Dayton area home sales this year continue to lag behind 2022, while home sale prices continued to increase.
Through April, sales reached 3,892, down almost 15.9 percent from 2022 during the same time period, according to Dayton Realtors Multiple Listing Service, which includes Montgomery, Greene, Warren, Darke and Preble counties.
The average sale price year-to date is $241,007,a five percent increase from last year. The median price also jumped eight percent from $189,900 to $205,000.
“We really haven’t seen a significant change year over year,” said Greg Blatt, Dayton Realtors president and the director of KW Commercial Advisors Realty. “Yes, sales numbers are down slightly, and days on market are up slightly, but that’s not enough to really sway the market. We’re still in a seller’s market.
“We’ve seen the (average home sale) prices continuing to climb, right, even though they’re not climbing as fast as they did say 2022 over 2021, they’re still climbing in the single digits. We’re seeing a kind of a stabilization, if you will. It’s still an active market. It’s not as active as it was.”
Much of the continued drop in sales and rise in average prices can be attributed to the market still running very low on inventory based on demand, Blatt said.
“While I think buyers have accepted that the interest rates have adjusted to more normal levels, the inventories haven’t yet caught up, and it’s going to take some time for inventories to catch up,” Blatt said. “We’re running about 23% of a normal market inventory, so as long as we’re running that short of inventory, we’re going to continue to see challenges in the market.”
National Association of Realtors is predicting that home sales will drop down to just above 4 million home sales this year, where normally it would run between 5 million and 5.5 million, he said.
“So you can extrapolate that out into a local marketplace given our size, but I don’t think what we’re seeing is surprising at all,” Blatt said. “I think you’ve got a little bit of buyer fatigue. Buyers are a little tired of putting in multiple offers and losing out.”
While the local market is still seeing multiple offers on a lot of homes, in some cases offers “well above list price,” other areas where homes aren’t quite in market condition, sales prices are starting to level out and stabilize, Blatt said.
“The only way we’re really gonna see inventories increase is for developers and builders to get more product and ground and build our way out of this, and that’s going to take a concerted effort between public and the private sector coming together and addressing zoning issues and permitting processes make it more efficient for developers and builders to get more products started,” he said.
April was the eighth consecutive month of decreases in year-over year sales, according to Dayton Realtors, whose multiple listing service showed there were 1,095 sales that month, a 16.5% drop over the 1,312 single-family and condominium sales reported in April 2022.
Average sales price in April was $253,042, exceeding last year’s monthly figure by three percent. Meanwhile, the median price also saw an increase, up four percent from last year to $220,000 for the region.
The average time a home stayed on the market was for 28 days, on average, this April, a 55% increase from a year ago when they were on the market for 18 days, but something that Blatt said was only “a moderate slowing.”
The overall number of single-family homes and condominiums available in the MLS stood at just 941 at month’s end, which represented a supply of less than one month, based on April’s pace of sales. Blatt said. Typically, the region has a three or four months supply of inventory on hand, Blatt said.
Oluwaropo (Abbey) Omodunbi, vice president and senior economist for the PNC Financial Services Group, told Dayton Daily News that home sales continue to decline for a couple of reasons, including long-standing demand/supply issues in the housing market.
“The U.S. is just not building enough homes (to match demand), and one of the reasons why we had the Great Recession in 2008 was because we were building too many homes and we’ve not quite recovered yet,” Omodunbi said.
Another reason why the region and nation are seeing lower home sales is because many people who bought a home the past couple of years did so with “very attractive mortgage rates,” including below three for some and between three and five for others.
“Many of those folks are handcuffed to their home so they’re very reluctant to sell their homes given that mortgage rates have gone up in the past couple of years, particularly since the Fed started raising interest rates in March 2022,” Omodunbi said.
In addition, higher interest rates are putting constraints on housing demand. “There’s less of an incentive to buy a house now because you know, mortgage rates have risen in the past year,” he said.
Right now, the U.S. housing sector housing market is in correction mode, and the decline in sales likely will continue through this year and into 2024 as the Federal Reserve keeps the fed funds rate elevated and the U.S. economy slows, Omodunbi said.
““We’re likely to see improved affordability due to lower mortgage rates and also due to lower prices.” he said. That’s the anticipation.”
While it was “very much a seller’s market” in 2020 through 2022, now it’s becoming less of a seller’s market and more of a buyers market, Omodunbi said.
April was the eighth consecutive month of decreases in year-over year sales.
SOURCE: Dayton Realtors