County residents struggle to find houses to buy

Jun. 10—Summer is usually a good time to buy a house, but this year there's a chill in the air.

The national average 30-year fixed mortgage rate increased by 18 basis points in May — and another 22 basis points for the week ending June 1 — while pending home sales were flat and existing home sales sagged in April, according to Forbes magazine.

Though the median existing-home sales price lowered a bit for the third consecutive month, local experts don't expect substantial, nationwide price declines anytime soon.

Prices for homes remain high, creating affordability challenges for first-time homebuyers.

The housing shortage is not news to anyone who has recently looked into buying a home in Ashtabula County, according to Bruce Schlosser, a full-time real estate broker in Ashtabula.

There are usually about 600 single-family homes listed every month in Ashtabula County. In May, they had 118, he said.

Ashtabula City Manager Jim Timonere said the city has its share of affordable housing, much more than any other local community.

"There are ample opportunities and land in the county for new development or renovation of existing structures," he said. "Whether other communities want to admit it or not, I believe some have deterred this type of development, which has left little choice but the city. That needs to end."

Timonere believes there are many people who can afford higher home sale prices of $150,000 and above, but there's a lack of inventory.

"When they do come on, they do not last long on the market," he said. "I would point to the townhouses on Bridge Street, the housing development on the former Harbor High School property, where many of those houses are selling for more than $300,000."

Timonere believes the problem is getting developers to develop affordable housing and provide them the tools to do so, such as subsidies and tax abatements.

"The answer is we need more programming from the state and federal levels to assist, and we need other areas of the county to get involved and encourage this development so the city of Ashtabula doesn't continue to go at a county problem alone," he said.

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, Schlosser said.

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 home, and now the average interest on a 30-year fixed mortgage is 7 percent, according to bankrate.com.

"People are not selling right now, which is further limiting available-for-sale homes in today's market," Schlosser said.

In times like this, one would think builders would construct new homes to fill in the gap.

Schlosser said rising materials costs, supply chain issues and labor shortages have negatively impacted housing inventory.

It costs about $93 to $140 per square foot to build a house right now in Ohio. Builders would have to spend $185,000 to $280,000 to build a 2,000-square-foot home, according to houzeo.com.

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.

Some statistics:

—Average cost of a home in the city of Ashtabula — $148,000 compared to $170,000 in the county.

—In the city of Ashtabula, 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.

County Auditor David Thomas said, "This is a strange real estate market we're in right now. We see it all in our office, both the listed and not listed real estate transfers, which gives us a good insight on where things have moved over the last year."

The Auditor's Office transfers all property in Ashtabula County, including vacant land, commercial buildings, farms, and residential homes.

Total real estate transfers in 2022 topped 5,266 for the year — a decrease of 246 from the prior year's 5,512 property transfers. In 2020 there was a dip in total transfers to 4,976, possibly due to the pandemic, records show.

Thomas believes speculation that a real estate bubble will happen in the near future may not occur in Ashtabula County, or may not be as large, because of supply and demand.

"No one can predict the future," he said. "But based on these last few years we have seen a large increase in demand but the supply of properties has not followed that trend."