What is Driving the Increase in Cincinnati Real Estate Sales?

What are the driving forces behind the increase in sales this month? “Home affordability and low interest rates,” said Pete Kopf, president of the Cincinnati Area Board of Realtors. “Economic uncertainty continues to hamper the housing market, but this is a great time for first-time home buyers, move-up buyers and even investors to take advantage of our extremely affordable market.”

What is Driving the Decrease in Prices of Cincinnati Real Estate?

There is common belief that the increase in the number of Foreclosures sales is pulling down the average price and increasing the sales volume. Overall this is a good thing since it is moving inventory off of the hands of the banks, and moving this inventory out of the system is the painful part of this recovery process. As the economy begins to add jobs look for price points to increase and sales to pick us as well. A second factor is that the number of high end properties being sold has slowed, and each multi-million dollar house sold can drastically impact the average price per sale in a market that moved just over 1,300 homes in October.

As prices decline you can insure your home's value

The Home Value Insurance Co. has re-entered the insurance market with a product that promises to protect homeowners from falling home values. Faced with a declining and turbulent housing market this insurance product provides homeowners a level of protection against taking a loss if they sell their home for less than they paid for it.

The product works by covering a loss of owner-occupied primary residences if the homeowner sells for less than home’s value when it was insured. Homeowners who acquire a policy are locked in at the present homes value for 10 years, ensuring that they are protected and compensated in case of a market decline of up to 25 percent. If home values appreciate during the policy term, insureds can cancel their current policy at no cost and purchase a new one with a higher insured value.

While very helpful to some the insurance policy will not apply to short sales or foreclosures and the policies will only cover homes that are worth $500,000 or less.  Ohio is one of the first few state to feature such insurance. If you are interested in the product contact us.

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.

Are you thinking about taking on a remodeling project or two in your home? Upgrades are a great way to get more enjoyment out of your home and, in many cases, help your home to sell more quickly and for a better price when you decide to put it on the market. As a Realtor in Cincinnati I see a lot of renovation projects in homes; bathroom remodels, additions, and new kitchens are the most common. More often than not, home sellers want to know ‘ did I do the right thing?’

The Return on my Remodeling and Renovation Investment

One of the first questions most people ask when considering a home renovation is, “Will this help the resale value of my home?” Remodeling Magazine has a very helpful online tool to assist would-be re-modelers answer this question. This tool can tell you, based on the city in which you live, the return on investment of popular home renovation projects.

Some of the top five mid-range remodeling projects in Cincinnati might surprise you. For example, replacing your entry door with a steel model provides the single greatest return on investment (76.1% of a $1270 project). Turning an attic into an extra bedroom came in second (71.4% of a $54,517 project), followed by replacing your garage door (68.2% of a $1345 project).  Replacing your siding with new vinyl siding came in fourth (64% of an $11,701), and embarking upon a minor kitchen remodel (63.7% of a $22,239 project) rounds out the top five.

It is important to note that even the projects that generate the largest return on investment do not recoup their entire costs upon resale. If you are considering remodeling or renovating your home it would be wise to consult a real estate agent during the process. Proper planning can help you maximize your enjoyment and investment.
e-mail Brett today for a consultation.

The diagram from USAA does a great job of showing the difference. It costs the same to rebuild identical houses in Cincinnati, but depending on where those houses are they would sell for different prices. If you insured your home based only on the recent tax assessment or sale price you could be under insured – considering the rising price of construction materials. It is very important for you to contact your insurance agent or insurance company and make sure that you home is insured for the replacement cost so that in the event of a disaster you are not under-insured.

Can the average household with average income buy an average home?

Compared to the rest of the nation Cincinnati has a few things in its favor. The report lists the national median home price at $177,900, and Cincinnati’s median home price at $137, 250.  Our home prices are 22% less expensive than the national average. On to of that our median household income is $8,000 higher than the national average. These two things combined give Cincinnati an affordability index of 257 vs the national average index of 172. In this case a bigger number is better!

The issue at hand is that the Green Acres Foundation purchased the property and wants to raze it to build a youth education park and facility. At the same time some neighbors in Westwood and a local historic preservation society are lobbying the Cincinnati City government to take possession of the home using eminent domain.

James Gamble House

The challenge is that if the city moves forward they would have to pay fair market value to the home owner (Green Acres Foundation) and then take on the responsibility of maintaining the property.  While some neighbors are eager to see the property saved, and possibly be turned into a park and education center ,the money to do so would come from the City’s general fund – a fund that is facing a budget deficit of $60,000,000.

From a real estate property value perspective the question I would look at is how do the two options impact property values in the neighborhood. If Green Acres creates a park and education center vs. the city creating a park and education center. Even if the building is preserved it is not a residence and that impacts the character of the neighborhood. In this instance the only opinion that will matter is that of a buyer considering a listing in the neighborhood … a buyer who may or may not care if that the eventual park and education center are in a preserved historic building or a new one.

The Case-Schiller index chart above gives a very clear depiction of how housing prices changed over the last decade. As it evident in the chart, the prices seemed to hit their low point in the third quarter of 2009. It will be important to watch the price index over the next three quarters to see if the slow price increase maintains its upward trend. While volumes are low, and sale times are long, real estate prices are slowly making a comeback.

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 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