Appreciation Archives
Posted by Mike Parsons
September 25, 2008 at 08:15 PM
While the first time homebuyer market $200,000 and under has been popping, homes that require folks to move then buy are sitting. The ones that are really struggling are the $400,000+ homes. The $400,000 plus marketplace has been fueled by the creative loans, teaser interest rates, and over-confident consumers that we hear about in the news everyday. This is simply not a time when purchasers feel confident enough to make those high dollar purchases. The media has created alot of fear. They figure they will wait it out. Also, many of the newer homes built in the last 5-6 years homes at $400,000+ that were sold on the outskirts of Columbus in neighborhoods like Wedgewood, Golf Village, Dublin, Powell, Lewis Center, etc.. are being perceived as over valued by the market. For most, its not huge price depreciation, but enough to keep most sellers under water. New builds were just sold at such a premium due to the below market financing. Buyers were evaluating homes based upon their mortgage payments instead of the purchase price.
The old addage Location, Location, Location is returning to be a theme as buyers are now much more considerate of commutes to work(gas), and the stronger investment of homes in established communities. Areas like Clintonville, Upper Arlington, Grandview, and Worthington have faired much better for sellers because every other home isn't on the market weighing the prices down. Buyers have forgone the huge open great rooms and vaulted ceilings for usually smaller homes in established communities that offer walk to schools, walk to restaurants, and more of a community feel.
Areas that are really taking a beating are Groveport, Pataskala, Pickerington, and Grove City due to a whole lot of new building and existing home inventory, and in some cases a perceived lesser school district.
Westerville and Hilliard are caught somewhere in the middle and have faired decently.
The Short North, Victorian Village, and Grandview continue to be pretty hot and pricey.
The Downtown and Arena District seller who bought in 03'-04 and were selling in 05'-06' did pretty well but it remains to be seen how many of the dowtown condos and lofts will fair over the next few years as investments. I am skeptical how the market will react to the once 5-10 tax abatments in some of these areas that will be coming due and are bound to affect buyers value and will go straight to their payments bottom line.
Posted by Mike Parsons
September 24, 2008 at 06:16 PM
Although traditionally a seller’s market, abnormally high levels of inventory over the past two years have been the key contributing factor for the change to a buyer’s market in central Ohio. However, the inventory of homes for sale has been decreasing throughout 2008.
There were 16,975 homes for sale in the central Ohio area in August 2008 which is 14.2 percent lower than last year at the same time
according to the Columbus Board of REALTORS®.
“Exceptionally high numbers of homes for sale over the past two years have made it appear that home sales were flailing,” says Greg Hrabcak, President of the Columbus Board of REALTORS®. “Although not the case, the fact that inventory levels are decreasing while sales are maintaining supports the market correction we’ve been anticipating.”
Although home sales today are not as high as during the housing boom, which started in 2003, sales are in keeping with pre-boom sales levels.
“Industry professionals know that the market has to take a breather after a boom in order to correct itself,” offers Hrabcak. “What most don’t realize is that, theoretically, home sales levels should be much lower to compensate for the inflated sales levels during the boom. The fact that our sales levels are in keeping with pre boom levels is actually strong evidence that the central Ohio housing market is healthy and stable.”
The average sale price of a home in central Ohio is down 4.8 percent from one year ago. “Again, this is due in great part to the high level of inventory.
When you have a much higher number of homes on the market than buyers, the sale price of a home will drop in order to compete for the smaller pool of buyers,” adds Hrabcak.
“However, we’ve seen the average sale price creep up throughout 2008. The average sale price in August was $175,632 which is almost 15 percent higher
than the average sale price of $152,790 back in January 2008!”
The Columbus Board of REALTORS® Multiple Listing Service (MLS) serves all of Franklin, Delaware, Fayette, Madison, Morrow and Union Counties
and parts of Champagne, Clark, Hocking, Licking, Fairfield, Knox, Logan, Marion, Pickaway and Ross Counties.
This is a press release of the Columbus Board of Realtors.
Posted by Mike Parsons
September 05, 2008 at 04:30 PM
Do you think your property, or your client's property, is valued too high by the Auditor's office for real estate taxes? Check out this article written by good friends of mine Ralph and Brian Berger. There is a complaint process that is administered by the Board of Revision.
