Alison Moss - Cincinnati Real Estate

Living Rent Free After a Foreclosure

In a sign of the times, more and more Americans are living in their homes post-foreclosure. An article in RSI media detials the growing phenomenon and attibutes the situation to the volume of foreclosures that have washed over the banks and the fact that they were not prepared to process them.

But the reality is that this situation has its advantages. The families that stay in the home post-foreclosure tend to keep the utilities on and maintain the property. They keep the A/C running which dehumidifies the house inhibiting mold growth and they winterize the pipes preventing costly leaks. In addition an occupied home is less likely to be vandalized (broken windows, copper theft) than a vacant home.

The backlog is one factor contributing the situation, the second is the volume of foreclosed properties on the market already. ForeclosureRadar says it now takes an average of 229 days for a bank to foreclose on a home in California after sending a notice of default, up from 146 days in August 2008. In addition releasing more cheap inventory into the market will only further diminish the value of the bank;s asset. It pays for the bank to have a family living in the home until a point when the market stabilizes and they can recoup their investment in a sale.

Although the family’s credit now has a foreclosure on it, living rent free has give some people the opportunity to use their mortgage money to pay off other debts, and in some cases even save a little bit of money so that when they move to an apartment or other living situation they have the ability to restart their lives with a small financial cushion.

Pending Home Sales Surge in Cincinnati and US

Due in large part to the Federal Housing tax credit the pending home sales in April surged to a 110.9 index rating up from 104 in March. How do we know that the tax credit was the cause of the increase? Well we can look at the historical data and see that the last surge of pending home sales occurred in October 2009 just as the prior tax credit was expiring according to RSI media.

Locally in the Midwest the index rose 4.1% to 104.2 and is 17.9% above April 2009 index. The Cincinnati market was certainly impacted by the credit. Scores of buyers looked to take advantage of the program, and in turn helped to stimulate the regional economy as well. Each new home purchase helps to provide work for contractors, inspectors, title companies, and movers just to name a few impacted industries. While the tax credit was positioned to help the real estate market the halo effect is that the increased volume of home transactions really has stimulated commerce in a number of sectors.

Which is a better investment Stocks or Real Estate

If you had invested $100,000 in the stock market in the 1^st quarter of 2000 (10 years ago), what would your investment be valued at today? Of course the answer would depend on what the specific stock or stocks you bought, but consider this:

The Dow went from 10,921 on January 3, 2000 to 10,583 as of Jan 3, 2010 — and at this writing it’s hovering around 10,186. So, $100,000 invested in a DJIA-like stock portfolio ten years ago would now be worth less than $100,000. See the DJIA information for reference.

By comparison, the average house purchased for $100,000 in the Cincinnati-Middletown-OH-KY-IN MSA during the 1^st Quarter 2000 would have been worth $122,438 in the 1^st Quarter of this year. Click here for FHA data. Of course, all real estate is local and just as stock appreciation depends on the particular stock, real estate appreciation depends on the particular property.

So, which was a better investment? You be the judge. Besides, everybody has to live somewhere!

Posted on Jun 03 in Cincinnati Real Estate, Investment Property, Investment Real Estate, Property Value
Tagged: 10 years, Cincinnati, djia, dow, FHA, investment stocks, msa, real estate appreciation, st quarter, stock appreciation, stock market, stock portfolio

Hamilton County Computer and TV Recycling

The Hamilton County Solid Waste Management District proudly announces the opening of the Cincinnati 2010 computer/TV recycling program. In an effort to properly and safely dispose of TVs and and computers Hamilton County is setting up drop-off days for its residents.

The program will begin Tuesday, June 1 and run through Wednesday, June 30th.
Hours are Monday – Friday, 9 am – 4 pm, and on Saturday, June 19th from 9 am – 2 pm.

Drop-Off Location:
11085 Kenwood Road
Blue Ash, Ohio 45242

As a reminder, this program is for Hamilton County, Ohio residents only. If you have any questions contact Susan Schumacher the Assistant Solid Waste Specialist at the Hamilton County Solid Waste Management District at 513-946-7734.