'Hottest market ever' spells unprecedented home sales, bidding wars

Unprecedented bidding wars and skyrocketing prices have local real estate professionals calling this year "the hottest market ever." "It really is hard to refer to it in another way," said Medina County Auditor Mike Kovack, whose office has recorded 2,463 home sales in 2021 totaling $337,318,436. "Saying it's the hottest market ever is looking back at the run-up to the Great Recession," he said. "This right now is a hotter seller's market. It's reflecting around the region, the state, and the country. It's like nothing else I've seen in my lifetime. Even throwing in inflation you didn't get anywhere near the prices we're seeing right now either." The median price for existing single-family homes nationwide is at a record high of $335,000, according to the National Association of Realtors. Medina County recorded 3,362 home sales throughout the entirety of 2020 compared with a pace this year that could exceed 5,000. Auditor's documents also show a consistent trend of buyers paying significantly more than listing prices and official valuation. Real estate professionals in Medina County say those higher, and still climbing, final sale prices often come after bidding wars the likes of which they've never seen. "The bidding wars are rough and we've had a lot of very discouraged buyers," said Quinn Johnston of Brunswick's LoFaso Real Estate Services. "The only way to win in multiple offer situations right now is for the buyers to ask for absolutely nothing. You can't ask for closing assistance. You have to work with whatever the seller wants. The buyers are accepting the cards they're handed and hoping for the best. "I've written 10 offers for the same couple and all of them were above asking price. It really is just insane," she added. Home sales authorities considered last summer and fall to be a boom in relation to very recent years, with the National Association of Realtors (NASR) recording 5.6 million single-family home sales in 2020. That was more than any other year since the housing market crash of 2008. NASR is also projecting single-family home prices to go up by 9 percent this year, a large jump from typical three to five percent growth and far above general wage increases. "I would absolutely say this is the hottest market ever," said Leslie Burns of Medina's M.C. Real Estate. "I put in an offer last night $30,000 over the list price. We were waiting to hear back to see if we got it. To even be in the running we had to offer a rent-back to the seller and cover the difference if the house doesn't appraise. It's crazy, just crazy." Many experts point to COVID-19-related factors such as working from home and remote learning as playing a hand in increased housing demand. Data also shows that the pandemic has led to many working professionals now having more money to spend on a down payment, somewhat due to not using those funds for typical expenses last year. Coupled with historically low mortgage interest rates, the past 15 months has encouraged many Americans to try their luck at buying a house. Kathy Dunlap, a Medina Realtor for almost 30 years currently working for Russell Real Estate Services, said everyone is pretty much at buyers' mercy. "Realistically, the houses themselves haven't gone up in price it's the demand that's gone up so far," she said. "There will be more homes coming on the market as we get closer to school being out. I'm doing a lot of counseling for folks. That's increased with folks just not knowing where to start. As the buyer you have to really hustle and do your homework way in advance." "I've sold all my listings and I have three more coming up between now and June 1," Dunlap added. "It's been very busy, to say the least." Sheila Watson of Brunswick's RE/MAX Omega real estate agency cited another pattern seen locally and nationally; older residents more hesitant to leave their homes for retirement communities, leaving more houses off the market and further driving up demand. "Our senior citizens are holding onto their houses," she said. "They're thinking if we go into another shutdown, which we hope we don't, how am I living my life? Where do I want to be if that happens? Older people who usually go into assisted living aren't doing that. If this happens again, they're thinking about not being able to get to their family." "A lot of households are combining generations," Watson added. "It's happened with the kids moving back in with the parents and vice versa." Outlets including the New York Times and Wall Street Journal reported recently that investor interest for renting out single-family homes is also at an all-time peak. Housing advocates have pointed out that continuing this pattern in combination with aforementioned factors could lead to significantly fewer first-time home buyers being able to enter the market. "We had an employee who was trying to move down to the Columbus area and I know she's had a very difficult experience," Kovack said. "Homes were selling before they hit the market. They were selling before the asking price. I don't think there's any question that middle income earners and lower income earners are having a very hard time in this market. It's just so ultra-competitive right now." "People are coming in with the cash and willing to pay more," he added. "It's without question a very difficult market for moderate income folks." Heavy recent investment in U.S. housing has come from individuals, domestic hedge funds, and even foreign governments, according to the Wall Street Journal. Roughly one quarter of 2020 home sales recorded by the Medina County Auditor's Office were marked as not owner occupied. Kovack said he considered that high but does not think current numbers show national investment trends manifesting locally. Watson and all realtors contacted for this article said many moderate- to middle-income earners have walked away frustrated from the home buying process. "They're saying they give up after they've made five offers," she said. "They're staying where they're at, to do another year's rent. You have to have a big down payment or cash right now. I can't believe how many cash buyers are out there right now. The home inspectors are down in their business because offers are being put in without an inspection. It's gotten to that point. That's scary but they're doing it." Contact reporter Jonathan Delozier at (330) 21-4050 or jdelozier@medina-gazette.com.