The Cincinnati Real Estate market is regaining some of it value according to an article in the Cincinnati Business Journal. The local market ranked #14 out of 50 national metropolitan areas based on value increases over the second quarter. Nationally home values are up almost 8% in the second quarter vs the first quarter. However Cincinnati gained 10%. As a region the Midwest has seen the strongest price increases in real estate compared to last year.
The challenge continues to be that all real estate is local. Some desirable areas of Cincinnati actually appreciated as the housing bubble burst and continue to hold their value. This situation speak volumes about the strength of our community and our local market
The outdoor kitchen is becoming a gathering spot for family and friends especially in a city like Cincinnati that tends to have good weather 8 months a year. The trend picks up where the back yard grill leaves off. The stand alone grill is getting replaced by a fully functioning kitchen complete with all of the comforts and appliances found inside.
The centerpiece of any outdoor kitchen is the grill. RSI media says that the one place to stretch your budget is on making sure you have a durable, and great performing grill. Gas, wood, or charcoal – doesn’t matter. Other appliances that are common are sinks, refrigerators, and in some cases keg taps, wine chillers, and even ice makers. In some instances homeowners are replacing the grill with a pizza oven!
When designing your outdoor kitchen consider the utilities, including water, gas, and electricity. Placing the kitchen near the home will give you better access. In addition consider the materials carefully. Color is important but also consider how hot your counters get in the sun, and how slick the flooring is if you spill BBQ sauce on it.
Outdoor kitchens help increase a home’s overall appeal to buyers. When you install you remember not to over-personalize it. Aim for a balance between function and pure aesthetics. remember to
In a sign of the times, more and more Americans are living in their homes post-foreclosure. An article in RSI media details the growing phenomenon and attributes the situation to the volume of foreclosures that have washed over the banks and the fact that they were not prepared to process them.
But the reality is that this situation has its advantages. The families that stay in the home post-foreclosure tend to keep the utilities on and maintain the property. They keep the A/C running which dehumidifies the house inhibiting mold growth and they winterize the pipes preventing costly leaks. In addition an occupied home is less likely to be vandalized (broken windows, copper theft) than a vacant home.
The backlog is one factor contributing the situation, the second is the volume of foreclosed properties on the market already. ForeclosureRadar says it now takes an average of 229 days for a bank to foreclose on a home in California after sending a notice of default, up from 146 days in August 2008. In addition releasing more cheap inventory into the market will only further diminish the value of the bank;s asset. It pays for the bank to have a family living in the home until a point when the market stabilizes and they can recoup their investment in a sale.
Although the family’s credit now has a foreclosure on it, living rent free has give some people the opportunity to use their mortgage money to pay off other debts, and in some cases even save a little bit of money so that when they move to an apartment or other living situation they have the ability to restart their lives with a small financial cushion.
If you had invested $100,000 in the stock market in the 1st quarter of 2000 (10 years ago), what would your investment be valued at today? Of course the answer would depend on what the specific stock or stocks you bought, but consider this:
The Dow went from 10,921 on January 3, 2000 to 10,583 as of Jan 3, 2010 — and at this writing it’s hovering around 10,186. So, $100,000 invested in a DJIA-like stock portfolio ten years ago would now be worth less than $100,000. See the DJIA information for reference.
By comparison, the average house purchased for $100,000 in the Cincinnati-Middletown-OH-KY-IN MSA during the 1st Quarter 2000 would have been worth $122,438 in the 1st Quarter of this year. Click here for FHA data. Of course, all real estate is local and just as stock appreciation depends on the particular stock, real estate appreciation depends on the particular property.
So, which was a better investment? You be the judge. Besides, everybody has to live somewhere!
A number of my discussions with other real estate agents and clients have focused on the state of the Cincinnati Real Estate market after the $8,000 tax credit. The situation is very postive because there are a number of other factors that are supporting a very active residential real estate market in Cincinnati and elsewhere in the nation.
A recent survey by Better Homes and Gardens found a number of factors weighing on the minds of potential buyers concentrated on the current level of affordability in the market. The research shows that nearly two-thirds (63%) believe it is a “buyer’s market,” more than half (54%) feel that mortgage rates are affordable, and 70 percent indicate that there are affordable homes on the market. The reason that buyers are still buying is that they can afford to buy good properties at lower prices with affordable loans.
I believe that it is this overall affordability that will support the residential market through the next year until the overall economy stabilizes and. As the economy heats up and interest rates rise look for the overall housing prices to rise also. Hopefully they will be in tandem with lower unemployment and increases in wages.
In recent days I have had a few phone calls from first time home buyers asking me if they should still buy a house even though they missed the $8,000 tax credit. In some cases they could not find the right house, or they did not hear that the credit was extended. Regardless of the reason they missed credit I tell the same thing; YES!
