New Numbers for a New Year!

Hello all!  It’s been crazy- busy at our home, and I’m sure at yours too.  I hate to be a cliché and write about looking back, and looking forward, but hey, it’s January of a new year. What can I say?

Ok. I promise.  I’ll keep my philosophical ranting, and resolution making and breaking discussions, off this page, and stick to some good old fashioned MLS market data to keep you up to date.

The following data is for single family homes only, Butler, Warren, Hamilton, and Clermont County. 

This data is compiled from The Greater Cincinnati Multiple Listing Service, as of about 10:30 a.m. or so today.
Once again, a “Distressed Property” is a bank owned or government owned foreclosed on property, or a property still owned by a consumer, but requiring bank approval for a “short sale”.

Obviously, the numbers speak to the issues we have all experienced in the local real estate market.  I want to point out that, while indeed, there was an explosion of distressed properties for sale over the last few years, the MLS wasn’t as strict or accurate “pre-market correction” as it is currently.  In other words, we didn’t keep track as well of short sales.  Many real estate agents didn’t even know what a short sale was until the last couple of years.  I remember a conversation in early 2007 with 25 year veteran about my fear that we would be seeing more and more short sales in the coming years.  Her response…”what’s a short sale?”  So there you have it.

Here are some current numbers:

2010 To Date as of 10:30 a.m. January 4, 2010

One thing that jumped out at me here is that while the average list price in the 4 main counties of Greater Cincinnati is $240,144, the average list price of the home under contract, waiting to close, is significantly lower: $157,854.  That tells me that the lower priced “bargains” continue to fuel this market.  It will be interesting, of course, to see what this next year brings.  The good news is that if this is your snapshot in time to be entering the real estate market as a buyer, there is still plenty of good reason to do so: low interest rates, tax credits, good inventory, and you still have the upper hand in most markets and price points.

Sellers:  don’t be discouraged. If this is your snapshot in time to put your home on the market,  just be sure to hire the team of agents with a proven track record, good marketing ideas, and a head for numbers ( hint, hint).  Priced well to be the “next best value”, your home will sell.    The RealCincy Group is here to offer advice and keep you up to date on the competition. In Ohio & Kentucky, we can help.  With our OUTSTANDING marketing and trend watching, we’ll get your home sold

More Cincinnati real estate information can be found at RealCincy.com

Stalled Luxury Home Sales

A few months ago I gave you information about the upscale housing market in the Greater Cincinnati area.  Those areas included Butler, Warren, Hamilton and Clermont counties.  We discussed the Jumbo Mortgage Market, and how tight control on the interest rates for the luxury home market may be slowing the housing market, at the “grass roots” level.

I just put together an update with closed sales stats through November 15, 2009.  I thought you might like an update.

Single Family Sales: Butler, Warren, Hamilton and Clermont Counties.
Source: Greater Cincinnati Multiple Listing Service

It’s possible that once the current 23 pending sales do close, that we the “Over $700k+” sales will not come to the anticipated 138 total.  We will just have to see if those homes, in this buyer driven market, that are priced close to the $700,000 list price, do indeed sell over $700,000

More Cincinnati real estate information can be found at RealCincy.com

More Mortgage Changes!

Having just missed Halloween, I may be a little late to try to scare you with a horror story or two. But hey! There’s never a moment when a good story to shake things up isn’t welcome.  Today, I wanted to share a potential trend that a few of us have experienced in the “wonderful world of real estate”: the lenders becoming involved in the home inspection negotiation process. If that doesn’t scare the living daylights out of you, maybe it should.

At the risk of redundancy, I’ll say it again. Home sellers REALLY need to have a home inspection prior to putting their home on the market. The little quirks and irks you’ve lived with for the last 5 – 15 years will show up on the inspection.  I know you don’t think the way the dryer vent exits the house right next to the outside air condition unit is an issue, but your buyer will. It’s been that way since the house was built in 1983. Doesn’t matter. It will show up on the report. 

