relatively more affordable. A little bit, yeah. A little but, and the city has a ton to offer, but it does mean that certain folks who maybe looked at this three years ago when that same house was 300, and in two years that house is now 360, they may have more difficulty qualifying, which again is why, although I'm biased, I would encourage people to have that conversation sooner than later to see if its home ownership is a possibility for them.
Juravich: And we already, we talked about this briefly, but basically gone are the days of a house being on the market for just a weekend. I mean, I'm sure there's some houses here and there that are like, this is a very high demand home, but overall you said that most houses are on the market for more than 30 days.
Jones: Been the trend of course with the winter months you know some people kind of slow down a little bit yeah there's not as much inventory or buyers out there we expect that to probably increase and the homes will be on the market less time come the summer months just because more people are out shopping for a home a school is ending which a lot of the drivers can are typically parents who are looking to position themselves in certain school districts or within a school district so they have a limited amount of time to. Find a home before the new school year begins.
Juravich: Move in between end of school year beginning and next one. Got it Listeners, I we want you to join the conversation. Have you bought or sold a home recently? Tell us about your experience or do you hope to buy or sell a home soon? If you have a question for our experts, you can join us 614 292 8513 that's 614 292 8 5 1 3 or send us an email all sides at double OSU org Our guests are staying with us and coming up we're going to talk about what sellers need to do to get their house ready to go on the market so we can increase that inventory. That's when All Sides continues on 89.7 NPR News.
Speaker 5: You know, every day on Up First, NPR's Golden Globe-nominated morning news podcast, we bring you three essential stories. At the heart of each story are questions. What really happened? What really mattered? What happens next? At NPR, we stand for your right to be curious and to follow the facts. Follow Up First wherever you get your podcasts and start your day knowing what matters and why.
Amy Juravich: You're listening to All Sides, I'm your host Amy Juravich.
While parts of the U.S. Are experiencing a housing crisis, Columbus still manages to be one of the nation's top housing markets. Columbus is still in need of more housing, and more affordable housing at that, especially to keep up with the growth in residents that is expected over the next 10 years in this city. But that being said, overall, and compared to many other places in the U S, Columbus is an affordable housing market. We're looking at the Central Ohio Housing Work at this hour.
Listeners, you can join us. Have you bought or sold a home recently? Tell us about your experience. Ask our experts a question, 614-292-8513 or email us at allsidesatwosu.org. Still with us is Kiana Jones, Secretary of the Columbus Realtors Board of Directors. Thanks for being with us, Kiana. Thank you for having me. And Nate Kinghoff, Producing Branch Manager for Neighborhood Loans. Thanks for be here, Nate.
Kinkopf: Great to be here.
Juravich: All right, so do you think, I'm gonna ask you to predict the future. Will Columbus stay a hot or warmish housing market for the rest of the year and for next year? It's here to stay.
Jones: Yeah, it's here to stay if it weren't for Columbus the population in Ohio would be declining So everyone it's it's a hot center. They consider this the Silicon Valley of the Midwest. So to stay. Okay.
And we talked earlier about a lack of inventory and builders, if they're not selling all their houses, they don't just build more of them. They up the price and they wait, right? So another way to get inventory though is for people to downsize and sell their houses. What are we experiencing there? Are people not doing that? Are people hanging on to their homes for longer? We have people hanging on.
Jones: To their homes. That's kind of what's made our inventory a little bit sluggish. Reason being is that they either caught the wave with the low interest rates and they don't want to try to purchase somewhere with higher interest rates with the higher home price included there. And secondly the fact that the homes themselves have increased in value so much there's nowhere for them to go. The inventory is just not there for them to find what they're for if they're looking for their last home or their dream home, there's just nothing there for them to purchase that's equivalent to where they're at now.
Juravich: Yeah, Nate, have you had people come into you and you just advise them? I think you need to stay put.
Kinkopf: Sort of, I like to just show them what that would look like and let them make that decision, but they often will come to that conclusion where it's like, I'm not gonna get much more house, or in a downsizing situation, I'm gonna pay a lot to downsize, it doesn't quite make sense, right, logically, from a mortgage standpoint.
