Over the last week, final legal decisions were handed down clearing the way for the sale of the remaining property of a lone boarded up house in the middle of prime real estate waiting to be developed into a new shopping center. The property, next to Rookwood Commons was a boarded up single family house which sold for $1.2 million dollars.

Developers wanted to build Rookwood Exchange — a $125 million complex of offices, shops, condominiums, apartments, restaurants and a parking garage — across the street from Rookwood Commons.  After a five year legal battle, many of the retailers have found other locations.

At the heart of this debate is the concept of eminent domain and what constitutes “public use”. Should a private developer be able to invoke this power to compel property owners to sell their land against their will? Or should eminent domain be enacted for only public works or government projects? Traditionally, governmental bodies can take land by eminent domain for public uses or invoke it over areas deemed blighted. The Ohio Supreme Court recently ruled that economic development by a private company does not constitute grounds for invoking eminent domain.

This article written by Seth Weismann of Atlanta Life Magazine provides a perspective on the current real estate market in Atlanta, but the most of same principles hold true in the Cincinnati market. In April of 2008, there is research that names Cincinnati as one of the top six cities for steady real estate prices in 2008.

Bottoms of real estate markets never announce themselves with fanfare. Economists generally only determine the exact bottom long after the market has sharply rebounded. My prediction is that when the dust finally settles, the experts will look back on the time period between now and the presidential election as the best time to have purchased a home. Why is this the case? There are several interrelated reasons. The first is that the housing market in the metropolitan Atlanta area is far healthier than most housing markets in the United States. We’ve seen some price reductions in housing but nothing comparable to other parts of the country. With our region’s population increasing by 150,000 people per year, prices can only go so low because demand is constant. It’s a nice cushion to have.

Second, for the moment, the Federal Reserve (Fed) is more concerned about encouraging growth than controlling inflation. Don’t expect this to last. If inflation remains high, look for the Fed to start raising rates right after the presidential election. This, along with the turmoil in the secondary mortgage market, is likely to drive up mortgage interest rates. This will make the effective cost of housing much higher than it is now even if prices continue to fall somewhat or remain flat. Let’s look at the following example to understand why this is the case.

Let’s say that a buyer gets a good deal on a property at $320,000 with a 30-year mortgage for 90 percent of the purchase price at an interest rate of 6.25 percent. The buyer’s monthly mortgage payment will be $1,773.27. Now, let’s say that the buyer gets a great deal on the same house at $300,000 but interest rates on the same 90-percent loan are now 7.25 percent. Even though the buyer is borrowing less, the monthly mortgage payment is $1,841.88. In other words, the buyer who waited for the great price actually ended up paying more for the property than the buyer who paid a little more but got a better mortgage interest rate.

Rising mortgage interest rates could drive housing prices even lower. My bet, based on the above example, is that the effective increase in housing costs resulting from rising mortgage interest rates will not be offset by further decreases in property values.

What does this all mean? The answer is that there is likely a short-term window of opportunity to get the best deal in this down cycle of the housing market. Where are the best deals? Well, remember that the entire housing market is on sale right now. The houses that are most deeply discounted are foreclosed homes presently owned by various lending institutions. These are sometimes referred to as “REO” properties or real estate owned. It’s not a bad place to start your search for a home. However, there is one major caveat to this suggestion: There is a big difference between price and value. The house that is the most deeply discounted from a price perspective is not always the best long-term housing value. If a house is functionally obsolete, in a less than ideal location and/or in a mediocre school district, the long-term value of the house may not be as good as a higher priced home where these things are not an issue. For buyers interested in value, focus on the following four factors:

1. Location: Buyers want to be close to work, shopping centers, healthcare and recreation. This is even more true with the rising cost of gas.

2. School district: Quality public schools always have been a huge factor for most
buyers.

3. Quality: Buyers want a well-built house.

4. Design and functionality: Many houses become functionally obsolete because of a lack ofclosets, size of bathrooms, layout of kitchens, height of ceilings or architectural design.

If the house is being bought for investment purposes, the price point of the house is far more important than when the house is being purchased to live in. Look for lower priced homes that will
appeal to a broad rental market.

If you have been sitting on the fence, it is finally time to move!

We received a number of comments about the recent post ‘Does a Felon Live in Your Neighborhood‘ and wanted to follow that up with some additional local Cincinnati crime information. It seems that Snopes.com has raised some questions about the veracity of the web page we were sending our readers to, and so we wanted to get a more reliable source for our readers.

crimereports.com is a site that takes in agency provided crime reports, geo-codes them, and places incidents on a map. The site is as accurate as local police reporting is. The map function allows users to zero in on a specific address, and it also provides those who register daily crime updates if they wish. Cincinnati Police Department participates so you can see the most recent reported crime activity in your area. Moreover here is a great resource to the 2008 Cincinnati crime statistics provided by Cincinnati PD.

Local Realtors sold 1,854 homes in July, and 11,371 the first seven months of the year. July sales represented the second best month of the year, relative to last year sales.

Nationwide, July home sales seasonally adjusted were up 3.1% from June, but off 13.2% from a year ago. With the new $7,500 housing tax credit in place for first-time buyers, that should stimulate sales during the remainder of the year.