I have already gone on about how this inspection portion of the purchase process can spook a nervous buyer and irk a seller who feels as though he has gone as low as he can go in this market, and he can’t be bothered with $300 roof repairs, $500 worth of broken window seals and a fireplace cap that needs replaced.  Knowing this information up front and having already made the necessary repairs, puts this seller in better negotiating position. And in this “buyer’s market”, wouldn’t you, as a home seller, want to find SOME advantageous position? And buyers, wouldn’t you like to buy a well maintained home that isn’t fraught with “surprise” issues? Just buy the home, bring your toothbrush, and move in!

A couple of lenders in the area have begun to ask for a copy of the home inspection summary page, and the addendum between buyer and seller outlining how any repairs will be handled.  One lender insisted on a physical re-inspection of the property prior to closing on what most of us would consider a “typical” FHA purchase.  Because the majority of home buyers do not care to pay for a 2nd home inspection, generally speaking, a walk-through prior to closing and collecting receipts for the work performed will insure compliance of the addendum. This issue arose: who pays for the inspection, and who is now the inspector’s client?

Another problem to consider is this:  the lenders are now telling buyers they want a “sign off” on the repairs, a statement of satisfaction with the work performed, well in advance of our contractual opportunity to complete our  “…within  48 hours prior to closing…” examination of the property. Generally about 5 days prior to closing so the paperwork can be processed in time for the appointed closing date.  Moving is a busy time, and most sellers wait until the last minute to complete repairs, especially if the luxury of a few days of occupancy after closing is negotiated into the contract.  We need to know that this is a possibility, and amend the wording of our purchase contract and / or addendum, to insure the buyers can comfortably sign off on repairs that they have had the opportunity to inspect. In other words: Sellers be ready because my buyers and I are coming over sooner!

Not to be an alarmist, but I am concerned a bit that if underwriters or loan processors 4 states away review an inspection report, and the agreement between buyer and seller on certain repairs, then decide they don’t like the agreement made between buyer and seller, are they now opening up the opportunity to insert their opinion on the resolution?  I don’t know. That is a little scary to me.  If your eyes are rolling at me right now, I understand. But loan processing is a very different scenario than it has been in the past.  I’ve had this discussion with agents and loan officers who all wonder if this is a passing fad, or harbinger of even more changes to come. 

Personally, I think much of this issue could be resolved by sellers taking the bull by the horns and just getting their homes in order prior to putting them on the market.  Make sure the GFCI plugs are where they need to be. Have a fireplace? Get it cleaned and inspected. Make sure it’s been deemed safe to use by a pro. Clean the gutters and tighten the wobbly ceiling fans. I know. Those are not “material defects”, but trust me on this one: they will be on the report.  Have the HVAC cleaned and inspected. It will show up on the report if you don’t have receipts to show it’s been done.

Do you have a list of things to do prior to closing? Please complete those items ASAP.  Not all buyers have their “backs against the wall” and will be certainly in a position to delay closing until they are satisfied that all work has been completed as contractually agreed.  A delay in closing may not be in your best interest either, so fix those windows, and clean those gutters because we are coming over to re-inspect!

More Cincinnati real estate information can be found at RealCincy.com

Eastgate, a section of the larger area also known as Union Township, is a prime candidate for continued growth. Development and re-development of existing retail space is a wise investment for both independent and “big-box” retailers. The Eastgate Mall expects a new anchor to take up residence on the sight of the former National Amusement Cinemas drawing even more customers to the area. Eastgate boasts relatively impressive demographics.  Approximately 11,500 households with yearly incomes $50,000 + are located within a 3 mile radius of Union Township.  The demand for new and upscale retail is palpable!

Successful because of the wide open land, with opportunities for commercial, small business, healthcare, housing and entertainment, there is still room to grow. Of course, with all the growth, comes traffic! The Eastgate corridor will soon be undergoing a “facelift”, to ease congestion.

A couple of the reasons that so many people want to explore the homes for sale in Union Township is for it’s convenient proximity to downtown Cincinnati, CVG, Lunken Airport and Clermont County airport. There is a variety of housing: comfortable starter homes to luxury home price points. The popular Polo Fields and Lexington Run are “must explore” pool communities for many incoming buyers.  Mature, treed neighborhoods with rolling terrain, and friendly neighbors, like Deer Valley, English Creek or Surrey Ridge, invite homebuyers to enjoy custom, quality built homes in the $200,000 – $300,000 price range, approximately 15 – 20 years old.  Many of the homes boast walkout basements, and wooded lots.