If you believe your value is high you will need undisputable evidence to support the valuation. Once you appeal your value, it can go up, down, or stay the same.
Taxes are one year in arrears. Therefore, your tax bill that will come out around December 20, 2007, is for the valuation of your property up to 1/1/07. This means if you have an appraisal for the appeal it should be dated as of 1/1/07.
If property values are dropping in your neighborhood in the year 2007, then this will take effect with your 2008 tax bill.
The county re-evaluates your property taxes every three years. Therefore, the county will be re-evaluating your tax valuation in 2008 (also upon transfer assessed valuation is adjusted to the sales price).
Instruction on filing a tax complaint and forms are located on the Auditor's web site. All local Auditor's web sites are on ColumbusRealtors.com under `Related Links'. Once at the Auditor's web site look for tax complaint or board of revision.
Also you will need to pull up your property record card from the auditor's office (under property search). This will have information needed to fill out the board of revision tax complaint form (i.e., tax district, parcel number, assessed valuation, owner of property and sales history).
Typically for residential properties, if the form is filled out properly and submitted and received before the deadline (March 31), and with evidence (an appraisal completed by a state certified appraiser) supporting a lower value, the board will make a decision and either will accept the appraisal value or set up a formal hearing.
The board of revision, the school board representative, and the person filing the tax complaint (and their attorney and/or appraiser) are usually the parties at the hearing.
The board will review your evidence (usually an appraisal or recent sales of properties or comparable sales of similar properties) for a lower property value. The school board attorney will also have the right to review the evidence and ask questions.
The board then takes the evidence under advisement and will notify by certified mail of their decision.
If the school board is involved they will (1) accept the board's decision or (2) appeal the case if they are in disagreement.
The school board if in disagreement may elect to have the property appraised for the appeal. The school board has a vested interest in real estate property taxes as they receive most of their funds from these taxes.
The appeals hearing is similar to the first hearing except now there is an opposing side.
After all evidence is presented, the board again will take under advisement and notify of their decision later by certified mail.
It is very important to fill out the form completely and properly. If an entity other than an individual is owner of the property the complaint may need to be signed by an attorney. Be careful to meet the deadline, and have substantial evidence to show a reason for a lower value. This form needs to be notarized. Complaints will only be accepted from December to March 31.
I have appeared before several boards of revision on numerous occasions and have found them to be very fair in both the complaint process and their decision.
The auditor's office uses a mass appraisal system to determine the value of your property. The system is good, however, most are expected to be the correct property valuation, but some are also expected to be high and low.
We are currently in a buyer's market in central Ohio as evidenced by larger inventory of houses, longer selling periods and generally leveling prices. Therefore, tax complaints will probably increase in 2008 even though the county will be doing a complete re-evaluation of properties.
By Ralph F. Berger, MAI, SRA and Brian R. Berger, R.F. Berger and Associates, Inc.
Posted by Mike Parsons
August 21, 2008 at 08:07 PM
Low interest rates and high inventory added up to more homes going into contract in July. More homes in fact than any other month since August 2007 as new listings fell, according to the Columbus Board of Realtors.
A drop in new listings in July helped contribute to declining inventory levels. The number of homes on the market, 17,707, slid nearly 12% compared to July 2007.
July was also central Ohio's second highest month for home sales, just slightly below the years strongest month with 2,242 home sales.
Greg Hrabcak, President of the Columbus Board of Realtors, said "Programs such as the first-time homebuyer tax credits in the recently passed Housing and Economic Recovery Act should motivate even more buyers in the coming months." He also added, "I think people who don't take advantage of the favorable market conditions now are going to look back five years from now and say 'What was I thinking?'"
Year to date sales of homes through July total 12, 869, 13.8% behind the July 2007 total, but still in keeping with pre-boom leels.
The average sales price of a home in central Ohio in July was $173,940.
