BRUNSWICK, Ohio — As mortgage rates continue to rise, a new report from Zillow shows home values are finally falling across the country after years of increases.
“I think the frenzy and the pandemic housing market is behind us,” Zillow senior economist Nicole Bachaud explained. “It's very different from where we've been, but it's not necessarily a bad thing.”
The report points out that nationally, home values fell 0.3% compared to July, the largest monthly decrease since 2011. Additionally, the report mentioned that listings now take about 16 days to go from “for sale” to “pending,” up from 10 days during the same time last year.
“In Cleveland, we did see home value appreciation slowing way down; It just didn't go into the negative,” Bachaud added. “They tend to generally follow the national trend. It's just not always quite as extreme as some other markets.”
The report goes on to mention that the typical home value in the Cleveland metro is $221,716. That’s up 0.1% since July and up 40.6% since August 2019. On the other hand, home inventory remains down 51% compared to 2019.
Multiple experts told News 5 that Northeast Ohio can also lag a couple months behind the national trends when it comes to residential real estate.
Realtor Jessica Chodaczek with LoFaso Real Estate told News 5 that the cooling down appears to have already started, impacting homes that are in the process of closing.
She said that means sellers’ expectations have to change.
“Houses are sitting on the market a little longer than they were and we’re seeing a lot less multiple-offer situations,” she explained. “Inventory is still low compared to the last several years, however [sellers] have to be realistic that their experience selling in the fall is going to be different than their neighbors who sold in the spring.”
“Homes used to sit on the market for 30 to 60 days,” Bachaud added. “Normally that was just the regular amount of time it took to sell your house. And so once we're in this rebalancing, we're getting back to our normal market. It's important to remember that it's OK. You only need one offer. You don't need 20 bids on your house to sell it.”
It comes at a time when more moves are being made that could impact home sales.
On Wednesday, the Federal Reserve raised its key interest rate by a substantial three-quarters of a point for a third straight time and signaled more large rate hikes to come. By raising these borrowing rates, it becomes costlier to take out a mortgage or an auto or business loan in an attempt to slow down inflation.
As for buyers, their affordability crisis could finally be getting a break.
“This is going to lead to a lot of opportunities for buyers who can afford to stay in the market, to find deals and to find less competition and a less stressful buying experience,” Bachaud added. “But it is going to look a lot different than the winters that we've seen in the past two years.”
According to MLS Now, the realty listing service throughout northeast Ohio, the average home sale price did increase from July to August by a mere 0.7%, with prices still up 7.4% compared to the same time a year ago.
Clay LePard is a reporter at News 5 Cleveland. Follow him on Twitter @ClayLePard or on Facebook Clay LePard News 5.
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