Central Ohio Home Source

The 2010 BIA Parade of Homes, which most people refer to as the “Columbus Parade of Homes” kicked off last weekend in New Albany, in a subdivision called Ackerley Park.  We must still be in a recession, since there are only 8 homes in the Parade this year.  I think this is probably a smart number of homes.  When there are 12-20 homes, as in years past, all but the most unique homes get blurred in the normal, one-and-done visitors mind.  Also, it makes good sense to feature custom builders in the parade.  I remember the 2003 Parade of Homes in the Shawnee Crossing subdivision in Pickerington, which featured 21 homes, far to many to see in one afternoon.  Many of the builders featured were tract home builders such as (the now gone) Beazer Homes, Dominion, and Maronda.   A good idea from a marketing standpoint for those builders, but I think many of those homes lost value, even before the “recession”.   Every year at the parade, I say: “If I was spending this much on a home, I wouldn’t want to live this close to my neighbors.”  Maybe those folks don’t enjoy mowing like I do…

Columbus Ohio Skyline - From Confluence Park

Job prospects for new grads in Columbus and all of Central Ohio are poor: “There’s no jobs out there” , according to a local employment expert… Okay, not really an expert. It was actually a new college graduate that I was sitting next to at a wedding reception last weekend.  So, after not really searching for a job in her field (I think it was Organizational Development/Business), she has decided to go back to school to become a nurse or something.  I couldn’t imagine deciding you took the wrong major AFTER four years.  Well, best of luck to her.

On to this BusinessWeek article that hit the newstands last week, highlighting the Best and Worst cities for new college graduates.  Here is the featured page on the Columbus, OH job market.  If you don’t feel like clicking through, the article highlights the many large, stable employers that are the backbone of our job market.  The article failed to point out that Columbus is the Capital of Ohio, and that a large number of state agencies are either housed here, or have a large presence here in Central Ohio.

For those in other real estate markets, read the full story, to see if your city made the list.

(The photo of Columbus that they use is very poor, and probably is over 20 years old.  Mine is much better, and i took it…)

Star Wars Comic Book, Issue #1

When I was a child, I used to read and collect comic books.  I read them for fun and enjoyment when I was in elementary school, but when I reached 12 years old or so, I fancied myself to be a serious comic book collector in the making.  I purchased the ”Official” comic book value guide, and made my purchases based on what seemed would be likely to appreciate in value.  Someday, maybe one of my purchases would be the next Action Comics #1 (the one which introduced Superman), or X-Men #1.  As I got more serious about it, and made my purchases, I began to discover that what the “Official” book said that a particular item was worth, and the price that I could get for that same item, was very different.  I found out, and what many collectors (whether it be baseball cards, Hummels, antique vases, etc.) have known for years is this:  Your _____________ (insert item here) is only worth what someone will pay for it. 

 I think that is where we are with real estate values in our market here in Columbus and Central Ohio.  As everyone by now must be aware,  values have dropped here in our market in the last two years, although we never had a crazy runup that other markets had.  There are many frustrated sellers trying to get more for their home than the market will bear.   Is that 30-year old house that has been wonderfully updated, with the gorgeous landscaping, in a respected school district worth the $100/square foot that they think it is?   In my opinion, probably so.  If you had to buy land and hire a contractor to replicate the house as it stands, it would most likely cost much more.   BUT (and it’s a big,big but), if that homeowner had to sell it in the next ninety days, they probably would not be able to get that magic number that they want to get.   Will they be able to get that price in a couple of years?  Probably.  Maybe.  Depends.  Now for those folks that built a new home during the 2004-2007 era, in the $300k - $1+ million market segment, that is a totally different story.  I have NO crystal ball for our friends in that arena.  This conversation is for the folks that own homes in the mid/median market for our communities. 

So is that wonderful house WORTH that $100/square foot?  YES!   Can they get that out of it right now?  Most likely, no.

I like to think of the tax credit in this way:  Let’s say you buy a $100.00 appliance, and you bought it because you needed it, and you liked the rebate.  Two months go by, and you forgot to send in the rebate, and it has expired.  Are you going to attempt to return the appliance?  No, you will probably shrug your shoulders, and forget about it.  I think that is what will happen with the tax credit.  Those buyers who are in the market now, and end up missing it, will still find the house they want, move in, plant flowers, put down mulch, paint the bedroom their favorite color… and get on with life.  They still want a house, and, if they can qualify, they will still buy that house.

Photo Credit

Vacant Home

The US Census bureau reported vacancy statistics this week, and the numbers are not good, in spite of some of the administrations efforts to improve homeownership.  There are a total of 130.6 million households in the United States, and of that, 18.9 million are currently vacant.  Those numbers are a bit higher than at the end of 2008. 

It would appear that in spite of the improvements in the housing market nationally in the last year, many more job losses have occurred in the last 12 months, which have kept the numbers stale.

Photo posted under Creative Commons: Source ExplorerTom via Flikr.

If we have learned anything from the housing crisis of the last 2 years, it is that the notion that we “deserve” a certain home or a certain lifestyle is ill conceived.  It only takes talking to an elderly relative that lived through the depression and World War II to realize that we probably have much more than we need right now.  Folks back then came up with creative ways to just survive from day to day.  There was no talk of mud rooms, outdoor living spaces, spa bathrooms–you get the picture. 

