Central Ohio home sales ended 2018 with a whimper, providing the strongest evidence yet that the red-hot housing market may be cooling.
Columbus-area home sales dropped 9 percent in December from the previous December, capping a year that saw sales drop 2.2 percent, the sharpest decline since 2009.
A shortage of homes on the market and rising prices are pushing away some buyers, not only in Columbus but across the state and nation. Ohio home sales fell 1 percent in 2018 and U.S. home sales declined in December to the lowest rate in more than three years.
“Right around the end of July, things started to really taper off,” said Andrew Show, owner of Buyer’s Resource Realty Services in Worthington and a Columbus Realtors board member. “It was a frenzied market until then.”
Show and others noted that 2018 sales still were the third-highest on record and suffered in comparison only to record 2017 numbers. Other measures of the housing market such as days on market and price suggest that the central Ohio housing market is in no danger of plummeting.
But after seven straight years of bidding wars and sharp price hikes, including a 7.4 percent increase in sales prices last year, some Columbus-area buyers are saying enough is enough.
“By the time we got to December, we were suffering from market exhaustion,” said Ken Wightman, an agent with Berkshire Hathaway Home Services who works heavily in the Short North and Italian Village.
“A lot of people said, ‘Let’s just wait.’
Columbus Realtors President John Myers attributed the sales drop to prices and choices.
“Fewer homes to choose from coupled with lower affordability made it tough for buyers in 2018,” Myers said in a news release.
Central Ohio homes sold for a median price of $195,000 last year, up from $181,500 in 2017 and $127,900 in 2011, when the market bottomed out.
Prices continued to escalate because of a supply shortage, especially in the sweet spots — under $300,000 in good school districts. Higher-priced homes continued to struggle to find buyers.
“The sweet spots are still a challenge, but there’s no sweet spot in the high end,” said Show.
Some expensive parts of central Ohio such as Bexley, Powell, New Albany and German Village saw sales drop last year while more-affordable communities including Hilliard, Circleville and Gahanna saw a bump in sales.
The number of central Ohio homeowners who put their house on the market remained about the same in 2018 as in 2017, well below the number required to balance the market.
“People are putting money into their existing house and not moving,” Myers said.
Central Ohio contracts for upcoming home purchases also dropped sharply in December, suggesting that sales will remain soft heading into 2019. In another indicator that the housing market may be turning, the RCLCO Real Estate Market Sentiment Index, an industry measurement of real-estate professionals’ optimism, dropped from 68 last summer to 37.5, according to figures released Tuesday.
The federal government shutdown also could put a damper on January and February sales.
“Once the government is fully reopened, I am hopeful that housing transactions will increase,” National Association of Realtors President John Smaby said in a release.
Wightman, for one, welcomes an end to the housing frenzy of recent years.
“We will see more balance this year,” he said. “Sellers will start to understand the crazy times are over.”