Prices in the Dayton real estate market remain sky high with buyers frequently engaging in bidding wars. If you’re a prospective home buyer who decided to wait for the market to cool down before buying, now might be the time to go back to house-hunting. Numbers across the nation indicate there are more listings entering the market.
Summer 2021 Real Estate Update
According to Redfin, the number of new listings went up by 4% in the month of June comparing to the same time last year. Additionally, the total was also 3% higher than the number of new listings in June 2019. The number of active listings dropped by 32% from a year ago. However, since March this year active listings increased by 8%. Home buyers haven’t been rushing to the market as they did at the beginning of the year since home prices have already increased and stabilized. According to Fannie Mae’s latest Home Purchase Sentiment Index (HPSI), 64% of respondents said it’s a bad time to buy a home, up from 56% in May.
On the other hand, home sellers rejoice. During the pandemic many sellers took their properties off the market since they didn’t want any strangers coming into their homes. Additionally, sellers worried that after selling their house they won’t be able to find a property due to the low inventory. According to the latest Fannie Mae’s survey, 77% of respondents said it’s a good time to sell a home, which is an increase from 67% in May. The growing number of vaccinated individuals and rising home prices encourage sellers to list their properties.
Since the beginning of the year mortgage rates have been anything but stable. After starting the year at a record low the rates climbed back up by the end of March. Recently, mortgage rates have dropped yet again and they are expected to slowly increase over the next several months. Low rates combined with high confidence among consumers concerning their monthly income draws more buyers to the housing market.
On the other hand, first-time homebuyers seem to have the hardest time trying to purchase their first property. Even with historically low mortgages, many prospective buyers can not afford the sky-high home prices. The majority of the younger millennials don’t have a sufficient amount of money to cover 20% of the down payment. Additionally, in today’s market, mortgage lenders like to see a buyer have at least 3 months of savings to account for unexpected events such as a job loss.
Dayton Real Estate Market Area – 3rd Quarter Update
The numbers from the Dayton real estate market seem to mirror the national data. Home sales increased by 19.8% in May when compared to the same month last year. The average sales price across the local markets went up by 18.1% in May 2021 from May 2020. May’s median sales price came in at $195,000, beating last year’s figure by sixteen percent.
Additionally, there were 1,792 new listings added in May which is a 3% increase from the same time last year. The inventory, however, has a long way to go since there were only 788 properties available for sale which is an equivalent of only 0.5 months of housing supply.
Buying the Right House in a Hot Market
The housing market may be slightly slowing down but home buyers remain determined to get their dream home, especially in the Dayton real estate market. Now even more then before it is crucial for prospective buyers to keep their emotions at bay and take time to consider what type of home they should buy. According to the recent Bankrate poll, 3 in 10 millennial buyers regret their house purchase decision because they either bought a house that’s too big or too small.
Before you start house-hunting consider how long you’re planning to live in a particular house. If a young couple who is starting a family plans to live in a house for 10 to 15 years they should consider not only getting a large house but also a house with all bedrooms on the same floor. Additionally, one extra bedroom instead of a large house may sometimes be all you need if you’re planning to work remotely from home.
In the highly competitive market some young buyers often consider buying a fixer-upper to save money and then expand it, if necessary. It may sound like a solid plan but there are certain issues to think about. Oftentimes, HOA rules or zoning regulations prevent homeowners from adding on to their property regardless if the lot is sizeable enough. Similarly, many owners think about converting an attic or a basement to an extra bedroom. However, depending on the cost of materials or the nature of the task the price of such a project may be quite high. For example, according to HomeGuide.com, the average cost to finish a basement runs between $24,000 and $46,000.
Sometimes home buyers forget that bigger houses don’t only cost more than smaller dwellings but they come with higher taxes, higher utility bills, higher insurance and more maintenance. Having all the extra space is wonderful but you may pay for it in the long run. To avoid financial hurdles in the future, your new house price tag should not exceed three times your annual income. You don’t want to become house poor!
With high house prices and low inventory it is important to narrow down your home wish-list to the most essential features. Consider what it is you dislike the most about your current living space. Is it a small kitchen or perhaps no garage? As exclusive buyer agents our biggest priority is for our clients to be remorse free when it comes to their home purchase. We can assist in the finding the right property for you and your family.
If you have any questions about our services or the Dayton real estate market please contact us today at 937-433-6838 or send us a message!