Cincinnati Real Estate Market on Track
The latest figures as per the National Association of Home Builders (NAHB)/Wells Fargo Housing Index show that there has been a slight decline in home-builder confidence in February. Instead of touching 48 after reaching 47 in January, the index has come down to 46 in February. But this does not seem to have much impact on the housing outlook for the greater Cincinnati region and Northern Kentucky which is largely positive for 2013. There are a lot of factors that support this possibility such as the rise in housing starts, increase in home sales, and the low unemployment rate.
The sales of homes in the region have been steadily increasing since the last quarter of 2012. In November, sales were up by almost 13 percent from a year ago. This was about 6 percent higher than the national average. The rest of the Northern Kentucky area saw an increase of about 4 percent. This has led to soaring optimism about the economy and the real estate market. James Blanton works with a firm representing numerous lease option homes in the region. His take on the situation is that “gradually, increases in home sales in the greater Cincinnati area is a strong indicator pointing towards economic recovery.” Well, Ohio is benefiting from oil shale for sure and this is bringing more energy to the market and creating jobs in parts of Ohio that has not seen sunny days in decades.
Inventory has also stayed low and this is putting upward pressure on the market. The low interest rates are also conducive to a positive trend and the reason interest rates are so low is because the Fed knows this economy is not performing well. “Interest rates are at historic lows and if they stay this way in 2013 and the economy steadies, then there is no reason why the housing market should not regain its momentum,” added West. The average sale price in December has gone up by about 5 percent and is now around $153,615.
An upswing is also expected in residential construction activity throughout this year. Experts in the field opine that by 2014, it is likely that housing starts will be back to their old glory in the Cincinnati region. Housing vacancy rates in the area are below two percent which is again a bright spot to remark on. The fact that the combined Cincinnati and Northern Kentucky region is considered a smaller economy is working out well as far as the housing market is concerned.
The unemployment rate in Cincinnati is at 6.4 percent which is much lower than that in the rest of the country and they deserve it; Ohio has a solid governor in place that is making job growth his central concern. Moreover, the down town area has been found to have the most concentration of jobs and thus is crucial to the region’s financial health. “The NAHB index of builder confidence relies primarily on job growth and consumer access to mortgage credit, which in this area is different from that across most of the country,” says West.
The median price of homes in the Cincinnati and Northern Kentucky area is well below the national average. This also makes it a lucrative market for investors who might be looking at buying and then renting out the property. Rental rates are only 16 percent lower than the national average whereas there is a 20 percent difference in sale prices. This means that there is a neat profit to be made if one buys a home and rents it out. All these factors combine to make the Cincinnati area a sparkling prospect for home buyers, sellers, and investors alike. And where the buyers, sellers, and investors are, is where there will be a thriving housing market.