Elizabeth Palmer and partner Lane Puntry are seeing that firsthand as they seek to become first-time homebuyers.
The Carlisle couple is looking for a space that’s about the same size or a little big larger than the 1,000-square-foot townhouse they rent. They’re also broadening their search beyond neighboring communities to as far north as New Lebanon because that community is closer to family, includes more affordable housing options and is “a little easier to even get showings” before they go under contract.
“With Carlisle being closer to Miamisburg and Franklin and all of that ... it’s been kind of unattainable looking at houses there,” Palmer said. “If we do find a house, we contact the agent, set up a tour, and more often than not, before we can even get to that point, it’s under contract within two or three days of the home being listed, so it’s just kind of impossible to find a home anywhere that’s not rural.”
Houses are even going under contract within 24 hours of them being listed, which she said makes it “very difficult to even see something to find it.”
Palmer and Puntry started looking at homes three years ago, but became more interested in doing so for the past year-and-a-half and the most active in the past six months.
“One of the houses that we had looked at at that time, sold for $100,000 for a 1,400-square-foot house (off of Route 35) and that would not happen now,” Palmer said. " The same size house would go for anywhere from $160,000 to $220,000. In the last couple of years, it’s really just skyrocketed.”
Comparing local communities
The median sale price of a previously owned home in the Dayton area grew 3.2% in April to to $225,000 from April 2023 when it was at $218,000.
This follows a wild decade for the local housing market. In 2013 Dayton Daily News reporting found nearly a quarter of homes were “underwater” — worth less than the mortgage balance — in the wake of the recession. Then the pandemic came and housing prices skyrocketed.
Home prices continue to grow. Median prices in 2024 reached $225,000 for January through April, up from $203,750 during the same time span last year, a 10.4% increase.
The five communities that were atop the list for largest median home sales price in 2013, Springboro/Clearcreek Twp., Bellbrook/Sugarcreek Twp., Oakwood, Yellow Springs and Centerville/Washington Twp., also topped the region in 2023.
The community with the highest median home sale price in 2023 was the Bellbrook/Sugarcreek Twp. area. Of the 250 single-family homes that sold there in 2023, the median value was $414,500. In 2014, the area saw 214 units sold at a median price of $222,700.
While Dayton and Trotwood continue to have the lowest home values, the sale prices in those communities have grown astronomically. In Dayton in 2013, there were 1,267 single-family homes sold at a median price of $25,100. In 2023, Dayton saw 1,574 units sold at a median price of $114,150.
The median home sale value in Trotwood grew 483% in the decade, from $24,000 in 2013 to $140,000 in 2023.
Factors at play
“The number one reason over the last decade for increased home sales have been attributed to long periods of low mortgage rates and low inflation,” said Kelly McCormick, president of Dayton Realtors and a realtor since 1991. “Lower rates brought young buyers into the market at the highest rate, historically. More recently the lack of inventory has boosted record high sale prices. Also, increased wages played an important role in affordability over the past decade.”
McCormick said some measures can be taken to combat such drastic increases.
“Increased home-starts from new construction would be ideal, but additionally, more land development, zoning changes in areas that prevent or impede new residential construction could help, tax incentives for buyers especially in urban growth areas to attract city development,” she said. “Additionally, government involvement offering grants and subsidies to renovate plighted areas; all could improve housing availability which would increase competitiveness in home prices.”
While many experts believe that housing affordability is expected to get better in 2024 as mortgage rates decrease and more homes come on the market, “there’s no crystal ball to look at to see how the housing market will perform in the coming year,” McCormick said.
“A lot will ride on consumer confidence, the Fed making adjustments to interest rates, and even the upcoming election can play a small role in shaping consumers’ attitudes toward buying and selling,” she said.
Housing prices have been increasing in Dayton and throughout many cities around the country, McCormick said.
“To slow the rise in home prices, we would need to see at least a doubling down on inventory,” she said. “More residential inventory in any community sparks competition and price changes. Even saying that, appraisals also have to catch up to any increase or otherwise decrease in pricing. All that adds up to time, economic outcomes and predictions.”
Region still among most affordable
Findings released by real estate website Redfin May 23 showed the median U.S. home-sale price hit a record $387,600 during the four weeks ending May 19, up 4% from a year earlier.
A study by Redfin shows that fewer than 16% of homes for sale in 2023 were affordable to local median earners, according to a New York Times report. That was the lowest rate since at least 2013, the year Redfin began tracking prices, when 50% of homes were affordable to local median earners, the Times reported. In 2019, before the pandemic, 40% of listed homes were affordable. In 2022, only 21% were.
But the Dayton Metro area also is among the areas where a much larger share of homes were affordable to all, the Times reported. It had the highest shares of affordable homes for median earners — about 50 percent, placing it among the top 3 of the 100 most populous U.S. metropolitan areas and just behind Detroit and Akron.
In contrast, affluent metros out west like San Francisco, Los Angeles and Oxnard, Calif., fewer than one in 300 listed homes were affordable to the typical household.
Last year also saw affordable markets become much less affordable, according to Redfin. That included the Dayton Metro area, where the share of affordable to all homes went from 53.1% to 49.4% in 2023.
“Relatively inexpensive metros have seen affordability erode quickly because housing costs have relatively more room to rise, and local incomes are often climbing at a fraction of the pace that mortgage payments are,” Redfin reported.
Increased home equity
The home sales price increases aren’t entirely detrimental. Those looking to sell a home now can do so at a greater profit than if they had done so 10 or even five years ago, McCormick said.
Someone who bought a home at a low price a decade ago is happy to see their investment double or more.
“Homeownership in America has historically created wealth and opportunities verses long-term renting,” McCormick said. “According to the National Association of Realtors, an average renter has less in savings than the average homeowner. Buying is most often the best way for anyone to gain wealth and opportunities for further equitable income from real property and real estate investments.”
Another “huge advantage” to the increases is having more home equity, she said.
“With more value placed on a home, it can help to build up a family’s financial retirement plans or allow them a greater ability to secure loans for home improvements or other needs,” McCormick said.
‘So much harder’
While the growth in home sale prices can be good news for homeowners and sellers, for buyers like Palmer and Puntry, it can be “discouraging.”
“It makes you wish that you had just jumped on something back then because now you’d be in a much better standing,” Palmer said. “We took the extra time thinking we could save up money, have an easier shot and then things just get so much harder exponentially.”
The catalyst to make them look for homes more seriously was rent prices increasing.
“We’ve faced numerous rent increases as well that at this point, we’re paying more than a mortgage for our rent in this townhome, so it’s just kind of a no brainer,” she said. “I know the markets crazy, but let’s just bite the bullet and find something because we’re paying more just to rent right now.”
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