CLEVELAND — It’s an industry that’s been anything but predictable these past few years: buying and selling residential real estate. However after years of appraisal gaps, waived inspections, and bidding wars, experts say this busy house hunting season to not be quite as busy as years past.
"Last year, it was a rat race, it was a blood bath," realtor Denise Franklin said. "This year is totally different."
According to MLS Now, the realty listing service throughout Northeast Ohio, the number of homes listed and sold in March 2023 is up more than 30% compared to February 2023. However, the number of homes sold is down more than 10% compared to the same time last year.
As Franklin points out, mortgage rates doubling over the past two years, paired with more buyers and fewer homes made the market unbearable for buyers and unbelievable for sellers.
To put the mortgage rate increase in perspective, every additional 1% added to the rate typically equates to about an additional $125/month on a mortgage payment.
For Franklin, the days of wildly over asking price and a dozen offers on a single house are behind us.
"For the average house now, maybe one-two offers," she said. "You no longer have those multiple offer situations, not as much."
"There’s less multiple offers, but we’re still getting multiple offers," Seth Task, who served as president of the Ohio REALTORS in 2021, said.
A sentiment that prospective buyer Allison Witherspoon hopes will help her finally land a home.
"One day [last year], I saw five houses, put in a bid on every one, got outbid on every one," she said. "How can we walk into every home and get outbid? There’s no way 27 people were looking at this home, but they were."
Over the past year and a half, Witherspoon lost count of how many bids she made on a home, saying it’s somewhere around 15.
"Turned down for every single one, outbid for every single one," she said.
Frustration to the point that she quit looking at home for a span of six months beginning last year before restarting earlier this year.
"I’m very optimistic and I’m really hoping that this is the year I move into my dream home," she said.
New 40-Year Mortgage Modification
There is additional hope for those who may buy a home beyond their budget.
Just last month, the Federal Housing Administration added an option that allows homeowners with an existing mortgage to modify their loan length up to 40 years to help lower payments and prevent foreclosures.
"The goal is to try to find ways to provide an affordable method for people to afford a home," Task said.
"Adding a 40-year modification with partial claim to our toolkit for servicers today reaffirms our long-term commitment to continue helping as many struggling homeowners as we can to keep their homes,” said Principal Deputy Assistant Secretary for Housing and the Federal Housing Administration Lopa P. Kolluri in a release.
Tips for prospective home buyers
As one of the largest investments someone can make, Task recommends buyers get pre-approved for a home loan and understood what you're willing to negotiate.
"With the still very low level of inventory we have, you may say to yourself I have to have at least three bedrooms and I will sacrifice this or that for it," Task said. "Know what those non-negotiables are."
Spring typically marks the ramp-up for the housing market, and Task adds there's still plenty of time for the market to morph again.
"We're going to see a lot more inventory, but we're also going to see a lot more buyers, but time will tell what will happen," Task said. We've already seen some people have to waive inspections just to get a house."
"When the weather gets nice, it brings out the flowers, it brings out the buyers," Franklin said.
Clay LePard is a special projects reporter at News 5 Cleveland. Follow him on Twitter @ClayLePard or on Facebook Clay LePard News 5.
Download the News 5 Cleveland app now for more stories from us, plus alerts on major news, the latest weather forecast, traffic information and much more. Download now on your Apple device here, and your Android device here.
You can also catch News 5 Cleveland on Roku, Apple TV, Amazon Fire TV, YouTube TV, DIRECTV NOW, Hulu Live and more. We're also on Amazon Alexa devices. Learn more about our streaming options here.
