The area housing market last year nearly rebounded beyond the record amount of homes it sold just a few years before recession.
Sales of existing homes in the Cincinnati area increased 6.02 percent last month, compared to the same period a year ago, and helped lead to the second best annual home sales on record, according to Cincinnati Area Board of Realtors statistics released Tuesday.
A total of 1,937 single-family homes and condominiums were sold last month, compared to 1,827 sales in December 2015.
Home sales for 2016 ended up at 26,114, nearly 7.5 percent over 2015 and just short of 2005’s record year of 26,553 homes sold.
“The real estate market is coming back strong,” said David Welch, president of the Cincinnati Area Board of Realtors. “Those are good numbers.”
Sales in Butler County increased from 4,931 in 2015 to 5,130 in 2016, with average sales price rising from $164,830 to $176,579, according to the board of Realtors. Warren County home sales also increased, going from 3,207 in 2015 to 3,464 in 2016 with average sales price increasing from $238,415 in 2015 to $241,232 in 2016.
Kelly Umbstead, president of the Butler-Warren Association of Realtors, said she is “pretty confident” both markets will continue to rise.
“Clearly our housing market is strong right now, and one of the things that is really starting to push up our home prices again is our lack of inventory,” Umbstead said. “Interest rates are still great and with a new administration … in Washington, who knows where our interest rates are going to go?”
That, she said, should get some people into the home buying market.
“If they’ve been waiting, trying to figure out when they’re going to buy, I think now is the time,” Umbstead said. “I hope President Trump keeps us with a good housing policy and keeps our interest rates low. I think it is forcing people to look at what they want to do and get off the fence.”
Expected trends in the region include rising mortgage rates, inventory remaining tight and home sales continuing with modest increases, according to a Market Trend Report for Cincinnati from RE/MAX of Southern Ohio.
“Despite declining inventory, year-over-year home sales increased modestly in Cincinnati in 2016, showing there is still much pent-up buyer demand,” reads the study. “However, rising mortgage rates may make buyers more cautious in 2017.”
In addition, Millennials and baby boomers will continue to be “a dominant force” in the area real-estate market in 2017 and are expected to account for most sales activity.
Both groups are not likely to put their housing plans on hold based on rising mortgage rates. They also represent large portions of the population.
“Both of those generations are up in the 70 to 80 million range in terms of count,” said Jeff LaGrange, region president for RE/MAX Ohio region. “Just sheer numbers of them make them the force that they are.”
Mollee Schierloh, 27, said she and her 28-year-old boyfriend fell in love with a 3-bedroom home in Middletown and the historic neighborhood in which it is located and purchased the home in November after nearly three years of renting in Hamilton County’s Arlington Heights.
“We finally had saved up enough money to decide to go ahead and buy a house,” Schierloh said. “We were looking at how much we were paying in rent, and we realized we could buy a house and make our mortgage payments about the same price as what our rent was.”
She said they offered full price — $130,000 — with the seller paying the closing costs.
“We recognized the fact that the house was probably not listed for what it was worth,” she said. “It’s a pretty substantially big house … at a very reasonable price and we knew that we probably would not get the same amount of house for the price that we would get it here anywhere else.”
Welch, of the Cincinnati Area Board of Realtors, said the “stellar year” for home sales in Greater Cincinnati also created market momentum so strong that the region also achieved all-time highs in average and median sales prices.
The average sales price for December rose 2.8 percent to $138,101, compared to last year, and the median price rose 10 percent to $119,900.
December posted the highest number of sales and average price versus any other December and contributed to 2016 being the strongest home sales year on record for the Cincinnati area, according to the CABR.
The average home price climbed to $190,339 compared to $178,837 a year earlier, a 6.43 percent increase.
At the same time, the inventory of homes for sale, as of Dec. 31, continued its year-over-year declining trend to 5,049 from 6,704 a year ago, down – 24.68 percent.
“Nine out of the past 12 months recorded record-high average prices of homes. Our low inventory coupled with low interest rates and consumers ready to purchase made this a very active market that continues to drive the prices higher,” Welch said. “Homes that are priced right and that are in move-in ready condition are the properties that are selling quickly.”