In a recent New York Times article columnist Ron Lieber outlines the letter he would send to a seller when making a lower offer. The letter explains the buyers perspective on the current market condition as well as their genuine intent on purchasing the property.

While we are encouraging our buyers to make offers that are reasonable for the market we also want to make sure that the seller understands our reasoning. On the other side of the coin I like the response that the article give for sellers who receive these kinds of letters. We like to make sure our seller’s homes are the best value (excellent condition and fair price) in the neighborhood. No one can argue with solid market research on both sales and knowledge of the local inventory.

Nation wide it seems like the drop in home values is slowing. According to a recent Standards and Poors report on home values, 18 of the 20 index cities lost less value over th last quarter than in previous quarters.

In looking at the chart the most critical piece of information I see is data out of Cleveland and Chicago. Both large mid western centers show a significant slowing in depreciation compared with previous quarters and in aggregate if you look at those as leading indicators for the region our decline may be slowing as well. We have reported before on Cincinnati real estate price trends and this is another report that makes us confident that the overall depreciation will most likely end with the calendar year especially if the summer sales season sees absorption of some of the foreclosed properties currently on the market.

CNN Money published a study today on the future value of homes all over the nation. After looking through the home value tool, the outlook for Cincinnati is fairly similar to that of Ohio.  The state will see about a 5% drop in home values over the course of 2008 with the depreciation slowing to a less than 1% fall in 2009.

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What this means to the average home buyer is that if you are looking to move up market, it is time to take a look and make a move. Moving upmarket in a housing slowdown is a financially rewarding thing if you are in a position to take advantage of the value changes.

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If you are moving from a $150,000 home to a $250,000 that is a $100,000 jump. If both homes sell for 5% less due to the market you are moving from a $142,500 home to a $237,500 home in a $95,000 jump. Same homes in question. $5,000 savings. Moreover the new house property tax will be assessed at the 5%  lower sale price.

Cincinnatians ‘get’ cell phones. They understand their value, and they use them for more than just talking and texting. Cincinnati actually ranked as the #7 market for mobile phone coupons by Cellfire as published in the Entertainment Marketing Letter. Such an appropriate time, considering all of the interesting cellphone based applications for real estate.

Back in December we reported on GotZapp for developers to send content to potential home buyers on their phones. In November we wrote about Hosefront which allows users to search tax records on a property with SMS or TXT messaging. In both cases the systems rely on savvy users, and according to recent reports Cincinnati has them in droves!

For years we have been moving to the suburban areas for lower prices, and in return we get longer commutes. With gas prices what they are what is the real cost of our suburban home? WorldChanging.org has a very interesting application on their site that shows you the real cost of your home, with the commute included. It is no doubt an interesting tool to use whenever moving to a new area, and especially a new city. The Center for Neighborhood Technology’s interactive map helps you see the real cost of an area. The CNT defines affordable as housing + transportation costs are less than (<) 45% of the median income of the area.

Those of us familiar with the Cincinnati real estate know that there are some areas covered here that tend to attract higher home prices, and people who can afford them. Using median income for the region may not be the best metric. If the number were based on zip code I would feel more comfortable with the map. However this certainly brings up a good point, that with gas at $3.35 a gallon location, location, location takes on a whole new meaning.

In the Cleveland area is a new trend in real estate marketing, Cleveland foreclosure bus tour. A real estate
agent books a tour bus and charges $15 per person for home buyers to go to three different suburbs with homes that have been foreclosed.

In Phoenix, AZ, which has been hit hard by the mortgage crisis, has Phoenix foreclosure Bus Tours that brought together real estate agents, mortgage brokers, and rehab specialists with potential home buyers and investors to try to get the foreclosed homes purchased.

Are these bus tours a good idea? In some ways, the tours can be a good idea since it may help move foreclosed homes off of the market faster. The real question is, are these tours taking potential buyers
away from the rest of the inventory in the city? In relatively price-stable Cincinnati there are areas with more foreclosures, and the regularly listed inventory in those areas may be suffering more.

Here is a checklist of items you should consider once you get a property under contract and are planning to have it inspected. This list encompasses questions that you should consider when hiring an inspector and tips for ensuring that the property is prepared for a complete inspection.

1. Does your inspector’s credentials meet or exceed state licensing requirements and industry standards?

2. Does your inspector’s company require them to meet ongoing training and performance standards?

3. Does your inspector have Error and Omission Insurance and a guarantee that stays in effect after the inspection has been conducted?

4. Does your inspector belong to any industry organizations like the American Society of Home Inspectors (ASHI), the National Society of Professional Engineers, and the National Academy of Building Inspection Engineers?

5. Have you checked at least 3 professional references of the inspector?

6. Have you made sure that the utilities are all turned on still at the property including furnace,a/c, appliances, electric, gas, water, and water heater so that they can be checked during the inspection?

7. Does your inspector have a lockbox key or will someone be there to let them inside the property to inspect?

I just read a very important article from Reuters explaining to current renters why it is an opportune time to buy their first house. Owning your own home is one of the most important investments you can make.

The article address the fact that the tumult in the market can be a bit disconcerting to new buyer, but the fact is that first time home buyers have the pick of the litter with a healthy inventory, low rates, and motivated sellers. In Cincinnati all of these factors are creating a prime situation for qualified first time home buyers.

Take advantage of the internet based real estate search resources, find a qualified mortgage broker, and make sure you have a seasoned and knowledgeable Cincinnati agen. Consider a number of options and think a few years down the road to make your investment in your home a success.

The Office of Federal Housing Enterprise Oversight announced Wednesday that it has cut the government-sponsored mortgage investors’ surplus capital requirement to 20 percent from 30 percent for Fannie Mae and Freddie Mac.

The office estimates that this reduction, in combination with the release of portfolio caps announced last month, should provide up to $200 billion of immediate liquidity to the mortgage-backed securities market, and allow Fannie Mae and Freddie Mac to purchase or guarantee about $2 trillion in mortgages this year.

This could mean significant news to our local real estate market. Credit is harder to come by due to more stringent lending practices in the wake of the sub-prime mortgage melt down. With the changes to Fannie and Freddie they will have more liquid capital to purchase more mortgages hopefully resulting in more credit being offered to home buyers.

All of these changes are a directed effort by the leadership of Fannie and Freddie to add liquidity to the mortgage market while keeping up both investor and home buyer confidence in the system. Both agencies have seen significant changes in the last few months including the clearance to purchase larger loans (jumbo) up to $729,250 in some areas. These changes are designed to help stimulate home sales and keep the economy moving forward.

Part of being a good real estate agent is understanding how to price a home to sell. The facts are that if your home is initially priced correctly it will sell and not languish on the market. Looking at the inventory within our office we saw a significant disparity between Days on Market between the sold / pending and what is active. SALABLE properties spent an average of just 88 days on the market while properties waiting to sell average 143 days on the
market - and they’re NOT SOLD YET! Look over the chart at our sample data from our office:

Information has not
been verified, is not guaranteed and subject to change.
Copyright ©2008 Rapattoni Corporation. All rights reserved.

As home sellers it is important to always remember that you home is worth what the buyer is willing to pay for it. In a slower market sellers must balance their desires for maximum price with an understanding that an overpriced listing could sit idle for well over a year, and will most likely sell only after numerous price reductions. If you are looking to move up in this market read our November post on the price and inventory of the Cincinnati housing market. You will learn how moving into a larger home makes financial sense in the long run if you do it is a slower market.