Meeting the demand for a variety of housing, new town homes are being offered in Wetherby Farms, along with quaint, single family homes designed to transport you back to “yester-year” with front porches, private rear patios, and garages accessed from rear alleys.

Ivy Trails straddles both Clermont and Hamilton counties, and offers both grand, upscale custom built luxury homes, and a Life-Style section. In the Life-Style section, the homes are smaller, but not wanting for a single, beautiful amenity!

Residents of Union Township enjoy a wonderful park system. Clepper Park and Veteran’s Park are just two of the area’s out door playlands. Ballgames, picnics, trails, fishing lakes….all to enjoy! The Cincinnati Nature Center’s Rowe Woods is also located in Union Township.

 The Union Township/ Eastgate areas are served by the West Clermont Schools.  West Clermont embraced the small school concept in 2002. High school students may attend either Glen Este High, or Amelia High, as they choose, based on the student’s interests. Ten small schools, 5 at Amelia, 5 at Glen Este, were established in 10  course studies as:

• School for World Studies
• School for Creative Arts and Design
• School for Business and Technology
• School for Applied Health Sciences 

Are you ready to learn more about properties for sale in the Union Township area? Just let us know.  The realtors with The RealCincy Group of RE/MAX Unlimited would be glad to provide you with homes available now, that just might tempt you to the area!

More Cincinnati real estate information can be found at RealCincy.com

The contest is centered on “Cincinnati Trivia” and every customer who plays is a winner!  You’ll claim either an instant-win food prize or a discount on a Cincinnati-style chili T-shirt. As any true Cincinnati-style chili consumer knows, you want your chili the way you want it! Order your 5-way, 4-way no onions, cheese coney “no mo”, that means no mustard for those of you new to the area still learning “chili-speak”. You can order your winning t-shirt to match your order preference. Who wouldn’t wear that proudly? :) Check out www.chilitownusa.com to see what I mean.
 
The grand prize winner will win a year of free family entertainment at Greater Cincinnati’s top attractions. The grand prize package, valued at more than $3,325, includes:
 
• Family memberships to the Newport Aquarium, Cincinnati Museum Center, Cincinnati Nature Center, Reds Hall of Fame,  and the National Underground Railroad Freedom Center
• Two tickets to three Cincinnati Bengals games during 2009
• Four tickets to the Meijer 300 at Kentucky Speedway
• Four tickets to the Five Show Series: The Marx Theatre Package at Playhouse in the Park
• Season ticket four-pack for the Northern Kentucky University Basketball season at the Bank of Kentucky Center
• A family four-pack to the Nutcracker at the Cincinnati Ballet
• A family four-pack to The Beach Waterpark and Kings Island
• A family four-pack for the Florence Freedom 2009 season
• Plus other additional great surprises

Those are great prizes! So get over to the Gold Star nearest you and play. You just might learn a thing or two about your hometown, or “adopted” home town, and win a little something along the way. Check out www.goldstarchili.com for more information.

More Cincinnati real estate information can be found at RealCincy.com

 Spring has arrived!

• Paula Deen – April 8. Cintas Center, Xavier University
• Tom  Foss – April 9. Funny Bone Comedy Club. Newport on the Levee
• Drew Hastings – April 15. Go Bananas Comedy Club…that should be a good show!
• Kings Island – April 18th……Opening Day….!
• Queen City Barbie Doll Club Show & Sale – April 19. Holiday Inn, Sharonville. I know my girls would have loved this when they were little!
• Sesame Street Live: When Elmo Grows Up – April 23 – 26. Bank of Kentucky Center
• Butterfly Show – April 18 – June 21. Krohn Conservatory

Such a welcome sight

More Cincinnati real estate information can be found at RealCincy.com

One of the most important elements of the Cincinnati home buying experience, and perhaps the most stress inducing portion of the process, is the home inspection.  In Part One of this series, I shared with you this thought: Just because the inspector wrote down a “problem”, that doesn’t make it so. Some “problems” are nothing more than items that can be fixed with a screw driver or by pushing the re-set button on the GFCI outlet. An inspection report that lists 5 or 6 of these types of “problems” nearly inevitably causes a nervous home buyer to doubt his purchase decision. Look objectively at the report. Dirty gas fireplaces can be easily cleaned by a homeowner. Smoke detectors can be installed after you move in. Wobbly banisters serve no real threat to your health. Just get out the screwdriver.