Juravich: So they end up with a higher interest rate to downsize and from your perspective that probably doesn't make sense for a lot of people
Kinkopf: Not just on the numbers, no. But lifestyle dictates everything that we do. The reason people buy and sell are the five Ds. Diapers, death, divorce, and there's two other ones. Family growing. But basically. Do you know the other Ds? I was waiting for you to finish the Ds, okay. Three out of five's not bad. But there are lifestyle reasons, schools, things like that, that help people to move. If they don't have one of those reasons, the numbers typically aren't gonna make great sense at this point.
Juravich: Yeah, do you do you think do you agree? Do you think people are holding on to their houses for longer than they have in the past?
Kinkopf: Yes, and I think that's why we see that price number still pushing higher because those houses aren't coming to the market. So that supply and demand is what it is.
Juravich: All right, we're going to take a couple of calls real quick. We have Hal in Clintonville. Hal, what's your question?
John Holmes: My question is that I own a duplex in South Linden near the Crew Stadium, and I'm wondering about a transaction for sale by handled by myself or should I list it with a real estate? What's the math on that and how are those properties selling now in the marketplace?
Juravich: All right, so he is near the Old Crew Stadium in South London, and he wants to know if he can sell it himself, should he hire a real estate agent, what kind of advice do you have for him? Well, that's a great question.
Jones: Question. There are a lot of people we call it for sale by owner and the one thing we do advise is that you will absolutely make more money selling your home by using a realtor versus attempting to sell it yourself.
Speaker 7: Why's that?
Jones: Reason being is that we do this every day. We are used to marketing your home. We know how to price it accordingly. And essentially the contracts and negotiation are the biggest part of getting you to the closing table. And without the expertise of a realtor and not being able to discern differences between offers and if you're working with a legitimate buyer, there'd be some pitfalls that you want to avoid.
That you may not be able to avoid if you decide to sell it yourself just to save a couple of dollars. So we always advise to check with a realtor. Linden is a great area. It's growing. Again, that's still one of the most affordable areas of the city right now. So my advice to you would be to consult with a realtor first. Look at the numbers that way, but you will absolutely make more money and sell your home for more using a realtor.
Juravich: Well, and remember, he mentioned he had a duplex. So that's interesting to me, because if you sell it, I mean, a dupex means there's two units, right? So I mean I don't know, he house it out with us anymore, but in theory he's renting it out, you know, renting out two sides. Can a realtor help you figure out like, whether it's better to keep renting it or that kind of thing?
Jones: Absolutely. I mean, they'll be able to look into market rates, rental rates for them, because Nate will tell you that's a part of determining the affordability or if someone being able to purchase that property.
Kinkopf: Yeah, go ahead. Let's lie. You wanna jump in there? I would love to. I'd like to first say, from my perspective on the lending side, using a realtor will always be a good decision. There's a lot that gets handled beyond getting you a better price, which statistically speaking, we know that they do, that you as an individual who doesn't do this regularly does not wanna be dealing with negotiating and remedies and all of that.
As far as the two unit, that's a very appealing property actually to a wide range of home buyers. Not just investors, but people who want that first home and maybe want to live in one half and rent the other. That kind of house hacking is how some folks are able to afford their mortgage because they're getting a lot of it paid by somebody else and build equity. So that would be a very, I would think, quite an appealing property if it was in, you know, ready and prepared correctly to sell.
Juravich: Yeah. Yeah. All right. And I have the D's. Our producer, Marcus, looked them up. Yes. So they're diamonds, diapers, diplomas, divorce and death.
Kinkopf: I think I just thought of the worst ones, I'm sorry.
Juravich: So, meaning getting married, yeah, right? So, diamonds, diapers, diplomas, divorce, and death. Those are the reasons that people tend to get, it'd be interesting to be talking about real estate, right.
Kinkopf: Quickly, yeah.
Juravich: Those Ds all make sense to me. That checks out, right?
