Ohio Housing Market Forecast for 2013

According to Forbes Magazine, “The housing market will improve moderately in 2013”. This is not to say, however, that a real estate “boom” is expected; authors say that “gains in activity and prices will be a welcome relief, but will leave many homeowners still underwater”. The problem is that we still have an excess supply of homes, and not enough of a demand to fill them. Here is a breakdown of housing market predictions for 2013:

Housing Vacancy Rate:

  • Normal: 1.5%
  • Highest: 3%
  • Current: 2.1%

Rental Vacancy Rate:

  • Normal: 7-8%
  • Highest: 11%
  • Current: 8.6%

Even though we’ve reduced vacancy rates from the high, we still have too much supply for our current demand.

Construction:

  • 2011-2012: 600,000+ units
  • Highest: 2.5 million units (2005)
  • 2013: 750,000 units
  • Needed: 1.5 million per year

Forbes claims that “recent underbuilding has been the greatest aid to housing recovery”.

Trends:

  • Slowed population growth
  • Less migration from abroad
  • Lower birth rate
  • Fewer housing units per person
  • Adult children moving back into their parent’s houses
  • Slow improvement in job market

Housing Starts:
2012: 700,000
2013: 1,000,000+

Home Prices:

  • Average prices are rising about 5% per year
  • This may be too optimistic to expect for 2013
  • A 3% increase plus inflation is a more accurate estimate
  • Owning a home is cheaper than renting in many cities

For more information on 2013 housing market predictions, click here. 

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