Temperatures may be climbing in Northeast Ohio, but the spring selling season is not heating up home sales.
Year-to-date through the end of April, home sales fell 15.7%, to 11,831 homes and condominiums from 14,029 for the like period of 2022, according to a Crain’s Cleveland Business analysis of recent MLS Now data. (The MLS Now data cover an 18-county region of Northeast Ohio.)
The picture is much the same statewide. Home sales across Ohio through the end of April fell 16.7% to 36,202 from 43,483 in the year-ago period, according to the Ohio Realtors trade group. Still, the Ohio Realtors reported last Tuesday, May 16, that the average home sale price statewide climbed 3.5% through the end of April, to $252,053 from $243,588 in the like period last year.
MLS Now monthly data for Northeast Ohio amplified the slowing trend despite the calendar in what’s typically a busy time of year. In April, 3,292 listed homes and condominiums sold in the region, down 18.5% from 4,039 in April 2022. The April figure even was down 7.2% from March 2023 sales of 3,549.
Lack of inventory gets most of the blame for dropping sales.
Through the end of April year-to-date, home and condo listings in Northeast Ohio fell 15% to 15,768 from 18,554 in April 2022, according to MLS Now statistics.
David Sharkey, president of Progressive Urban Real Estate of Cleveland, said the scarcity of listings is making the market behave as if it were hot. That’s because when you have a buyer, they still encounter multiple bids.
“Last week, we took a couple to a 1,200-square-foot house in Bay Village. It was just stunning. The price was in the $300,000 range,” Sharkey said. “The listing went up on Wednesday. When we got to the showing Friday, there were five agents and their buyers there.”
In this case, Sharkey’s prospects did not bid because they felt the beautiful property was too small.
“People talk about the market going bust,” Sharkey added. “I’m not sure what that really means if there continue to be more buyers than sellers.”
Akil Hameed, the broker-owner of FASS Real Estate Services of Shaker Heights and president of the Akron Cleveland Association of Realtors, blamed the lack of listings, growing uncertainty about the economy and interest rate shifts for the slide in sales. He hopes the picture on interest rates clears up by August, in time to help the market this year.
The only other solution, Hameed said, is for builders to construct more infill housing in the region. That also would lift the supply of homes available for sale.
Alicia Kosec, president of the Northern Ohio and Michigan market for Howard Hanna, said in a phone interview the market is paying a price for the past few busy years.
“The pandemic years were such pull-ahead years that we had many sales that might have happened in 2023 had there not been such a buying frenzy,” Kosec said. “Now you have people sitting in a house with a mortgage of 2.5% to 3% while they would have a new rate up to 6%. They think, ‘Why sell my house to look for another house when I have such a good rate?’”
However, she is positive about the rest of the year.
“Sellers are going to see it’s a great market to get into,” Kosec said, because competition keeps up prices. “I’m hearing the idea that May might be the new March if more listings come on the market. Sellers just need to plan ahead for what they will do rather than deciding it as they go along.”
However, Hameed worries a structural shift may be occurring in Ohio. He said he suspects the growth of bulk housing wholesalers may be keeping sellers from the traditional MLS market.
“I think that with the amount of wholesaling going on, it’s reducing inventory,” Hameed said. “As an association, we are urging that potential sellers meet with a licensed professional for information. They may not be getting a wholesale perspective on the market from a wholesaler.”