Kinkopf: Thank you for looking that up.
Juravich: Yeah, all right, we're going to believe the internet there. Jeremy in Groveport, what's your question, Jeremy?
Speaker 8: Hi, I own a house in Groveport. I've been here since 2018. My fiance and I are getting ready to move up to a place in Sunbury. And prices and everything are crazy up there right now. And we are actually gonna rent. So I'm going from a house that I own into a rental. And I'm wondering pros and cons on keeping my place and trying to rent out my place. As opposed to selling it outright.
Juravich: All right, well, let's let's get some opinions here, because I can I can see two sides to that. I mean, renting it out, you could you could make some money, but then you have to take care of it. So yeah.
Jones: Well, Jeremy it comes down to the numbers for you and and what works best for you if renting it Well, let's start with selling it. If you decide to sell the property If you're not gonna make the money that you want to make from that then of course You've made your decision that way as far as rental rents are up Rents are not not through the roof, but they're definitely up over the past couple of years. So I'm pretty sure you would have no problem renting that out.
There's a lot of workforce housing down in Groveport that's needed. There are individuals that would be looking to rent a home with their families. So but again, it comes down to the numbers. But going into another rental situation, just stay mindful that those rents increase. So once you have the ability, if you can take some equity and sell the home in port and take some equity to use that to purchase and were in Sunbury, then that probably would be your most beneficial move to make.
Juravich: And Jeremy mentioned Sunbury is a is some he meant he said Sunbury as a hot market right now. Is that true?
Jones: Super hot right now because you just have to grow out. Columbus, central Ohio they're anticipating that hopefully within the next 10 to 15 years anything within an hour's drive of Columbus will be considered Metro. So it's kind of East Coast where you know people get used to making a commute into the city for work.
Juravich: Our city's growing up. Is that what's happening? We'll take one more call here. Robinson in Bexley. Robinson, what's your question?
Speaker 9: Um, I, I had a couple of questions, but, but primarily I'm under the impression that LLCs and other organizations are purchasing a significant amount of residential homes and that's, uh, having a, which has probably occurred to some degree over the past, but it's at a higher degree now, and that is driving prices up to some degrees and creating a barrier for normal people to purchase homes. Um, do you have any insight on that experience?
Juravich: Yeah, okay, so let's get some thoughts. So an LLC, so basically like a company swooping in and buying houses instead of individuals buying houses. Are you, is that still happening? I mean, I heard a lot about that happening closer to post pandemic times. Nate, are you seeing companies buying houses?
Kinkopf: Anecdotally, from where I sit, I'm not gonna interact with them as much, just based on our business flow and the type of buyers we work with. It does happen, the percentage of how often that's happening, quite frankly, I'm sure at the moment, Kiana may know. Kiana May know, sorry. But I do think that that, if being done at a high number, does put some pressure on prices as well, so I'm not sure if we have those numbers here. Yeah, are we seeing?
Juravich: Are we are we seeing LLS?
Jones: Coming in and buying things? Yeah, you still have institutional investors that are coming into the market, and it does put a strain on your average home buyer because they're coming in and paying cash, which is a lot more lucrative sometimes, or even a seller is thinking about, hey, I'll take the cash deal over having to work with financing. But the Columbus Realtors has worked really hard to try to introduce, help city council and introduce legislation.
Juravich: I was just going to say, I feel like I've talked on this show about a piece of legislation to stop LLCs from doing that. Is that happening? Well, we haven't.
Jones: We've been able to completely stop it. Wholesalers do have a place in this ecosystem. There are some homes that just cannot be financed, so they have to require cash. But there are some wholesaler legislation that was passed through the City of Columbus that will require wholesalers who act on behalf of institutional investors to try to purchase these homes to make them register and also disclose to sellers that they may be getting the best deal, which takes a lot of equity out of that.
And some of the wholesalers and investors will purchase the home and just leave it vacant. So we also have worked hard to have a vacant housing registry enacted that will reduce the blight that's in neighborhoods and so that you don't have vacant homes that are bringing down the values of those that are occupying.
