The volume of housing sales is holding steady in the Cincinnati region as average and median home sales prices continue to rise and set new records.
The 2017 year-end average home price climbed to $202,169 compared to $190,908 in 2016, a 5.9 percent increase, and the December average sale price climbed to $198,356 compared to $190,625 a year earlier, a 4.06 percent increase, according to the Cincinnati Area Board of Realtors.
At the same time, the inventory of homes for sale, as of Dec. 31, continued its year-over-year declining trend to 4,360 from 5,049 a year ago, down 13.65 percent.
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Greater Cincinnati’s housing market is “vibrant and strong,” according to Phil Morrical, who last month started his role as president of the Cincinnati Area Board of Realtors, a 4,500-member association of local real estate agents.
“Even though inventory is low, interest rates also remain low and homes continue to sell quickly if in move-in ready condition, in a desirable location and priced correctly,” Morrical said. “The average sales price set a new high for 18 consecutive months.”
Buyers need to be aggressive in seeking a home, he said.
“Cash buyers have a significant edge in home buying due to the certainty and ease of a closing,” Morrical said. “This allows them to find a home and execute a purchase contract faster. In the past year we have seen an increase in the use of an escalator clause in contracts to allow quick response to competing offers.”
In Butler County, the amount of home sales dropped from 5,134 in 2016 to 5,009 in 2017, a 2.4 percent dip. In Warren County, the amount of home sales declined from 3,473 in 2016 to 3,396 in 2017, a 2.2 percent drop.
But both counties saw gains in home sale prices, with Butler County increasing from a $160,000 median price in 2016 to $170,000 in 2017, a 6.25 percent gain. Warren County went from a $209,000 median home sale price in 2016 to $224,000 in 2017, a nearly 7.2 percent increase.
Morrical, of Morrical Realty won REALTOR of the Year honors from CABR in 2011. He’s the first realtor in Hamilton to ever be the president of CABR and the second from Butler County, with Tom Hasselbeck of Sibcy Cline-Fairfield being the first.
In addition to being the president for the Cincinnati Area Board of Realtors, Morrical also serves in another capacity as the chairperson for the Liberty Community Authority.
“With the Liberty Center being basically the center between Cincinnati and Dayton, I can attest to the increasing interest in the area,” he said.
Butler and Warren counties continue to benefit from movement to the suburbs from the urban cores due to the availability of land, Morrical said.
“Builders and developers continue to look at the counties between the Cincinnati and Dayton metropolitan areas for new housing and commercial development,” he said. “Austin Landing and Liberty Center are just two examples of expanding development in these areas along the I-75 corridor.”
By 2040, the U.S. Census Bureau projects that Butler and Warren counties will have the biggest gains in population in this region and fill the gap between Dayton and Cincinnati, Morrical said. A merger of the two metropolitan areas into one, is projected to be the formation of the 18th largest metro area. This would place it above San Diego and the Tampa-St Petersburg areas, he said.
So what to make of increased talk of a housing price bubble?
“The basic economics of low inventory, high demand and low interest rates will potentially increase the price,” Morrical said. “Remove or reverse one of those factors and you will tend to see the average prices of housing go down.”
“(Last year) ending down 0.60 percent for the region earmarked the third largest number of sales in a calendar year, with 2016 being the second. This has nothing to do with a housing price bubble. It just confirms that Greater Cincinnati has a very active real estate market.
“A continued decrease in inventory may cause an increased demand on rental property.”