Banking & Finance

Amid Tight Housing Market, Buyers Want More

YOUNGSTOWN, Ohio – Houses in the upper end of the real estate market are selling, but they need to be updated and ready for the new owners to move in immediately.

“We don’t have enough inventory, and if it’s even just a little overpriced and in a desirable location, it’s going to sell,” says Alicia Kosec, northeastern regional vice president for Howard Hanna Real Estate.

Kosec, who oversees 10 Howard Hanna offices including Poland, Canfield and Howland, was one of several area real estate professionals interviewed for this story. Others are representatives of Real Living Brokers Realty Group; Burgan Real Estate; Northwood Realty Group; Keller Williams Chervenic; and Gallagher, Clark & Carney Realty Group.

Low inventory is driving demand in most areas, the professionals largely agree, although what buyers want isn’t always on the market. And particularly in the higher end, it has to be close to meeting their specifications.

High-end houses, as defined by the agents, means a value of at least $250,000 but that often ranges much higher.

Getting Buyers Is Easy Part
Buyers’ first concern is location and the school system, Kosec says.

“We see big demand for one-story homes, ranch homes – young, old. It doesn’t matter,” she continues.

Buyers are also looking for first-floor master bedrooms and laundry rooms as well as attached garages – room for three cars is mandatory in the higher-price ranges, she says.

“In the higher-price points, they want a lot of light and an open floor plan” as well as high ceilings, she continues. Carpet is no longer popular. Buyers want either hardwood or tile because of their durability.

Getting buyers is the easy part, she says. Everything that follows, such as securing appraisals, inspections and dealing with lenders, is where buyers are encountering issues.

‘No Inventory’ in Some Markets
We’re seeing crazy, very low inventory, particularly in the $300,000 to $350,000 range,” says Yvonne Smith, broker-owner of Real Living Brokers Realty Group, Howland. A recent $200,000 property had six showings its first day on the market and the owners got four offers.

In this area, houses above $300,000 are considered upscale, as are condominiums above $200,000, Smith says. Houses in the neighborhood of $300,000 are in the “sweet spot” but the market tightens once the price surpasses $500,000.

Smith says her firm is doing a lot of business in Howland, including new construction that tends to be presold. “We could do more business in Austintown and Canfield but there’s no inventory,” she laments.

‘A Good Time to Sell’
Based on how fast houses in the $400,000 price range are selling right now, there’s enough inventory to last about 17 months, says Sue Filipovich, broker with Burgan Real Estate, Boardman. Most houses in that category lie in Canfield, Poland, Howland and Boardman.

“It is definitely a good time to sell,” Filipovich says. Even in the upscale range, sellers are getting close to their asking prices, she relates, and properties in excellent condition can command a little more. Updates are critical in the higher end of the residential market as well, Filipovich says.

“Most buyers are looking for updated kitchens and updated bathrooms,” she says. In kitchens, buyers are seeking granite or high-end laminate countertops and hardwood or wood-like flooring. In bathrooms, they are looking for modern fixtures and walk-in showers.

“A lot of buyers are looking for more of an outdoor experience as well,” she continues. “Being able to carry that home experience to the outdoors is important.”

Buyers Get Close to Asking Price
We don’t have a lot of new construction,” one reason for the shortage, affirms Marlin Palich, Ohio general division manager for Northwood Realty Services.

The upscale market is very good, among the best he has seen in his 39 years in real estate, Palich says.

Mahoning and Columbiana counties are doing very well, while Trumbull County is slower compared to the other two, he reports.

Activity in Mahoning County centers around Canfield, Boardman and Poland as well as rural areas such as Ellsworth that have more land. In Columbiana, sought-after areas include the cities of Columbiana and Salem. “In Trumbull County, you’re probably looking at the Howland-Bazetta-Cortland marketplace,” he says.

Sellers are receiving offers close to their asking price and many properties are receiving multiple offers, Palich says.

In urban areas, upscale interest tends to focus on development communities, he says. In rural areas, buyers look more at acreage but interest “always focuses on the home,” he says.

Within houses, kitchens are “always a focus,” Palich agrees.

Beyond that room, buyers are looking for three-car garages and master suites with updated en suite such as a separate shower or jetted tub.

‘Soft Market’ in Sharon Area
In Mercer County, Pa., the market for upscale homes has been “pretty soft” the past two years, says Nancy Schlegel, sales director at Northwood’s Hermitage office.

“We’ve got an overabundance of upscale homes,” she says. “A lot of the homes they’re looking for and we don’t have are upscale ranch homes.”

Schlegel says her office only has a few houses under contract in the $300,000 range and 24 active listings.

She attributes softness in the market to downsizing at Sharon Regional Health System under previous owner Community Health Systems Inc. Under CHS, several doctors moved out of the area, she says. Now that Steward Health Care System has purchased Sharon Regional, she expects to see more activity as doctors return.

Among the features prospective buyers look for are outdoor kitchens and patios. “They want extensive landscaping with outdoor lighting and fire pits built in,” Schlegel says.

Preferring to Build ‘Dream Home’
Holly Ritchie, a partner in Keller Williams Chervenic, says the high-end market is tough because of new-house construction in that segment.

“There’s so many people who want to build their dream home. They don’t want to buy resale,” she says.

For the most part, a house in the $200,000-to-$400,000 range in the tri-county area will get two or more offers, she says. A house she had listed at $225,000 recently had 13 showings and four offers in six days, she says.

“When the supply is low and the demand is high, that’s great,” she says. “It’s a great time to sell your home.”

Ritchie also saw strong interest in a $1 million property in Liberty. Several prospective buyers were interested.

“We listed it the first of April and it was under contract in 14 days,” she says. “If it’s a perfect property and in neat, clean condition, the properties will sell.” In this range, they also need to be in move-in condition, she notes.

“[Buyers] expect all the upgrades. It’s not that they want them – they expect them,” Ritchie says. “They expect perfection. They don’t mind paying for it but they want perfection.”

High-End Properties ‘Going Fast’
Proper pricing on the seller’s part is critical, says Sean Carney, partner in Gallager Clark & Carney Realty Group, Columbiana.

“If the house is priced right and its updated, then they’re getting asking price – and sometimes, on rare occasion, we’re seeing with more interest they’ll go a bit above,” Carney says. “If they’re priced too high to begin with, they’ll linger on the market for a while.”

New construction starts are the biggest change in the high-end segment. There are at least five projects launched in the last six months in Columbiana County that would be in the $400,000-plus range, he says.

“The big thing is how recently a house has been updated,” Carney stresses. “They [buyers] want newer hardwood already there. They want the newer appliances.”

In the high-end market, buyers “really want to do nothing but move in” and make minor changes.

Published by The Business Journal, Youngstown, Ohio.