Juravich: Around them. Well and it's a shame if we're having such an inventory problem to have a house just sit empty. Are they not selling it because they're a company and they're not a human or they're not selling because they are waiting hoping a year from now it'll be worth more.
Jones: Well, the saying goes, don't wait to buy land, buy land and wait. So some of them will just purchase it because it is an investment on their end. And with the prices and the increases that we're seeing in Columbus, there's a possibility that they can make a small amount of money in a short period of time.
Juravich: This is All Sides on 89.7 NPR News. We're talking about local real estate with Kiana Jones, Secretary of the Columbus Realtor's Board of Directors, and Nate Kingkopf, Producing Branch Manager for Neighborhood Loans. Listeners, have you bought or sold a home recently? You can tell us about your experience, or give us a call if you have a question.
614-292-8513, or email us at allsidesatwosu.org. Nate, I wanted to spend a few minutes talking about interest rates. So, um. There's some change coming at the top. You know, Fed share Jerome Powell's term is over. There's a new chair, Kevin Warsh, he's starting. How does something like that impact you? You're a lender on the ground in Columbus, Ohio. Does it matter who the Fed share is to you?
Kinkopf: Not nearly as much as people think it does. What matters more is things that are likely to cause inflation, because that is directly correlated with higher yields and higher mortgage rates. So what we saw in February was rates had moved down almost as low as they'd been in several years to right around 6%. The war in Iran has caused that, basically, to go up more than half a percent.
And the way that relationship works is that puts pressure on oil prices. Oil prices go up, the cost of everything else goes up, inflation goes up. Investors don't like that. Mortgage rates rise as well. So that conflict, from an interest rate perspective, is not helpful at all. And the other piece to that is when you need to get money financing that, like the Pentagon borrowing trillions of dollars to do that, that also helps cause more inflation. So those factors are much bigger than the chair of the Fed. And as of now. Rate cuts that were expected to maybe be able to happen this year are not expected till late 2027 if not later based on how the environment has changed the last two months.
Juravich: Yeah, I got an economics lesson recently saying that the news makes it sound like cutting interest rates sounds good, but what happens is if you cut interest rates too much or at the wrong time, then inflation will offset it. Am I explaining that correctly? Exactly. So it's not going to help anything to cut a half a percent or a quarter percent, right?
Kinkopf: Correct. That's not going to undo all the things that we're talking about that actually impact it.
Juravich: Yeah, but does something like gas prices going up, does that impact home buying? Cause I mean, you think like it cost me $70 to fill my tank, but $70 on a $350,000 house, $70 is not anything, but like are people factoring that all in now too?
Kinkopf: I think indirectly. I think the effect it has on everything else, because again, those prices going up makes everything go up in its cost, and if people have to pay more at the grocery store, they have to more at their restaurant, wherever they're doing, they have less disposable income to look at buying or increasing their housing payment. To your point, that 6% jump of home prices is around 120 bucks on a mortgage payment.
So it sounds like a lot, 6% is a good amount, but it's about $100 to $120 more on their mortgage payment, so that is- which now
Juravich: Which now, apparently, is a tank of gas, but okay. Exactly, so.
Kinkopf: So yeah, I mean, those costs going up are challenging. But to Keanu's point earlier, rents also will likely rise as a result. So trying to get in and get in the game, we, similar phrase, I like to say time in the market is always going to be better than trying to time the market because of how this appreciation works and how all these numbers relate to each other.
But you're spot on. I mean that cutting the rates is not going to be helpful and it's not going to happen anytime soon barring some unforeseen COVID type thing.
Juravich: But in an election year, it sounds good, like to cut interest rates, right? Like it's a good-
Kinkopf: Lots of things sound good at certain times, but as far as reality, which is what we work in daily and what we see, the rate environment, we've been between six and seven and a half for about four years. I wouldn't expect it to go outside that range if I'm a home buyer. So again, trying to time it here or there is just gonna end up you paying more, probably more for your house when you go pull the trigger.