The purpose of the inspection is to determine if the home has any material defects that were not immediately visible when we toured the home together. What are we concerned with?  Roof condition, termites, radon, non-functioning windows that may prevent an escape in case of fire are good examples. A good inspector should be able to help you understand the difference between real issues, and items that should probably be done at some point….like adding an extra smoke detector in the upstairs hall for example.

Your home inspector is not supposed to be there looking for little bits of problems. He is there to identify major fixes, and major problems.  The purpose of writing down wobbling ceiling fans and loose banisters is to help you “perfect” the imperfect home.  These are not written down to give you a list of items to present to the seller. A wobbling ceiling fan should not affect your decision to buy your home.

Now that we have wrapped our heads around the purpose of the report, and the very real fact that we will need to go line item by line item, making a clear determination between fact, opinion, safety and a weekend minor chore list, let’s talk about what else can happen.

Why Didn’t He Find This Problem?

During the 2 or 3 hours that you and your inspector are together, your inspector may miss a few things. Why? Some problems can not be found unless you actually live in the home. A good example is  hot water distribution in the home if two showers are being run. Drippy faucets can materialize at any time. Leaks can develop after you move in and certain conditions arise…..like a wind storm a month after you buy the home.

The “Last Man In” Theory

It has happened that an inspector discovered a leak in the roof that could be fixed with securing shingles, or correcting a problem with flashing. Bring in the roofer that recommends a new roof. Why? The “Last Man In”.

The “Last Man In” theory is this: The last guy to work on a problem is reluctant to just “fix”, he would rather replace. He doesn’t want the exposure of liability, real or imagined, because he was the last guy to touch it.

Just another thought: in the winter, your inspector can not test the air conditioner. If we are having a snowy winter, the roof may not be clear for weeks. When we are experiencing a hot, sticky summer day, the furnace will not be flipped on.  Problems can manifest later. Wind can be damaging and ground settles. Motors on garbage disposers and trash compacters can give out. I’ve never been able to make sense of the life span of a water heater.  I’ve had them last 20 years and I have seen them go in less than 10. Your inspector doesn’t have a crystal ball.

Different Opinions

There is more than one way to build a home. On the Cincinnati market today are homes built what we might call “Good”, “Better”, “Best”.  All are acceptable.  If you are purchasing a 10 year old $150,000 home, it’s probably “Good”. An inspector might call out something that is “Best” because it is his opinion that all homes should be constructed a certain way or contain a particular feature.   If your home is built to code, the seller doesn’t have to make design changes to make the home “Best”. Bring in a contractor and his opinion may differ on how something should be done that was not noted on an inspection report. Remember, you have two different opinions because the two sets of eyes are coming from different approaches.

You home inspector is giving your home a general, overall visual sweep.  He will not light the pilot light on water heaters, pull apart the furnace, or conduct an extensive mold test. He will generally recommend HVAC and fireplace cleaning.  He will not perform any invasive tests.

Remember that your inspection, even if no real material defects are found, is not going to eliminate any and all future issues. When I bought my home in 2000, my favorite inspector performed a very good inspection. However, within the first 12 – 14 months my dishwasher leaked, the ice maker stopped making ice, the A/C didn’t work the following summer, the water softener stopped working and the garbage disposal quit and needed to be replaced. 

I hope this helps you understand what to expect at your home inspection. The home inspectors that we can recommend will try to do a good job for you. They are here to help. Let’s just be sure to take the report, one item at a time, always keeping in mind the purchase contract language and intent of the inspection contingency, and keep the emotion out of it. I bet you’ll find that the stress just melts away and you will enjoy the home purchase process even more.

More Cincinnati real estate information can be found at RealCincy.com

Story #1

Let’s set the scene: 1st time buyers nervously moving forward on a purchase. They are doing things right. They have saved for the down payment, they have the money in the bank for emergencies, and they are buying well below their approved purchase price so they do not stretch themselves.  Enter the home inspector.  The home inspector convinced them that the electrical wiring in the 25 year old home “was shot”. His exact words. The sellers need to have an electrician re-wire the home. He could not get the front porch light to come on. The exterior plug on the porch didn’t work. It was “dead”.  There were major issues to address! The couple was scared to death of the “fire trap”. They wanted out of the contract….NOW!

