Pushed by the federal tax credit, home buyers got off the fence to purchase homes earlier than they would have usually, but in Ohio the expiration of the tax credit may be having a huge impact on Ohio housing markets. The tax credit, intended to some how push the housing market into a recovery has triggered a set-back in much of the state, and may have done more damage than good.
Summertime is usually the home buying season in Ohio because of its cold winter months, but home sales plummeted after the expiration of the tax credit and don’t appear to be making any sort of recovery any time soon. Homeowners thinking about making another home purchase are often stranded in negative equity positions, unable to make a move. Despite record low mortgage rates any sort of recovery in sales is being dwarfed by the troubled economy.
Home prices were rocketing in Cleveland before sales slowed and showed all the signs of sustaining a strong recovery, but with the drop in sales any substantial appreciation for the year will be lost over the remainder of the year as banks slash selling prices on foreclosures. Housing prices got so low in Cleveland many buyers thought they couldn’t get any lower.
However, foreclosures and high joblessness trouble Cleveland, which is projected to see a rise in foreclosures over the remainder of the year. Cleveland should see only nominal housing appreciation as a result for the year, and has been re-assessed to appreciate just 2.1% in 2010.
Unemployment hovering in the 10% range also plagues Columbus, the state’s largest urban area, where the foreclosure rate hasn’t been as high as Cleveland. But the market is anything but strong in Columbus as more homeowners are unable to afford higher priced mortgage payments and walk away from their homes in rising numbers. The pain of the collapse in housing is all too evident in Columbus, which is forecast to appreciate just 1.7% for the year.
The housing market in Cincinnati appeared to be making a turn for the better even before the federal tax credit was applied, but a tough economic environment damaged by the lack of bank lending to businesses and home buyers is troubling the region. A projected increase in foreclosures and bank assisted short sales will hamper a recovery during the rest of the year.
The move into a more stable economic environment will be delayed until more people go back to work in Cincy as the long haul through economic hard times lingers. Home prices are forecast to decline over the remainder of the year and drop an average of 2.9% in 2010.
Toledo has suffered through the ups and downs of economic cycles, and perhaps more than any where else these days in Ohio is impacted by the decline of jobs in the auto industry. A troubled economic climate clouds its future, resulting in slower home sales. Toledo is forecast to see average home prices down by 2.8% for the year.
Dayton’s market has also been tied to the auto making industry. An increase in more job re-hires should aid the area’s economy over time, but lower home prices are projected for the rest of the year with average deflation of 2.4%.