Washington, D.C. – January 25, 2015 – (RealEstateRama) — In 2015, residential real estate experienced its best year since the Great Recession ended in 2009. Although inventory could still use a jolt, demand was healthy throughout the year and there was enough supply to keep the engine strong.
Central Ohio saw 29,408 single-family and condominium home sales in 2015, up 9.3 percent from 2014 (26,917) marking the highest year for home sales on record. The last time home sales came close to being this high was in 2005 during the housing boom when annual sales reached 27,493 according to data gathered by Columbus REALTORS® from their Multiple Listing Service.
Columbus, South-Western School District, Hilliard School District, Olentangy Local School District, and Westerville School District saw the highest level of sales activity throughout 2015.
Inventory struggled to keep pace with demand in 2015. Even though new listings increased by 3.9 percent to rest at 37,351 for the year, there were only 6,010 active listings at the end of the year which is lower than inventory levels back to the year 2000.
Inventory could see a rise in 2016 depending on additions from new construction along with would-be sellers tapping into a market already in their favor.
The overall median sales price of a home was up 4.6 percent to $159,900 for the year. Prices for Single-Family homes were up 4.1 percent compared to last year, and Condo home prices were up 5.8 percent.
“Home prices should continue to rise in 2016 but perhaps at a tempered pace as the market approaches a natural balancing point, said John Royer, 2016 President of Columbus REALTORS®. “We anticipate price gains to be more in line with historical norms in 2016.”
Interest rates did not go up earlier in 2015, as was widely anticipated, but the Federal Reserve finally took action with a short-term rate increase in December and is expected to do more of the same with some consistency in 2016. Housing and the wider economy has proven itself ready for such a move, and rate increases can actually serve to maintain economic balance.
If consumers are unwilling to pay higher rates on borrowed money, 2016 could get off to a slow start. By historical standards, that seems like an unlikely reaction. Even if rates were to reach 4.5 percent, it would still be well below what weaker economic conditions than exist today have easily borne in the past.
“While rates may get the most digital news ink, other topics worth attention in 2016 include affordable inventory for new buyers, competition from cash investors for that inventory and the continuing barrier to entry that is student loan debt,” added Royer.
The national homeownership percentage is the lowest it’s been since 1993. As rental development continues, especially in urban centers, and as rental rates continue to rise, we may begin to gradually see some pushback on paying a lease versus a mortgage. Lending stringency and interest rates may have an effect on the number of new buyers we see in 2016.
Gross Domestic Product increased at an annual rate near 2.0 percent to close 2015, and chances are favorable to get above 2.5 percent next year. Housing is again considered a cornerstone of the national economy. Contributing factors from within the industry include better lending standards and improved inventory unhampered by foreclosures. Declining unemployment, higher wages and low fuel prices have also nudged buying power forward. Conditions are good for a continuation of positive trends in 2016.
Columbus REALTORS® is comprised of over 7,200 real estate professionals engaged in residential sales and leasing, commercial sales and leasing, property management, appraisal, consultation, real estate syndication, land development and more.
The Columbus REALTORS® Multiple Listing Service (MLS) serves all of Franklin, Delaware, Fayette, Licking, Madison, Morrow, Pickaway and Union Counties and parts of Athens, Champaign, Clark, Clinton, Fairfield, Hocking, Knox, Logan, Marion, Muskingum, Perry and Ross Counties.