Solution:  Burned out light bulb & a GFCI that just needed reset. Yep, that’s it. Seller replaced the light bulb and pushed the little red button on the GFCI, and problem solved.

Story #2

Let’s set the scene: Young executive moving to Cincinnati with his wife and baby. We select a beautiful, gently lived in one year old home. The sellers barely had time to unpack, when he was transferred so the home was sitting there empty, just waiting for my buyers.  For some reason that we don’t quite understand, the paint work is a bit “patch-y” & it really shows up in certain sunlight. Not the nicest touch up job I’ve ever viewed, but this is a great house, reduced in price to meet the market conditions. My customers decide this home is “the one”.  We draft an offer with the understanding that if the sellers accept our contract, we will take the home “as is” and not ask for the home to be re-painted. Offer accepted.  Enter the home inspector who notes on his report that the whole house needs repainted.  I explained to the buyers that our “best deal” included the fact that the home needed repainted, and the sellers are not even going to entertain that notion. And…AND….the purchase contract clearly states that we are not conducting an inspection to discuss cosmetic issues!!   I might add that the same home inspector made comments on his report about yard conditions, on the neighboring lot, in a new construction neighborhood, before there was even a house built!!  He also missed the giant sink hole in the front yard.

Solution:  Our purchase contract clearly states the following. “It is not the intent of this provision to permit the buyer to terminate this agreement for cosmetic or non-material defects or conditions.  Buyer agrees that minor repairs and routine maintenance items are not to be considered material defects with regard to this contingency”. If you sign it…you agree to it!!  Did the buyers ask for the paint job after the inspector said that they should? Yep. Were the sellers a bit, let’s say miffed? Yep.  Did it cause unnecessary anxiety as the buyers suddenly decided that because the home inspector “…said that we should put that in the contract and have them repaint the home….” that this normally respectful and calm Realtor ® didn’t want to put her foot in someone’s backside? Oh yes!!

Story #3

Let’s set the scene: A lovingly maintained 15 year old, custom built 2 story enters the market.  It goes under contract and the buyers send over their inspector.  The inspector notes a problem with the roof. A small leak is noted near the chimney.  It is his opinion the roof has lived a useful life, and that the sellers should spring for a new roof.  The seller disagrees. He understands the integrity of the roof, and knows that a new roof is not at all necessary. There is no curling, no flaking, no loose shingles, zero indication that this roof doesn’t have another 10 years of life. He hires his own roofing expert to examine the issue.  A $200 fix later, and the flashing is repaired, the water is now properly flowing as it should.  Would you rather spend $200 for a minor fix, or about $4000 – $5000 for a new roof? Just because an inspector said so?

Ok….I have collected plenty of stories over the years, but this should do it for now.  Here’s my point:  We absolutely, positively must keep home inspections as an integral part of our home buying and selling process. The guys generally do a good job, and I don’t for a minute think that any one of them are out to “trash” a contract, nor do they intend to make trouble with poor reports.  But they are human. Until the perfect humanoid home inspecting droid is invented, there will be mistakes.

The unintended consequences of the home inspection that notes every “this or that” is this: while it may sound “thorough” it scares the heck out of buyers! It causes buyers to question their purchase, and wonder if they should move forward on a home that is now “tainted”. Talk about buyer’s remorse!! Sorry, but there is no provision in a purchase contract to dump on a home because now you doubt your decision.   When you are handed your home inspection report, be objective. Really look at what is important on that report.

Let’s not bother to address cosmetics like paint, landscaping, carpet stains or what’s happening in the neighbor’s yard. We took that into consideration when we drafted our offer.  There is no perfect home and your inspector will certainly find something to jot down. Your inspector may note items like wobbling ceiling fans, loose banisters, stains on linoleum, etc.   That’s ok. The point of noting these items should be to help you have a running list of “to-do’s” and point out items that you just might want to take care of after you move in.

Don’t panic. Give the seller the opportunity to correct the “issues”.  Keep in mind there may not even BE an issue!  Sorry, but just because the inspector wrote it down does not make it so.

