“The hottest housing market in history”, that’s how Columbus Realtors headlined their annual 2017 housing report. In summary:

  • Home values have increased by 6.3% (average sales price: $214,802)
  • Sales were up by 1.7% (closed sales: 32,218)
  • The inventory is down to 3,876 homes for sale
  • The supply is only 1.4 months
  • Days on Market (DOM) have plummeted by 20.5% to 35 days in average

If you love charts and want to study the numbers, I suggest you download the complete 2017 Annual Report on the Columbus Housing Market.

Instead of dwelling on last year, let’s look ahead and figure out what to expect in 2018. Here are answers to the 7 most common questions from home buyers and sellers.

What Will Happen to Housing in 2018?

Most real estate professionals agree that 2018 will be similar to 2017. Home values will continue to rise, and the inventory will shrink even more. It is unlikely that builders can catch up and fill the demand gap.

I see opportunities to get good deals in the upper price ranges (above $400K), while first time home buyers will face more competition due to the limited number of affordable listings.

Are We in Another Housing Bubble?

No, we are not in a housing bubble. Demand is very high due to the fact that more people are moving to Columbus (growing by 1% a year) and our economy is very strong. The home ownership rate (% of people who own vs. rent) is at a 10-year low.

Unlike 10 years ago, when mortgage lenders gave away loans without documentation, lending requirements are quite strict, and the number of loan defaults is low.

Will My Home Lose Value If I Buy Now?

It is unlikely that your home will lose value if you buy now and stay in your home for 5 years or more. In most neighborhoods, home values will continue to rise. In some areas they will rise significantly. If you sell in a year or two, however, you will likely lose money due to transaction costs, commissions and closing fees.

Where Should I Invest in Real Estate?

It is hard to find undervalued properties in today’s market. If you are a real estate investor planning to flip homes, I suggest you look at quickly appreciating neighborhoods.

“Gentrification” is happening in a few parts of Columbus where home values vary substantially. Southern Orchards south of Children’s Hospital, Olde Towne East and West Gate are just a few areas where savvy investors can create value by remodeling old homes.

Where Can I Find the Best Deals in this Hot Market?

To find great deals as a home buyer look for properties that are in move in condition, but have not been updated for 20 or 30 years. These homes usually sit on the market for more than 30 days, as most buyers expect the latest bells and whistles.

If you are handy and don’t mind making improvements after you buy, you will be able to buy these “dated” homes below market value.

We also see opportunities in the new build sector. Many builders own inventory homes they could not sell before the end of the year. They offer substantial discounts on these properties to get them off their books.

Will the Inventory Improve in 2018?

The inventory of homes for sale will not improve in 2018 – most likely it will get worse.

Over the past 3 years the number of new listings added to the market has been almost identical at 37,000. At the same time closed sales have increased every single year. It is unlikely that more home owners will decide to sell in 2018 than last year, and builders cannot catch up with the increased demand.

What Are the Options for First Time Buyers?

Most new construction homes start at $350,000 for a base model. Many first-time home buyers can’t afford that price.

You have 2 options to become a homeowner: either wait a few years until you can afford a more expensive home, or buy a less expensive home that needs updating, make improvements, build equity and move up to a more expensive home in 4 or 5 years.

Call or text me at (614) 975-9650, if you have more questions about buying or selling in 2018!