The 90-day average score on the Altos Research Market Conduct Index for the Toledo metropolitan area has fluctuated between 50 and 54 since early March. A score of 30 or higher is considered to indicate a seller's market.
According to Altos data, Toledo-area homes in the second-lowest quartile of the market (median price $199,900) have an average 90-day Market Action Index score of 84.44 and have been on the market for a median of 14 days. In contrast, homes in the top quartile of the market (median price $625,000) have a Market Action Index score of 35.9 and have been on the market for a median of 56 days.
Agents attribute the changing market conditions to the current interest rate environment.
“Properties under $300,000 or $350,000 are really doing well, but above that price range, I think interest rates are really impacting buyers in those price ranges,” said Eddie Campos, president of Northwest Ohio Realtors and associate with RE/MAX Preferred Associates.
“I showed a client a home that recently went on the market for $599,000. Buying that home today would mean a $1,400 difference in monthly mortgage payments compared to three years ago. That's a pretty big difference.”
Campos said he has seen an increase in the number of days on the market for higher-priced homes, as well as a trend of prices dropping for properties at the top of the market.
Mortgage rates appear to be a real issue for Fleischman's buyer clients when their homes need renovation.
“If you need repairs and you're paying high interest rates, it's out of your budget,” Fleischman says. “Today, many first-time homebuyers are only putting 3% or 5% down on an FHA loan, so they don't have the cash needed to make repairs and can't afford the monthly mortgage payments at high interest rates.”
Local real estate agents say they are still seeing bidding wars at the lower end of the market, but the multiple bid situation as of July 2024 lacks the fierce competition seen in pandemic-driven markets a few years ago. However, Fleischman noted that you still see the occasional escalation clause, inspection exemption clause and appraisal gap clause.
“We recently made an all-cash offer on a property that was $36,000 above list price, but the client lost out because it was a beautiful single-story brick home in a great location,” Fleischman says, “but of the multiple offers, the majority of bids are fixed-price offers with a 30-day closing date after closing.”
Local real estate agents say they are dealing with buyer fatigue as the market remains competitive, especially at the lower end of the market.
“There's definitely frustration,” Campos said. “Most of the people who write to us with offers are on their third, fourth or fifth offer.”
For Campos, the biggest challenge for buyers is the current inventory situation.
“There's a shortage of properties for sale, so there's still competition,” Campos said.
According to data from Altos Research, the 90-day average number of single-family listings in the Toledo metropolitan area was 613 as of July 5, up from 542 in early May. The number is down from 637 a year ago and 1,345 before the COVID-19 pandemic began.
But real estate agents say good news is on the way for disgruntled buyers.
“From an inventory standpoint, we're starting to see more homes coming on the market,” said Jim Geyer, broker and owner of ERA Geyer Nokes Real Estate Group in Findlay, Ohio. “It's going up slowly, it's not where we'd like to be, but it's improving.”
The 90-day average number of new single-family homes on the market in the Toledo area was 108 in early July, up from a record low of 72 recorded in late February.
While some would-be sellers with low mortgage rates are choosing to hang on and wait out the current interest rate environment, local real estate agents say interest rates are becoming a hurdle in getting properties on the market.
“I think people, by nature, get bored,” Fleischman said, “and they've been locked into that interest rate, and I think they're now realizing that interest rates aren't going to be that low again, so it's becoming a question of whether maintaining your interest rate is more important than having the backyard you want or having the lifestyle you want.”
“At the end of the day, there comes a time when everyone is willing to pay that price to get the home they want.”
Heading into the fall, real estate agents expect the Toledo market to remain relatively strong, but they're hoping buyers will have a little more breathing room.
“A home that's listed for $399,000 today might go up to $415,000, but I think a home that's listed for $415,000 in the fall is going to sell for that price, not $430,000,” Fleischman said. “I think buyers are going to have a chance to negotiate a little bit more, get an inspection and fight a little bit more.”
Real estate agents expect the upcoming presidential election to complicate things a bit, but they remain optimistic about the long-term future of Northwest Ohio's housing market.
“From an economic standpoint, in terms of jobs and so forth, we're doing pretty well,” Geyer said. “Our population is holding up, and the market challenge we're facing isn't a lack of buyers willing and able to buy. The issue is inventory. But we do have more sellers looking to put their homes on the market, and the more successful sales there are, the more sellers willing to put their homes on the market.”