Inventory of homes for sales locally stands at 16,689, which represents 9 months of inventory. That’s down from last July’s 17,880, which is improving news for sellers. A balanced market – equally good for buyers and sellers – is 5-6 months.

The average selling price in Greater Cincinnati last month – at $181,259 – dipped 3.84% from a year ago. Mortgage rates remain favorable locally, as they have all year. A conventional, fixed rate loan in July averaged 6.60%. That compares to 6.56% the same period one year earlier. It’s now 6.68%

“While sales are off somewhat in the area, it’s a whole lot better than some parts of the nation,” said Karen Schlosser, president of the Cincinnati Area Board of Realtors.“For the year, we’re off 16.9%. Sales in parts of Florida, Nevada and California are off over 30%.”

Schlosser said the current housing market is excellent for buyers, due to a good inventory of homes to choose from, favorable prices, and attractive mortgage rates.

If you are planning to sell your home in the near future, here is some information that might be of interest. The National Association of Realtors has found that the top ten preferences that buyers are most interested in when searching for a home are:

• Central Air Conditioning
  
• Garage (2 or more spaces)
  
• Walk-in closet in master bedroom
  
• Backyard/play area
  
• Cable/Satellite TV-ready
  
• High-speed Internet Access
  
• Separate shower enclosure in master/main bath
  
• Patio
  
• Fencing
  
• Home less than 10 years old

Get the power to see more! Cincinnati’s MidPoint Music Festival (MPMF) announced today that music fans can now reserve a 3-day wristband pass offering the opportunity to see all performances for this year’s festival, September 25–27, 2008.

The $29 wristband pass, available for pre-order at mpmf.com, provides festival attendees access to 17 stages and concerts by all MidPoint bands. To order a wristband pass, click on the “SEE IT ALL” button on the MidPoint homepage. Venue admission is subject to legal capacity.

New Producers. New Features.
Cincinnati alternative newsweekly CityBeat is producing MidPoint Music Festival for the first time in the event’s seven-year history. New this year will be an expansion of venues into Downtown, along with many of the historic-Over-the-Rhine neighborhood locations used in the past. Two groups of stages are equally divided north and south of Central Parkway, making it easy to walk between venues, and festival transportation will also be available.

“MidPoint is dedicated to fostering growth within Over-the-Rhine and Downtown,” said Dan McCabe, executive producer. “All the recent discussion about Cincinnati possibly getting streetcars in the central part of the city led us to think it would be cool to show folks the proposed streetcar route, which conveniently works with these venues. It’ll give them a real taste of the streetcar movement.”

To demonstrate the potential of Cincinnati streetcars, MidPoint sponsor Scion is making 20 xB crossover vehicles available to help festival attendees cruise between the uptown and downtown clubs along the proposed streetcar route. Less walking means more listening.

How well do you know your neighbors? Home buyers often ask about the people that live in the neighborhood. Since that information is subjective, here is a tool that might help you to learn factual information about the criminal history of homeowners in the neighborhood. Click here for a direct link to the site. Every place you see a red balloon or thumb tact is the home of a convicted felon.

Type in your address and your neighborhood map will pop up. Just hover your mouse over an icon and not only will the name come up, but also the crime they were convicted of.

In a tighter market one of the indicators that real estate agents look at is days on market (DOM). The number of days it takes a home to sell once it is put on the market. We pulled 40 zip codes and looked over the average days on market and saw some interesting trends. Not to surprising was that the Oakely / Hyde Park area (45209) led the list with just 92 DOM. The area surrounding Sharonville (45241) had a 101 DOM, and Norwood, 45212 saw an impressively low 104 DOM. Indian Hill had one of the longest aver DOM with 137, tied with Franklin 45005.

Knowing the average DOM for your market is crtical if you are looking to sell your home. You must be patient but more important you need to use this information to properly price you home if you want it to sell faster than average. A good Cincinnati Real Estate agent will be able to give you the details of your area. If you re looking to sell your home, or buy one e-mail me or call 513-518-1140.

A recent report on Realtor.com speaks to the increasing number of ‘pending’ home sales nationwide. A sale is ‘Pending’ when it is under contract and waiting to close. The report shows that the pending sales index In the Midwest rose 1.3 percent in June to 79.6 but is 13.3 percent below a year ago. The index is measured against the volume of ‘Pending Sales’ in 2001.

Nationwide the numbers are on the upswing. In the Midwest, particularly in Cincinnati, a number of factors are contributing to the market improvements. The $7,500 first time home buyer tax credit, the market correction, and proper home pricing are all contributing factors. In addition there are fewer units on the market helping those that are on the market sell faster.

If you were planning to apply for the seller funded downpayment assistance program through  Ameridream, please be advised that this program will soon be coming to an end on October 1, 2008.  There is speculation that this program is being eliminated by Congress because the foreclosure rate by those who participated in this program was higher than other groups.

Per the Ameridream website here is some background information on its Down Payment Assistance Program. Charitable down payment assistance funded in part with seller participation has allowed homeownership to grow without using taxpayer dollars. To date, more than one million families and individuals have utilized this down payment assistance, generating nearly $10 billion in home equity for those families. These working families qualify for FHA insured loans in every respect, but are unable to save the needed down payment. Please visit http://www.supporthomeownership.com to let your voice be heard to Congress to save this program.

The city of Cincinnati’s downpayment assistance programs are not affected by this change.