-Information derived from Columbus Board of Realtors
Posted by Mike Parsons
November 27, 2007 at 08:50 PM
Slower listing pace supports market correction
(November 27, 2007) The number of listings added to the market in October was down for the third month in a row, a strong indicator that the market is beginning to correct itself. The 3,578 homes listed last month is down 6.9 percent from one year ago. In addition, new listings in August and September were down 8.3 percent and 5.7 percent respectively according to the Columbus Board of REALTORS®.
"The record number of listings added to the market each month has tilted the scales strongly in favor of the buyer this year," said Brad Bennett, President of the Columbus Board of REALTORS®. "As the inventory of homes has been roughly sixty percent higher than our norm, sellers have had to lower prices to compete for the buyer. This has caused home values to appear lower than they actually are. As the listing pace slows, inventory levels will drop and home prices will rise again as the market begins to correct itself."
The average price of a home sold in central Ohio in October was $164,844 which is 0.9 percent lower than the average sale price one year ago. The average sale price of a home sold in the first ten months of the year is $173,122, which is 1.5 percent lower than the year to date average last year.
"A Forbes.com study released in early October reported that Columbus Ohio is the third most stable housing market in America and further projects that we?ll see strong price appreciation in 2008," comments Bennett. "As REALTORS®, we know that 2007 has been a corrective year after several years of extraordinary housing activity. We also know, based on our experience, that central Ohio is and always has been reliable and solid when it comes to home values."
Posted by Mike Parsons
September 18, 2007 at 07:15 PM
When it comes to housing, words like slump, slow, and risky pepper headlines across the country today. Those of us in central Ohio scratch our heads, as in our market, sales are exceptional when you take a look at the big picture...
In 1972, the Greater Columbus area was made up of six counties, had a population of 1,170,000, fixed mortgage rates were 7.5 % and Realtors sold 8000 homes.
By 1982, our population was 1,270,000 (up 100,000 in 10 years), fixed rates were 16+%, and 5700 were sold.
By 1992, the population was 1,400,000 (up 130,000), fixed rates were 8.25%, and 14,000 homes were sold.
Today, our population is 1,700,000, fixed rates are in the 6.25% range, and last year REALTORS sold over 26,250 houses.
I repeat-26,251 homes were sold last year in Central Ohio...that's hardly a slow market!
Here's the good news you haven't heard!
-In the past 40 years the median price of homes increased every year except 2006-which followed four record setting years of increases.
-Central Ohio home values have increased almost 33% in the last decade.
-Last year was the third highest number of sales ever in Central Ohio. Yes, it was down 4.5% from 2005 and the average sale price is down a whopping 1%, but it was still a good year. Today, compared to 2004, only 3 years ago, we have sold close to the same number of houses and the average sales price is up nearly 3%.
-The median net worth of a rental household is $4,800, yet the net worth of a homeowner household is $171,000.
-In the next 15 years the baby boomers are going to inherit 90 trillion dollars. Ninety-six percent of baby boomers think real estate is a good investment, 8 out of 10 own their own homes, and 34% own multiple properties. That demand for the future real estate will certainly push investments higher.
-Since 2000, the DOW has gained 10% (all in the last year). In the same time, the average home nationwide appreciated 88%.
-While we often hear that Ohio leads the nation in foreclosures, we were actually 8th in 2006. Certainly that is not great, but Ohio is also #8 from the top in the percentage of households that own their own homes! In Columbus, we are 19th of the top 100 MSA's in foreclosures, but are lower than Vegas, Dallas, Denver, Indianapolis, Houston, Memphis, Lauderdale, and lots of others.
-Problem sub-prime loans make up less thatn 1.5% fo all loans.
-Standard & Poor's recently released its list of top 50 major metros at risk of declining home prices in the next two years showed Columbus as one of the least risky. According to the report, on average, there's a 34.6% chance that home prices will drop in the nation's top 50 markets int he next couple of years, with many of the riskiest markets falling in areas that saw steep run-ups in prices in recent years, followed by decreased affordability and drops in rate of appreciation. Columbus is #6 from the bottom and has a less than 10% chance of homes prices falling here (well below the average) in the next two years.
In a nutshell, for the first time in 35 years...
-Inventory is high so there's a terrific selection of homes to choose from.
-Home prices are very competitive.