The picture above is from a fantastic, life changing book, Material World, the the photographer, Peter Menzel.   In this book, Menzel features a snapshot of life for the median family in 3o different nations in the world (the family in this picture lives in rural India.  The highlight of each section is the signature photograph, where the featured family takes all of their worldly possessions from inside their home (or hut or whatever it might be), and poses with those possessions outside their home.   If you don’t want to buy it, check it out of the library.  Most of us spend countless hours of our week thinking about what we don’t have, lusting over the latest gadget, car, our neighbors new $20,000 kitchen makeover–whatever the thing might be.  All we need to to is ponder the statistic that 2/3 of the world lives on $1.00 per day to realize that our perspective in the United States is very far out of proportion.

Take some time to make plans and goals for this year — try to include some time where you are focusing on the needs of others less fortunate than yourself.  You will feel much better about your life — I guarantee it!

It has been a wild couple of years, hasn’t it?  I am not going to say I predicted it, by any means, but it seemed a little odd to me back in 2005 when an acquaintance with a 500-ish credit score and very modest income was able to qualify for a brand new $130,000 home.  She eventually sold it short sale before it got really ugly (similar units are now selling in the $60k range - maybe a bit more).

If you have 15 minutes to kill, and aren’t planning to water your crops in Farmville, or whack anybody in Mafia Wars, check these out.  We really like this explanation of the entire credit crisis.  Check it out — it is not exactly the “Dummies” version, like I would prefer, but it boils it down fairly well for most folks.  And we like the slick computer program they used to make this (you see the same thing used in the new Ford Truck commercials naarated by Dennis Leary (I think).

**Disclaimer: In this video, the folks that default on their home are portrayed as the family that is overweight, smokes, and has more kids — for the record, that is not accurate.  I am aware of plenty of thin, nonsmokers with no kids that have defaulted on their mortgages!

Part 1:

Part 2:

Your Money or Your Life - the book

A great resolution for the new year is to READ MORE BOOKS and WATCH LESS TV.  It’s on my family’s list, to be sure.  A great book to start off with is Your Money or Your Life by Joe Dominguez and Vicki Robin.  I read this one a few years ago, and it totally changed my perspective on work and purpose.  This is a great one to read if you are really trying to establish a healthy budget and financial gameplan.  It is not going to outline it all step-by-step, but it is a great one to read if you are starting that process.   It will get your head in the right place. 

A brief synopsis:  The authors were living in the rat race, and wanted a different game plan.  They started by outlining every penny that they spent (it’s not really that hard to do, if you try), and seeing where their spending patterns were falling.   They set out a plan to reduce spending, and increase savings, with the intent to drop out of the corporate world, and be able to live on their savings, and do what they wanted to do, which means different things for different people.  Maybe it means you quit your job where you are travelling out of town 4 days a week, and take a lower paying job just down the street from your home.  Or maybe you want to retire early, and work at a homeless shelter, or build homes for Habitat for Humanity.   

If nothing else, read it to get a fresh perspective.  Its a whole lot more than the “save more, go out to eat less” drivel that alot of financial experts are pushing right about now.

Check out the authors web site here.

I just recently saw this funny video that pokes fun at the frustrating process buyers are having in trying to take advantage of the bank owned foreclosure “deals” that are out there.  Obviously, the producer of this short film exaggerates some of the frustrating factors, but most are based on reality. 

The guys that made the video are in Southern California, where the market for bank owned foreclosures is actually super hot right now, so the “714 offers” part may be closer to reality there than it would be here in Columbus, OH.  But buyers here are experiencing cases where a house recently listed goes into contract within a couple of days, and they are “left out in the cold”.  It is generally the homes that are in good areas, but are priced very low that get snatched up quickly.  

Buyers (and their agents) need to realize that Listing agents owe their full duty and loyalty to their clients, which in this case happens to be a bank.  When they are dealing with agents representing bank owned foreclosures, the agents are following the guidelines and directives of the bank.  The communication lines are often delayed a bit:  an offer can be submitted, but not get an answer back from the bank for two or three days.

It helps to know your market.  This means you need to understand the house values in the neighborhoods in which you are searching.  Know what is selling, know what is not selling and why.   So if you are looking for a home in a certain subdivision, and most homes in that neighborhood that are in good condition are selling for $150,000,  a bank owned foreclosure (in similar condition) in that neighborhood will NOT sell for $80,000.    The listing agents that the banks hire are going to be very savvy, and WILL know the market.

Well, the final days of opportunity for the $8000 first time homebuyer tax credit are upon us.  If someone wants to close by 11/30, then he or she (or they)  must be ready to rock and roll right NOW…  Most importantly, have that loan officer on speed dial, and make sure that he or she has all the pay stubs, credit pulled, etc., so that when that offer is accepted, all the dominos will be ready to fall to get that house closed in time.

Now, I just had a conversation yesterday with a buyer who had been talking to their loan officer.  The loan officer said, “I heard a rumor that they were going to extend the tax credit and even make it larger than the $8000 that it is right now…”  WHAT??  RUMOR??  Rumors are generally not a good thing to pay attention to, especially when it comes to major life decisions.   That “rumor” is what the National Association of Realtors, and many others in the real estate industry are suggesting.  But I highly doubt that this loan officer in question has a red phone to the White House, or to every Senator and Representative.

Nothing is guaranteed!   That tax credit may go away, and NOT come back.  (If I had to guess, I would say that it will continue or come back in some shape or fashion.  But there is always a chance that other spending initiatives will take precedence (like the proposed Healthcare plan), and your representatives will come to the realization that all of this money has to come from somewhere, and that possibly homebuyers will have to go back to the way it was for all but 2 of the last hundreds of  years of home ownership, and NOT get a cash gift from Uncle Sam.

Just my 2 cents today…

Photo posted via Creative Commons via Flickr…courtesy of e_walk.