Juravich: This 3% of 2010 days, is that gone forever?
Kinkopf: It's gone forever.
Juravich: I think I can say that. You can say it. Yeah.
Kinkopf: I think I think people would love something in the five percent range would be fantastic. That would be the new three
Juravich: The five is the new three. Okay, what would have to happen for that to happen? I mean.
Kinkopf: The opposite of those things we just mentioned, so inflation going down, which doesn't look likely. Other bad things economically, like unemployment going up, new jobs not being created, those sort of things lead to bond markets reacting to make rates go down. As we mentioned earlier, talking off error back in 089, as things kind of went downward in the economy, rates dropped as well. So that would help rates, but it wouldn't help a lot of other things that we care about. So it's.
Juravich: So we can't we don't want to wish for another housing crisis. We don't wanna wish for a pandemic. But those are the things that make the rates come down
Kinkopf: Yes, or just magically going back to February, that would help too.
Juravich: Magically.
Kinkopf: Just going back two months before this that would help rates be back down where they were is is what's going on Around the world is hurting rates now. So that if that happens to come to an end
Juravich: Oh, you're talking about the war in Iran. Okay, I was like, I'm like, what happened in February? Oh my gosh.
Kinkopf: If that somehow ended soon, you will see rates probably get better, whenever that is.
Juravich: I see. I see, okay. Listeners, you can join us, 614-292-8513, or email us at allsides.osu.org.
Upcoming, we're going to talk a little bit more about housing demand, what it means to put your house on the market, and we are going to be talking about refinancing. That's when all sides continues on 89 7 NPR news.
You're listening to All Sides. I'm your host Amy Juravich. According to Zillow, the Midwest is one of America's most popular housing markets. Columbus continues to show strong housing demand even in a market where mortgage rates remain elevated and affordability is still challenging nationally. We're talking about central Ohio's real estate market this hour. Still with us we have Keona Jones, secretary of the Columbus Realtors Board of Directors. Thanks for being here.
Jones: Thank you.
Juravich: And Nate Kinkoff, Producing Branch Manager for Neighborhood Loans. Thanks for Thanks for having me. Listeners, you can join us 614-292-8513 or email allsides at wosu.org. We have Ehap in Columbus. Ehap, what's your question?
Speaker 9: I'll ask about what is the requirement for the new immigrant to have a home by the financing.
Juravich: Okay, yeah, let's talk about that. So what, if you're an immigrant into the country, is there anything different about financing and what happens when they come talk to you?
Kinkopf: Yes, so recently the FHA changed kind of their guidance and guidelines on that. Conventional loans are still able to be done for permanent residents. If you have a work visa, if you have a documented reason, flying to your employer, that you can qualify for the same conventional loan somebody else can, which is looking at your income, looking at what assets you have and what credit you have.
Juravich: Okay, and this kind of relates to, are there federal or state programs still out there to help people buy a home? There used to be a lot of first time homebuyer programs where you could get help with a down payment. Are those still around? Thank you very much.
Kinkopf: They are, and they're very worth looking into. A couple that we like to use, the state of Ohio has something through OFA, which has various options for down payment assistance, or if assistance isn't needed, a subsidized lower rate than what would be in the market. And there's several other local products, depending on if you're buying in the city of Columbus, or if you buying just in central Ohio at large, that if you fall into the right category of your income level, your first time buyer status, you may qualify. So those are all things to. To definitely look into and ask about early on because they can help make home ownership more possible more quickly.
Juravich: So back to Ehab's question though, if he's a new immigrant and if he has the documentation, then maybe he could also qualify for a first-time homebuyer program too.
Kinkopf: Possibly a-
Juravich: Possibly and there used to be a lot of programs for like for veterans The like an American dream program or those all still out there do they all have different names? Yeah, a lot that's still out. There. Okay. Yeah, I don't feel I feel like I don't hear about it as much But maybe I'm just not looking in the right places
Kinkopf: Yeah, VA loans in particular are fantastic for veterans. It's something that everybody should look into if they have that qualification. But as I've said a couple times, I think having that conversation early on, even if you're a year or two out from buying, you may find that you could fall into one of those categories where maybe you can get assistance that will make buying a lot more realistic sooner and so that you can that house priced at today's price versus what we think might be two years from now.
