Improving the Housing Stock by Reducing Inventory

The theory is that if you can demolish the lowest prices, homes in the worst condition you effectively eliminate the lowest price point option and drive up the average home price. Without low cost options investors will be drawn to consumer owned homes. In the donation process banks effectively shift the Demolition costs, which begin at $10,000, to the municipality. In an ideal scenario they will be able to sell the lot  to home builders in better economic times and recoup the demolition costs through the sale and future property taxes.

Impacting Local Markets

This strategy is dependent on the municipalities absorbing the upfront costs and there is a defined ROI to their investment. Removing blighted homes reduces eyesores and hazards.  There are efforts going on now in Cincinnati to remove blighted real estate and improve the safety of neighborhoods. Including bank-returned properties could accelerate this type of urban reclamation effort, but only if there is funding available from the municipalities.

There is positive news this week as additional construction in Over The Rhine add mixed income real estate into the Cincinnati market. While the market is down, nearly all of the units (8/11)in Phase 1 have been pre-purchased according to yesterday’s newscast on wvxu.  The development group 3CDC continues to lead the charge in redeveloping the neighborhoods adjacent to Downtown, providing new options for those looking to purchase Cincinnati real estate in the heart of the city.

The best news is that this project is mixed income and this shows the continued commitment by 3CDC and the city to include residents of all income levels and not just those who can pay premiums for newly renovated construction.  It is important for the vitality of the city that these efforts to provide affordable ($160,000 for over 1,500 SQFT of new construction) continue. An additional 11 units are planned and the Over-the-Rhine Community Housing is a partner in this project. They are providing special financing on five of the 22 units, making them affordable for low to moderate income buyers.

The local arts scene is vibrant and there are major projects going on to support the arts throughout Cincinnati. Part of the charm of this community is its dedication to cultural development and the parProjects is a perfect example.  In the Northside neighborhood two artists are using old shipping containers to build an arts and community center. Blocked and stacked like giant Legos, the containers’ modular nature allows for flexibility in shaping the large design to occupants’ specific needs.

Help support this project  by voting for parProjects in the Pepsi Refresh contest from May 1 to May 31. The contest prize of $50,000 is enough to build the first phase of their long-term dream of a Northside community art center. Outstanding art collectives and engaged citizens enhance Cincinnati’s appeal as a choice city for relocation.

1. Read Between the Lines
Take a look at the minutes of the condo association board meetings to see what the building-wide challenges are. Even if there aren’t any complaints, reading the minutes will reveal the sorts of projects that are under way at the complex — projects the seller may have neglected to mention.

2. Who is Paying Their Bills?
Make sure the association is collecting the dues from everyone on time! . If people aren’t paying their association dues on time.  Carefully consider buildings that are underfunded.

3. Planning for Repairs
Associations take on a lot of building maintenance so make sure the repair fund for the new roof, driveway, and exterior are well thought out and funded.

4. Insurance, Insurance, Insurance!
Gt a copy of the certificate of insurance, which is a summary of the association’s policy. First see if the replacement costs covered by the policy are an accurate estimate of the cost of rebuilding. Then make sure that the policy has a building-ordinance clause, which means that the insurance will cover the cost of bringing the building up to code if there is any rebuilding to be done. Finally, make sure that you understand exactly what the association policy covers and what you are responsible for.

5. Legal Compliance
Buying a single-family home without a lawyer is no big deal for many people. But with a condo, there’s so much more involved. Contact a local real estate lawyer and have him or her go over the bylaws of the association. Also see if there are any pending cases by any residents against the association.

6. Can I rent My Unit?
Certain associations have a limit on the number of units that can be rentals at any one time. If you plan on renting your out down the road make sure you know the rules and plan in advance.

7. Professional Management
If the complex is professionally managed, check out the management company as thoroughly as you check out the association. Ask other owners. Ask people in nearby buildings. And be sure to interview the day-to-day manager directly.

8. Read The Books
Read the condo documents for anything out of the ordinary and think in advance. Are there restriction on commercial vehicles, pets, loud music, or even placement of ‘Real Estate Signs’. Remember when you go to sell your condo you want to know you attract the next buyer.

I wanted to offer some insight and opinion on murals and property values. Frankly – it depends. It depends on the neighborhood, it depends on the mural content. There are some instances where murals ad tremendous beauty and value to neighborhoods and showcase the diversity and vibrance of the culture. In some cases murals can be a distraction. If you or your community are planning a mural hire a professional and make sure you have buy in from the entire community and especially the building owner!

Take a few moments to learn more about the projects and sign up and volunteer. It is a great way to give back to the community. Already there are over 300 participants and so many projects still need more hands so get involved and make a difference. Help out Keep Cincinnati Beautiful, the Peaslee Center, Starfire and many more worthy organizations.  Click on Cincinnati Give A Day for more information.

If you have questions please call me at 518-1140.

If you plan on stopping by please leave a comment and let me know!

My professional opinion about this situation as a Cincinnati Realtor is that property owners in areas where vacancy rates are elevated, can face delated property values. Before purchasing a property you should always be aware of the sales trend and vacancy rates in that specific area prior to signing any contracts.