Ohio Real Estate Update | December 2021
Hello fellow Ohians. I hope you're all enjoying this lovely holiday season. As we close the annals of 2021, it's clear this was an amazing year in real estate. While we still have a week to go, home sales have already exceeded those of 2020 by more than 10%. In addition, average prices are up nearly 13% to last year and homes are selling 12 days faster with an average days on market of just 16.
Despite this trend, there is still excitement surrounding the number of new listings hitting the market - 2,628 in November to be exact - exceeding November of 2020 by 12%. However, this increase in new inventory can hardly keep up with the demand.
“The last time we had this many new listings was in 2010 when there were 17,471 homes for sale and sales were less than half of what they are today,” said Michael Jones, 2021 President of Columbus REALTORS®. “So, the fact remains, we are not seeing fewer homes being listed, we’re seeing an exponential increase in the number of folks looking to buy in central Ohio.”
In other news, the Federal Reserve just announced that interest rates will likely be raised in 2022, which sent mortgage rates to their highest levels in nearly a year. The average 30-year fixed mortgage, for example, is around 3.25%. For many, this is no surprise. Interest rates have been abnormally low since the 2008 recession, so in some sense, this is just a normalization. In addition, fears of rising consumer prices could spur further hikes as increasing interest rates is one of the federal government's most effective tools at curbing inflation.
With all that in mind, we don't anticipate any major changes in the housing market for 2022. Though prices have been rising relatively quickly over the past few years, increasing mortgage rates will likely offset much of the gains next year. However, supply-chain constraints are still slowing down new home construction which means we're likely in for another year or two of low inventory. I wish I knew for certain, but if I had to guess, I'd say home prices a year from now will likely be around 3% higher than where they are now - a modest increase compared to previous gains and inflation, but an increase nonetheless. Only time will tell. Until then, stay safe, keep warm, and have a very happy holidays with your friends and family!