Juravich: What does down payment assistance look like? Is it like you get a grant or is it a loan for $5,000 or $10,000, something like that?
Kinkopf: A lot of them have a time period tied to them through which you have to keep the home, and if you sell or refinance, you owe that money back. And that's something that's disclosed and discussed with you up front. So, for instance, with OFA, there's a seven-year.
Juravich: Yeah, what's over? What's OFA?
Kinkopf: Ohio Housing Financing Agency runs a program here that's funded at the state level that we've used for over a decade, so it's very reliable. But they have a product that you can use to get assistance to buy, knowing that if you look to sell or refinance within seven years, that assistance you got is, you need to pay it back. So again, can work for some people who plan on being in the home for a long time. Alternately, a lower down payment, asking for seller credit, staying strategic with your realtor. There's various ways to try to minimize your out of pocket and still have the best loan that you can.
Juravich: Is it better if you're asking for help from one of these programs? I mean, is it better to get the down payment assistance or to get a lower rate assistance?
Kinkopf: I think it's very specific to the individual's needs and their budget. I personally like the idea, or I guess don't like the idea of somebody buying a home at the top of their budget that we're allowed to give them because the lender looks at gross income and all these calculations and we all know that's not what we all get at the end of the day. And we know home ownership has costs. So if we can use some money from OFA to help get the house so you can still have a few months of savings when you get into the house, you're probably set up for success better that way.
Juravich: All right, we have another call from Joanne in Columbus. Joanne, what's your question?
Speaker 10: Okay, I am considering moving from Columbus to a foreign country. I bought my house during COVID, so I got a three and three-quarter percent loan on this. So I'm in my condo, yeah, I'm my condom with a HOA and mortgage combined less than $650 a month. Congratulations, Joanne. Yeah I know. Yeah. Yeah. I know! So why are you moving? The political climate is my problem.
Juravich: All right. Okay. Well, that's another show, but continue, Johanne. Go ahead.
Speaker 10: My question is, would I be better off renting my house and just renting in another country or selling this outright and in-
Juravich: investing in another country. All right. That's an interesting question. There's a lot there. Kiona, what would you like to unpack? I was going to say, there is.
Jones: A lot to unpack there. Now, not sure where you're moving to. There are countries that have their limitations on you being able to purchase as a foreign individual and you may be required to rent. The other thing to look at is if you need the funds from the sale of your home to start your new life in the new country.
So if that's a requirement for you, then of course to sell the home and take the proceeds with you. Would be beneficial with the loan amount that you have in the mortgage payment you would have no problems whatsoever renting the property out. If you're going to be in another country I would strongly suggest that you consider a property management company to assist you with that. That would probably take on average 10 to 15 percent of the rents on a monthly basis to help manage that property for you. So it really comes down to just an individual decision on if you want to take the funds with you and based on whatever political climate, if you want to leave your assets here in the states or if you decide you want to take them with you.
Juravich: But Nate, if Joanne pays only $650 a month, I mean, in theory, she could rent it for more than that, I'm sure, no matter where she is in Columbus.
Kinkopf: Absolutely, is she still with us or is she off?
Juravich: Uh, yeah, no, she's still here.
Kinkopf: Do we know what the value might be on the home, if you had to take a guess, Joanne?
Speaker 10: Yeah they're renting right now in this area between one thousand and thirteen hundred a month
Kinkopf: What do you think the value of the property is as far as the price?
Speaker 10: Well, see that that I've been watching him on the Sunday sales And my condo when I first spotted shortly afterwards, they started going for 150 now. They're down to 125 And I only owe 50 000 on mine
Kinkopf: Well, yeah, every market's different, every neighborhood is different. And I just want to understand, because again, if we do see, it just sounds like maybe not there. But if we see four or five percent year over year growth, that's what you're kind of giving up potentially is five to six thousand dollars of growth in that home value whenever you do sell one day. But I do love that you're watching the Sunday sales rather than looking at Zillow. I think that's probably could be even more accurate in some cases. So you're doing that.
