Columbus’ hot housing market is turning heads.
The city jumped seven spots to land at No. 9 in Realtor.com’s hottest markets in the nation in March, the second month in a row that Central Ohio has outpaced most of the nation. And a big part of that, the site said, is supply and demand.
In Central Ohio, where the number of homes available for sale has dropped for 85 months in a row and isn’t likely to change anytime soon, it’s more like supply and demand, demand, demand.
“Never in history have there been more eyes on fewer homes than today,” Javier Vivas, director of economic research at Realtor.com, said in a statement. “The price gains observed in the last days of March tell us the market is on pace to see half of the homes listed above $300,000 this summer.”
The Realtor.com hot list tracks cities where homes get the most views on the site and spend the fewest days on the market.
Listing prices nationally are up after two years of declining numbers of homes for sale — and Realtor.com noted median listing prices, at $280,000 this spring, are already higher than at their highest point in summer of 2017.
It’s good news for sellers, but it’s also pointing to a market imbalance that could be problematic.
M/I Homes CEO Robert Schottenstein said recently that many homebuilders went out of business in the Great Recession, and those that remain are hesitant to overextend themselves, so new homes aren’t coming online fast enough.
And that means housing affordability is becoming an even bigger problem, especially when Columbus is growing in population.
“Affordable housing is slowly being eliminated in the communities with good school systems and important amenities because of increased prices due to supply and demand,” said Ken Gold, CEO of Columbus development group Skilken Gold. “Columbus in general lacks good affordable housing alternatives. A new strategic initiative in a public/private space needs to be created to solve the lack of affordable housing inventory.”
Gold said part of the problem for homebuilders is first-time buyers are having a harder time getting financing, and their homes are competing with rentals and their “urban cool.”
“There needs to be recognition and understanding that job creation and economic growth requires adequate housing, there certainly is a need to meet that kind of demand,” said Molly Gwin, a senior associate at Isaac Wiles who has practiced in development. “The other important thing is housing at all types of levels. There’s a desire to leave the traditional one-bath four-bed and downsize to an empty nester product. There’s also a need for affordable housing for young people.”
Achieving that, in some cases, requires something that some local cities have resisted: more densely packed and lower-price point neighborhoods. Unfortunately, proposals for more affordable or “workforce” housing have generated concerns about traffic, crime and other objections.
Gwin said the market itself could well end up driving communities away from this kind of thinking.
“A lot of the density those city codes require are not reflective of economic realities,” she said. “They may require (two homes per acre), but what we’re seeing is people don’t want that, some don’t want the big yards they have to take care of. Many who want a home can’t afford a big house, either. Reasonable densities are important and that needs recognition.”