On the House: For buyers and sellers, a few good bets
Jim Weiker
A colleague becomes irritated every time I write a story based on new real-estate statistics.
Perhaps he’s jealous. After all, the figures give me plenty of material for stories.
But, of course, it’s precisely the abundance of material that annoys him.
Real estate is the baseball of industries: awash in numbers that can be manipulated to demonstrate just about anything.
Want to show that home sales are up? Mention that year-over-year sales rose for five of the past six months in central Ohio.
Want to show they’re down? Note that annual home sales dropped in 2011 for the sixth straight year to the slowest year in more than a decade.
Want to show that foreclosures are up? Point out that central Ohio filings have risen for two straight months.
Want to show that they’re down? Point out that foreclosures have dropped now for two consecutive years in Ohio.
For those weary of keeping daily score, here is the big picture:
Let’s start with foreclosures. The rise in foreclosures is often linked with the housing crisis but predates it by a decade. Foreclosures started rising in Ohio in 1996 and rose steadily until 2010, when they began to taper off slightly.
As for home construction, a key measure of the housing industry, it peaked in central Ohio in 2003 before starting a precipitous five-year decline that has yet to show any signs of improvement.
If you’re a homebuilder or a worker who relies on that industry, you’re still in the dark without a flicker of light.
By two other indicators — home sales and average sale prices — the housing industry started its slide in central Ohio in early 2006 and plummeted sharply during the next three years.
But the past two years show a more complex picture: Since the end of 2009, housing sales and prices have largely leveled out; they haven’t improved but neither have they worsened significantly.
What does this mean if you’re a buyer or seller?
Prices are still a moving target in some areas, such as certain inner-city neighborhoods that are full of foreclosures. But in most neighborhoods, prices have stabilized and aren’t likely to drop significantly.
Indeed, in some places, prices show signs of rising. The median sales prices of homes in Gahanna, Grandview Heights and Downtown Columbus were up substantially in December compared with a year earlier. (But those are one-month figures only and are based on relatively few sales.)
If you qualify for financing, are ready to buy and have found the right home, you should bite the bullet. Even if the price drops $10,000 on the home you’re eyeing, you’re gambling on three things: that someone else won’t buy the home, that interest rates will stay low and that borrowing won’t get more difficult.
The odds are in your favor on interest rates, which experts think will remain low at least through the year. But Washington is considering several changes that could make borrowing more difficult and perhaps more costly.
In addition, the number of homes for sale in central Ohio is sharply down from a year ago, meaning that there’s going to be more competition for that home you’re considering.
If your home has sat on the market for six months with only a handful of queries and no offers, you need to drop the price if you want to sell it.
If you can’t afford to drop the price, you had better have some cash to bring to the closing or plan to rent it, or start pleading with your bank.
So what does the future hold? Anyone who tells you they know for sure doesn’t know for sure.
But, in housing, there are many more reasons to think the worst is behind us than ahead of us.
Jim Weiker is the home and garden writer. Reach him at 614-461-5513 or by email.
jweiker@dispatch.com
A colleague becomes irritated every time I write a story based on new real-estate statistics.
Perhaps he’s jealous. After all, the figures give me plenty of material for stories.
But, of course, it’s precisely the abundance of material that annoys him.
Real estate is the baseball of industries: awash in numbers that can be manipulated to demonstrate just about anything.
Want to show that home sales are up? Mention that year-over-year sales rose for five of the past six months in central Ohio.
Want to show they’re down? Note that annual home sales dropped in 2011 for the sixth straight year to the slowest year in more than a decade.
Want to show that foreclosures are up? Point out that central Ohio filings have risen for two straight months.
Want to show that they’re down? Point out that foreclosures have dropped now for two consecutive years in Ohio.
For those weary of keeping daily score, here is the big picture:
Let’s start with foreclosures. The rise in foreclosures is often linked with the housing crisis but predates it by a decade. Foreclosures started rising in Ohio in 1996 and rose steadily until 2010, when they began to taper off slightly.
As for home construction, a key measure of the housing industry, it peaked in central Ohio in 2003 before starting a precipitous five-year decline that has yet to show any signs of improvement.
If you’re a homebuilder or a worker who relies on that industry, you’re still in the dark without a flicker of light.
By two other indicators — home sales and average sale prices — the housing industry started its slide in central Ohio in early 2006 and plummeted sharply during the next three years.
But the past two years show a more complex picture: Since the end of 2009, housing sales and prices have largely leveled out; they haven’t improved but neither have they worsened significantly.
What does this mean if you’re a buyer or seller?
If you’re a buyer . . .
The chance that your dream home is going to drop a lot in price is slim.
Prices are still a moving target in some areas, such as certain inner-city neighborhoods that are full of foreclosures. But in most neighborhoods, prices have stabilized and aren’t likely to drop significantly.
Indeed, in some places, prices show signs of rising. The median sales prices of homes in Gahanna, Grandview Heights and Downtown Columbus were up substantially in December compared with a year earlier. (But those are one-month figures only and are based on relatively few sales.)
If you qualify for financing, are ready to buy and have found the right home, you should bite the bullet. Even if the price drops $10,000 on the home you’re eyeing, you’re gambling on three things: that someone else won’t buy the home, that interest rates will stay low and that borrowing won’t get more difficult.
The odds are in your favor on interest rates, which experts think will remain low at least through the year. But Washington is considering several changes that could make borrowing more difficult and perhaps more costly.
In addition, the number of homes for sale in central Ohio is sharply down from a year ago, meaning that there’s going to be more competition for that home you’re considering.
If you’re a seller . . .
Forget 2005. Your home probably isn’t worth that now. In fact, I happen to know exactly what it’s worth: No matter what you paid for it, no matter what you owe on it, no matter what it once appraised for, it’s worth precisely what someone will pay for it.
If your home has sat on the market for six months with only a handful of queries and no offers, you need to drop the price if you want to sell it.
If you can’t afford to drop the price, you had better have some cash to bring to the closing or plan to rent it, or start pleading with your bank.
So what does the future hold? Anyone who tells you they know for sure doesn’t know for sure.
But, in housing, there are many more reasons to think the worst is behind us than ahead of us.
Jim Weiker is the home and garden writer. Reach him at 614-461-5513 or by email.
jweiker@dispatch.com
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