CANFIELD, Ohio – Home values are increasing in the Mahoning Valley more than elsewhere, but there are some concerns holding the market back.
The Business Journal asked local experts about the market at the Housing and Mortgage Rates Roundtable, sponsored by Advanced Technology Partners, on Oct. 28 at Courtyard by Marriott.
Panelists included Trisha Howe, executive officer of the Home Builders Association of Mahoning Valley; Alex Micco, real estate agent at Keller Williams Chervenic Realty; Marlin Palich, general manager/principal broker at Berkshire Hathaway HomeServices Stouffer Realty and president of the Ohio Real Estate Commission; Sue Filipovich, broker at Burgan Real Estate; Michael Stevens, owner of Coldwell Banker EvenBay Real Estate; Anthony Lucarelli, senior vice president, director of mortgage sales at Farmers National Bank; Rocky Page, mortgage sales manager for the northeast region at Consumers Bank; Michael Kurish, president and CEO of the Associated School Employees Credit Union; Johna Scherzer, vice president of lending at 717 Credit Union; and Lewis Voisey, senior vice president, east region mortgage sales manager at WesBanco Bank.
Filipovich said while a balanced market between buyers and sellers is six months of inventory, this region remains a seller’s market, with about 3.6 months of inventory. However, Filipovich said the inventory lasted only three or four weeks only two years ago, with houses selling really fast.
“So it has balanced that way, but we need to work on affordability and … the new construction end of it with construction costs,” Filipovich said.
Palich suggested that while inventory levels are improving, he would like to see more homes on the market of certain types, like those affordable to first-time homebuyers.
Lucarelli said would-be first-time homebuyers are being squeezed because the cost of homes is increasing, and so are rental prices.
Micco agreed that he would like to see more inventory for first-time homebuyers, but he said in this region, home markets are more affordable than the rest of the country.
“Affordability is key,” Scherzer said. “We have so many people that are coming into the housing market that we do need housing stock to fit their needs. They’re not looking for a huge house. They’re not looking for a $400,000 house.”
Between a mortgage, downpayment, insurance, taxes and interest, Scherzer said there is little left to make improvements that first-time homebuyers want to make.
Filipovich agreed that most of the entry-level homes under $200,000 were built in the 1960s and need a furnace or a roof, which might not be in the first-timer budget.
“Yes, the price point might be affordable, but the improvements might not be,” Filipovich said.
“How do we address the ability for [first-time homebuyers] to afford the payment,” Voisey asked? “And how do we create programs and opportunities to be able to fill that gap of lack of down payment and closing costs that I think are critical for us as an industry to close that gap?”
With new homes costing $400,000 and many Mahoning Valley homes being built in the 1960s or earlier, Kurish suggested that perhaps new homes should be built to adjust for the salaries and smaller families of today.
“Many of the homes are larger than what many buyers need,” Kurish said. “A lot of homebuyers today are in the two to three individuals within a family unit, and they don’t need the homes that were built for five and six or more people.”
Howe agreed that many first-time homebuyers don’t want to remodel, because of their tight budget, and want new construction. But they also don’t want to go over $150 per square foot to build. She suggested the keys are working with builders and developers and having places to build where the infrastructure is already there.
Palich noted that more local baby boomers might consider moving and freeing up some quality housing stock if they could find a place to go, like a condominium or villa.
“We don’t have them,” Palich said. “And again, they would be giving up their houses, and a lot of them are in good shape. They’ve kept them up. But they have nowhere to go.”
Lucarelli added that post-pandemic, there were 50 houses on the market that fit a buyer’s wants and needs, but buyers never got to see them because they left the market so fast, which may have led to a “little bit of buyer fatigue.”
Interest Rates and Optimism
One of the factors that could help improve activity, according to Lucarelli, is mortgage rates. He said mortgage professionals are predicting that rates nationwide could dip below 6% by the end of next year.
“And I think that’s where my optimism lies,” Lucarelli said. “I think if this thing goes below 6%, it really starts to spur activity.”
Kurish added that he has credit union members who refinanced in 2021 and got a 3% interest rate.
“They’re very prideful in the fact that they got those rates, and they act like they’re not going to surrender those rates,” he said.
Most of the panel agreed that 3% rates are probably not returning and 6% is not high historically. Palich said he once sold a house with a 21% interest rate.
“I think we’ve got to get away from saying ‘that high rate of 6%’ – I mean, since it’s still a very good interest rate, really,” Page said.
Palich added that if someone finds the house they are looking for, they should buy it. And should interest rates drop, they can always refinance it.
“There’s an increase in the use of adjustable rates,” Scherzer said. “That optimism in the market is making consumers say, ‘This isn’t my forever rate. … I can go now, get the house I want, the price point I want and then be able to have that rate adjusted for me.’”
Stevens said there is optimism throughout the region, not just in the housing market but with the local economy and the people who could come and fill new jobs, especially in Trumbull County.
“If we have the potential growth around here that we’re talking about, then yes, we may be facing a housing crisis,” Stevens added. “I think you hear national stories [about] what the real estate market does, but I think we’re very unique.”
More from the roundtable will be available in The Business Journal’s upcoming December issue and at BusinessJournalDaily.com.
Pictured at top: In the front row, from left, are Sue Filipovich, Trisha Howe and Johna Scherzer. In the back row, from left, are Michael Stevens, Michael Kurish, Marlin Palich, Anthony Lucarelli, Rocky Page, Alex Micco and Lew Voisey.