Over the past few months, I talked to many frustrated buyers who were ready to give up on their home search and continue to rent.
I believe this is a mistake as the market has been normalizing this summer.
Will the Housing Shortage Continue?
Unlike what most people believe, the pandemic was not the reason for the current housing shortage. It has been years in the making.
Since the end of the Great Recession of 2008 new construction fell well below the number of homes needed to satisfy demand. Developers were underbuilding for more than 10 years.
According to some estimates, we are now 5 million homes short of meeting demand. It will take a while to catch up.
Some experts believe that the housing shortage will last for 10 years.
I don’t expect that home prices will drop anytime soon.
Columbus Housing Affordability Suffers
Housing affordability has steadily declined during the pandemic.
The Housing Opportunity Index (HOI) for Columbus is the second lowest in the Midwest – right after Chicago.
The HOI represents the share of homes that would have been affordable to a family earning the local median income.
The HOI is 69.3% in Columbus, the lowest value in Ohio and the second lowest in the Midwest. For comparison, the national HOI was only 56.6% last quarter.
Are We Back to a Normal Housing Market?
In late July and early August, we saw a significant shift in home searches. Many families enjoyed their post-pandemic freedom – they took vacations instead of hunting for a home.
The showing index has dropped to 2019 levels, substantially more homes are being listed for sale, and the inventory increased to 2,737 homes – the highest number since the beginning of the year.
These are clear signs that the housing market is normalizing.
Are You Planning on Buying or Selling this Fall? Call or Text me at (614) 975-9650.