Did you realize that the Fall market is already here! It snuck up on us. It might not feel like it with these 90 degree days, but now that Labor Day has come and gone, we’re in the heat of the Fall market. Literally.
Over the years, we’ve seen an incredibly strong market in September and October because of lack of inventory and increasing demand. This year is no different, but there are some trends in the market that you’ll want to keep an eye on so you can see how they might effect your selling and buying plans.
To understand the market though, we first to explain how we view and track the local real estate market. We’ve all heard that real estate is all about location and that’s never been more true. We like to use the term “Hyper Local”. What does this mean? Well, each neighborhood has it’s own ecosystem if you will. Demand and supply can be different from one neighbor or another…heck, from one street to another. Monthly, our Build Cincinnati team reviews the sales, listings and trends for each area we focus to understand the health of that market. We even go as far as breaking each area up by price point.
An example would be looking at Montgomery and Hyde Park. Below, you’ll find a quick breakdown of home sales and listings at different price points and their average days on market. By going hyper local, we can best advise our clients on how to position their homes or buying plans.
Less Than $400,000 – 10 Listings
$401,000 – $700,000 – 26 Listings (2 New Construction)
$700,000+ – 40 Listings (18 Resale or Completed Homes & 22 New Construction)
Less Than $400,000 – 28 Listings
$401,000 – $700,000 – 18 Listings
$700,000+ – 25 Listings
Most people are under the impression that each of these areas are Seller Markets, meaning the lack of inventory gives Seller’s the edge. That might be true some cases, but in many, there is actually a growing amount of inventory. Before you worry though, Cincinnati in general only has 2.1 month absorption rate
. This means that if there were no new listings, all of the homes would be sold in 2.1 months (theor
etically, of course). A balanced market in Cincinnati is 4.5-5 Months
, so we’re still well below that.
Here’s what this means to you:
For Sellers: the market is strong! Home prices are up 7.4% across Ohio. However, Sellers and Agents need to be care not to become over confident in a home’s ability to sell at any price. When pricing your home to sell, we need to be ever vigilant in finding that sweet spot on pricing. The first two weeks after listing are the most important and you only have one chance to do it right. We always arm our clients with list price range and of course, a suggested list price. When reviewing the competition and sales, be sure that you’re being objective.
For Buyers: Inventory is low in most cases, but there are great properties that come on the market (or we find through back channels) routinely! Our team is hungry to find new homes, lots and opportunities for our Buyers, but we all have to work harder than ever to find them. This means making yourself available as much as you can to see homes the moment they hit the market and being pre-approvaled! We’ll be sure to take care of you on this front!!
Building Buyers: Cost is going up so get it now before it gets even more expensive to build! Over the past 12 months, the cost to build has gone up 8-10%. That’s purely the cost of materials and contractor work. Lumber, hardwood, labor, roofing, you name it! The longer you wait to build, the higher likelihood that the cost will go up even more. Land and lot opportunities are more difficult and more expensive to find too. If you’ve considered building, now might be the time to explore it a little more seriously.
With that, we’ll leave you with an interesting statement that sums up what many are seeing out there and to calm any of those that are throwing the term bubble around…
“We’re seeing the first indications that price appreciation may be slowing, but the underlying fundamental housing market conditions support a natural moderation of house prices rather than a sharp decline.” -Mark Fleming Chief Economist at First American
If you’ve driven around Hyde Park or Mt. Lookout in a while, you’ve probably seen a few new construction homes or two pop up where an older home used to be. This is a trend that has really gained steam over the past few years since urban areas like Hyde Park are so sought after. And, Buyers, of course, love anything new! But, it’s not just Cincinnati. It’s happening all across the country as older homes that have structural or functional issues are being brought down to make way for newer homes.
Our group, Build Cincinnati, along with our builders have been at the forefront of infill redevelopment. We source properties for our Buyers and Builders so they can have the opportunity to have the best of both worlds: a walkable, urban neighborhood and a brand new home. And, one of our builder has become the most popular in these parts: Classic Living Homes.
Led by longtime builder, Bernie Kurlemann, Classic Living and it’s team have been building for decades. Only in the past 5 years though has their group been rejuvenating the urban core. They’ve taken a different approach than many though. Their homes are designed to match the surroundings as much as possible. Bernie personally researches the nearby homes and their small details to incorporate those subtle touches to each of his homes. If you’ve ever driven by the home on Delta Ave, you’ll see exactly what I mean.
