In late January the Columbus Board of Realtors released their monthly housing stats for December 2012. One of their findings: over the past 12 months the median sales price of Columbus homes rose by 8.7% to $139,000.
There was a collective sigh of relief by home owners who have been waiting to list their properties. The market has finally turned. Home values are on the rise again.
Before you call your real estate agent and put your very own residence on the market in hopes of selling at a nice gain, read this article to the end. Numbers are deceiving. The 8.7% increase may not represent how your home fared over the past year.
Here’s how I discovered that something is “wrong”.
Here’s What’s Wrong
I have been tracking home values in Dublin for the past 4 years. As you can see from the chart at the top of this post, sales prices of Dublin homes have not changed much since 2009. As a matter of fact, the median sales price of Dublin homes was down by 3.7% in 2012 (red line).
At $307,000 Dublin home values are still more than double the average home value in the Columbus Metro Area.
Let me explain why Columbus home values have increased, while Dublin and other suburbs did not gain.
The Impact of Lender Mediated Sales
The overall price increase we witness in Columbus is heavily affected by the number of distress sales, or the lack thereof.
The table below explains why.
| Closed Sales Q4 2012 | Columbus Metro | Dublin (Corp) |
| Total Sales | 5,650 | 148 |
| Lender Mediated | 1,740 | 14 |
| Share of Lender Mediated Sales | 30.8% | 9.5% |
| Median Sales Price Traditional | $161,500 | $315,000 |
| +/- over previous year | +2.5% | +2.3% |
| Median Sales Price Lender Mediated | $67,000 | $158,500 |
| +/- over previous year | +4.8% | -40.4% |
In 2012 the share of lender mediated properties (such as short-sales, foreclosures, REOs) had dropped dramatically. Only 30.4% of all closed sales were lender mediated as compared to 34.8% a year ago. And the median sales price of distress transactions increased by almost 10% from $122,000 to $134,000.
With fewer foreclosures on the market and an increase in the value of these properties, the median value of homes was up, even though the values of non-distress sales did not change.
Why are Dublin Real Estate Values Down?
Let’s have another look at Dublin home sales.
In Dublin the share of foreclosure sales was only 9.5% in 2012. However, the median sales price of lender mediated Dublin homes was down by 40.4%. Obviously, this had a major impact on the overall loss in value of 3.7% (in Dublin).
Traditional home sales in both Dublin and Columbus show a 2.3% and 2.5% increases respectively.
What does this mean for Buyers?
This is really good news for you, if you are a home buyer just entering the market. You did not miss the boat, yet. Home values are still relatively low and, combined with historically low interest rates, your buying power is better than ever.
My advice: buy now! Home values will go up in 2013, because the inventory of homes for sale is at a 10 year low. You will have to compete with other buyers for quality listings in the suburbs.
What should Sellers Do?
If you are a seller you may still have to wait another 6 months to realize a substantial gain. However, the low inventory will force the market to adjust and home values will increase in 2013.
If you have to sell quickly, now is a good time.
If you want to get top dollar, wait a few months.
Whether you are buying or selling, I can help you complete a hassle free transaction. Call me at (614) 975-9650 to get started now!