In a recent edition of Time magazine there is a featured article about some services that help home owners negotiate new rates with their banks, or even walk away from their homes.  Some of these services package information for homeowners in distress and in some cases help advocate for the home owner.  Other services simply repackage and sell publicly available information.

Companies like the Walk Away Plan provide home owners who are in distress some counseling as well as assistance in negotiating with their bank for a new loan at a current interest rate, or renegotiating the loan all together. Other services, like Short Refi Me,  try to work with your bank to refinance your home based on current value.

There is some good news recently put out by the Cincinnati Board of Realtors. According to the sales numbers the last 4 months have seen increasing home sale activity, a good indication that the housing market is beginning to recover. An even better secondary metric is that the overall inventory is dropping. This means that more houses are being sold than are being put on the market. Generally speaking a balanced market caries about 5 months of home inventory.

More sales and less inventory helps to return demand to a steady level. It is this relatively static demand that has given Cincinnati real estate has historically appreciated 2% each year. Although modest, it is steady and the recent positive changes in the short term market point to the fact that we will soon return to slow and steady long term appreciation.

Month 2008 Home Sales Inventory

January             1,130                    13.31

February          1,334                    11.32

March              1,557                      9.75

April                 1,636                      9.49

May                 1,913                      8.38

Everyone I know has been asking us “So how is the market doing … really.” The honest answer is that it is not as bad in Cincinnati as other place but of course, we would like it to be better. When we pulled up numbers and took a statistical look at both sale price and units sold the number show a decline, but not the catastrophic drop some other parts of the country have seen.

Hamilton County saw a decrease in sales of 14% (3137 to 2697) in the first five months of 2008 compared to the first five months of 2007. In the same time period sale price fell slightly by 11% ($169,617 to $152,360). The challenging part about these numbers, particularly the sale price is that there are so many bank owned homes being sold now at a fraction of their market value. With fewer overall sold properties, the higher volume of bank sales is having a greater impact on the average sale price in Hamilton County.

If you watch the news to often you hear the consistent drone that home prices are down! The real estate market is in the tank! Well that may be true in some areas but not all. The fact is that in select Cincinnati neighborhoods the average SOLD price is up 20% or more including parts of Amberley, Indian Hill, and Mariemont. The area around Symmes Township and Dry Run / Mt. Carmel have seen better than 9% increase in sold price.

On the other hand some zip codes drop in sold prices up to 25% in the same time period. There could be dozens of reasons for this including tax abatements, inflation, inventory, and normal cyclical changes in neighborhoods. Paramount is that when looking for a home or an investment property your agent has a sense of the overall market trends in that particular area. Nothing is ever a guarantee for valuation but this is the kind of information you should ask for and expect from a real estate professional.

The accuracy of information in this post is dependent on the MLS system for time periods. The analysis included 31 zip codes comparing the previous 6 months with the same six month period one year prior. The analysis is a useful tool for estimating value trends and is not guaranteed to be applicable to all properties in the areas aforementioned.

I read an article on cinplify.com, that linked to a Standard & Poor study that found that Cincinnati and Columbus to be the most stable housing markets in terms of price and posed the least risk of price decline in the U.S. This is because Texas and the midwest were less affected by the real estate boom.

The article on MSN reports that there’s a 34.6% chance on average that home prices will drop in the nation’s top 50 markets in the next couple of years, according to PMI Mortgage Insurance’s new U.S. Market Risk Index, which heavily factors in recent price volatility. Some of the markets that will be most affected by this drop are the areas that saw the most rapid appreciation, followed by the reduction of affordable housing, which then impacted the level of appreciation. Some of these states include Nevada, California, Florida, and Arizona.

Recently a San Diego couple filed a lawsuit against their real estate agent because as buyers they feel he did not give them sufficient information to make a competitive offer on their home. According to the post from the Today Show the agent was allegedly negligent in not telling them about other houses that sold for less, including one three doors away that has a pool and sold for $105,000 less and another that was considerably
larger that sold for $175,000 less.
A professional Cincinnati Real Estate agent should provide you with a comparable market analysis with recent sales in the surrounding area. They should be happy to answer any questions and help you form your opinion of the value of your perspective new home. Remember, this is a referral based business so it is in the best interest of the sales person to give you the best experience possible. As a consumer making a life purchase you have the right and should feel comfortable asking your real estate agent tough questions about market conditions. Much of this information is public and can be found in public records accessible to anyone. Watch the video here.

One of the hard realities of the current housing market is that some people took up loans that they can not afford to keep once their Adjustable Rate Mortgage began to adjust. In a some cases homeowners are having to sell their homes in pre-foreclosure sales, or in some cases the lenders are foreclosing and taking possession of the property. RealtyTrac has an online tool that allows home buyer to look at some of these properties. After a quick look today I saw a variety of properties ranging from an $432,000 foreclosure in Amberly to a $9,500 bank owned 4 bed 2 bath home in Norwood. The website does require a registration and membership fee but it does provide some very good free preliminary information and it is worth reviewing.

I know that we all struggle with the same question - what repairs or upgrades should I do before I sell my home? We wonder if we are going to get the money back in a higher sale price, or with it help get my home sold before my next mortgage payment is due. Home and Garden TV shows give tons of great ideas on how to inexpensively update the feel of key rooms in your home, you just have to be willing to spend a little bit of money to make a lot of money.

Homegain,com has a Sales Maximizer that give you insight on the best investments you can make in your home before you sell it. Cleaning and de-cluttering a house is listed as the most cost effective investment you can make!A good Cincinnati Real Estate Agent can help you though the process of getting your home ready to sell for top dollar. An absolute must read is this Home Sale Maximizer Guide. Coming soon we will have a list of contractors we have worked with and would recommend so check back often!

Part of what impacts home prices are the outside forces such as interest rates, supply, demand, schools, and other business and neighborhood factors. Personal perception is a major factor in the market value of a home or neighborhood, and it is valuable information for any buy looking to get a fair deal, and any seller looking to market their property at a reasonable price.

So here is Home Predict, website that is allowing people from all over predict the value of homes and neighborhoods. What is important is that market value is a function of the Wisdom of Crowds. If 90 of 100 people think that a neighborhood’s average home is worth $200,000 it is good bet that as a buyer you should be looking to pay about that much, and as a seller it would be wise to list it as such.

In the market boom what we saw collectively was a skewing of the perception of value. We all thought homes were worth more, and therefore the price tags went up. Now as the market cools, and the economy slows we collectively are correcting our perception. Potential buyer’s value perception are the most important information to have, but a community wide poll would probably return similar results. I’d like to see a group of us getting on and helping to set the value of our homes and real estate here in Cincinnati.

Everyone agrees that people loosing their homes to Foreclosure is bad for individuals, banks, and neighborhoods. In fact so many people are aware of it even Congress is stepping in to help people in better proceed with Debt Forgiveness. In normal circumstances when you have a debt forgiven, or reduced, that amount is counted as taxable Income, according to the IRS. If you bank forgives you for the last $10,000 of your loan, why would the IRS think you have the cash to pay taxes on it? Silly.

The Federal Government is stepping in and offering up H.R. 3648, a bill that would eliminate Federal tax on debt forgiveness. The House has passed the bill and it is on the way to the Senate. So how would that impact us? Well in short it could lead to more Cincinnati residents staying in their homes. The US Census Bureau says that home ownership in the Cincinnati metro area has slipped a bit from 68.4% in 2005 to 65.5 in 2006. It is so important for us as a community to do the most we can to maintain our home ownership rates up because people who care about their homes also care about their communities. You can continue reading about this topic at Open Congress.