Another key contributing factor to the increased infill activity is the City of Cincinnati LEED Tax Abatement, which allows Buyer’s and Builders to go green and save a few future dollars along the way. Examples of LEED features in a home may be energy saving appliances, extra insulation, low-flow shower heads, toilets and faucets, and even solar panels in the roolf. Depending on the level of LEED, Buyer’s can capitalize on an abatement for improvements of $400,000 for LEED Silver, $562,000 for LEED GOLD and an unlimited amount of LEED Platinum. Of course, these do come at a cost, but long term they can be great decisions and help the environment while you’re at it!
Just in the past 2 years, Classic Living Homes has leveraged LEED in homes all around Hyde Park and Mt Lookout on Springhill, Richwood Ave, Morten St, Lower Grandin, Shaw Ave and Stettinius with the assistance of the Green Building Counsel in Over The Rhine.
So, if you’re considering buying a new home in the City anytime soon. You may want to consider Classic Living Homes or at least building a new home. Build Cincinnati has new lots and market homes going up all the time! You owe it to yourself to take a look!
If you’ve been living in the City of Cincinnati, chances are you’ve heard about the tax abatement for new construction and remodeled homes. Unless you’ve been living under a rock, of course.
But, do you really know how it works??
Here’s a little crash course on the tax abatement and why it’s been such a driving force in the Cincinnati residential real estate market…
As you may know, when you build, add-on or invest in your home, your property taxes can and, most often, WILL go up! This is obviously true in the City of Cincinnati as other municipalities, but there is a special little incentive for those looking to invest in the City (all 52 neighborhoods). The Cincinnati Community Reinvestment Area (CRA) Residential Tax Abatement, as it’s called, offers property owners the ability to minimize their tax implications. This means that any improvements will NOT significantly add to your property tax bill. You would only pay on the amount of “pre-improvement” value, up to certain levels.
Let’s give a few examples:
Example 1: You purchase a home or lot in Walnut Hills. The value of that existing property is $100,000. If you then build a $400,000 Leed Gold Certified Dwelling (we’ll get into the LEED certification below) on the property, you would only be taxed on the $100,000 for 15 Years. The remaining $400,000 would be abated for those years thus saving you around $8,000 per year!
Example 2: You own a home in Oakley assessed at around $250,000 and have decided to add on to the back of the home. The renovation will cost $150,000. That entire amount would be tax abated for 10 year. It’s only 10 years as opposed to the 15 year new construction abatement because of the regulations. This still saves you almost $3,000 a year for 10 years. That’s almost $30,000 in savings!
So, how do you do this? First off, you’ll want to call a professional (a builder or us at Build Cincinnati) that understands the tax abatement and construction process. You determine what the best plan of action is for your house or lot and then review the abatement guidelines at the link below. Once construction is complete (and have an audit from a LEED professional if you did a LEED Home), you’d need to submit your application to the City with the necessary documentation, which includes an improvement spreadsheet, Certificate of Occupancy, LEED audit and a few other miscellaneous documents.
Now, the secret sauce: LEED Certification. The City of Cincinnati is one of the BEST places to build a LEED certified home because it saves you even more money. If you look at the link above, you’ll see that this energy certification has tiered savings based on the certificate level. As you’ll see, LEED Silver allows for up to $400,000 abated, LEED Gold is up to $562,000 and LEED Platinum is UNLIMITED.
Of course, LEED comes with it’s extra building cost, but that’s specific to the home you build and how much money you can spend! Be sure to choose a builder (Shameless Plug ALERT…like Classic Living Homes, Walker Homes, Ashford Homes, Quest Homes, Legendary Homes) that’s knowledgable on the process because this will prove invaluable. Also, an excellent resource on the subject is the Green Building Consulting in OTR. They have spearheaded the LEED process for many of our client’s homes.
Now that you’re armed with this information, doesn’t building and remodeling in the City sound that much better! Not only can you design a home specifically for you and your family, but you can save money in the process!
For more information on the Tax Abatement, feel free to reach out to our Build Cincinnati team members at 513-686-7676