There's no denying that the Ohio housing market is shifting, with rising interest rates dampening demand from would-be buyers. There has been an uptick in the number of properties listed for sale, which bodes well for the recovery of the housing market and the creation of more available homes for buyers. Limited inventory was previously driving prices and sales — but now that inventory is increasing and homes are taking longer to sell, it’s a sure sign that the market will continue to slow down.
According to Ohio REALTORS, the number of homes sold in September was 15% lower than last year's, while average sales prices continued to grow. The number of homes sold in September 2022 was 13,785, a 15% decrease from the 16,214 sales recorded in September 2021. The average sales price in Ohio increased by 7.1% from September 2021, when it was $242,877 to $260,232 in September 2022.
Twelve of the fourteen monitored marketplaces in the state reported an increase in the average price for the month compared to September 2021. Additionally, sales activity in two local marketplaces increased or remained steady from the previous year. Through the first nine months of 2022, home sales are 5.4% lower than in the same period in 2021, with 117,999 units sold in 2022 compared to 124,700 in 2021. The 2022 year-to-date average sales price of $261,049 represents a 9.2% increase over the 2021 year-to-date average of $239,091.
Ohio Housing Market Forecast: Will it Crash?
Despite record-high mortgage rates, Ohio's real estate market is still among the hottest in the country. As a result of the increased rates, buyers now have a better chance of having their offers approved, although it is still a seller's market. The market is just starting to settle down. It's not like there is a crash coming in Ohio's housing market.
Experts say there are still huge hurdles in the state's housing market, which are already hurting other issues for people seeking to find a place to live, but the demand for houses in Ohio is starting to level off, with a fall in sales and a lesser increase in the average price. Central Ohio is anchored by Columbus, the state capital and the 15th largest city in the country.
The average selling price of homes is beginning to fall as they sit on the market for longer than usual. The overall line is that “if you're wanting to buy, yeah, this is a terrific moment,” despite the fact that supply is still low. The average sales prices in the Columbus housing market for this year's April and September were $334,000 and $331,000, respectively. That is a drop of almost 1% over the past five months.
According to Zillow, the typical value of homes in Ohio is $216,746 as of September 30, 2022. Ohio home values have gone up 12.3% over the past year.
- 1.013 Median sale-to-list ratio (August 31, 2022)
- 57.0% Percent of sales over list price (August 31, 2022)
- 28.9% Percent of sales under list price (August 31, 2022)
Investing in Ohio real estate is a good idea, especially in Columbus, Cincinnati, and Cleveland, where there is always a high demand for housing. According to Neighborhoodscout, the Ohio real estate APPRECIATION RATE in the previous 12 months (2021 Q2 – 2022 Q2) was among the highest in the country as the median price went up by 18.41%. APPRECIATION RATE was 6.69% between 2022 Q4 and 2022 Q2. Prices have risen by 32.85% in the last two years and 53.99% in the last five years.
All-Transactions FHFA House Price Index for Ohio (Quarterly)
The FHFA HPI is the nation's only collection of public, freely available house price indexes that measure changes in single-family home values based on data from all 50 states and over 400 American cities that extend back to the mid-1970s. In Ohio, FHFA HPI is 420.23 as of the second quarter of 2022, an increase of 18.4% from last year.
- Q2 2022: 420.23
- Q1 2022: 393.87
- Q4 2021: 382.08
- Q3 2021: 373.09
- Q2 2021: 354.89
Here's Zillow's forecast for some of the metro areas in Ohio. 40 out of 46 metros in Ohio are expected to have a home price growth between September 2022 to September 2023. Only 5 metros are expected to see a home price decline in 2023. Rising home values and listing prices, combined with limited inventory, indicate that Ohio's housing market is still tilted toward sellers.
This trend is likely to continue for the foreseeable future unless inventory grows faster than demand or rising interest rates completely dampens the demand to a great extent. Having said that, just like everywhere else, the Ohio real estate market will also see a deceleration in home price growth in 2023 and probably in 2024 as well.
Ohio's Top Markets to See the Highest Increase in Home Prices in 2023
- Wooster, OH home values are forecasted to rise 13.2% between Sept 2022 to Sept 2023.
- Zanesville, OH home values are forecasted to rise 3.8% between Sept 2022 to Sept 2023.
- Youngstown, OH home values are forecasted to rise 3.6% between Sept 2022 to Sept 2023.
- Mount Vernon, OH home values are forecasted to rise 3.6% between Sept 2022 to Sept 2023.
- Mansfield, OH home values are forecasted to rise 3.4% between Sept 2022 to Sept 2023.
- Columbus, OH home values are forecasted to rise 2.7% between Sept 2022 to Sept 2023.
- Cincinnati, OH home values are forecasted to rise 2.3% between Sept 2022 to Sept 2023.
- Lima, OH home values are forecasted to rise 2.7% between Sept 2022 to Sept 2023.
- Wilmington, OH home values are forecasted to rise 2.2% between Sept 2022 to Sept 2023.
- Dayton, OH home values are forecasted to rise 2.1% between Sept 2022 to Sept 2023.
Other Factors That Can Impact the Housing Market in Ohio
When the housing market is booming, it is partly caused by job growth and decreases in unemployment. The housing market is inextricably linked to the economy. The health of the economy and job growth affects real estate buyers' purchasing power. As of September 2022, the unemployment rate in Ohio is 3.8% (Not Seasonally Adjusted).
Before the pandemic, in 2019, Ohio's gross domestic product (GDP), the broadest measure of economic production, totaled $698.5 billion, a 3.3% increase from the 2018 total GDP of $675.9 billion. Ohio's 2019 GDP was the 7th largest in the U.S., ranked between Pennsylvania (6th) and New Jersey (8th). Ohio's real GDP grew 5.5 percent at an annual rate in the 4th quarter of 2021.
Ohio's gross state product (GSP) in 2022 reached $620.7b, with a growth of 1.0% over the 5 years to 2022. Businesses in Ohio employed a total of 5,743,338 people in 2022, with average annual employment growth over the past five years of -0.2%. The top three sectors by total employment are Manufacturing, Real Estate, Rental and Leasing, Finance, and Insurance, while the unemployment rate across the state in 2022 was 4.2%.
More people require housing as the population grows. This means that, in the long run, population growth drives increased demand for housing and, as a result, a strong real estate market. Population growth has a positive impact on the housing market. Ohio is constantly growing and according to the United States Census Bureau. The state of Ohio has a population of 11,802,444, having grown an annualized 0.2% over the five years to 2022, which ranks it 38th out of all 50 US states by growth rate.