When an investment corporation defaults, or walks away, from a property it is called a strategic default. When a home owner can no longer afford their mortgage they foreclose. Somehow there has been tremendous stigma placed on the homeowner that has to go into foreclosure, while large corporations face defaults with indifference. The Huffington Post and NPR Marketplace both look at the issue:
A group led by Tishman Speyer Properties gave up the 56-building, 11,232-unit Peter Cooper Village and Stuyvesant Town apartment complex in Manhattan, turning the properties over to its creditors after defaulting on some $4.4 billion in debt. Wall Street Journal. The $5.4 billion acquisition in 2006 was the single biggest residential property purchase in U.S. history. It’s now worth an estimated $1.8 billion.
“We basically walked away from it,” said Clark McKinley, a spokesman for the California Public Employees’ Retirement System [CalPERS], one of several investors in the venture, wrote off its $500 million investment, McKinley said. “It’s underwater, anyway, so we’ve lost it,” he added. “We took our medicine, and we’re learning from it.”
Sadly lenders are fighting the stay off a mass of foreclosures. If homeowners start walking away from their mortgages en masse, there’s little doubt the housing market will collapse and take the economy with it. The New York Times has a list of proposals to help home owners reduce their principals. What is critical is that we need to reestablish stability in the market to prevent a second wave of the housing crisis.
As we approach the end of the year the various cities and counties in Cincinnati will begin to calculate the property taxes that we all owe. Some areas of Cincinnati are currently in a tax abatement zone (they pay less or no property tax at all), but the rest of us will owe our 2009 property taxes in 2010.
What happens if you feel your property taxes are too high? If a number of houses have sold in your area and you are certain they were for less than your home’s taxable value? As a Cincinnati Realtor I have access to the information and the insight you need to appeal your property taxes.
Property taxes are based on the value of your home, and your home is only as valuable as the homes in your neighborhood. If they sell for less then your home is worth less and that is important in appealing property taxes. Considering the economic changes that occurred between 2007 and today property values in Cincinnati have changed. Some areas have appreciated, and some have depreciated. It is important to know where your house is valued so you can make sure you are paying your fair share. If you have questions about appealing your property taxes please contact me and I will be happy to consult with you. 513-518-1140
The City of Cincinnati will not increase property taxes this year. Even though the city is facing a budget shortfall, City council did not request a higher rate early enough in the process and therefore Cincinnati City Property Tax rates will remain at 4.46 mills.
Local residents should not see an increase in their property tax bill, at least the City portion of their bill. Council was able to act in time and approved the continuation of the rate. Had they not voted the City could have had the rate default to 0.0 mils, taking away $60 million dollars of much needed tax money.
If you are concerned about your property taxes and think the county appraiser overvalued your home call me. We can talk about comparable sales and determine if you are paying to much in property tax and what we can do about it. 518-1140
Price Sells Real Estate! If you price your property appropriately for the current market conditions your real estate will sell. NPR ran an article a few days ago that really highlights this point. last year the Miami, FL condo market was nearly dead. To many built and proposed condos, to few buyers, and prices that reflected the 2007 levels of nearly $400 sqf.
Move forward to today, Fall 2009, and condo buildings are selling out in 6-8 weeks … at $200 sqf. Peter Zalewski, a real estate broker who runs the Condo Vultures, explains that the Miami Condo market’s price reset has sparked interest in Latin American and South American investors. They seem to be cash buyers and feel that the current prices are a relative bargain.
The challenge that is preventing more buyers form purchasing is that financing is very hard to obtain in these new construction condo buildings. Fannie Mae and Freddie Mac are denying loan applications to well qualified purchasers simply because there is such an over-suply of units that reselling a unit could prove a dauting challenge.
The lesson we all need to learn here is that to sell real estate ANYWHERE you need to price it correctly for today’s market. If you are interested in a condo, or a home in the Cincinnati area contact me today!
Yesterday the Case-Shiller home price index came out, and it had some positive numbers. The C-S index looks at 20 major metropolitan real estate markets and watches the change in home sale prices on a monthly basis. The index provides numbers that are normalized for the home prices in the first quarter of 2000.
Because Cincinnati is not one of the markets observed by the index, we have o draw some conclusions from our closest neighbor, which is Cleveland. The below chart shows the decline and slow rebound of the housing market over the last 12 months in Cleveland.
Case Shiller Home Price index July 2009 - Cleveland
What we see in the numbers is that in February, March, and April of this year home values in Cleveland fell below the their 2000 value levels for the same months. But we also see an increase in home values as the spring and summer months arrive. In Cincinnati we saw a similar trend, driven by a number of factors including the season, first time home buyer credit, and improving macro-economic conditions.
