Last year, after months of inactivity caused by the pandemic lockdown the real estate market exploded in the summer. After dropping almost 30% between March 2020 and May 2020, real estate sales climbed back up 21% in June. In the Dayton Ohio real estate market the total cumulative sales volume for 2020 reached $3.4 billion which is 15% higher than in 2019. As of now, the housing market remains hot with buyers regularly engaging in bidding wars. However, with mortgage rates slowly climbing up and the extremely low homes inventory the future of the housing market looks uncertain.
2021 Dayton Ohio Real Estate Market Update
According to the latest updates from Board of Realtors, the Dayton Ohio real estate market is hotter than ever. Home sale prices are up about 25% comparing to the same time last year. Additionally, the median sales price in the area is $162,500 which is 14% higher than 2020 numbers. As reported by CoreLogic, across the country, real estate prices are now rising at the fastest pace since 2006.
In January 2020, the average rate on the 30-year mortgage loan was about 3.75%. Then, after the pandemic started, mortgage rates began their gradual, year long descent dropping to as low as 2.72%. However, the recent passing of another financial stimulus and the drop in the unemployment rate is causing mortgage rates to go up slightly.
Higher mortgage rates may mean many buyers, especially first-time home buyers, won’t be able to afford to purchase a home which can affect overall home sales. However, experts agree the slight rise in mortgage rates may cool off the real estate market but only on a small scale. There are prospective buyers who have been patiently searching the Dayton Ohio real estate market for a year now. The demand for homes remains at all times high.
The extremely low housing inventory remains the biggest struggle for the real estate market. Nationwide, in February there were nearly half as many homes for sale as in February 2020. Moreover, due to the cold winter weather this year the number of new listings coming to the market in January and February dropped dramatically.
In the meantime, home builders are struggling trying to keep up with the demand. Last year many construction companies were forced to stop their production and lay off employees due to the pandemic. When they were finally able to resume their work they were facing a shortage of qualified labor and higher material prices, such as lumber. On average, the construction cost of a new home is about $26,000 higher than it was a year ago. Some builders are actually slowing down their construction work now waiting for prices to drop.
On the other hand, the low inventory fueling high real estate prices caused increase in home equity. On average, a homeowner has gained $26,300 in their home’s equity. Many homeowners took advantage of their house equity and used the money for home remodeling projects, such as a home office or a study room.
Downtown Dayton in Demand
Last year there was quite a significant trend among home buyers who were leaving their city apartments to search for homes in the suburbs. This was most evident in the large urban areas such as New York and San Francisco. However, in reality many of these buyers were not completely abandoning cities but buying larger homes in the city.
Many of the prospective home buyers are looking for larger homes within walking distance to shops and restaurants. This preference is especially evident in the Dayton Ohio real estate market. Homes are selling fast all over the Dayton area but downtown properties seemed to be in a very high demand. Dayton Oregon Historic District attracts many buyers due to the stunning Victorian homes situated amongst unique galleries, shops and restaurants. Young professionals are drawn to Dayton South Park located close to the University of Dayton and many city amenities. Located just a few miles from downtown Dayton, Centerville has also gained a lot of interest among home buyers. This modern, residential community boasts a variety of stone houses and a great number of activity venues such as parks, nature areas, swim clubs, shops and more.
Is it a Good Time to Invest in the Dayton Real Estate Market?
There is no question the housing market we’re in now is complicated and incredibly competitive. Finding your dream home won’t be easy and it will require a lot patience and knowledge. During home shopping you may be tempted to submit an outrageous offer or agree to some of the seller’s demands which may not be in your best interest.
According to a recent report from Fitch Ratings house prices nationally are 5.5% overvalued. When you’re shopping in a seller’s market the best approach is to submit your best offer first to outbid the competition. However, home buyers should make an informed decisions based on market research. If you’re working with an exclusive buyer agent who knows the local market well he or she will help you come up with the most reasonable offer. Even though the home prices are surging right now home buyers should be on the lookout for grossly overpriced properties.
Additionally, some prospective home buyers try to outsmart the competition by forgoing the home inspection. If a home inspector finds some major issues a seller may be forced to drop the price. This strategy to please the seller is very risky for a buyer. There is no such thing as a perfect house. There may be some serious issues lurking in the house you’re interested in such as roof damage or electrical wiring problems which can cost you a small fortune down the road.
At Buyer’s Corner Realty, our exclusive buyer agency team will go far and beyond to help a buyer find their dream home at the right price. If you have any questions about how our services can make a great difference in finding a property in today’s highly competitive market please contact us today at 937-433-6838 or send us a message!