-Interest rates are awesome (only 3 years in the past 35 years have rates been lower). So you can get more for the money.
-And there are still many great loan programs for deserving buyers.
Now is a great time to buy!
By Brad Bennet-President of the Columbus Board of Realtors
Posted by Mike Parsons
August 29, 2007 at 08:09 PM
9/15/07-We will be hosting a FREE Home Buying Seminar for first time buyers. We thought we would do this class to help first time buyers feel more comfortable going through the home buying process. Often, buyers haven't done the necessary research and aren't prepared for their home purchase. This course is designed for those that hope to buy within the next year, but maybe not tomorrow. It is intended to give home buyers the basics so that everything isn't thrown at them all at once when the time comes to buy. This discussion is intended to disregard the hype and talk about the real issues that are important first time buyers. Subjects that we will talk about are:
1. Typical Steps in a Real Estate Purchase including financing, home search, making and negotiating an offer, to inspections, insurance for your home, and closing on your home.
2. How do I apply for a mortgage loan? What things do I need to be aware of when applying for a mortgage?
3. The biggest mistakes first time homebuyers make in Columbus, OH.
We will have an open forum for any questions big and small after the presentation.
The Free Homebuying Seminar will be held at Park National Bank located 7140 N. High St. Worthington, OH 43085 (Just South of 270 on the corner of Wilson Bridge and High). It will begin at 10am and will go unitl approx. noon depending upon the amount of questions. Light refreshments will be provided. Please call or email to register your seat. 614-523-6818. RSVP is required.
9/15/2007 at 10AM Park National Bank Worthington, OH 43085 614-523-6818 or email mike@parsonsrealestategroup.com to register now!
Posted by Mike Parsons
August 17, 2007 at 06:32 PM
Anyone read the Columbus Dispatch lately? If you are like most of us, the constant barrage of doom and gloom concerning the real estate market can wear on your brain, especially if you have a home for sale. What is the real story with the market you ask? Without writing a novel here are the issues that are affecting the Columbus Real Estate market in a negative way.
Factors that are contributing to the Columbus Real Estate Market slowdown are the following:
1. Tightening of credit and income requirements from banks. Approx. 15% of the homebuyers over the last few years had shaky credit. They no longer can get a similar loan with the tightened standards. With fewer buyers there is less demand and prices come down to meet demand.
2. Over supply of recently new constructed homes. Many buyers were lured into buying new construction with low buy down rates. These buyers were basically buying into the "low-temporary payment" and not the $200,000 mortgage that it was. If it wasn't for the buy down rates and introductory low payments many of those homes wouldn't have sold for the premium prices that they did.
3. Many adjustable rate mortgages that have adjusted to a much higher variable rate thus thus leaving struggling homeowners to try to pay their mortgage payments. Most ARM loans are fixed for 2 or 3 years, then adjust to a higher floating variable rate. The bulk of the ARM's issued were inked between 2003-2005. Most are hitting that 2-3 as we speak and more will realize increases over the next year or so. This is creating many home sellers and more inventory. These borrowers have to weather the very high new payment or sell.
4. The overuse of buy-down mortgages by banks and home builders. Example-A builder would qualify a home buyer on their ability to make the first year mortgage payment of $1000, but each year the payment would rise $200. Most first time homebuyers understood this at the time of purchase, but figured they would either be making more money 3 years from that point or would just sell the home. By the 4th year, we are seeing a flood of new homes on the market because homeowners can't afford their $1600 payment. When every third house goes up for sale on a street supply goes way up, demand and market value goes way down (price drop).
If I am a buyer is it a bad time to buy right now?
No, Between now and the next year and a half will be a great time for buyers to buy at the bottom of the market. Markets are efficient. Meaning Supply and Demand will sort itself out and prices will stabilize in 1.5-2 years or so. Buy at the bottom.
I have a home to sell. Should I sell now?
If you don't have to sell now I would probably hold out for a couple years to maximize your return. If you do need to sell, the good news is that even though you might have to sell for a little bit less than you thought, you will be buying an excellent value on the buyside.
Where are the problem locations and areas I should avoid when buying a home?
