DELAWARE, Ohio – The real estate market has been red-hot the past four years, but signs have popped up that the growth is slowing down. In Delaware, that means for the first time in years the year-over-year sales price decreased.
Now we are talking about going from $206.12 to $205.78, so let’s keep it in perspective. For the average home owner that is about $650 difference on the home value. Keep in perspective that same home has probably gone up in value by $134,649 in the past five years. It was time for a little market reconciliation.
Blip or Trend
It would be easy to say this is a blip and everything in the market is status quo. “Not so fast, my friend,” Lee Corso would exclaim. There are a lot of signs that the market is beginning to slow down and normalize. Three key ones stand out in my analysis.
- Price Per Square Foot: All calculations are based on price per foot. Why? Because if we just looked at the average sold value it would look like Delaware City went up by more than 20%. That’s because the average home sold in the City was 2,406 square feet, which is nearly 22% larger than a home sold last year.
- Days on Market: In May 2023, the average days on market was 43, that’s by far the highest we have seen since 2020 when it hit 49 days. By comparison it was 14 and 16 days in 2022 and 2021, respectfully. Homes staying on the market longer has also increased the current inventory market to about five weeks.
- List to Sale Price: While some homes are still getting multiple offers and going in contract in a matter of hours; the majority of them are not. And when the houses do get multiple offers the numbers are not going above list price like they were the past two years. In May 2023, the average Delaware City home sold for .05% – or about $1.05 – below list price. Again, not a number to get worried about – it is about moderating the sales prices.
And while home sellers are disappointed to learn that they aren’t going to see 20% growth over the past year; for the rest of us this is good news. Keep in mind rising prices are only good when you sell, the rest of the time all it does is increase the cost to own a home – taxes, insurance, etc. – in today’s world.
Central Ohio Region Remains Strong
The prices continue to slow down, but both the Central Ohio region and Delaware County saw sale prices continue to go above sales price. Regionally the homes sold for 1.16% over list price, while it was .36% in the county – so both basically become statistically flat.
Break Down of Central Ohio Prices By Square Foot
The biggest take away, I continue to see each month is that over-priced homes are not selling in this market. When we are seeing the inventory essentially turnover every 4-5 weeks, a few dollars seems to making a big difference. On the average sized home this month (1,972 square feet) in Central Ohio the difference between active and pending is more than $83,000.
Toby’s Take Away
Use a proactive real estate agent that is looking at comps that sold in the past 60-90 days at most. Comps from last summer don’t count anymore. And too many agents are doing their clients a disservice by allowing them to believe they can still do that or by using bad data to create the comparable market analysis. The market is changing, so you need to as well.
As a buyer, that doesn’t mean that we aren’t in a very strong seller’s market still. But it does allow for a buyer to make a reasonable offer and be in the running for the house.
Toby Boyce is a Commercial Real Estate Consultant with Coldwell Banker Realty in Delaware, Ohio and real estate expert for DelawareO.com. You can reach Toby by visiting his website at www.TobyBoyce.com.