The housing market received a much-needed boost in the fall when mortgage rates started to decrease, but unfortunately, this relief was short-lived. Despite two interest rate cuts by the Federal Reserve, mortgage rates have once again risen and remain stubbornly high.
This rate turbulence has had a ripple effect on individual markets like Cincinnati, where real estate agents are uncertain about what each sale will bring.
“It’s a very unpredictable market,” remarked Teena Jackson, a Redfin agent in Cincinnati. “I’ve been in this industry since 2005, and I can honestly say that I have never experienced a market quite like this one. We have to navigate it together.”
Cincinnati has seen benefits from the broader resurgence of the Midwest, with major corporations establishing offices in the area to take advantage of the lower cost of living compared to the coasts.
These companies attract transplants who move for work, leading to an influx of homebuilders providing additional housing on more available land. This has driven economic growth in southern Ohio and northern Kentucky, intensifying the competitiveness of the housing market.
“We are an affordable area compared to many others, which attracts a lot of relocation due to the presence of big companies here,” explained Donna Deaton of RE/MAX Victory + Affiliates. “We have General Electric, PNG, Amazon. This has significantly boosted our sales.”
Jackson highlighted the market’s unpredictability by citing two recent sales. One property was significantly underpriced and received 28 offers in less than 24 hours, eventually selling above the asking price. In contrast, another comparable home had an offer below the asking price accepted.
This fluctuation is indicative of a market shifting away from favoring sellers. According to data from Altos Research, the for-sale inventory has increased from 1,864 on a 90-day rolling basis in May to 3,019 presently.
A significant drop in new listings is contributing to this trend. Weekly new listings decreased from 410 on Nov. 1 to 186, although it’s common for new listings to decline as the holidays approach.
This decrease in listings has also led to a decline in the median sale price, dropping from $400,000 in June to $350,000 currently, marking a low point for 2024.
With more homes available for sale, buyers have gained more leverage, as evidenced by Altos Research’s Market Action Index score declining from 55 in May to 45 now. Altos considers any score above 30 to indicate a seller’s market.
Sandi Wethington, an eXp Realty agent, shared a recent transaction where the seller went to great lengths, installing a new septic tank and roof to close the deal.
“I’ve been in the industry for 35 years, and I haven’t seen that many concessions in any transaction before, but the seller was determined to close the deal,” she said. “It’s becoming a more common occurrence.”
While the market typically slows down during the holidays, Cincinnati agents anticipate both buyers and sellers to remain active in the new year, despite high mortgage rates. Individuals who have been waiting for rates to decrease due to recent life events may no longer have the luxury of waiting.
Despite the increase in inventory and decrease in prices, the number of homes for sale is still considerably lower than usual.
“I believe the market is still very healthy, but the limited inventory remains a challenge, and I see this as a consistent issue across all price points,” stated Meg Perez of Coldwell Banker Realty.
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