The local housing shortage has frustrated Mahoning Valley home hunters — especially first-time buyers — local real estate and mortgage experts told Mahoning Matters.
Housing supply reached historic lows in 2021, the National Association of Realtors reported this month, and now homebuyers are navigating their way through a highly competitive market – and are likely paying far more than they would have just two years ago. We’ve looked at local property market trends and got advice and tips from our expert sources on how Valley homebuyers can get ahead.
Matt Moore, branch manager of Amerifirst Home Mortgage in Poland, told Mahoning Matters that currently the demand for housing is greater than the supply. This is something that has been a significant issue over the past two years, he said.
Moore said home values rose 12% last year, compared to a 5% increase over the past 10 years, according to a report on housing in the Youngstown-Warren Metropolitan Statistical Area:
“In the entire Youngstown-Warren area, there are only 2,300 homes for sale right now,” he said, citing the report. “In Mahoning County, it’s even more restrictive.”
Housing supply in the county has declined 18% over the past five years, Moore said. Now there are only five homes for sale per 1,000 people, according to a similar county report:
Home prices have risen nearly 30% since 2019, the National Association of Realtors reported. The median selling price of a home in mid-2019 was $285,300, and it rose to over $362,000 by the end of 2021, according to the association’s data.
Realtor Dennis Gonatas of Burgan Real Estate in Youngstown told Mahoning Matters that people are willing to pay more than the market value of the house just to stay competitive.
“If you make an offer of $210,000 and the house [valued] for $205,000 they will still pay the $210,000 to cover the gap in the valuation,” he said.
Moore said demand is fueled by the large number of millennials entering the market to buy a home. The average home buyer in the Valley is between 27 and 35 years old, according to the Mahoning County report.
Youngstown, which has a median income of $28,822, is the fifth most affordable place to live in Ohio, according to a February report from SmartAssetwhich used 2019 census data. East Liverpool, with a median income of $32,119, is the tenth most affordable.
On average, Youngstown homeowners pay two-thirds less on their annual mortgage than the state average and three-fifths less on property taxes, the data shows.
Jeffrey Rickerman, president of the Mahoning Valley Real Estate Investors Association, said it’s not just housing that’s affordable, but it’s the very low cost of living that draws people to the area.
“There were so many people working in the [steel] mills that there must be accommodation for all these people. Then the steel mills shut down, and that was a big shock to the economy,” he said. “Youngstown and the Mahoning Valley are really booming, and it’s very active now.”
But today’s lack of inventory is frustrating first-time home buyers, Gonatas said.
“Millennials are actually bidding on homes [without seeing them], as long as they like the pictures and I definitely don’t recommend doing that,” he said. “Millennials are looking for move-in ready homes, which is very difficult [to find] in this market. »
Gonatas said buyers who submit competitive bids are always overlooked by others who are able to provide money or are willing to forgo inspections or pay more than the appraised value.
Nearly 1 in 5 local buyers make cash offers on a home. Most of the time, this makes these buyers more attractive to sellers, compared to those working with a conventional loan.
“People shoot [cash] from 401(k) accounts, other retirement assets in their home, or other funds in the bank,” he said.
Before the COVID-19 pandemic, homes stayed on sale for 20 to 30 days on average, Rickerman said. Now they only last four to seven days on the market, he said. A beautiful property visited on a Wednesday afternoon could very well have a pending offer by next weekend, he said.
“A person has to be really aggressive to stare and come out and stare right away,” Rickerman said.
Despite all that, the housing market is now in its slowest season of the year, Moore said.
He said he expects supply to pick up over the next few months, but that won’t be enough to meet buyer demand, which will cause home prices to continue to rise.
“I expect it to ease a bit, but not to the point of really changing market dynamics right now,” Moore said.
Here are some tips for home buyers to keep in mind when looking for a home in the Mahoning Valley:
Have a plan, get pre-approved, start saving
If you’re considering buying a home now, it’s extremely important to have a plan and strategy in place, Moore said.
When homebuyers dive into the housing market without being pre-approved for financing, or don’t have a mortgage in place, it can be difficult to place a competitive offer on a home, Moore said.
“They might find [a home] they are interested and they want to make an offer and they won’t even know if they qualify for a loan,” he said. “Talk to a mortgage professional, figure out what you would qualify for. … They should plan this and start saving money.
Moore said down payments are a major hurdle for first-time home buyers.
“That’s what would really hold young people back. Maybe when they got out of college they got their first job. It’s a well-paying job, but they don’t have any savings,” he said.
Rickerman said homebuyers need to have a competitive down payment amount to be considered in the market – the average down payment is 20% of the home’s value – which requires saving money over time.
“[Loan officers] are going to tell you how much of a house you can afford and also how much down payment you need,” he said. “Then you can start looking at neighborhoods and you can get to know neighborhoods around you or neighborhoods that interest you.”
He suggested finding the right loan officer first.
“Mortgage brokers or loan officers will want to see the pay stubs, and that you have the ability to be able to pay that loan on a monthly basis,” Rickerman said. “The more attractive you are to a seller, the more likely they are to accept your offer.”
Get an inspection
Rickerman said that before closing on a home, a homebuyer should have the home inspected by a qualified home inspector for structural damage or problems with the electrical system or the roof.
“They will have the equipment to check everything and they can give you a report and sit down with you and talk to you about what everything the report means and make sure you understand,” he said.
If a house is between 50 and 100 years old, it probably won’t be in pristine condition, Rickerman said.
“There will probably still be issues that the inspector will pick up on and you need to understand those issues and make sure you’re comfortable with them,” he said.
Home inspections typically take seven days, Gonatas said. If they identify needed repairs, buyers may be able to renegotiate their offer to compensate.
But now homebuyers are mostly forgoing those inspections to speed up the transaction, he said.
“Your home is usually the most expensive purchase of your life, and it can also be the most expensive thing to fix,” Gonatas said. “Home inspections can often help you make an informed decision about what you want fixed or it’s so bad you’re walking away.”
Work with a real estate agent
Finding an experienced, long-established real estate agent — someone who is “informed, aggressive and knows the market players” — is extremely critical for homebuyers, especially first-timers, Rickerman said.
“You want a real estate agent [who’s] will walk you through the process and look at the pros and cons of the homes you’re looking at,” he said.
Rickerman said homebuyers should check with their real estate agents first to make sure they will meet their needs. A real estate agent should consider the pros and cons of each home and be honest with buyers during the process, he said.
“You shouldn’t necessarily just pick the first real estate agent you meet. … You should interview your real estate agents, just like you interview a contractor or anyone else working for you,” he said.