There are really 3 things to focus on in today’s market. Those three things are Interest Rates, Inventory and Home Prices. Everything else rises and falls on those three metrics in most markets and in this market there is an argument to be made that everything rises and falls on one thing…. Interest Rates.

We can go ahead and start there. Interest rates have gone from 8% down to 7.35% over the last 30 days. This has been largely due to a lower than expected (added) Jobs Report and a lower than expected Inflation number (both month over month and year over year). This happened at the same time last year and started a trend that led to much lower rates, if that happens this year, expect demand to pick up just like it did last year after the first of the year if this trend holds. Interest rates have been the driver of the real estate market and just this small drop in a seasonally slow time of year has led to an increase (albeit a very small one) in buyer activity.

Inventory remains at historically low levels, but due to an increase both locally here in Central Ohio as well as nationally, we are seeing overall inventory levels coming in above last year, despite the overall environment being very similar. This could be a signal that we have finally seen the end of the low inventory environment that has plagued the real estate market and led to crazy high prices along with the bidding wars, etc. That being said, this is the very beginning and not the guarantee of anything!

Pricing is the thing that so many have been predicting will fall and it continues to be stubbornly high despite the interest rates, which has led to very low affordability. That being said, the average sales price in October was more than 5% more than last October and the same trend is in place so far in November this year.

Thank you for continuing to support Marsh Home Group, we appreciate all of you for your continued support and remain grateful for all that you have done to contribute to our success over the years. We look forward to what is to come over the upcoming years!

Happy Thanksgiving!

Troy

When I look at the overall health of the market for buyers, sellers and investors I look at 3 main components: Affordability, Supply/Demand and Future Demand Expectations. In today’s market update I’m going to use each of these (which all impact each other) to explain why I think now is a great time to buy in Columbus and for some that means that now is the time you should be selling as well.

Affordability

Affordability is at record lows right now. Nationally it’s at places we haven’t seen since the early 80’s when interest rates were over 12%. The same holds true in Columbus and Central Ohio, the average income nationally has to spend almost 40% of GROSS (not your paycheck) on their mortgage payment to buy the “average home”.

This means that many people are priced out of the market. In order to increase affordability, builders are subsidizing interest rates and many sellers are willing to do the same especially if they aren’t selling immediately.

The two fastest ways to get affordability back into line is through decreased mortgage rates or dropping prices. Neither of which are guaranteed in the foreseeable future.

Supply and Demand

Supply – Inventory (the number of homes currently available to purchase), has remained close to all time lows and has been for most of the year. This continued to be driven by homeowners who don’t want to sell their 3% or 4% interest rate and buy a home at a higher price with an interest rate close to 8%. This is keeping inventory off the market and supply low.

Courtesy of Trendgraphix

Demand – We typically measure demand by the number of homes we have in contract. That has been a less reliable indicator during the pandemic because the in contract numbers have been kept artificially low by the historically low inventory. The best way I’ve seen to measure demand other than boots on the ground/antidotal evidence is through national mortgage applications. We can see below that the purchase loan index is even lower than it ever got during the Great Recession, yet prices remain stable to due such a low supply.

COURTESY OF MORTGAGENEWSDAILY.COM (click for full article)

Future Demand Expections

When decided to purchase or sell a home in today’s market you have to look at where you think the housing market is going and where the economy is going in the area that you are purchasing. With businesses moving to Columbus regularly as well as major projects with Intel, Microsoft, Google, Amazon and more, Columbus continues to present a large growth opportunity. Below is a graph from MORPC (Mid Ohio Regional Planning Commission) forecasting the population to grow by 726,000 residents in the next 26 yrs which would bring the total population to over 3.1 million. They have to have somewhere to live.

Click to View Full Article from Morpc.org

Summary – What should I do now!?

With very positive long term growth potential, Columbus is poised to continue growing. Despite a tough few years during the great recession, the Columbus real estate market has come roaring back and far surpassed all expectations. That was before Intel and the other major projects announced their intentions to come to town. With those projects having already begun and new companies announcing relocation here regularly the experts expect the Columbus population to grow pretty significantly (as shown above).

We believe that the current market represents an opportunity to buy without competition that may not present itself again for a while once mortgage interest rates level off. We saw the same phenomenon happen last fall when purchases slowed due to higher rates and then following a drop in rates, the frenzy re-ignited and caused more multiple offer situations and further increased prices. Even with lower demand on the sell side, it is typically offset by the fact that most buyers are moving up in price point when they buy, ironically enough, even downsizing buyers.

That recommendation comes with two caveats:

1. You plan to live there for 3-5+ yrs

We believe that if you see yourself living in a home or owning a home (investor) for more than 3 yrs that an investment in Central Ohio Real Estate is a smart one today. If you plan to keep it for 5+ years it’s an even better bet in our opinion. If you plan to own for a year or two, it could be a good time to consider renting or buying a fixer upper that you can add immediate equity to.

2. You can comfortably afford today’s monthly payment or the fully adjusted ARM monthly payment

We think that long term rates will likely come down over the next 1-2 yrs and possibly significantly. If/when that happens a refinance could represent a great opportunity to have locked in today’s pricing, but improve your monthly/annual financial position with a lower rate. We don’t recommend stretching yourself thin or betting that rates will for sure lower in the next 1-2 yrs unless you are fully prepared to pay whatever the current or future adjusted rate would be if you choose an Adjustable Rate Mortgage (ARM).

We specialize in helping people navigate the market of the moment, reach out to us and let us know how we can help you through your current situation!

Ashley Marsh

Want to know what’s trending in Holiday Decor? SIMPLE – Yes SIMPLE.

Gone are the days of cluttered old decorations for holidays. The new trend is simple and clean. Using fewer items but making them the center piece. You want to incorporate them with your current home decor pieces so they look like they belong. This means swapping pillows instead of adding more, one pumpkin and a bat on the bookshelf with your current vases and books. Let’s take a look at some examples:

Troy Marsh

Susan Pierce

Evans Farm is growing in Lewis Center! Single Family Homes, Townhomes, Patio Homes and apartment building is in full swing. The retail center is just about finished and the businesses are starting to flow in. This is really exciting and is going to be a hub for the Lewis Center community!