The National Association of Realtors (NAR) has ranked the Central Ohio housing market as one of the 20 strongest in the country. A number of factors could be driving the market, but job growth appears to be the most significant. However, some economists fear that the job growth engine could be sputtering, which raises some concerns about the long-term direction of the housing market.
Job Growth Concerns Overstated
A recent report from PNC Financial Services Group Inc., found that the job growth is expected to slow slightly in 2015. They reported that the number of jobs in Central Ohio increased 2.3% in 2014, but expect that figure to drop to 2.2% this year.
The figure is not very significant, but still raised some concerns among economists and real estate agents. Some fear that deceleration in the job market is a leading indicator that the economy is losing steam, which would threaten the direction of the housing market.
However, experts from PNC doubt that there is anything to be worried about. Mekael Teshome, an economist with PNC, responded to this question with stark optimism. “No, not at all,” Teshome said. “I think one of Columbus’ advantages is it’s not a boom-and-bust economy. Settling into a normal rate of growth is not entirely bad, especially with the unemployment rate fairly low. It’s really actually a good thing – we’re at cruising speed.”
Teshome acknowledged that job growth declined slightly in the third quarter. However, he said that slower growth was expected. He also pointed out that job creation was actually stronger than PNC predicted earlier this year.
“Columbus will remain among the growth leaders in the Midwest, even as the region’s economy settles into its long-term growth rate,” read the PNC report, which bodes well for the direction of the housing market as well.
Housing Market Likely to Continue to Rise
The housing market could face a setback if job growth decline too much, but a fallout in the job market doesn’t appear to be on the horizon. The NAR believes that housing demand will continue to rise for the foreseeable future and nothing in the PNC report indicates otherwise.
While job growth may decline slightly over the next few months, it’s likely to still surpass the national average. Housing demand will probably continue to rise if it continues to outperform neighboring states, especially if more people relocate to Ohio for better career prospects.