Rather than tell you where not to buy, I would tell you that homes with the following qualities are much less affected by market issues than others.
Location,Location,Location. Try to be inside the outerbelt 270. Pick cities that have top ranked school districts. Pick neighborhoods that have parks/schools in them. Pick a neighborhood that is established, meaning a track record of sales in a reasonable amount of time. If you are looking at a neighborhood where literally half of the homes are for sale, that is not an established area. Pick a neighborhood with good proximity to Downtown Columbus. Pick a home that has character. If the home you are looking at has 10 other homes just like it on the same street, you will be facing alot of direct competition when you sell. Your older established areas with great schoold districts are the safest bets. new build condos in the outlying suburbs are facing alot of competition and should be avoided. Unless you are buying a foreclosure or under market these new developments should be avoided. It is tough to sell a condo when there are 100 others of the exact same model for sale down the street. Don't buy a newer home in an area where you will have to compete with builders when reselling your home, the builders will win. If it is must that you buy and brand new home, buy it from a quality builder, not one that maximizes the square footage for the dollar with bad floorplans, lesser components, and shotty materials. If you would like me to tell you who they are feel free to give me a call. Many of these lesser builder's homes sold in 2006 for $250,000. You couldn't get $190,000 now for many of those homes. Don't be that guy!
I hope this blog has helped in some way. If you would like to talk any further about the real estate market I am only an email or phone call away. Mike P
Posted by Mike Parsons
July 05, 2007 at 08:33 PM
This real estate market is in slow motion. Not quite as bad as the National and Local Media would have you know, but still slow. Things are selling, just slower than they were 1-2 years ago. Due to the much longer marketing times we see sellers adjusting their prices to the slow demand, thus, prices sagging a little. We haven't seen any big dips like Florida, Arizona, Cali, etc..., probably 1-5% less than prices in 2004-2005, early 2006. I expect this trend to continue through the end of 2008 at which time we will see a bottom.
Rates have ticked up a bit to approx. 6.875 or so but they are still very good compared to the average over the past few decades.
This expected slow down is magnified by buyers poor confidence from seeing media hype, tightening of lending standards which has taken many subprime buyers out of the market, over supply of inventory in Columbus's surrounding, newer over-built subdivisions, and seller's (ARM's) adjustable rate mortgages starting to shift to higher variable interest rates this year.
Note to Columbus Real Estate Buyers:
Now is a great time to buy. Think location. On the outskirts you can find every third new build for sale. Invest in a community that maintains strong demand. You can find that in neighborhoods where there are few homes for sale, and in cities that are land locked. - If they are going to be building down the street after you buy your home why would they buy your house in 5 years rather than build their own new home? Invest in a home that appeals to a wide audience yet has unique factors you can't find in the home down the street(historical character, central location, convenient to all highways, functional floorplan, walking distance to parks/schools, close to hotspots/nightlife/culture, don't be afraid to make cosmetic improvements to create value)
And remember, if you have a home to sell before you buy, you may get a little less for your home when you sell but you should be able to get a great deal on the new home you buy.
How can I put myself in the best resale position down the road?Buyers and sellers remember: You may get more square footage and a cooler updated floorplan buying a new home but don't be surprised when resale time doesn't pad your wallet. There is a trade off between new homes and resale. New homes typically won't start appreciating until year 4-5. Older, centrally located, established neighborhood homes start appreciating from day one. When you buy new you pay a premium for new mechanicals, roof, ability to customize, and always competing with multiple like-king houses in the neighborhood, etc...When supply is high in a neighborhood, homes are always competing with one another and prices never appreciate.
Posted by Mike Parsons
October 16, 2006 at 09:45 PM
Kirk Herbstreit, the former OSU Buckeye football player and current Gameday TV personality bought this 3600 sq. ft. home on Onandaga in Upper Arlington in 2004 for $739,500, only to bulldoze it. Thats an expensive lot! He then built a brand new home(not pictured) that is rumored to have cost $3-4 million.(below)
He recently just sold this Wedgewood home in Powell at 5166 Canterbury for $1,075,000 where he lived while his house was being built. Not a bad selling price considering he bought in 04' for $975,000 at the peak of the luxury market when other homes in this price range didn't appreciate much.(below)
OSU Football Coach Jim Tressel sold his old home on Arlington Ave in Upper Arlington due to it's lack of privacy. He opted for a larger setback lot on McCoy where he purchased this 2 acre, $1,375,000 home for list price. He now has a football field sized front yard which helps to keep stalkers off his front porch.(below)
I will continue with OSU theme.
