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Confusing Market!

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Paul George,

Confusing Market!

I’m not an economist.  I’m not a financial advisor.  I’m not a politician. I’m not a glass half full or glass half empty kinda guy.  I’m just a guy who sees what I see.

In today’s world there is plenty of information available and more opinions that we can take in. The information you consume could be influenced by your job, talk radio, your neighbors, parents of your kid’s friends, Facebook, Twitter, or just about anything that you gravitate too.  Most of the time you choose information sources that help you justify what you might already be thinking.

I will share my opinion based on what I’m seeing in our local real estate market.

First, I want to let you know what I see on a national level.  If we are not in a recession, we soon will be.  We all see the price of gas, the price of food, we see the lack of certain foods, and we see the shortage of certain items.  We see home prices going up like never before and we see the stock market jumping all around.  We see interest rates rising faster than ever.  We see divisions like never before.

Nationally, the housing market will slow down.  I do NOT think there will be a housing bust though.  The difference from the housing crash of 2008 is that we have full employment, so people are working and can afford homes (for now), but we do have a supply problem.

While nationally we will see a slowdown, locally we will see much less of a one.  It’s simply supply and demand.  Columbus is one of the fastest growing cities in the Midwest.  Locally, we have a lot going for us and more locally, in Delaware County, we have exponentially more going for us.  Homebuyers are flocking to our area because of great schools, diverse populations, access to employment and a myriad of other reasons you already know.  Now we have Intel and its suppliers coming to the area.

We have a housing problem here.  The current market is squeezing out homebuyers looking to spend under $300,000 because of climbing interest rates, supply shortages and overreaching zoning regulations.  Builders cannot build affordable homes with regulations currently in place.  NIMBY (Not in my back yard) does not make it possible for builders to build for less than $500,000.  We are losing to sister cities like Indianapolis, Austin Texas, and Raleigh North Carolina who have more common sense zoning regulations. 

So, when you have a short supply of homes, a growing population, and incoming businesses increasing job growth for the next 30 years, supply and demand says home prices will still increase, even during a recession.  That is what is confusing.  There is a bad economy elsewhere but locally we will be doing pretty well. There will be some headwinds, but overall, we will be in great shape compared to other cities.  We will have issues, but nothing we cannot overcome.  Because of the growth and viability of the area, our issues will not be a downturn; our issues will be how to handle all the great growth we will see for the next 30 years.

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