Residential real estate market slowing, but still on a roll in 2023
by Dan Holland
An unprecedented period of increasing home-sale prices in 2021 and 2022 may show signs of slowing, but sellers are still in the driver’s seat.
“Overall, it continues to be a strong sellers’ market,” said Michelle Mehaffey-Taylor of RE/MAX Above & Beyond in Brecksville. “Even with the rising interest rates, there are still buyers out there. We’re still expecting to see home values increase in 2023 and 2024, but not at the rate that we have seen over the past two years since COVID – it was just insane.”
Real estate prices are mostly based on demand. “When there’s a surplus of demand, that price is going to be higher; when there’s less demand, that price will come down,” explained the team of John and Suzanne Lambert of Howard Hanna Real Estate Services in Brecksville. “The problem right now is that there are more buyers than homes available.”
The home real estate market in Northeast Ohio seems to have stabilized with the days of multiple offers above asking price coming to an end, said Mehaffey-Taylor.
“It’s actually nice to see a little reprieve,” she said. “Houses are still going into multiple offers, but now with two weeks on the market versus two hours. That was not a safe market for buyers or sellers.”
“In spring and early summer last year, you would see many multiple offers, special contractual terms, people waving inspections, doing appraisal gaps – and right now, you’re not seeing those things because there’s not a need for it,” said the Lamberts.
Mehaffey-Taylor said there is still a bit of a real estate “bubble” in Northeast Ohio.
Data on the communities in which the homes have a higher price point shows that the prices are still increasing. In many communities the average home sale price has increased about 20% since 2020.
“There is still a high demand for new buyers to move into these areas simply because of the location, great city services and great school systems,” Mehaffey-Taylor said.
The seller’s market has the most impact on buyers looking for a house at a price point of $250,000 and under, said the Lamberts. “The person who used to be able to afford $250K can only afford $200K now. So, those are the people who are most impacted. Plus, when you get to those higher price points, even with the interest rates being higher, [the buyers] are stronger financially. So, it’s less of an impact.”
According to Zlillow.com, the metropolitan areas of Charlotte, Cleveland and Pittsburgh are projected to be the top-three hottest trending real estate markets in 2023.
“We’re still affordable from a national perspective even though from a local perspective, our market is higher than it’s ever been,” said the Lamberts. “A lot of the migration we’re seeing is corporate related mainly because, since COVID, a lot of these companies are going to a remote work force.”
“We are seeing a lot of people moving to Ohio because we are so affordable compared with other areas of the country along with many companies now allowing their employees to work from home,” echoed Mehaffey-Taylor. “Why live in a 1,200 square-foot ranch in San Diego when you can have a mansion and better quality of life here in Northeast Ohio?”
Pricing a home correctly for the current market and time of year is still key for sellers.
“It comes down to how a house is priced as it pertains to market value,” said the Lamberts. “If people have the perception that a home is a great buy, you can still get above list price; it just depends on where it’s priced.”
“It’s important that sellers be realistic and listen to experienced realtors in the area and base their evaluations on facts and not on wants,” added Mehaffey-Taylor. ∞