The housing market got some much needed relief in the fall when mortgage rates began to drop, but it was short lived. Despite two interest rate cuts by the Federal Reserve, mortgage rates rose again and remain stubbornly high.
The turbulence in rates has trickled down to individual markets like Cincinnati, where real estate agents say they don’t know what to expect from sale to sale.
“It’s unpredictable,” said Teena Jackson, a Redfin agent in Cincinnati. “I’ve been doing this since 2005 and I tell clients that I’ve never seen a market like this, so we have to navigate it together.“
Cincinnati has benefited from the broader revival of the Midwest, where large corporations have opened offices to take advantage of the cheaper cost of living compared to the coasts.
These companies bring in transplants who move for work, and homebuilders have flocked to the area to provide additional housing on more available land. This has driven economic growth in southern Ohio and northern Kentucky — and made the housing market competitive.
“We are such an affordable area compared to a lot of other areas that we bring in a lot of relocation because we have some big companies here,” said Donna Deaton of RE/MAX Victory + Affiliates. “We have General Electric, PNG, Amazon. That has really boosted up a lot of our sales.”
Jackson underscores her point on unpredictability by comparing two recent sales. One was “severely” underpriced and got 28 offers in less than 24 hours, eventually selling for more than the asking price. But on a comparable home, another of her clients had an offer below the asking price accepted.
It’s a symptom of a market that’s transitioning away from sellers. According to data from Altos Research, for-sale inventory has risen from 1,864 on a 90-day rolling basis in May to 3,019 today.
A substantial drop in new listings is a contributing factor. On Nov. 1, weekly new listings were at 410 but have since dropped to 186, although new listings tend to drop in December as the holidays approach.
The downward trend in listings has also pushed the median sale price down from $400,000 on a 90-day rolling basis in June to $350,000 now, which is a low point for 2024.
Relatively more homes for sale are giving buyers more leverage, as evidenced by Altos Research’s Market Action Index score falling from 55 in May to 45 today. Altos considers anything above 30 to be indicative of a seller’s market.
Sandi Wethington, an eXp Realty agent, said she recently participated in a transaction where the seller installed a new septic tank and a new roof to get the deal closed.
“I don’t know that I’ve seen that many concessions on any transaction in my 35 years, but the guy wanted to get it done,” she said. “It’s just become a more common theme.”
While the market will naturally slow down during the holidays, agents in Cincinnati expect buyers and sellers to be active in the new year, even with mortgage rates remaining high. People who need to move because of a recent “life event” have been waiting for rates to come down, but many can no longer do so.
Despite the rise in inventory and decline in prices, the number of homes for sale is still considerably lower than normal.
“I still think the market is very healthy, but the limited inventory is definitely an issue, and I would say that’s consistent across the board, no matter the price point,” said Meg Perez of Coldwell Banker Realty.
