Home buying in Toledo becoming more competitive, expensive
12/15/2017The median down payment that buyers are willing to put towards the purchase of a home increased 23 percent in the third quarter from the same period in 2016, a sign that home buying in metro Toledo is becoming more and more competitive.
The median down payment in the Toledo area is now $8,750, according to Attom Data Solutions, a California-based real estate data firm. That is the highest the median down payment has been since the third quarter of 2014 when it stood at $9,000.
The $8,750 represents 6.3 percent of the local median sales price of $140,000. In the second quarter, the down payment was just $7,113, or 5.1 percent of the median sales price of $139,900.
Daren Blomquist, senior vice president with ATTOM Data Solutions, said metro Toledo’s median down payment is still lower than the national average, “But certainly, it’s ratcheting up.”
For nearly a year, inventory in metro Toledo has dwindled. It has led to multiple offers for homes and homes spending fewer days on the market.
Mr. Blomquist said when the market is tightening home buying becomes “a full-contact sport” among buyers.
“Rising down payments has to do with a combination of lending standards staying tight and lenders requiring more skin in the game,” Mr. Blomquist said. “But it seems that buyers are upping the ante when it come to down payments, going above and beyond what the lenders are requiring.”
Mr. Blomquist said in an increasingly competitive market buyers may feel they gain an advantage by offering a bigger down payment. “It’s a sign to the seller that this buyer is well qualified ...and there’s a better chance this deal is going to close,” he said.
Nationwide, the median down payment is rising.
It was $20,000 In the third quarter, up from $18,161 in the previous quarter and up from $14,400 in third quarter a year ago. That marks a new high extending back to the first quarter of 2000, the period when Attom first starting tracking down payments.
The $20,000 median down payment was 7.6 percent of the median sales price of $263,000, up from 7.1 percent in the previous quarter and up from 6.1 percent in third quarter of 2016.
Attom said the median down payment was over $50,000 in 12 of 99 metro areas analyzed recently, led by San Jose, Calif. ($247,000), and followed by San Francisco ($170,000); Los Angeles ($118,000); Oxnard-Thousand Oaks-Ventura, Calif. ($105,000); Boulder, Colo. ($99,900); San Diego ($79,000); New York ($72,778); Fort Collins, Colo. ($61,482); Bridgeport, Conn.($60,000); Boston ($60,000); Seattle ($59,043), and Naples, Fla., ($52,000).
Contact Blade Business Writer Jon Chavez at jchavez@theblade.com or 419-724-6128.