The Cincinnati housing market is heating up going into the Summer months. In the first half of 2017, we have seen home prices return to pre-recession levels and historically low inventory. Here are 3 things to look for this Summer in the Cincinnati real estate market:
1. Inventory Increasing Slightly
Declining inventory was without a doubt the defining feature of the housing market in the first half of 2017. It led to price appreciation, as well as a hyper fast market for buyers and discouraged some sellers to enter the market place. The low inventory trend is continuing, but there are some signs the Summer market will open up a little more - with the most helpful sign being new construction sales. Homebuilder sentiment picked up late last year and continues to be strong for the 2017 market - this has fueled the breaking ground of many developments across the city. Many families are deciding to stay in their current homes during the 4 to 6 month construction periods to avoid moving twice. As new development phases get completed, we expect the existing home inventory to increase slightly.
2. Multiple Offers
What goes hand in hand with low housing inventory? Multiple offers! More buyers are expected to enter the market this Summer and continue to out pace the supply of homes across Cincinnati - creating multiple offer situations.
3. Mortgage Rate Volatility
The two major political events of 2016 set mortgage rates moving in opposite directions. In June, the British vote to exit the European Union put rates near a record low. In November, the U.S. election of Donald Trump had the opposite effect, sending rates above 4% for the first time in two years. By historic standards rates are still low. In 2017 experts expect movement, but differ on where for the 30-year fixed rate will land. Estimates range from between 3.75% and 4.6%--not so far from where it is today.
In March, the Federal Reserve bumped short term interest rates to a target range 0.75% and 1.0%, the second hike since the recession. The increase left rates low by historic standards and did not have a huge impact on mortgage rates. However, the Fed's policy makers indicated they anticipate two more rate increases in 2017, which could have a larger effect. That's up from the two increases officials projected before Donald Trump was elected.