Real estate markets all throughout the country have seen drastic changes in the year 2020. Yet places like New York or Chicago, typically booming real estate markets, have declined. Cincinnati, typically not one of those markets, has become one of the hottest real estate markets in the country.
Single-family homes and condos are selling faster in Cincinnati than in any other city, according to a survey from Re/Max, just behind Omaha, Nebraska out of the 53 metro areas surveyed. Even with a decrease in inventory for homes on the market, and an ever-increasing median home price in the Cincinnati metro area, there is still a huge demand for those looking to buy in the area.
How Did Cincinnati Become a Hot Real Estate Market?
In 2020, the number of single-family homes sold in Cincinnati was 26,687, beating out the previous record of 26,560 from 2005. According to the Cincinnati Area Board of Realtors, the entire year of 2020 broke records for the Cincinnati real estate market. In December of 2020 alone, home sales were up 21.04%. One week in October saw the 5th largest year-over-year decline in number of days that a home stayed on the market.
So, what led to the market becoming like this? There are a few factors that go into it.
The start of all of this was the dramatic drop in home sales brought on by the pandemic. This drop led to a record low slashing of mortgage rates seen all throughout the country. According to a survey done by Freddie Mac, a 30-year fixed-rate mortgage was at 2.66%, which is the lowest rate in the survey’s history which has been done since 1971. People saw this, and jumped at the opportunity to take advantage of such low rates.
As to why people are choosing Cincinnati to move to, it is its cost of housing. Even going into 2021, the average home price in Cincinnati is $180,000 which is still a little over half of the national average. This being said, if demand continues this way, the list price for homes will only continue to go up.
The increase in home sales subsequently led to a major decrease in inventory for homes on the market. In July of 2020, housing inventory took a huge dive and decreased 46% compared to that same time the prior year. The lack of inventory is a huge factor when it comes to home prices. If there is not enough inventory to meet the demand of buyers, the cost will go up and it becomes an even more competitive market to try and buy in.
Will This Continue for The Remainder of 2021?
The Cincinnati Area Board of Realtors predicts that 2021 will most likely continue the trends of 2020. In February of 2021, despite inclement weather with below-freezing temperatures and snow limiting showings of houses, the median days of homes being on the market was only 3 days. This is a 57% decrease from the same time last year.
The number of homes for sale on the market are also still decreasing though the demand has not. The median home price was also up 13%, making it the 22nd consecutive month of price gain in Cincinnati.
How to Navigate the In-Demand Cincinnati Real Estate Market
There are a few things you can do at least to stand out from other potential buyers. Start getting approved now for anything you can before putting an offer in on a house, and have all of your documents in order, ready to send off. Another thing would be to see what repairs may need to be made on a potential house you are looking at and offer to take care of those. Many homeowners find repairs such a hassle so it could make your offer more appealing.
Altogether, it looks like the Cincinnati housing market has no signs of slowing down in 2021. If you are looking to buy in Cincinnati, you will have to act fast on any homes on the market.