Yes, we can ask the seller to take care of these items. Many sellers who take pride in their home will be glad to address even a minor “to-do” list. Let’s just try to keep in mind the purpose of the inspection……material defects.

More Cincinnati real estate information can be found at RealCincy.com

There have been several key changes to the First Time Homebuyer Tax Credit; here are some of the highlights:

• The amount eligible for the tax credit is lesser of 10% of the cost of the home or $8,000. This is an increase from the July 2008 provision of $7,500

• Any single family residence will be eligible, as long as the homebuyer will be using it as his or her primary residence

• The tax credit reduces, or eliminates, the income tax liability for the year of the purchase. Any unused amount of tax credit is refunded to the homebuyer

• Be aware that there are income limits. The full amount of credit is available for individuals with adjusted gross income of no more than $75,000 annually. For those filing a joint return, the adjusted annual gross income can be no more than $150,000. This phases out above those caps at $95,000 and $170,000

• First time homebuyer (and homebuyer’s spouse) may not have owned a primary residence in the 3 years prior to purchasing the home in 2009

Here are some significant revisions to note:

• No repayment of the tax credit is required for home purchases on or after January 1, 2009 and before December 1, 2009.  This is a major difference from the tax credit offered to first time homebuyers in 2008

• If the home is sold within 3 years of the purchase, the entire amount of credit is recaptured on sale. This will apply only to homes purchased in 2009

• Home buyers can use state and local bond funding and still take advantage of tax credit

• All revisions are effective as of January 1, 2009

As always, it is essential to discuss your potential or impending home purchase with your tax advisor.

There are many fantastic reasons to purchase your first home – now you can add another one to the list: a sensible tax credit!  So give us a call or shoot us an email, and we will refer to you a mortgage consultant that will help you to assess your purchase power. Then, let’s get out there and boost the economy!

More Cincinnati real estate information can be found at RealCincy.com

Click this link here for a detailed, and I do mean detailed, monthly statistical charts. You’ll know more about the Greater Cincinnati real estate market trends than ever. This is really good information. Enjoy!

Click here to see MLS monthly and year end updates.  I immediately noticed a lot fewer licensed agents at the end of the year, than at the beginning of the year. Yep…it’s been difficult this last year. We are thankful for each and every opportunity that we’ve had in 2008 to assist our customers and clients with their real estate needs. We always appreciate the continued referrals from friends and past customers. Thank you.

The real estate market for residential sales in Cincinnati continued to decline, reaching into the double-digit drop from the same period last year.

In 2007, there were 22,265 home sales in Greater Cincinnati.
In 2008, there were 18,752 home sales in Greater Cincinnati. 

A 15.8% drop in volume.  Gross volume took a hit too. 21.4%. $3.9 billion in 2007 to $3 billion in 2008. We saw a drop in average sales price of 6.7 %, from $173,986 in 2007 to $162,340 in 2008.
We are currently seeing about a 10 month absorption rate. In other words, it could take about 10 months for any single home to sell, or be “absorbed” into the market. Although most sellers get a bit anxious after 90 days, a balanced market is about 6 months.

Northern Kentucky market statistics are interesting too. Northern Kentucky home sales dropped 14%, 5,126 in 2008 from 5965 in 2007.  Total volume dropped 13/3%, to $823.3 million last year from $949.7 million the year before.  The average sales price did rise 1% to $160,611 from $159,210.

So, what does 2009 bring? Dunno. What I can say is this: Interest rates are silly low. If you are sitting on the fence, trying to “time the market” and decide if it’s dropped low enough for you to get in on  a purchase, stop it.  Experts and armchair prognosticators alike disagree on “bottom”. Besides, by the time it’s identified, you’ve missed it. Enjoy the choice of good homes available, interest rates we didn’t think we would ever see again, and go buy a HOME!

If you want to sell….need to sell…..do not be discouraged. Well marketed, priced right, staged, “inspected and corrected”, your home will sell!! Look at our Guaranteed Sale Program. Maybe that will work for you. Check out our “Serious Sellers” Satisfaction Package. Is that a good fit? We have other options too. Give me a call. We’ll see what will work best for you and work on bringing up those 2009 numbers together.

More Cincinnati real estate information can be found at RealCincy.com