Ohio Sales Update Spring 2023

Ohio’s demographics means it is often used to get a snapshot of what’s happening in the nation. So it’s not too surprising if Ohio real estate sales reflect what’s going on throughout the United States. Ohio Realtors recently released the latest data about the Ohio housing market.  Notably, the number of homes sold in Ohio fell in April 2023 compared to the amount during the same month in 2022.

In other words, sales activity is slowing down. Explore the numbers to find out what this means for both Ohio and the entire country’s housing market.

Ohio Sales Drop by 21%

In April 2023, closed home sales in Ohio were 10,094, a stark 20.9% decline from the 12,763 home sales recorded a year prior. However, in good news for homeowners, the average sales price in Ohio went up 4% to $268,257. So far fewer homes sold, but the average home price in the state still ticked up. This indicates the reduction in total closed sales isn’t about a lack of demand, but a lack of supply.

According to Ohio Realtors’ President, Ralph Mantica, there are a few economic elements playing into real estate activity. Tight inventory levels means there simply isn’t enough supply in the Ohio housing market to keep the prices low. The laws of supply and demand suggest that with restricted supply, demand is keeping prices buoyant.

Another economic factor playing into the sales drop off is the higher interest rate environment. This is helping drive some of that home seller skittishness, as Mantica called it. After all, if you acquired a 30-year fixed-rate mortgage when mortgage rates were half of what they are now, you are potentially looking at spending hundreds of dollars more a month just to buy a house of the same size. That’s driving home owners to stay put, helping to keep existing and new listings low.

Home Prices Trended Upward Statewide

Ohio Realtors’ data also compared the average prices for April 2023 vs. 2022 in 15 different markets. Here the trends held up. Twelve of these 15 markets reflected a year-over-year increase in average price for April 2023. Only one of these local markets showed increased sales activity compared to the previous year.

So the overall sales price increases across the state weren’t just statewide averages, but truly a pervasive trend across the local regions.

Notable Ohio Regional Markets

In the largest markets, like Cincinnati, Columbus, or Dayton, the sales numbers tended to hover around 15-25% decreases, which is in keeping with the statewide average.

The market in the Cincinnati metro saw a 27.9% sales activity dropoff, higher than the statewide average of 20%. The 2,204 units sold in 2022 declined to 1,590 in 2023.

One market with a major decrease in sold units was Ashland, which nearly decreased by 50%. However, it’s important to note the small sample size, as the actual numbers went from 41 to 21. With smaller sample sizes, it’s just as possible to see a larger increase when the numbers turn in the other direction.

Meanwhile, prices continued their slow but steady rise. In some high-volume areas, like Columbus and Dayton, the prices only moved up modestly, including a 2% increase for Columbus and 3.1% for Dayton. In Cincinnati, the average home price increased by 7% in April 2023.

The Impact of Interest Rates

The higher interest rates available now continue to delay real estate plans for homeowners that don’t have to move. Until there is some relief, either in home prices or in the mortgage markets, these owners could continue to delay any plans to list their homes on the market.

That’s exactly what we’re seeing in Ohio during the spring 2023. We’ll likely have to wait for interest rates to return to levels closer to what we saw in 2020-2021 rather than 2022-2023 to encourage more listings.

There’s also the factor of demand. Ohio markets are reflecting the sustained demand for housing, which is keeping home prices from leveling off or even correcting after the explosive pricing growth experienced in 2020-2021.