After surging real estate market, cooldown underway with NEO home sales

BRUNSWICK, Ohio — As mortgage rates continue to rise, a new report from Zillow shows that home values ​​are finally falling across the country after years of rising.

“I think the frenzy and the housing market brought on by the pandemic are behind us,” explained Nicole Bachaud, senior economist at Zillow. “It’s very different from where we were, but it’s not necessarily a bad thing.”

The report points out that home values ​​across the country are down 0.3% from July, the biggest monthly decline since 2011. In addition, the report mentions that it now takes around 16 days for listings of “for sale ‘ to ‘pending’, from 10 days at the same time in the last year.

“In Cleveland, we saw that home appreciation has slowed sharply; It just didn’t go negative,” added Bachaud. “They tend to follow the national trend. It’s just not always as extreme as in some other markets.”

The report goes on to mention that the typical home value in the Cleveland Metro is $221,716. That’s up 0.1% since July and a 40.6% increase since August 2019. On the other hand, the housing stock is down 51% compared to 2019.

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Several experts told News 5 that Northeast Ohio may also lag a few months behind national trends when it comes to residential real estate.

Real estate agent Jessica Chodaczek of LoFaso Real Estate told News 5 that the slowdown appears to have already begun and is affecting homes that are about to close.

She said that means seller expectations have to change.

“Houses have been on the market a little longer than they used to and we see a lot fewer multi-offer situations,” she explained. “However, compared to the last few years, the inventory is still low [sellers] have to be realistic that their experience of selling in the fall will be different than their neighbors who sold in the spring.”

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“Houses used to stay on the market for 30 to 60 days,” added Bachaud. “Usually that was just the normal amount of time it took to sell your house. And once we’re in that realignment, we’re going back to our normal market. It’s important to remember that it’s okay. You only need an offer. You don’t need 20 bids on your house to sell it.”

It comes at a time when more moves are being made that could impact home sales.

On Wednesday, the Federal Reserve raised interest rates by a whopping three-quarters point for the third consecutive month and announced more large rate hikes. Raising these lending rates makes it more expensive to get a mortgage, car loan, or business loan to curb inflation.

As for shoppers, their affordability crisis may finally be getting a break.

“This will lead to many opportunities for buyers who can afford to stay in the market, find deals and find less competition and a less stressful buying experience,” added Bachaud. “But it’s going to be very different than the winters we’ve seen over the last two years.”

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According to MLS Now, the home listing service in Northeast Ohio, the median home selling price rose just 0.7% from July through August, but prices are still up 7.4% from the same time a year ago.

Clay LePard is a reporter at News 5 Cleveland. Follow him on Twitter @ClayLePard or on Facebook Clay LePard News 5.

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