It's been a red-hot market in a lot of places around the US and Columbus is no different. We seem to be a perfect middle of the road city where there's fantastic activity, super weather, and very affordable homes. But, that for sale sign doesn't last long in the front yard before the home is sold. Blink and you might actually miss it.
According to some recent real estate stats, May's number broke the previous monthly record as the average days on the market coming in at just 34 days. Homes are selling so fast because there are simply not that many properties for sale. Even though new listings came on the market in May of this year versus May of last year, it didn't help the overall supply situation. Demand is still strong because interest rates remain low, and especially for our area, homes are still pretty affordable. The total supply of homes for sale in May was 5.4% lower than last year at this time. Overall there's only about a 2 1/2 month supply of homes for sale. A six month supply or absorption rate is considered a balanced market. This means that if no more homes went on the market as of today, it would only take 2 1/2 months for all the properties to be sold.
This shortage of listings continues to drive prices higher and cause bidding wars. Of all the homes sold in May, nearly 28% when above their asking price. Nearly a quarter of sellers in May dropped their prices, which is interesting because most of them probably didn't have to. Prices are still going up but not the same rate we saw at the beginning of the year. It's still very much a seller's market and because of rising mortgage rates, it could be pushing buyers to the limit of what they're able to afford.
Mortgage rates have been increasing and are now hovering around the highest level in seven years, but it's still pretty low. Our economy is strong and wages are rising and if the housing supply can be increased with a new home construction, the negative impact of rising interest rates will be mitigated.
Speaking of new construction, the nation's homebuilders have been increasing their production and most of the time focusing on the move up price market. Demand is strongest at the entry level or first-time homebuyers but the supply is the lowest in this category. [Source]
For buyers looking for starter homes it can be difficult but having your own buyers agent negotiating on your side for your rates and terms is really the best way to get what you're looking for. Give me a call today and let's go take a look at some homes that meet your search criteria and price throughout the Columbus area.