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.

Whether you prefer to live in a single family home, townhouse, or condominium you can find them all in Mt. Lookout conveniently located just east of downtown Cincinnati. This neighborhood is primarily residential with the convenience of commercial business in one central area. Many of the residences in this area are currently part of the tax abatement zone where property taxes are waived for 10 years.

One thing that most people probably do not know that Mt. Lookout also has the privilege of being home to the nation’s oldest fully operational observatory founded in 1842. Mt. Lookout’s website reports that it has one of the highest owner occupancy rates in Cincinnati nearly 80% of the 1,400 units available in the neighborhood and is the home to approximately 3,400 residents.

Mt. Lookout is conveniently located near the 94 acre Frederick H. Alms Memorial Park and the 224 acre Ault Park which is the fourth largest park in Cincinnati. Mt. Lookout has sidewalks running through most of the major streets and neighborhoods and even has a running club where the routes are mapped out, is part of the Cincinnati Public School District, and is nearby the Oakley Community Center.

Mt. Lookout Square is the home of unique shops, coffee shops, a theater, restaurants, and bars. In the warm spring and summer months to come this is the perfect place to walk around and grab a bite to eat at one of the restaurants with open air seating. Mt. Lookout is the host of Junefest so look out for a posting as that events nears.

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.

As we look back at what was the last half of 2007, from a real estate perspective, on a national level things were not all that good. The sale of new construction and existing homes was down, due in large part to the sup-prime mortgage mess. Part of the current real estate cycle is a return to balance and 2008 is the year for exactly that. This Washington Post article (registration required) gives a nice retrospective on what was 2007 and provides a positive outlook for 2008. The latest quarterly home-price data from the Office of Federal Housing Enterprise Oversight found that while significant declines have occurred in dozens of speculative markets in the past year, prices were flat or up in 204 of the 287 metropolitan markets surveyed.

Real estate in Cincinnati is one of those markets listed where appreciation has held very slow and steady for years. The beginning of 2008 is going to be a great time for new homeowners to come in and purchase first homes while interest rates are still reasonable. There is a tightening of credit, but those who qualify will enter a buyers market and become homeowners for nearly the price of rent. Purchasing a a larger house in a buyers market is always a good idea. You may not get top price for your current home but you will not pay top price for your future home either. The key is to have a real estate agent who understands the economics of the market and can help you make wise long term investments.

The Cincinnati Public Schools System is in the midst of building its first LEED Certified school to services Amberly Village, Gold manor and Pleasant Ridge. The new Pleasant Ridge Elementary, designed by Steed Hammond Paul was engineered to meet the standards of the Leadership in Energy and Environmental Design (LEED) Green Building Rating System™ created by the United States Green Building Council. The LEED building exercise has been a true learning experience that CPS is carrying forward into the 10 year, $1 Billion dollar Facility Renovation Master Plan project in which over two dozen school will be refurbished.

There are now drawings and models of the new Queen City Square available for viewing. Western and Southern has a press release available for viewing and it describes some of the attributes of the structure. The real question is in the wisdom of constructing a new office high rise in a market that has such a high vacancy rates. Even though the QCS project is not due to open until 2011 I hope there will bee a serious need for the space. Downtown is growing with more living space and now hopefully there will be an attraction of new creative class workers to fill both the new offices and new residences. A recent Grubb report on office vacancy rate show the third quarter of 2007 continues a trend of decreasing vacancy rates initiated in the 3rd quarter of 2006. We will keep our eye on the development downtown as the QCS and The Banks come on line adding even more high quality new living and working space to Cincinnati.

Just to the North of the heart of the University of Cincinnati sits Ludlow avenue. And exceptionally eclectic and vibrant street filled with a menagerie of shops, restaurants and mosaic store fronts. Ludlow Avenue is going through a major urban planning and redevelopment that is sure to improve the physical function and aesthetic appearers of the area.

This section of Clifton is mainly populated by old architecture and the unique food and shops there shows the diversity of a area. In addition on the south side of the UC campus on Calhoun Street there is significant construction going on as the university adds additional student housing, new shops, and restaurants. Moreover the Painter group is planning a green development in Clifton with shops and graduate housing just off campus.

I was talking to a real estate agent yesterday and we discussed the inventory of homes in the greater Cincinnati area. I was very surprised to hear them terribly concerned about their perception that there are 11 months worth of homes on the market right now. I questioned his concern and did some research on my own at Housing Tracker.

The short story is that there are 64 more homes on the market today than there were one year ago, 1/2% more inventory than in 2006 and 1.8% more inventory than 2005. Now it is true that prices have gone down slightly; for the median home the drop since 2005 is 3.35% and for higher priced homes 4.45% over the same time period. Lower priced homes have dropped 5% since 2005 but also did not experience the price spike and hard correction that the median home and luxury home experienced.

What this translates to is that if you are in a median priced home it is the best time to move to a bigger space if you need to. I know it is against everything that we have been hearing on the news but the reality is that the price of the home you want is closer to selling price of the home you have right now. Math does not lie - the difference between a median and high priced home this week is $90,000. One year ago that difference was $97,000 and in 2005 the difference was $94,302. In real dollars upgrading is ALWAYS a good move in a down market. If your Cincinnati real estate agent is not telling you this they are just plain wrong.

Week Inventory 25th Percentile Median 75th Percentile
11/28/07 11,415 $99,900 $149,900 $239,900
11/28/06 11,351 $104,900 $158,000 $255,000
11/28/05 9,418 $104,900 $154,900 $249,202