Real estate a hot seller's market in Portage County area
Fueled by low-interest rates and scant existing inventory, the area real estate market has heated up, and it’s a seller’s bonanza.
Area real estate agents say they haven’t seen anything like this since the real estate bubble in 2007 or longer.
“I’ve never seen it like this in the 35 years I’ve been doing this,” said Jack Kohl, owner of Jack Kohl Realty in Ravenna.
Interest rates, agents said, are at historic lows around 2.25% to 2.5%, making it a cheap time for would-be homeowners to buy if they can avoid a bidding war for a home.
For consumers, the tight housing market with just days to find and make offers on homes make it a tricky time to enter the market, said Elsie Sayre, a broker with Coldwell Banker Schmidt Realty in Streetsboro.
“The only way you’re really going to make out is if you sell and don’t buy,” she said.
Kent real estate agent Carol Foote of Cutler Real Estate said she’s had personal experience with trying to buy in Ashville, N.C., where her daughter recently made an offer on a home.
“She bought a house with one day on the market, and there are three backup contracts,” she said. “That’s the market across the nation.”
She said the industry helped keep the economy running during the spring as the country emerged from various COVID-19 shutdowns.
“Real estate has led a lot of the recovery coming out of the original COVID shutdown,” said Foote. “We were considered essential; people needed houses.”
Over the past year, prices are up as well, based on MLS data supplied by Sayre and Cindy Mustafa of Keller Williams.
Average prices in the area for October 2020 were $223,880, up from $181,124 in 2019. Prices were up every month in 2020 compared with 2019, according to the MLS data.
Foote said time on the market can be measured in days in some cases.
“What I’m seeing out there is, in our area of the world, we still see record-low inventory — especially for price points $250,000 and under — and we’re seeing days on market for listings at some of the shortest times in history since we’ve been tracking this stuff,” she said.
Leah Babb, who covers areas west of Akron for Coldwell Banker Schmidt Family of Companies, said the inventory of existing homes is small.
“To only have one month of inventory, that’s why things are crazy,” she said, adding a normal inventory might last three to four months. “We have lots of buyers; we’re getting 20 offers on a property; it’s ridiculous."
According to Sayre’s MLS data, the average number of days on the market this year is 75, but Foote said that figure doesn’t really paint a clear picture because some real estate agents leave homes on the market during the closing process so they can take backup offers.
“When houses do hit the market, there are typically multiple offers in one or two days and usually above the listing price,” Kohl said.
Mustafa said the current market feels like a real estate bubble.
“We haven’t seen activity like this since the collapse of 2007,” she said. “How much better can it get? I don’t know.”
But she did say there have been more defaults on auto loans and more cases of forbearance in real estate, which she said may indicate the housing market could slow down soon.
However, she also said the National Association of Realtors Chief Economist and Senior Vice President of Research Lawrence Yun recently predicted 2021 would likely continue to be good for real estate.
Foote said she doesn’t believe there’s a real estate bubble.
“None of the economic pundits would say this is a bubble,” she said, adding the hot market is predicted to continue into 2021. “I think real estate goes on cycles. We all know it’s not going to continue like this. When that change happens, I don’t think any of us can predict accurately.”
Sayre and Kohl both agree it seems unlikely current conditions will continue for much longer.
“I’ve been saying for six months to a year now that this feels like a bubble,” said Kohl. “I guess the bubble is getting bigger still. I don’t know how long this is going to last; I don’t think interest rates will go up any time soon.”
Kohl said slow new home construction is hampering the supply of homes on the market. Some of that is due to supply chain issues driving up building material costs, but it’s hard to tell whether a normal supply chain for materials ultimately would bring the housing market back into balance.
Reporter Bob Gaetjens can be reached at 330-541-9440, email@example.com or @bobgaetjens_rc.