CLEVELAND, Ohio — Home sales are up in Cuyahoga County as the coronavirus pandemic and the corresponding recession continues to rage, with buyers saying they endure fierce bidding wars to get the house of their dreams.
Houses that may take a few weeks or months to sell are now going within hours, Realtors say.
Kelsey Smigel lives in an apartment in Pinecrest in Orange Village and started looking for a house with her fiancé in recent months. Some homes sell so fast that people like Smigel have lost out simply because they hadn’t yet made it to their scheduled showings.
“Just last weekend, we went to an open house,” she said in an interview last week. “As we were walking in, they said they went under contract a half an hour before.”
Home sales in the county were higher in July than the same month last year, according to statistics from the Northeast Ohio regional listing service Yes-MLS. Last month saw 1,776 homes sold, while July 2019 saw 1,612, an increase of more than 10%. The sales in July are also up from June, which saw 1,521 sales.
All of this comes amid a pandemic, which put millions of people out of work. While overall home sales are still down in the county from last year, that may not last for long if such a surge continues.
Rocky River Realtor Elcin Riza said she saw the demand go up in the past six weeks. It’s been an “amazing” market, she explained, though people in the industry said it’s unclear how long such a burst of activity will last.
However, the county isn’t the only place seeing the increase, and other areas are seeing even more significant boosts. The National Association of Realtors reported a 24.7% increase in existing home sales nationwide in July from June.
That is also 8.7% higher than July 2019, according to the organization. Houses were typically on the market for 22 days, down from 24 in June and 29 from the same month last year.
Realtors said the coronavirus is affecting home purchases in myriad ways. For one, the recession that followed the pandemic led the Federal Reserve to slash interest rates to their lowest rates in a half-century.
It also has people thinking about having more space, either because they are working from home or trying to still see friends and family while social distancing.
“I think things have just changed for people,” Cleveland Realtor David Sharkey said. “What they were normally doing they’re not doing anymore. They’re thinking in those terms…(for) how they work and how they play.”
People are thinking, “if this is going to last, we need to be prepared for this,” Sharkey said.
Riza also said she sees more people moving because it’s easier to move now and that some families don’t stay in houses as long as they once did.
All of those factors, combined with too few houses going on the market and a low number of new houses under construction, has caused homes to go quickly. It also means that people are paying more than the list price.
“My fear is that these buyers who are paying $15,000, $30,000 over asking (price) because they’re in a bidding war with 14 other people,” said Judy Gorbett Darwal, the owner of RE/MAX Trinity in Brecksville and the past president of the Akron Cleveland Association of Realtors. “In three years, if they want to sell, they’ll have no equity left, and they’re walking away.”
Realtors said the competition is fierce in many of the suburbs that homebuyers would expect. Rocky River and Solon, both known for their well-ranked school districts, remain competitive, as does the inner-ring suburb Lakewood. Specific neighborhoods in Cleveland, such as Ohio City, Tremont and West Park also garner interest.
But now, other inner-ring suburbs such as Parma, Garfield Heights and Maple Heights are seeing increased interest among buyers, if only because they are more affordable.
During the 2008 recession, home values in Parma dropped by about half, Gorbett Darwal said, and sellers were lucky to get $50,000. Now, she said, some houses are selling for $170,000, she said.
Sharkey agreed.
“Places that had fairly weak markets, they’re not weak anymore,” he said. “Markets that had been popular, it’s just even worse than it was before.”
That’s what happened to Rose Oleksiak, a client of Gorbett Darwal’s who recently moved to a condo in the Akron suburb of Macedonia with her husband to be closer to her children and grandchildren.
Oleksiak said she experienced a lot of heartbreak when she searched over the past two years, as buyers snatched up homes quickly. She and her husband finally moved a month ago.
When she listed her house in Parma a couple of months ago, 20 people scheduled showings, and four people submitted offers within a day. It was soon under contract for higher than the list price.
“I still wouldn’t believe it myself until I got the money in the bank, because it’s too good to be true,” Oleksiak said.
Realtors said they are preparing clients on both sides for quick transactions. Sharkey tells clients that they must prepare to immediately to make an offer if they like a house.
Gorbett Darwal advises clients not to buy houses that have been on the market for fewer than seven days, lest they run the risk of overpaying. Reza tells them to try and get the best feel possible when touring a house so they can quickly make an offer. She said to take another opportunity to do so during the inspection.
Inevitably, though, there are winners and losers when so many people look to buy the same house, and that has left prospective homeowners feeling stuck.
Smigel, looking to move to either Brecksville or Hudson, said she and her fiancé have looked for about eight months. They put in offers on four or five houses. No luck.
She said they know they had to be patient but that the search has lasted longer than expected. The hope was to find a place by the time their apartment lease expired in June.
Now, they’re going month to month, and the 27-year-old said she frequently checks multiple listing sites such as Homesnap, Zillow and Redfin. Smigel, another client of Gorbett Darwal’s, learned which sites list houses faster than others because timing is everything.
“We’re going to just keep looking and hopefully something comes up,” Smigel said. “If you don’t look at a house the day it hits the market you don’t have a chance.”
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August 31, 2020 at 09:00PM
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Low-interest rates, coronavirus pandemic result in explosion of home sales in Cuyahoga County - cleveland.com
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