Over the last three years, the Toledo housing market has seen impressive appreciation rates. In fact, over that same period, the Toledo housing market has outpaced appreciation on a national level. Where as the average rate of appreciation across the country was 28 percent, the Toledo real estate market saw home values increase by as much as 33.3 percent. However, despite the increase in home values, Toledo is far behind. The median home price is just over $100,000, whereas the national average has reached $216,567.
With recent gains, Toledo homeowners were happy to see equity return to the market. The following highlights how much equity has been gained relative to the year of the home’s purchase:
- Homes purchased in the Toledo housing market one year ago have appreciated, on average, by $20,804. The national average was $12,783 over the same period.
- Homes purchased in the Toledo housing market three years ago have appreciated, on average, by $30,530. The national average was $55,406 over the same period.
- Homes purchased in the Toledo housing market five years ago have appreciated, on average, by $25,154. The national average was $49,675 over the same period.
- Homes purchased in the Toledo housing market seven years ago have appreciated, on average, by $9,341. The national average was $9,474 over the same period.
- Homes purchased in the Toledo housing market nine years ago have appreciated, on average, by $177. The national average increased $3,419 over the same period.
While unemployment in the Toledo area is better than the national average, it is not by much. Coming in at 5.3%, Toledo’s unemployment rate is about half a percentage point better than that of the rest of the country. The encouraging thing is that it has shown strong improvements over the course of a year. In 12 months, Toledo’s unemployment rate dropped nearly two and a half points. Economists, however, remain less optimistic for the coming year. With an expected job growth rate of 0.3%, not much is expected out of the employment sector. Local employment growth is poor and needs to improve if the job sector is to supplement supply and demand within the housing sector.
The Toledo housing market has one major factor working in its favor: affordability. In fact, the National Association of Realtors (NAR) has recognized Toledo as the third most affordable market in the country. That is a far cry from markets like Seattle and San Diego – each of which have been subjected to historically high appreciation rates over the last three years. As recently as the end of last year, homeowners in the Toledo housing market were allocating an average of 6.2% of their income to monthly mortgage payments. That is actually 3% below the area’s historical average. Homes in the area are actually becoming more affordable. That being said, the average homeowner across the United States puts 16.3% of their income towards monthly mortgage payments. That is nearly three times the amount of Toledo.
With homes in Toledo being more affordable, younger Americans should continue to show interest in the area. Housing is simply too expensive in most of the major metros. Therefore, Toledo should see more first-time buyers enter into the market. With any luck, first-time buyer activity could spark more home activity.
According to RealtyTrac, 18% of Toledo homeowners in the metro area were underwater on their mortgage by the end of 2014. That said; 23,899 homeowners owe more than their home is actually worth. While the current number of underwater homes is relatively high, it represents a 31% drop from this time last year, when 34,647 homeowners were in the same situation. The drop in severely underwater homeowners is due, in large part, to recent appreciation.
“Median home prices nationwide bottomed out in March, 2012, and since then have increased 35 percent, lifting 5.8 million homeowners out of seriously underwater territory,” said Daren Blomquist, RealtyTrac vice president.
The Toledo housing market was the beneficiary of a 5% increase in median home prices last year.
Data indicates that foreclosure activity also experienced a drop. To be clear, foreclosure activity includes notices of default, notices of trustee’s and sheriff’s foreclosure sales, and real estate-owned properties that have been foreclosed upon and repurchased by a bank. That said, foreclosure dipped approximately 29% at the end of 2014. Perhaps even more encouraging, that number represents a 64% decline from the previous year.
According to RealtyTrac, the decrease in foreclosure activity was most prominent in Lucas County, where foreclosures declined 71% from August 2013. Activity dropped 14% in Fulton County, 4% in Ottawa County, and nearly 9% in Wood County. Of course, experts are quick to note that while foreclosures are down, they are not entirely out of the picture. The Toledo housing market still has a substantial number of foreclosures on the market, and more are expected in the coming year.
Unfortunately, the Toledo housing market has yet to make the recovery many had hoped for. Too many homeowners are still facing foreclosure, with more to follow in the coming year. Unfortunately, the job sector doesn’t appear ready to support housing any time soon either. Of particular interest, however, is that progress that has been made since the worst part of the recession. Yes – the area has seen minimal improvements, but some ground made up is better than none. The Toledo housing market has a long way to go in the face of strong headwinds, but the good news is that it is heading in the right direction.
Toledo Housing Market Summary:
- Current Median Home Price: $107,000
- 1-Year Appreciation Rate: $22.3
- Unemployment Rate: 5.3%
- 1-Year Job Growth Rate: 0.3%
- Population: 282,313
- Median Household Income: $42,792