Low Inventory, Multiple Offers: Housing & Mortgage Roundtable Preview

CANFIELD, Ohio — Lack of inventory remains a significant issue for the local real estate market, one that some participants in a recent Business Journal roundtable say is partially tied to the last economic recession.

The Business Journal invited real estate and mortgage professionals to participate in the event, which was held May 16 at at the Courtyard by Marriott here.

The participants were Samantha Aldish, an agent with Keller Williams Chervenic Realty; Don Fatobene, mortgage sales manager at Farmers National Bank; Rob Kelly, mortgage loan officer and sales manager at Consumers National Bank; Jenna Koontz, an agent with Howard Hanna Real Estate Services; Marlin Palich, general manager and principal broker for Berkshire Hathaway HomeServices Stouffer Realty; Holly Ritchie, an agent at Keller Williams Chervenic Realty; Janeen Shackelford, an agent at Brokers Realty Group; and Michael Stevens, co-owner of Coldwell Banker – EvenBay Real Estate and president of the Youngstown Columbiana Association of Realtors.

“We’re in a healthy market overall,” Kelly says. “Inventory’s the issue here.” 

Regardless of whether houses are listed at $100,000 or $450,000, they are receiving multiple offers – offers above the asking price and lasting just three days on the market, Ritchie says.

“We’re seeing multiples on all levels, no matter what the price point is,” Aldish affirms.

“We’re still dealing with a global supply and demand issue,” Stevens says, echoing sentiments expressed by several of his colleagues.

According to Koontz, the absorption rate in Mahoning County is just over a month’s supply. “So it’s still definitely a seller’s market, across all price points,” she says.

“There are quite a few borrowers out there,” Fatobene says. “It’s just a matter of them finding something to buy.”

One of the factors driving people into the house-buying market is rising rents. “I’m seeing more renters looking for properties because they’re tired of rates going higher,” Shackelford says. 

Among the cash buyers Aldish sees are senior citizens who had downsized previously and rented for a time. Also, while young people are moving out of the state for jobs, middle-age people with families in the area are returning.

“I’ve had quite a few people coming back from Florida,” she says.

“Family has been probably one of the largest driving forces when you see people relocating back here,” Stevens says. “They want to be closer to Mom and Dad.”

Ritchie says she had several families during the COVID-19 pandemic that sought a larger house because their kids moved back home after losing their jobs. Now those kids have moved back out, and they are stuck with a larger house but don’t have another place to go if they sell their current one.

“Every single lower-priced home that I’ve sold goes into multiple offers,” Ritchie says.”

Local properties also are attracting attention from out-of-town buyers, both those who want to live in them and investors looking to rent them. Some are drawn to the low cost of living here compared with other areas, Shackelford says.  

Koontz points to another factor in the low inventory locally: a lack of new construction over the past 15 years since the Great Recession. Interest rates bottomed out during the pandemic and spurred people to buy houses because money was cheap. That created “a ton of buyers,” but the inventory “was never there to begin with,” she says.

“There was a lot of new construction” before 2008, but when the economic crash hit, that “almost came to a halt,” Palich says. Developers used to be willing to build more units on spec. “We really don’t have that anymore,” he says. 

“We do have some construction going on, but it is limited,” Kelly says.

Before the COVID-19 pandemic, the economy was robust and unemployment was at an all-time low, helping spur the real estate market. Now people don’t want to leave houses that they bought on loans at a 2.5% interest rate to buy a property at a 6% rate or higher. Many baby boomers have decided to remain where they are until the economy settles down.

The cost of new construction is pricing people out of the newly built market as well, Fatobene says. In addition to interest rates, inflation is driving up the cost of construction materials in recent years, in part to supply chain issues exposed during the pandemic.   

One of the changes Stevens points to in recent years is a shift in buyer attitudes. Where five years ago they wanted turnkey properties, the lack of inventory has led them to consider options where they might need to do more work on the house.

Additionally, the inventory shortage also has spurred buyers to reconsider properties in the Mahoning Valley’s two core cities, Warren and Youngstown, putting upward pressure on those prices as well.

Financing some of the inner-city homes can be a struggle, particularly when owned by “an older family” for a long period and the condition of the house is “tough,” as Fatobene puts it.

The full roundtable transcript will be published in the MidJune 2023 print and online editions of The Business Journal. The video recording also will be posted with segments distributed on multiple news platforms.

Pictured at top: From left are Michael Stevens, Don Fatobene, Samantha Aldish and Jenna Koontz.

Copyright 2024 The Business Journal, Youngstown, Ohio.