Too many buyers for too few homes. The combination is causing real estate agents to approach homeowners in high-demand neighborhoods who hadn’t even thought about selling.
“I know where I want to live, and there just isn’t a lot on the market,” said Tera Fitzer, who’s shopping for a condo in Over-the-Rhine.
Her agent, Lee Robinson of Robinson Sotheby’s, sent a letter last week to owners of 45 condos that meet her criteria for a home in the $200,000s with secure, attached parking. So far, no luck.
“The Gateway Quarter is hot as a firecracker,” Robinson said.
As the spring home-buying season gets under way, agents are taking extra steps to find the perfect home for buyers in a market where desirable properties are in increasingly short supply.
It’s a marked turnaround from home-buying seasons of years past.
New reports out today will show 20 straight months of increased home sales in Greater Cincinnati and Northern Kentucky as buyers have returned to the market to take advantage of historically low interest rates.
The Cincinnati Area Board of Realtors will report a 14.8 percent increase in February sales compared with a year ago.
The Northern Kentucky Association of Realtors will report a 1.5 percent increase.
At the same time, active listings, or houses available for sale, are down 15.5 percent this month from March 2012 in Southwest Ohio. Active listings are down 10 percent in Northern Kentucky. And combined, they’re down by more than a third since peaking in 2008.
If the trend continues, experts say demand should start to push up home prices that have been falling for about five years.
That would go a long way toward encouraging more owners to sell, putting the housing market back on solid ground and giving traction to an overall economic comeback.
Getting creative for clients
The new market reality is that well-maintained homes that are priced right are going fast – and many are drawing multiple offers. The problem is that those properties aren’t plentiful.
“If you talk to agents, we have buyers in every price range where we’d love to see new inventory,” said Courtne Brass, a Coldwell Banker West Shell agent.
Two weeks ago, Brass sent 200 letters to several streets on the West Side where her buyers were seeking a home. She got responses from five property owners – one of which might be a match. The mailings aren’t a new strategy for veteran agents, but Brass estimates she hasn’t done one in more than five years. “I haven’t needed to,” she said.
Keller Williams agent Molly Reidel is trying a slightly different approach. She recently sent a family information on houses in their price range that had been listed, then taken off the market, last year in Anderson and Newtown. The clients viewed and made an offer on a house, but the sides were unable to reach agreement on price, Reidel said.
Agents are also returning to tried-and-true tactics such as networking with one another to give their clients an edge. John Lorms, an agent with Re/Max Affiliated in Northern Kentucky, previews and takes buyers through upcoming listings of several agents before the houses go into the Multiple Listing Service.
Agents also share information on “pocket listings,” properties that are for sale but that the sellers don’t want listed in MLS.
Still reluctant to sell
Still, locally and nationally, buyers are running up against a scarcity of properties to choose from. The shortage is greater in Southwest Ohio than in Northern Kentucky, with some exceptions.
Nelson Rennekamp, head of the Northern Kentucky group, said he’s seeing pockets there with more buyers than sellers, too.
The problem is worse in some other markets: The National Association of Realtors, which releases February numbers today, reported inventory down 25 percent nationally in January compared with a year ago.
The glut of foreclosures has finally funneled through the market, both locally and nationally. At the peak in 2008, the region had nearly 19,000 active listings, but many were distressed properties, and the bulk have now sold. Today, there are 12,391 listings.
Also, many would-be sellers simply gave up because prices fell so low.
Teresa and Tony Bir tried to sell their million-dollar home in Boone County’s Triple Crown in 2008 to move closer to their sons’ parochial schools. Those who looked at it wanted to pay half price, so they quickly pulled it off the market, Teresa Bir said.
The Birs have been reluctant to list again, knowing they’re still not going to get the price they paid when their home was built in 2006. However, they have been encouraged by the steady sales in Triple Crown in the past few months, so they’re thinking about giving it another try.
“Houses are selling for prices that maybe aren’t 2006 prices, but at least they’re not 2008,” Bir said.
“We’re going to list it in the high $800,000s, and then hopefully we’ll recoup that on the purchase.”
In fact, prices haven’t budged much: While Southwest Ohio saw a 3 percent increase in the average price in 2012, to $156,000, Northern Kentucky saw a 1 percent drop, to $145,000. February numbers are more promising in Northern Kentucky, Rennekamp said, with a 7.5 percent price increase.
“You would logically say values should be jumping up, but we’re seeing a slight uptick – not what you would expect,” said Kevin Kelly, president of the Cincinnati Area Board of Realtors.
Both he and Rennekamp expect prices to show more improvement by year’s end.
Increasing prices could help the quarter of all Greater Cincinnati owners who still owe more on their homes that they’re worth.
And Realtors think sellers eventually will see that the market is tilting in their favor.
“If potential sellers knew there was such a demand for houses right now they would be more likely to list,” Brass said.
“The perception is they’re going to have to take such a loss that they don’t want to list.”