YOUNGSTOWN, Ohio – The co-owner and broker of Kelly Warren and AssociatesKelly Warren, shares the story of a recent listing in the Cornersburg neighborhood of Youngstown.
The home, listed at $129,000, had 50 viewings in one weekend and its owners received 12 offers, she says.
“It sold well above the asking price and was only on the market for three days,” she says. “If we had accepted the first offer, it would have only been on the market for four hours.”
The rapid sale reflects today’s market, driven by low inventory and rising sale prices, as reported by Warren and other real estate professionals in the area.
Others contacted for this story were Sue Filipovich, Broker/Owner at Burgan Real Estate, Boardman; Fontineese Green, a real estate agent with Berkshire Hathaway HomeServices Preferred Real Estate in New Castle, Pennsylvania, and president of the Greater Mercer County Association of Realtors; and Alicia Kosec, Vice President and Director of Regional Sales is in Ohio for the Pittsburgh-based company. Howard Hanna Real Estate Service.
SUPPLY AND DEMAND
“We have a demand problem. We have high demand and not enough inventory,” says Kosec.
“We’re still at an all-time high in inventory,” Green says, so market activity in Mercer County is low.
Neighboring Lawrence County is equally competitive, reports agent Preferred Realty. Buyers are always looking to buy. But a house is gone as soon as it hits the market.
A recent property in Hermitage, Pa., received 10 offers and sold “for way more than the listing,” she reports. Selling prices in this Mercer County town are up nearly 40% from where they were two years ago, according to Berkshire Hathaway’s Green.
“The pandemic really hasn’t stopped anything for us,” she says. “If anything, it made the market hotter.”
The number of homes sold is down but the volume of sales continues to increase, says Filipovich of Burgan Real Estate. Inventory averages about a month and a half’s supply.
“A healthy market is when there’s a six-month supply,” she says. “Now it’s definitely unbalanced, it’s still a seller’s market.”
Kosec, which oversees 15 Howard Hanna offices in an eight-county region including Mahoning, Trumbull and Columbiana counties, attributes the low inventory in part to owners who likely should have sold but didn’t. They stay in houses that are too big for their way of life because they have nowhere to go, as few new houses have been built since 2008.
“Before the crash, everyone was building these huge, big McMansions,” she says. Few buyers are interested in such properties now.
According to Kosec, many of the builders who erected them were over-leveraged and went out of business with the downturn in the housing market that accompanied the Great Recession.
Additionally, supply chain issues, rising material prices and lack of contractors are contributing to the shortage of new housing construction.
“They’re building, but at a slower pace than the last time we had a big housing boom,” Warren says. Some new real estate developments are underway. “But we don’t see them as quickly and as much as between 2001 and 2006,” she says.
Builders might be cautious about having so many spec homes so they don’t get “locked in again” if the market changes significantly.
“We had so many builders go bankrupt in that time,” Warren says. She also points to rising supply costs, as well as the higher price – and scarcity – of labor.
Due to low supply, price appreciation is up 13% year-on-year in Poland, for example. Properties receive an average of five or six offers; some have 16, reports Filipovich.
In the Tri-County area, a home that cost $100,000 three years ago could cost $145,000 today, or more than $160,000 if it’s in “superior condition,” Filipovich says.
“Buyers have to make very quick decisions once a home is on the market,” says Kosec. “If you want it, you have to go further by asking. You must close a valuation gap if there is one. And if you ask for an inspection, chances are you won’t get the house. … If we had more houses for sale, we wouldn’t have such a big problem.
The “bottleneck” of housing supply is in the baby boomer/empty-nest segment of the market, she says. In this regard, the Mahoning Valley is catching up with the rest of the world.
“Our prices have been low for so long that we are waiting for a price correction here,” Warren says. “Part of it is just supply and demand. There has been so little inventory that existing home prices are just going up and up.
The sellers are in what Kosec describes as an “excellent position.” She notes that some homeowners who have second homes at Lake Milton are selling their primary homes and staying on their lake properties until a suitable property becomes available. Others are moving into homes they have in Florida or the Carolinas, or moving in with their brood until they find something.
Location is the attribute most sought after by buyers. But they also want modern properties with modern kitchens and bathrooms, says Green. She remembers taking a prospect to a “nice property” with hardwood floors. But the kitchen hasn’t been updated, and the colors stray from the neutral palette most buyers are looking for today.
“Even though it was a good price, she wasn’t interested in it because it didn’t have enhanced features and she didn’t want to do the things that would upgrade it to her standards,” she says. .
Another feature that agents and brokers report many buyers are looking for is home office space.
“People are still working from home and looking for that extra bedroom or designated office space,” says Green.
Filipovich agrees: “Pretty much everyone, whether they have a job outside their home or are retired, loves having an office space.
Kosec is also seeing an increased demand for offices and flexible spaces brought on by the pandemic. “You have a lot of people who are no longer working in full-time offices. They have a mix of part-time at home and part-time in offices. And some are completely mobile.
“It really depends on personal opinion,” says Filipovich.
In addition to upgraded kitchens and bathrooms, the top priority for upgrades is a basement that doesn’t take on water. This is a frequently encountered problem due to the age of the local houses.
“It’s an expense for the seller to sell their house or for the buyer to accept it as is and fix it,” says Filipovich.
Still, she says, shoppers become less picky about cosmetics as long as big-ticket items like the roof, furnace, basement and electrical are functional.
Young homebuyers are “buying anything,” says Kosec. They buy ranches they weren’t interested in, as well as colonials with 1980s decor, and redo them.
People don’t always get what’s on their wish list. More contemporary looks are popular today, with clean lines and natural wood, whites and grays, and open floor plans where the kitchen and great room are open to each other “so so you can cook while having fun,” says Kosec.
The heavy, dark Tuscan-European look that was popular in the early 2000s has fallen out of favor, she adds.
“Ranch-style homes are very popular, but people don’t realize it’s more expensive to build a two-story home because there’s more concrete, more roofline,” Kosec says. . In addition to master bedrooms and updated bathrooms, homeowners with kids also want spaces for them, such as finished basements and bonus bedrooms.
BEYOND THE BOURGEOIS
Traditionally popular areas of the Mahoning Valley — Boardman, Canfield and Poland in Mahoning County and Howland and Cortland in Trumbull County — remain in demand, but buyers are increasingly looking elsewhere, agents say.
Filipovich sees “tremendous interest” in the west side of Youngstown as well as Mineral Ridge and Girard.
Homes on the north, south and west sides of Youngstown are selling “pretty quickly,” Kosec says.
“They love the ranches that are in the Brownlee Woods area,” she continues. Markets like Campbell and Struthers, which people once left for the suburbs, are seeing renewed interest. To the south people move to Columbiana and Salem.
Some buyers are taking advantage of areas of the city like Cornersburg that are surrounded by open-enrollment school districts, Warren says.
Hermitage remains attractive in Mercer County, but people are also watching Sharon, Green says. “From what I understand, downtown Sharon is going to be an incredible attraction for [Mercer] county” following recent hires to city development staff, she says. “I anticipate that residential and commercial spaces will be renovated there.”
In Lawrence County, Neshannock Township has always been desirable due to factors such as its walkable spaces and school district, Green
Filipovich says people often ask him when the real estate bubble is going to burst. “There are fewer bubble problems here than in other areas,” she replies. “We still don’t see that here.”
In the photo above: Kelly Warren, Sue Filipovitch, Fontineese Green and Alicia Kosec.
Copyright 2022 The Business Journal, Youngstown, Ohio.