There are a number of reasons that this is a good time to purchase a home.
First is that over the long term Real Estate has been a solid long term investment. Over the years Cincinnati has seen relatively stable property value appreciation. Our property values did rise and fall with the rest of the country over the last 6 years, but we did not have the dramatic soar and crash like Miami, or Las Vegas. Invest in a home because you love it, not because you are looking for fast appreciation.
Second thing I point to is the closing gap between Rent and Ownership costs. With property values AND interest rates lower the gap between Rent and Ownership has shrunk substantially. According to a national study by Marcus & Millichap Real Estate Investment Services the difference between the cost of Rent and Ownership has decreased to as little as $100 a month in some markets. The study looked at 43 major markets and found that using the median home price and median rent the cost difference was $256. That is the smallest gap since 1993.
The third point is that there are still very good deals to be had. There are sellers who want to sell their home now and are willing to negotiate on price and terms to get the deal done. While it is still somewhat a buyers market sellers are also feeling the home values stabilize and may not be ready to give their home away in a fire sale. They key point I try to emphasize is that interest rates are at record lows. Home values have returned to 2003 levels, but the interest rates today are lower. Bottom line – the price may be the same but it will cost you less to buy the same hose today as it did in 2003 thanks to low interest rates.
For more information please e-mail me or call me at 513-518-1140
Every year trends in bathroom renovations change. Materials, technologies, and even the color palates change with the year and season. RSI media interviewed a number of renovation contractors and architects to better understand the demand for renovation and the types of renovations home owners are looking to do.
According to the interviews with architects requests for kitchen and bathroom renovations are on the rise compared to last year. 28% say there is greater interest in kitchen and bath remodels compared to the same time last year!
In addition the trends seem to be thoughtful, modest improvements. Unlike in years past, homeowners are being careful not to over improve their homes and they are considering the amount they will recoup when they do decide to resell. In the bathroom gone are the days of towel warming bars, steam showers, and glitzy fixtures. The most popular improvements are:
-Water-saving toilets
-Radiant heated floors
-Accessibility/universal design, or features that are adaptable and allow homeowners to age in place
-LED lighting
-Doorless showers
If you are thinking about renovating your bathroom call me at 513-518-1140 for contractor suggestions and ideas on how to improve your bathroom without over-improving your bathroom!
A recent article in the Appraisal Journal Winter 2010 issue features a study that shows that Zillow Zestimate values are no more accurate than the homeowners’ estimates. The Appraisal Journal is the quarterly technical and academic publication of the Appraisal Institute, the nation’s largest association of real estate appraisers.
“Zillow’s Estimates of Single-Family Housing Values,” by Daniel R. Hollas, Ph.D., Ronald C. Rutherford, Ph.D., and Thomas A. Thomson, Ph.D., examines how Zillow’s estimates of value, known as Zestimates, compare to actual sale prices. The study, which was conducted in Arlington, Texas compared the Zestimate prices, the home owner’s opinion of their homes value, and the final selling price. Zillow.com is an automated valuation model Web site. Zestimates use a combination of objective data points that include recent sales, tax records, and average home appreciation factors to come up with a suggested Zestimate. What Zillow can not do is account for the subjective elements that impact a final sale price such as condition of the home, occupancy, and the level of finishes. A kitchen renovation may not have an impact on a Zestimate score but it will impact the opinion of a real estate agent, appraiser, and a buyer!
The authors looked at home sales in Arlington, Texas, a location where Zillow has indicated its data has the highest accuracy level. Still 40% of the Zestimates were more than 10% higher than the sale prices. Independently, other studies have shown that homeowners’ overestimate the values of their homes by 5.1% and new owners
overvalue their homes by about 8.4%. While Zillow can provide a price estimates quickly, their accuracy is certainly suspect. The best way to evaluate your home’s market value is to call a real estate agent and schedule an appointment. an agent with local knowledge will provide you insight on your home compared to the homes currently listed, and that is the most accurate way to find the true market value of your home.
When working in Real Esta you have to appreciate that everyone will have a different view of the same property. Buyers, sellers, real estate agents, and appraisers all see the same house in different ways. A client sent me a very funny e-mail that really captures the essence of the different points of view. Please enjoy the various perspectives of how others see your house:
Your house as seen by You
Your house as seen by a Buyer
Your house as seen by your Mortgage Lender
Your house as seen by the Appraiser
Your house as seen by your Tax Assessor
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.
The challenge continues to be that all real estate is local. Some desirable areas of Cincinnati actually appreciated as the housing bubble burst and continue to hold their value. This situation speak volumes about the strength of our community and our local market
