Cincinnati-area housing market back to near “normal”

The numbers coming in show the Cincinnati area housing market will close 2013 with its best year for units sold since 2006, and best average sale price since 2007, according to data from Cincinnati Area Board of Realtors.

A home is the single biggest investment most people make, so the value of their home is an important source of wealth.

More existing homes sold in Butler, Clermont, Hamilton and Warren counties and surrounding areas this year through November — 21,366 — than all of 2012. Last year, 18,988 single family homes and condominiums sold. The number of homes sold from January to November 2013 grew 21.3 percent from the same period of 2012, according to the board of realtors.

The number of homes sold in 2012 — 18,988 — rose 12.7 percent from 2011. Sales declined in 2011 and 2010 from the years before.

Annual home price appreciation in the Cincinnati market rose 5.5 percent this year through November to $164,900. The average sold price also increased 3.2 percent in all of 2012 from the year before, following a decline in 2011 from 2010, according to the realtors group.

The official numbers won’t be released until later this month, but preliminary estimates for Cincinnati-area December home sales would put the year’s total units sold at 22,705, the best since 25,215 homes sold in 2006.

The average sold price of $164,900 through November is the highest since local homes sold for $173,997 on average in 2007.

Cincinnati’s housing market peaked in 2005 with 26,560 homes sold that year for an average $179,574.

“We really had a good year, but there’s guarded optimism about the new laws coming out,” said John Holbrock, 2013 president of Hamilton-Fairfield-Oxford Board of Realtors and co-owner of Hamilton real estate firm Realty First. “Plus interest rates are going up.”

This year will present new challenges for the local housing market’s recovery.

The local housing market is believed to be returning to more normal conditions with fewer foreclosures saturating the market. Home values are climbing after they plummeted during the recent economic crisis.

However, double-digit sale increases seen in 2013, such as the 31 percent rise year-over-year in homes sold in July, are not likely to continue in 2014.

New rules are being considered for how borrowers qualify for a mortgage and how loan rates are calculated that could go in effect later in January.

Interest rates are expected to continue their gradual rise from historically record lows. Cincinnati-area mortgage rates in November averaged 4.43 percent for a 30-year fixed rate loan compared to 3.41 percent a year ago, according to the realtors group.

Interest rates either cause people pause, or encourage people to get off the fence and act now on buying a home, real estate agents said.

“Affordability is definitely the best today as what it’s going to be for the immediate future,” said Michael Mahon, executive vice president of statewide brokerage HER Realtors.

HER Realtors of Columbus merged earlier this year with the former Southwest Ohio brokerage of Real Living Realty Services. The combined statewide real estate agency sells properties in Cincinnati, Columbus, Dayton and Toledo and is expanding to Cleveland, Mahon said.

Due to low inventories of available homes for sale, and increasing investment by out-of-state institutions in residential properties in Ohio, Mahon said his firm expects sales prices to rise at a normal pace of 2 to 3 percent in 2014. However, due to new rules for buying a house and a still troublesome job market hurting demand, he expects sales to be flat this year compared to 2013.

“In order for us to get back up to that next level of housing we need to work on getting more jobs created in the state of Ohio,” Mahon said.

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