Bruce Schlosser talks to city officials about local housing trends
Mar. 16—ASHTABULA — The housing shortage is not news to anyone who has looked to buy a home recently in Ashtabula County.
To address the situation, Bruce Schlosser, a full-time real estate broker in Ashtabula, spoke at City Council's Community Development Committee meeting Tuesday at the Municipal Building.
"When it comes to houses to buy [in Ashtabula County], we usually have about 600 single-family homes listed every month," he said. "Right now, we have 118."
According to the National Association of Realtors (NAR), the supply of homes for sale in the U.S. — typically measured in months of supply — reached a record low in January 2022. While that number has grown since, the supply is still not enough to meet the demand, he said.
The lack of inventory created what Schlosser called an "appraisal gap increase," meaning when a single-family home is appraised at $170,00, but sold for $210,000, the buyer has to come up with the difference.
"The buyer had to come to the table with cash [to make up the difference]," he said.
Recently, with inflation and the increase in interest rates, houses are not quite as much in demand.
High mortgage rates are deterring homeowners from selling, for fear of giving up their locked-in low rates, he said.
Many Ashtabula County homeowners paid around 2.5 percent interest for their current home, and now the current average interest on a 30-year fixed mortgage is 6.9 percent, he said.
"People are not selling right now, which is further limiting available-for-sale homes in today's market," he said.
City Council President John Roskovics asked why builders are not constructing new homes to fill in the gap.
Schlosser cited rising materials costs, supply chain issues and labor shortages due to COVID, which have all negatively impacted housing inventory.
Building costs are at about $90 a square foot right now, he said.
The average sale price in the city of Ashtabula is $148,000, but to build a home would cost more than $200,000, he said.
"Help is needed for builders," he said, noting no one is buying land and constructing 10 homes on it right now. "Only owners are building their dream homes."
Schlosser hopes when about 70 new jobs are created at the Petmin pig iron plant, to soon be built in Ashtabula, that it will benefit the local housing market.
Some statistics:
—Average cost of a home in the city of Ashtabula — $148,000 compared to $170,000 in the county.
—In the city, only 49 percent of people own their home, while 72 percent own their home in the county.
"When you can't afford to buy, you rent and rent is escalating," he said. "The demand for rentals is extremely high in the city."
—Schlosser believes home values will continue to increase because demand is more than the supply.
Schlosser is a broker with BHHS in Ashtabula and Jefferson.
He manages 32 licensed realtors in the two offices, as well as provide listing and buying representation for his personal clients.