OSU Basketball Coach Thad Matta bought this home in the Woods of Josephinum in Worthington on 8/12/2004. The home was only on the market for a week. They were asking $925,000 and Matta got them down to $895,000. The 4054 sq. ft. home is located on Seminary Ridge with a great lot backing to the Olentangy River. (below)
Former Buckeye Football Great and TV/Radio personality Chris Spiellman, bought this home on Edgemont in Upper Arlington back in 1996 for almost $700,000. He has since invested about the same amount of money on upgrades and renovation. His home is valued at $1.6 million and he pays the city almost $30,000 a year in property taxes. (below)
Former Buckeye Andy Katzenmoyer owns this home in Tartan Fields on Rob Roy Dr. He purchased this home in 2000 for $650,000. It was featured in the Parade of Homes, boasts a custom home theatre, and back to the golf course.
Continue reading MTV CRIBS comes to Columbus, Ohio-Buckeye Edition »
Posted by Mike Parsons
September 11, 2006 at 06:21 AM
The Worthington neighborhood traditionally known as Worthington Estates has appreciated very well compared to other areas in Columbus, as well as other areas of Worthington. This is not due its breathtaking architecture or new inviting floorplans. This neighborhoods location is what continues to carry it past its competitors.
The Worthington Estates/Worthingway/Olentangy Hills area is bordered by WIlson Bridge Rd. on the North, High St. on the East, the Olentangy River on the West, and Highgate on the South. This neighborhood is one of the few around where children can walk to elementary school, middle school, and high school. This benefit alone is the significant demand driver. Worthington schools hold top state rankings. The neighborhood also borders the Olentangy River bike trails which offer neighborhood access to scenic walks along the river through the parks. The parks are extremely safe, large, and well maintained by the city. Most locations in the neighborhood are a bike ride to Old Worthington shops and restaurants, the Worthington Pool, and the Worthington Community Center. Worthington Estates tends to attract well to do families that could many times afford a more expensive home, but enjoy the humble atmosphere and unmatched amenities.
The area is currently undergoing a turnover from it's original 1960's owners to a younger family oriented neighborhood. We are seeing a premium put on homes that have been cosmetically updated and expect to see many new renovations and additions in the coming years. You can't find Location like this in a newly built neighborhood in Southern Delaware County! Developers today could never match the neighborhood amenities this close to Central Columbus.
Posted by Mike Parsons
August 18, 2006 at 07:20 PM
The answer is, It Depends! Location. Location. Location. 3-5 years ago condominium complexes like Bethel Village (corner of Sawmill and Bethel) appreciated a little more per year than many well-to-do, surrounding single family homes. Due to economies of scale, and developers finding greater profit in condo development, we have seen many new condominium projects built on Columbus's North arch and downtown areas. This has transplanted a lot more condo inventory into the marketplace in the last couple years. When supply rises, demand falls. When demand falls, price appreciation will slow.
Continue reading Condo vs. Home, What is the best investment? »
Posted by Mike Parsons
August 17, 2006 at 06:49 PM
Many buyers struggle with whether they should buy a condominium or a single family home. A common objection for condos is thinking that a condo fee is throwing money away. One must first understand what a condo fee covers. Often, a condo owner will not have to pay for water or sewer costs, this is paid by the condo association.
Continue reading Home vs. Condo - Are condo fees worth it? »
Comments (2)
Posted by Mike Parsons
July 28, 2006 at 01:53 AM
Home appreciation in Columbus tends to be governed by 3 factors. There are always exceptions but these are good guidelines to follow when evaluating the investment of your purchase. If you’re prospective home has one of these qualities you are in pretty good shape, if it has all three you will be in one of the highest appreciating areas in the city.
Continue reading Home Price Appreciation in Columbus »
