New Home Construction Surge Won’t Level Largest Inventory Drop in History

New Home Construction Surge Won’t Level Largest Inventory Drop in History

New home construction has surged all over the country in 2016. With inventories dropping further every single month, many of my customers choose to buy a spec home (or have one built). This is the best solution, if you can’t find the features you are looking for in existing listings.

According to the Census Bureau 4,040 permits were issued for new single family homes in the Columbus Metro Area in 2016. That’s an 18% increase from 2015.

Compared to the 31,532 homes sold in 2016, new home construction only account for 12.8% of all sales.

The Largest Inventory Drop in History

“Just when we thought inventory couldn’t get any lower, it did,” these are the words of 2017 Columbus REALTORS® President Mic Gordon commenting on the Columbus housing report for January 2017.

The Bad News

Let me give you the bad news first: the listing inventory dropped by 25.3% in January 2017 as compared to January 2016 (when it was 17.8% lower than in 2015).

Less than 4,500 homes were available for sale at the end of January. At the same time, pending contracts continued to rise, so we are heading into a very challenging buying season.

The Good News

The good news is that the market is thriving. Closed sales are up by 4.9%, pending contracts by 4.4% and the average sales price has increased by 6.0% year over year.

It’s a good time to sell, it’s tough to buy! New home construction may be a good alternative, if you don’t want to compete with other buyers for a limited number of listings.

Note: While we have a very competitive sellers market in the mid price ranges, there are plenty of luxury homes (priced above $500K) for sale.

A Narrowing Gap

This chart shows how the listing inventory and closed sales changed over the past 5 years during the month of January. The gap between homes for sale and closed transactions has narrowed considerably.

Inventory vs Closed Sales in Columbus OH during January

This trend has created a “chicken or the egg” dilemma. Many home owners who want to sell are holding off, because they can’t find a suitable property to move to.

During the same period home values have increased by 36.9% over the past 6 years (see below).

Average sales price of homes in Columbus OH in January

January 2017 Columbus Housing Stats

Home Sales were up by 4.9% in January to 1,594 closed transactions.

Home Values have increased by 6.0% year over year with an average sales price of $195,773 (that’s just $550 lower than in December).

Days on Market were 50 in January. That’s 10 days shorter (-16.7%) than a year ago. The supply is only 1.5 months.

The Inventory dropped to the lowest level ever. Only 4,329 homes are listed for sale. That’s 25.3% lower than last year.

You can download the complete housing report and all local housing reports at www.columbusrealtors.com/stats.

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About the Author

Susanne has helped more than 500 home buyers or sellers in the past 3 years. She is consistently ranked among the top 1% of all real estate agents in Central Ohio. Connect with her on Google+ or call or text her at (614) 975-9650.

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