As we move into fall, many eyes in the real estate world are focused on how high mortgage rates have slowed down the market over the summer. While the final month of summer saw a slump, these conditions may create a golden opportunity for buyers in Columbus, Ohio, to jump into a less competitive market this fall.
According to recent data from Realtor.com, homes in August 2024 spent an average of 53 days on the market—the longest period in five years. Additionally, 19.3% of listings saw price cuts, making this summer the slowest real estate season in half a decade. This might sound like a gloomy picture, but for buyers, it opens a window of opportunity.
Why Columbus is a Key Market
Columbus, Ohio, is no stranger to growth and transformation. Over the past several years, the city has seen a surge of interest from major corporations like Intel, Google, Amazon, and Facebook, which have chosen to either establish or expand operations in the region. The arrival of these companies has had a profound impact on the local economy, boosting job growth and increasing demand for housing.
Historically, Columbus has been an affordable and attractive housing market compared to coastal cities, but this dynamic is rapidly changing. Home prices have been rising as the city’s population continues to grow, driven by its economic development and cultural offerings, such as The Ohio State University and a booming tech sector. However, with mortgage rates currently high, many potential sellers and buyers have paused, leading to longer times on the market and an uptick in price reductions.
A Fall Opportunity for Buyers
As Realtor.com’s Chief Economist, Danielle Hale, points out:
“This fall could be busier for the housing market than this season typically is, but it’s still likely to be a less competitive time, which makes it ideal for flexible buyers.”
For buyers in Columbus, this means fall 2024 could be a prime time to secure a property. High mortgage rates, combined with more homes lingering on the market, provide buyers with more options and less pressure compared to the competitive spring and summer seasons.
What Happened in August?
The summer slowdown in the Columbus housing market can largely be attributed to high mortgage rates. This caused both buyers and sellers to wait for a more favorable environment, leading to a market stalemate. But all of that could be changing soon.
The Federal Reserve’s upcoming mid-September policy meeting is expected to result in lower interest rates. While the Fed doesn’t directly control mortgage rates, their decisions often influence them. Realtor.com’s economists predict mortgage rates could fall to around 6.3% by the end of 2024. Once rates dip, the market is likely to heat up again, so buyers might want to act before competition ramps back up.
Housing Stock in Columbus This Fall
One of the key trends to watch this fall is housing stock. In August, new listings actually fell by 0.9% compared to the previous year, marking the first decline in nearly a year. Many homeowners have been reluctant to sell because they’re locked into low mortgage rates from previous years, much lower than today’s rates.
Jeff Lichtenstein, broker and owner of Echo Fine Properties, humorously notes:
“That 4% spread has homeowners holding on to the current rate like Gollum held onto his precious ring.”
As rates fall, more homeowners may be willing to part with their low-rate mortgages and list their homes, which could increase inventory. But as Hale points out, the homes that do go on the market may take longer to sell, meaning more choices for buyers without the urgency to act immediately.
Columbus Housing Market Changes Over the Years
Columbus has historically been an affordable market, but this has been changing rapidly in recent years. The influx of major companies has driven demand for housing, which in turn has pushed prices higher. Home prices in Columbus have increased steadily, and with the arrival of companies like Intel building large facilities, the city’s tech and manufacturing sectors are booming. This growth has brought a wave of new residents and homebuyers, particularly those relocating from higher-cost states like California and New York.
With 86% of homeowners holding mortgages below 6%, many are hesitant to sell their homes and face a higher interest rate on a new mortgage. However, as rates drop, this dynamic is expected to shift, bringing more listings to the market and creating opportunities for both buyers and sellers.
What to Expect for Buyers This Fall
1. More Time to Decide
In August, homes lingered on the market for nearly a week longer than last year. This fall, buyers can expect even more time to make decisions, as the typical time on the market increases in the cooler months. While rates are expected to drop, competition for homes is likely to stay lower than during peak spring and summer seasons. This gives buyers the opportunity to thoroughly evaluate homes and negotiate more favorable terms.
2. Home Prices Could See a Bump
If mortgage rates drop as predicted, Columbus could see a slight bump in home prices as more buyers enter the market and bidding wars resume. But don’t expect prices to skyrocket overnight—buyers offering above the asking price won’t become the norm again immediately.
Jason Gelios, a real estate agent with Community Choice Realty, explains:
“You will have a slight increase in confidence from both homebuyers and sellers, and that, in turn, might bump prices up slightly.”
3. Sellers Will Need to Stand Out
Columbus has been a seller’s market for years, with high demand and low inventory supporting higher prices. However, this dynamic is shifting. Buyers have become pickier, and sellers need to step up their game to stand out. This might involve reducing prices, improving curb appeal, or being more patient when waiting for offers. As Christine Dupont-Patz from Re/Max of Cherry Creek puts it:
“Gone are the days when sellers just had to put a sign in their yard and have multiple offers.”
A Fall Buying Strategy for Columbus
If you’re a buyer in Columbus this fall, you have a unique opportunity. With mortgage rates likely to dip and more homes on the market, you’ll have more time and less competition. This is the perfect moment to reassess your priorities, create a list of must-haves, and set up specific real estate searches to get notified when a listing that meets your criteria becomes available.
As the housing stock increases and the market activity picks up, you may find yourself with more negotiating power and less pressure to make a snap decision.
Make Your Move in Columbus This Fall
The summer real estate slowdown in Columbus has created a runway for buyers this fall. While mortgage rates are expected to decline, the market isn’t likely to become as frenzied as previous years, offering an excellent opportunity for buyers who are ready to act. As the number of homes for sale rises and mortgage rates trend downward, you’ll have more time and options to find the right home for you.
Ready to jump into the Columbus real estate market this fall? Call Sell For 1 Percent at 614-451-6616. We’re full-service realtors offering exceptional service for only 1 percent commission, saving you thousands of dollars. Let’s help you find your dream home in this dynamic city!
