Central Ohio Real Estate Update, May 2020
Happy Tuesday, Central Ohio! I hope you all had a fun and safe holiday weekend! While Memorial Weekend 2020 was nowhere near normal, the real estate market here in Columbus is starting to portray some semblance of the ordinary April. However - well, that's a month for the record books. Here are some surprising stats from last month compared to April 2019.
Homes Sold: 2,277 (-15%)
Average Price / Sq Ft: $140 (+7%)
Average Days on Market: 30 (-6%)
New Listings: 2,724 (-27%)
Month's Supply of Inventory: 1.2 (-14%)
As we've mentioned before, hundreds of homeowners have decided to delay their home sales due to COVID-19. Economic uncertainty has forced people to reconsider moving plans, but perhaps the biggest reason for this trend is homeowners do not want to risk infection by having agents and prospective buyers in their homes. The number of new listings was down 27% in April, a trend that continued through the first half of May. You probably learned in economics 101 that a decrease in supply will inevitably lead to an increase in prices. But what about demand? COVID-19 certain impacts buyers too, right? The answer - sort of. The number of active buyers is less concrete a metric, however, mortgage applications provide us with some insight. According an article by Mortgage Professional America, new home mortgage applications fell 12% compared to last year. While substantial, it's nowhere near the 27% decrease in new listings we experienced on the supply-side. In many ways, the demand-side has been subsidized by record-low mortgage rates, which approached the 3% mark last month (for a 30-year fixed). The question now is, what's next? With the economy starting to open back up, the fear is that we'll experience a flood of new listings that will have devastating effects on real estate prices. While I'm not that much of an alarmist, I do expect a modest decline in home prices over the coming months - a trend that likely won't take hold until late Summer or early Fall. According to Zillow, "We now expect house prices to fall a total of 2.7% by October from their February values...we still expect home prices to return to Q4 2019 levels by Q3 2021". If you have any questions on the Columbus real estate market, don't hesitate to reach out. In addition, be sure to check out our weekly video series on YouTube discussing current trends in the Central Ohio real estate market!