Juravich: Alright, you're gonna have to tell me what that is. I don't know what it means to watch a Sunday sales versus look at Zillow.
Kinkopf: Well, if it's what I recall when I was a kid watching that show, it's just pictures of houses that sold in the area and what they sold for. Oh, that show. Oh my gosh. That show's still on. Sounds like it might be.
Juravich: Wow. Okay. Well, yeah, Joanne is not with us now, but I remember watching that. I am having a flashback. Wow. All right. That's so funny. All right. Well let's spend, we only have a few minutes left. Let's spend a few minutes, Kiana, if someone is sitting on their house right now and they're thinking about selling because they know that there's this inventory demand and they know they could, they know, they can sell, but their house needs some more. What do you tell them? Like, do they need to put a $30,000 kitchen in to sell their house? No, it's all about
Jones: pricing it accordingly we have sellers that say I don't want to put another dollar into it but they just have to be realistic about the pricing that they'll receive for their home but what we always say is yes if you can refresh anything in your home there are things that add value to it without an entire investment if you're able to repaint the interior of your home maybe some upgrades to your bathrooms, just even the sink or... New toilets and such like that.
And curb appeal is huge. Invest in the landscaping of your property. And make sure your mechanicals are up to date. With the pricing of homes right now, since people are already spending a lot of money on the home, they don't want to go into a home that's going to create even more big ticket items for them, such as the furnace or the air conditioning unit. So if you're able to either upgrade those things or at least get them tuned up To a satisfactory place where they'll last for some time. Those are the things that at least I'm advising my clients To look at with so they'll be sustainable in their homes or buy a new furnace. Don't up don't update the kitchen
Juravich: That kind of, yeah, that would be a better.
Jones: Yeah, because you can build equity so many different ways, and one of them is to do your own upgrades that way. But again, those high ticket value items that you incur the first year, it will devastate your savings.
Juravich: All right, and Nate, I tweaked it, but we only have two minutes left. So I'm gonna ask you about refinancing. With interest rates the way they are, I'm assuming people are not coming to you to refinance as much as they were maybe 10 years ago.
Kinkopf: That is a good assumption. If we go back to those five D's, which I won't try to remember though, that is also a reason people refinance, because with the equity they might have in their home, they may need to pay for a wedding or pay off some debt that's at a higher interest rate and they can leverage the equity in their own, although they'd be taking a higher rate than maybe they have, to still better their financial position. So that is one reason we still see some refinancing, is cash out refi. But you're right, as far as rate reduction, it's not as common right this moment.
Juravich: Okay. But another reason people might talk to you about refinancing is they have now decided this is their forever home, even if it didn't used to be, and they want to do a big renovation. And they need a big chunk of cash. So you're saying that some people will come to you for that and they'll end up with a little bit of a higher interest rate, but they can get that cash, right? Correct. Okay. All right. Well, we are down to the last 30 seconds. Do you have a parting thought about the real estate market you want to give us, Kiana?
Jones: Just want to let everyone know that the market is still strong out here, so if you're thinking to buy, buy today. If you're think about selling, the inventory is needed, and there's somewhere we can find
Juravich: I want to thank both of our guests. Our guests have been Qiana Jones, the Secretary for the Columbus Realtors Board of Directors. Thank you for your time today. Thank you. And also Nate Kinkoff, Producing Branch Manager for Neighborhood Loans. Thanks for your time today, Nate.
Kinkopf: Thank you. See you next time.
Juravich: And this has been All Sides on 89.7 NPR News. If you missed any part of today's show, listen back at our website, www.wosu.org slash All Sides. Subscribe to our podcast. Every episode is available in our mobile app. This is All Sides on 89, 7 NPR News. I'm Amy Juravich.