“The low inventory does drive some of what is happening in the market, so that’s been an issue across the board as far as the Dayton region goes, both inside Dayton as well as outside,” said Bob Morrison, Dayton Realtors president.
The houses in Dayton are older, Morrison said, and that means they come at cheaper prices.
But as those houses age and more housing is built, it tends to be upper-end condos, not lower-end or affordable housing, said Realtor Mark Davison of Sibcy Cline, who partly works with bank-owned properties.
Some of Dayton’s underlying issues caused WalletHub’s study to rank the Gem City’s housing market the third worst of the 300 largest U.S. cities in terms of attractability.
“Dayton could use improvement in a couple of different areas, but right now it has the fourth highest percentage of homes with negative equity, over 30 times higher than some of the best real estate markets,” said WalletHub analyst Jill Gonzalez.
Homeowners aren’t keeping up on their mortgages, according to the study. Davison said its partly that jobs have left Dayton as major companies relocated or shut down in the last decade, but the drug epidemic that plagues Ohio also leads some to spend mortgage money elsewhere.
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“You do see a lot of these places (at the bottom of the list) kind of along rust belt cities that still have not fully recovered from the recession,” Gonzalez said. “When the people living in your community aren’t able to keep up with the mortgages, that’s when we start to see more foreclosures or more delinquencies.”
If those houses foreclose, that leads to even bigger issues. Davison said he’s seen foreclosures take up to six months before a bank officially takes possession to list the home.
Banks also tend to list the houses much higher than the real estate agent values it at, Davison said. That means the houses stay on the market even longer until the bank drops the price closer to the appraisal.
During those months, banks struggle to keep up the maintenance on the properties. If they’re vacant long enough, it attracts vandals, which decreases the value of the home and surrounding homes.
“Nobody wants to live in a house when you’ve got a vacant, deteriorating house beside you,” he said. “The value of your house is going to be determined by the two houses to your left or right and across the street.”
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Dayton residents see these vacant homes as an issue too. Grove Avenue resident Al Busse lives between two houses that are for sale, but he said more of the vacant houses need to be torn down, paving way for new houses that will improve the neighborhood.
“I do not understand why we have houses stand for years that nobody lives in,” said Mary Jo Wiley, president of the Greater Dayton Realist Association.
But Morrison said the city isn’t as bad off as the study makes it seem and the Dayton Realtors aren’t concerned about the city’s housing market. While some areas of downtown aren’t moving as quickly, there are pockets that are thriving thanks to increased momentum in downtown amenities, and all areas are improving, he said.
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In the last year, distressed listings, or those that must be sold quickly because the funds tied up in the house are needed quickly or the house is nearing foreclosure, within Dayton city limits have decreased more than 37 percent since August 2017.
One of the first steps in improving Dayton’s housing market is to increase the inventory, he said.
“Focusing on building affordable housing, I think is one of the most important things that local officials can do to make sure this problem does not persist in the future,” Gonzalez said.
Jobs are also coming back, Davison said.
“It’s got to be a community effort on all sides to do that kind of a change,” Morrison said. “No one entity is going to be able to change the nature of real estate on its own overnight.”
That includes employers paying higher wages, residents working to improve neighborhoods and real estate agents communicating to home shoppers that neighborhoods are safe, Morrison said.
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