As a result, Warren County Auditor Matt Nolan is expecting his county’s housing market to continually change more than it already has. Nolan said Warren County properties are beginning to sit on the market for longer than they had when interest rates were low and the seller’s market was booming.
“For a while there, [prospective home buyers] would have to bid on a property, pay above list price, and there would be 15 people bidding on it,” Nolan said. “That’s not happening right now. Houses are sitting on the market again for a little longer, people are looking at them closer.”
As all county auditors do, Nolan’s office uses conveyances — the actual physical transfer of the property’s title — to track home sales. Nolan said title companies take an average of 30 to 60 days to get the conveyance to the auditor’s office, causing a slight delay in the county’s ability to track home sales in real time.
But, Nolan said Warren County has yet to see major market ramifications of a rising interest rate — which could include decreasing values and much more infrequent property sales.
“We haven’t seen anything to show, one, less sales, or, two, that prices are actually decreasing,” Nolan said. “We’re just seeing a slow in the increase — right now.”
The way Nolan sees it, though, those larger ramifications are more-or-less inevitable if rates continue to rise.
“If interest rates keep going up like they are, it’s going to result in either sales stopping altogether or values starting to decrease,” Nolan said.
To put it plainly: “Doubling in interest rates in one year is going to generally cause sales to go down,” Nolan said. “We’re not seeing it yet, but we feel it’s likely coming here as this keeps going up.”
On the realtor’s side of the equation, the housing market in the region is showing bigger changes.
The merged Butler-Warren Association of Realtors and the Realtors Association of Greater Cincinnati (RAGC), which tracks housing market data across the region, published a release Monday detailing a substantial dip home sales have seen in Butler, Warren and Hamilton counties — to the tune of an overall 17.8% drop in sales and 18.9% fewer homes listed in a year over year comparison.
In early September, the average interest rate on a 30-year fixed-rate mortgage was 5.66%.
“After years of a booming housing market, higher mortgage rates have cut into buying. While sellers are hitting pause, buyers still on the market can expect less competition and slightly lower prices this fall,” said Kay Edwards, president of RAGC.
Nolan said that, if interest rates continue to climb, more folks will be priced out of the chance to buy a home. If the market doesn’t have the buyers with current interest rates and prices, Nolan would expect home prices to eventually drop to entice more buyers.
“When most people buy a home, they buy it with a per month payment in mind — ‘I can pay $700 a month,’” Nolan said. “So, if the interest rate goes up this much, that increases their monthly payment, and it’s going to decrease the value of homes.”
Additional year over year data requested from RAGC shows comparable stories for the housing markets in Butler and Warren Counties.
In Warren County in Sept. 2022, home prices dropped 2.5% compared to Sept. 2021, while 32.2% fewer homes were listed in the county compared to the same period a year prior.
In Butler County, home prices actually increased by 5.7% compared to Sept. 2021, while 15.8% fewer homes were listed compared to the same period a year prior.
In both counties, homes sat on the market for 66.6% longer than they did a year ago. Granted, homes in both counties are staying on the market for just 5 days, on average.
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