Welcome to the Business Journal Archives
Search for articles below, or continue to the all new BusinessJournalDaily.com now.
Search
Sales of High-End Housing Rebound in the Valley
CANFIELD, Ohio -- Light instrumental music wafts through this newly listed house on Montereale Drive, the setting for an open house June 11 to showcase the upscale property for real estate agents.
The spacious, 5,444-square-foot contemporary house, built in 2000, has six bedrooms, 14-foot ceilings, a custom kitchen, a finished basement with media room and exercise room, a full-house stereo system and a three-car heated garage. It’s been shown seven times since Celeste Kasten listed it three weeks ago, she says.
“I’ve had quite a few agents come back for a second showing with their buyers,” says Kasten, an agent with Northwood Realty Services in Salem. “We definitely are seeing increased market for the upper-end luxury homes in this area.”
Listed at $659,000, the single-family residence is “competitively priced,” she says. High-end properties typically stay on the market 90 to 180 days. “It’s a seller’s market in the high-price ranges. There’s not a lot of inventory in this price range in Canfield,” Kasten remarks.
The Montereale Drive house is an example of the resurgence in high-end demand compared to when the Great Recession clipped the real estate market at all levels, as values dropped and foreclosures surged.
Marlin Palich, Ohio general manager for Northwood, characterizes demand in the upper-end segment as “strong.” One recent listing had three offers before it eventually sold for $1.2 million, he says.
Popular communities for high-end properties include Canfield and Poland in Mahoning County, Howland Township in Trumbull County and Salem and Columbiana in Columbiana County.
One of the factors driving activity in high-end real estate is low investment performance, Palich observes. Individuals who have money in other investments and, in some cases, aren’t getting the return they want, may be taking that money out of the markets and using it to purchase a house, he says.
“People are looking back at real estate investment. It’s always a secure thing,” Palich says.
“The upscale end has definitely bumped up a bit,” specifically in the $300,000 to $500,000 range, affirms Alicia Kosec, managing broker at the Poland office of Howard Hanna Real Estate Services. “Higher than that, it’s good; but it’s not setting the world on fire.”
Low interest rates, heightened consumer confidence, more jobs and increased job stability are all contributing to a stronger market, Kosec observes.
Most of the higher end activity is taking place in Poland, Canfield, Boardman and New Middletown, she finds. “Lakefront properties are really hot right now.”
On pricing, “no one is unrealistic” and sellers are “willing to look at comparables and price the properties to sell,” Kosec continues. That said, in certain markets multiple offers are driving prices above what they are listed at, she adds.
One reason existing upscale houses are moving as briskly as they are is the lack of new construction in that price range, says John Burgan, owner of Burgan Real Estate Ltd., Boardman. “Upscale, as long as it’s in good condition, has been very active, and I think that’s because there’s been such a void,” he says.
“Nobody is willing to spec a home in the $300,000-plus range” and if anyone had an interest, lenders are reluctant to provide financing, Burgan continues. “That’s what’s really making the upscale market so popular. … There’s such a small segment of houses available that [buyers are] snapping them up.”
Moreover, he observes, “Sellers are much more realistic than they were in the past” on the need to make improvements before putting a house on the market as well as on pricing.
The upscale market is “very brisk,” agrees John McCarthy, a broker with Mayo & Associates, Boardman. Like Burgan, he attributes that mainly to the lack of new construction.
“For what you would deem our executive level homes, the Poland, Boardman, Canfield markets tend to be the areas with the most supply and thus the majority of the activity,” McCarthy says. “Canfield seems to be leading and has been leading the way in re-sales for the past few years, mainly due to a larger amount of inventory.”
Recently listed houses are seeing activity early in the listing period due to the amount of information available to buyers from Internet sources, he says. “As soon as a new home comes on the market, the first 30 days the home gets a lot of immediate activity” and it isn’t unusual for an offer to come, McCarthy says.
One of McCarthy’s properties, listed at more than $600,000, had 22 showings in its first 45 days on the market, “which in the past was unprecedented,” he says. “So it’s a good sign for the local market.”
In Salem and northern Columbiana County, Harry Hofmeister, broker and auctioneer at Hofmeister Realty & Auction Co., Salem, says the upscale market – which he defines as properties going for $200,000 and above – is “very strong.” The backlog of inventory has been “greatly reduced” and a lot of buyers say they can’t get what they want, he reports.
“We went through a period where those homes were not moving, and in the last year and a half we probably tripled the amount of upscale sales that we had in the last five years,” he says.
Hofmeister credits the rebound to an overall “more positive feeling,” particularly in Columbiana County and southern Mahoning County. Although he can’t attribute “a lot of sales” to shale activity, “it certainly has people thinking more positively in our area,” he says. He also points to the availability of “cheap money.”
Nevertheless, despite interest rates remaining relatively low, many buyers are opting to forgo financing.
“A lot of them are paying cash for these upscale homes,” remarks Marisa Volpini, broker and manager of Real Living Volpini Realty Group, which has offices in Mahoning and Trumbull counties.
About 75% of sales Volpini sees in the upper-end market are cash, she reports. In Poland, for instance, houses listing at $400,000 and $500,000 are getting offers “and they’re coming in cash,” Volpini says.
“As a matter of fact, a lot of loan officers are not very busy,” she says. Banks are asking for brokers and agents to bring them deals “but we can’t bring them deals if the buyers pay cash.”
Editor's Note: This story first appeared in the MidJune edition of The Business Journal, in subscribers' mailboxes this week.
Copyright 2014 The Business Journal, Youngstown, Ohio.
CLICK HERE to subscribe to our twice-monthly print edition and to our free daily email headlines.