If you have been thinking about moving up into a large home this may be the time to make the move. As prices begin to rise proportionately more expensive homes will gain in price faster than lower priced homes. A $500,000 home will cost $550,000 if it gains 10% in value, while a $200,000 home will cost $220,000. That is a $30,000 difference. call me today if you are interested in deeper local market analysis! 513-518-1140
The Cincinnati Area Board of Realtors recently issued their monthly report. The news is pretty much what we all in the real estate field expected. Prices are still slightly depressed, but home sale volume is slightly better than last year. August 2009 was slightly better than August 2008 in terms of the number of homes sold. The average cost of real estate sold is lower this year, due in part to the volume of short sales and foreclosures being purchased.
There is wide belief that the First Time Home Buyer Tax Credit has helped increase sales volumes and help avert further decline in our area’s home prices. The below graph shows the steady seasonal increase in sales that we see in our market during the warmer months of spring and summer. I am trying to impress on my clients that although the tax credit ends on November 1st, they truly need to have contracts written and the financing process started no later than the middle of October, and even that is cutting it close.
Recently I have been working with a number of clients who have expressed interest in purchasing a foreclosed property simply because of the savings, compared to the market value of the home. Foreclosures are still abundant in Cincinnati and as the jobless recovery continues, sadly, more foreclosures will be coming on the market.
Thankfully the volume of property has been manageable compared to the foreclosure glut that other states have experienced. According to foreclosure-tracking company RealtyTrac.com
, over half of the country’s foreclosure-related actions in August occurred California, Florida, Michigan, and Nevada. The top 10 list also includes Arizona, Illinois, Georgia, Ohio, Texas and New Jersey.
The word of caution I give my buyers is that with a foreclosure, the savings on the initial sale price may not yield an overall benefit depending on the condition of the home. Those considerations, coupled with the general complexity of the Foreclosure purchasing process, are giving my buyers an appreciation for how much more value a well maintained home has.
If you are interested in purchasing a foreclosure call me at 513-518-1140 or e-mail me for more information.
It is a fact that there were 1,905,723 foreclosure filings – default notices, auction sale notices and bank repossessions in the first six months of 2009. That represents an increase of 9% from the previous six months (July – December 2008) and 15% increase over the first 6 months (January – June) of 2008 according to reporting service RSI media.
Sadly a portion of the foreclosures appearing in recent months are due to the overall economic slowdown and subsequent job loss being experienced in almost every industry. Small local companies cut back staff as the economy slowed and those staff, unable to find new positions, found themselves unable to pay their previously affordable mortgage. he 10 states with the highest foreclosure rates were Nevada, Arizona, Florida, California , Utah, Georgia, Michigan, Illinois, Idaho and Colorado. While the Cincinnati real estate market has seen price and sales volume declines, this is top 10 list I am glad Ohio is not on.
Homegain conducted a survey that shows that many homeowners think their homes should be listed 10 to 20 percent higher than what their Realtors recommend. Nearly 20 percent of homeowners think that their homes are worth 20 percent higher than their Realtors’ recommended listing price.
A recent Zillow® poll showed that sellers were no longer ‘in denial’ regarding the U.S. housing slide. The latest HomeGain survey says that that while homeowners may be aware of falling home prices around the country, many believe that the slide doesn’t apply to their homes.
How do you know if your Realtor has priced your home right? Here are some guidelines to ask your agent:
1) Has your agent shown you sales within the last 3-6 months in your neighborhood? If no recent sales have occurred in your neighborhood then you must find the closest neighborhood that is similar to yours and in the same school district.
2) Do the comparable sales you are using have the same number of bedrooms and bathrooms as your home?
3) Have you seen photographs of the homes you are comparing your property to? Are the amenities and condition the same?
4) How long have the homes in your neighborhood been taking to sell? Look at how many price reductions occurred before homes have been selling? Ask your agent for the original price and have them look at how many price changes occurred prior to the sale of the comps.
Currently appraisers are only looking back 3 months for sales comparisons. Remember that a house is only worth what someone is willing to pay for it in the open market regardless of what the tax records state. Before making capital improvements, I advise that you conatct me at 513-518-1140 to find out what the homes are selling for in your area to be sure that you are not over improving your home. You don’t want to be the most expensive house on the block.
The Realty Times published an article last month indicating that the bottom of the real estate market is in sight. This is good news as the busy season is just on the horizon. Spring home inventories are entering the market right now and buyers are in a great position with interest rates lingering around the 5% mark for a 30 year fixed and in the high 4%’s for a 15 year fixed. These record low interest rates coupled with the amount of inventory on the market are good news for home buyers.
For people looking to sell their homes, the news is positive as well. The most important strategy for home sellers is to price the home properly initially. Homes in some Cincinnati Neighborhoods have increased in value over the past couple of years. I have the information by zipcode. If you are curious about homes in your zip code please email me at alison.moss@comey.com with your zip code and I will provide you with that information.
