You're watching Columbus home prices climb and wondering when they'll finally come back down. I get calls about this every single day from people like you who want to move here but are waiting for the market to cool off. Here's the reality: Columbus is one of the booming real estate markets in the United States right now, and the numbers tell a story that might not be what you want to hear.

As of June 2023, we're sitting at 1.2 months of inventory. That's it. When you compare that to the 6 months of supply that signals a balanced market, you can see we're nowhere close. The median home price hit $370,000 in June 2023, up $15,000 from the same month in 2022. Prices are still climbing, and with major employers pouring billions into the area, I don't see that changing anytime soon.

But here's the thing: there are pockets of opportunity right now, especially if you're looking above $500,000. Homes at that price point are sitting longer, which means you have room to negotiate seller concessions, closing cost coverage, or rate buydowns. I'll walk you through what's actually happening in the Columbus market, when prices might drop (spoiler: not soon), and where you can find leverage as a buyer today.

Table of Contents

• Columbus: Inventory Crisis and Rising Prices
• The $500k+ Opportunity: Where Buyers Have Negotiating Power
• Major Employers Fueling Long-Term Growth
• When Will Prices Actually Drop?
• Renting vs. Buying: The Real Cost of Waiting
• Which Strategy Makes Sense for Your Timeline

Columbus: Inventory Crisis and Rising Prices

The Columbus real estate market is running on fumes when it comes to inventory. According to the Columbus Board of Realtors, we only have 1.2 months of supply as of June 2023. What does that mean for you? It means there are way more buyers than homes for sale, and that imbalance drives prices up. Historically, 6 months of inventory is associated with moderate price appreciation. We're not even close to that.

The median home price in Columbus hit $370,000 in June 2023. That's $15,000 higher than June 2022. Home prices have appreciated year over year, and I expect that trend to continue even as interest rates climb into 2024. Most experts predict rates will start dropping next year, but until then, prices are still rising because buyers are tired of renting and willing to compete even at higher rates.

Right now is not the time you're going to walk in and get a fantastic deal on your dream home. There are other buyers in the market looking for the same thing you are, and competition is fierce. I lost on a million-dollar offer just last month. We went $100,000 over asking, waived the inspection, waived the appraisal, and we still lost. Even at the $1 million price point, it's highly competitive in good areas here in Central Ohio.

Why Inventory Stays This Low

We have a supply and demand problem, and supply isn't catching up anytime soon. Homeowners who locked in low interest rates a few years ago aren't selling because they don't want to trade a 3% mortgage for a 7% one. New construction can't keep pace with the number of people moving here. Until we solve that imbalance, prices aren't coming down.

The $500k+ Opportunity: Where Buyers Have Negotiating Power

Here's where things get interesting. Homes priced over $500,000 are sitting longer because interest rates are higher. Some buyers are willing to wait a little bit longer to buy that perfect home, especially if they're over that $500,000 mark. If you're shopping in that range, you have an opportunity right now that you won't have when rates drop.

When a home sits for 20 or 30 days, you can come in and negotiate seller concessions. You can have the seller cover your closing costs, or you can have the seller buy down your interest rate in the form of closing costs. This is a fantastic option that a lot of buyers are using right now because it's an opportunity you cannot get when interest rates are lower. When rates drop, there are going to be so many more buyers in the market, which will drive up competition. You as a home buyer would not have leverage or power. The seller will have all the power.

So if you're looking at homes above $500,000 and you see something that's been on the market for a few weeks, that's your chance to negotiate. Ask for rate buydowns, closing cost coverage, or other concessions that make the monthly payment more manageable. This window won't last forever.

Major Employers Fueling Long-Term Growth

Home prices are expected to go up in Columbus and Central Ohio over the next five years. Here's why. Companies such as Nationwide, Children's Hospital, Cardinal Health, Google, Facebook, Intel, and Honda are making billion-dollar investments in the area. Some companies are making million-dollar investments. This is just going to add fuel to the fire in the housing market.

Anywhere within 30 minutes to an hour of Columbus is going to see appreciation, in my opinion. More businesses, more people, and more education investment are coming to the Columbus and Central Ohio area. Homes are going to get more expensive over the next five years. This doesn't mean you shouldn't buy a home, but just expect home prices to increase steadily as these employers bring thousands of jobs to the region.

When you have that kind of economic growth, housing demand follows. People need places to live, and our inventory can't keep up. That's a recipe for continued price appreciation, not a crash.

When Will Prices Actually Drop?

So when can we finally expect home prices to drop here in Columbus? We can expect home prices to drop when months supply of inventory exceeds where we're at now. Right now we are only at 1.2 months of supply, which is nothing. Like I mentioned earlier, 6 months supply of inventory is appropriate for moderate home appreciation. We need to be closer to that 8 to 12 month mark of month supply of inventory before we even think about the housing market and home prices starting to drop.

Homes above $500,000, especially in that $1 million range, are sitting a little bit longer, but homes still are selling fast. It's still highly competitive in good areas here in Central Ohio. Home prices will drop, maybe, but I do not see home prices dropping until we solve the supply and demand issue where supply catches up with demand.

I don't want to be the burden of bad news, but the real estate market is not going to crash. If you wanted me to say that during this article, I'm sorry, it's just not going to happen. We would need a massive shift in inventory levels, a major economic downturn, or a significant drop in demand for prices to fall. None of those things are on the horizon right now.

Renting vs. Buying: The Real Cost of Waiting

Renting here in Columbus is just so expensive. I had a client whose landlord bumped their rent up $400 the next month. If they wanted to re-sign and stay in that same apartment, their rent was going to be $400 more. That is insane. I do not wish that on my worst enemy, but that's the reality. Renting in Columbus and Central Ohio is going up as well.

I highly recommend, if you can afford to buy, why not save money, build equity, and let that appreciation work for you? In 3 to 5 years, if you decide to sell, you can get good equity and make a profit. Buyers are just tired of renting here in Columbus. Even though interest rates are higher, people are choosing to buy because renting is so expensive and unpredictable.

When you rent, you're paying someone else's mortgage and building their equity. When you buy, every payment builds your net worth. If you're waiting for prices to drop before you buy, you're also paying rising rent in the meantime. That's money you'll never get back.

Which Strategy Makes Sense for Your Timeline

If you're moving to Columbus and trying to decide whether to buy now or wait, here's what I tell my clients. If you're planning to stay for at least 3 to 5 years, buying now makes sense even at higher interest rates. You can always refinance when rates drop, but you can't go back in time and buy at today's prices once they've climbed another $20,000 or $30,000.

If you're looking above $500,000, this is actually a great time to buy because you have negotiating power. Sellers in that price range are more willing to offer concessions, and you can use those to offset the higher interest rate. If you're looking under $500,000, expect competition and be ready to move fast when you find the right home.

Waiting for a crash isn't a strategy. Waiting for inventory to hit 8 to 12 months so prices soften? That could take years, and in the meantime, you're paying rent that's going up $400 a month. I'm a licensed realtor here in Columbus, and I get calls and texts from people every single day, from people like you watching these videos looking to make the move to Central Ohio. Let's talk about your timeline, your budget, and where you can find the best opportunity in today's market.