LIMA — Home prices in the Lima region continued to rise in May despite a 24.1% decline in the numbers of homes sold over the previous year.
The average sale price in May rose to $147,141, a 16.8% increase over May 2019, according to the Ohio Association of Realtors’ monthly report.
However, 53 fewer homes were sold in May 2020 compared to a year ago.
Why are home prices rising when unemployment is so high?
John Navin, a professor and dean of the Dicke College of Business Administration at Ohio Northern University, suggested that many would-be sellers are choosing not to list their homes right now, given concerns about Covid-19 and an uncertain economy.
“If people aren’t putting their houses on the market, you’re going to have a lot of demand and limited supply,” he said.
While Navin said he expected demand to slack a bit more than it has, given the economic uncertainty that comes with the coronavirus pandemic, there appears to be a large enough group with sufficient disposable income and mobility to keep buying homes.
By the end of May, the National Association of Realtors found that housing inventory nationwide was down 18.8% over the previous year.
“Sales completed in May reflect contract signings in March and April – during the strictest times of the pandemic lockdown and hence the cyclical low point,” Lawrence Yun, chief economist for the National Association of Realtors, said in a statement Monday. “Home sales will surely rise in the upcoming months with the economy reopening and could even surpass one-year-ago figures in the second half of the year.”
Ohio Realtors President Chris Reese on Monday said record-low mortgages rates, which he anticipates will remain low through the end of 2020, will help drive housing demand as the economy reopens.
But Navin said he expects many homeowners will use the opportunity to refinance their mortgage, as some families are still uncertain about moving.