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U.S. Apartment Rents Rose the Most Last Year Since Recession, Survey Says

Average rose 4.6% to nearly $1,180, Reis reports

By LAURA KUSISTO

Jan. 5, 2016 11:30 p.m. ET

 

Apartment rents increased faster last year than at any time since 2007, a boon for landlords but one that has stoked concerns about housing affordability for renters.

 

Average effective rents nationwide rose 4.6% in 2015, the biggest gain since before the recession, according to a report released Tuesday by real estate researcher Reis Inc. The average apartment rent now sits at nearly $1,180, up from about $1,125 a year ago.

 

MORE:

http://www.wsj.com/articles/u-s-apartment-rents-rose-the-most-last-year-since-recession-survey-says-1452054600


"Save the planet. Move to the city." -- The Downtowner podcast

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Don't have a better place to put this. I suppose this is a housing market/trend since many renters don't know what are normal/ethical landlord practice or what rights tenants have (they have substantial rights)....

 

Judge orders notorious Cleveland landlords to pay $4 million to female tenants (photos, video)

By Rachel Dissell, Brie Zeltner, The Plain Dealer

on January 15, 2016 at 10:00 AM, updated January 15, 2016 at 5:05 PM

 

CLEVELAND, Ohio – After Brianna Bowers' son tested positive for lead poisoning in 2013, public health officials told her landlord, Derek Brown, that her apartment had to be inspected for the toxin.

 

...She didn't know that it was unusual for a tenant to lack a written lease. Or for a landlord to demand that rent be paid only in cash.

 

Nor did she know that Brown, 48, and his brother Graig, 44, were among Cleveland's most notorious landlords.

 

The two were accused dozens of times over the past decade of mistreating tenants: taking their deposits, locking them out of their homes, threatening them, swearing at them, or taking everything from clothes to family keepsakes from tenants who were late on rent, or asked for repairs.

 

MORE:

http://www.cleveland.com/metro/index.ssf/2016/01/judge_finds_that_notorious_cle.html


"Save the planet. Move to the city." -- The Downtowner podcast

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Northeast Ohio home sales up 14% in 2015 from 2014 total

January 20, 2016

By STAN BULLARD   

 

Northeast Ohio home sales may be on a plateau in the coming year after racking up a big gain in 2015 over the prior year.

 

Figures from the Northern Ohio Regional Multiple Listing Service showed property sales kept humming in December, so sales for the entire year climbed 14% to 50,901 listings from 44,593 in 2014.

 

The record warmth in December also kept property sales from cooling off as 15% more listings, or 4,139 properties, traded this December compared with 3,602 the prior year.

 

MORE:

http://www.crainscleveland.com/article/20160120/NEWS/160119754/northeast-ohio-home-sales-up-14-in-2015-from-2014-total


"Save the planet. Move to the city." -- The Downtowner podcast

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Report: Top 10 residential real estate markets for investors

AUTHOR Hallie Busta @halliebusta

PUBLISHED Nov. 9, 2016

 

BiggerPockets’ list follows the spirit of other recent reports that explore where inventory, population, employment and pricing conditions hit a sweet spot and where buyers and investors can find affordable opportunities.

 

Realtor.com recently reviewed the country’s top 100 MSAs to find the 10 that had the least competition for homes. The real estate listing website’s 10 "most overlooked" markets include El Paso, TX, in the top spot followed by Albany, NY, Virginia Beach, VA, Winston-Salem, NC, and Augusta, GA.

 

Similarly, Coldwell Banker’s annual Home Listing Report ranked more than 2,000 U.S. real estate markets by the average price of a four-bedroom, two-bathroom home there. While cities on the West Coast dominated the top of the list — the first 11 were in California — the bottom of the list reveals cities with investment potential, including Cleveland and Detroit

 

MORE:

http://www.constructiondive.com/news/report-top-10-residential-real-estate-markets-for-investors/430010/


"Save the planet. Move to the city." -- The Downtowner podcast

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Last week the WSJ said that Millenial renters have become buyers this year. As usual the trend is most obvious on the coasts, but it may spur more condo construction or conversions in the Midwest or boost demand for starter homes in need of TLC..

 

(pay site)

https://www.wsj.com/articles/the-next-hot-housing-market-starter-homes-1494495003


There's nothing wrong with optimism, as long as you don't get your hopes up.

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From Cleveland Plain Dealer reporter Michelle Jarboe's (mjarboe[/member]) twitter account. She is attending the National Association of Real Estate Editors' Spring Conference in Denver........

 

The Counselors of Real Estate Chairman Scott Muldavin is unveiling the group's top 10 issues affecting real estate for 2017-2018 at #NAREE17. They are ...

 

1. Political polarization and global uncertainty, which cause delays and the inability to move.

 

2. The technology boom is going to change every aspect of buying, selling, managing real estate.

 

3. Generational disruptions. At a demographic inflection point. Boomers and Millennials getting in each other's way.

 

4. Retail disruptions. Retail's not dying - it's changing. People favoring experiences over traditional formats.

 

5. Infrastructure investment. Infrastructure's now part of the #realestate asset class. Significant winners and losers.

 

6. Housing: Big Mismatch. Affordability not an issue everywhere. But a problem where jobs are, where people want to be.

 

7. Lost decades of the middle class. Stagnant incomes. Automation. Student debt. Boomers w/o enough money in the bank.

 

8. Real estate's emerging role in healthcare. Including how buildings themselves can contribute to health and wellness.

 

9. Immigration. Real estate impacted b/c of reduced access to skilled workers, effects on tech sector, innovation.

 

10. Climate change. Way much more info now re: flooding risks for investors, buyers, owners. Perceptions impact values.


"Save the planet. Move to the city." -- The Downtowner podcast

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3. Generational disruptions. At a demographic inflection point. Boomers and Millennials getting in each other's way.

 

 

6. Housing: Big Mismatch. Affordability not an issue everywhere. But a problem where jobs are, where people want to be.

 

 

 

These two are closely related. Boomers want suburban offices, Millennials want to live in the core. Uncool Crescent and rural areas left holding the bag.

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There isn't a lot of turnover right now - supply has been down YoY nationwide (and in Columbus as well) for something like 14-15 consecutive months.  It's reaching near 20 year lows I think I read.

 

Part of that is because new builds ground to a halt in 2008/2009.  So now with things picking up again, there's a lack of "newer" supply over the last decade.  Many people opted to rent instead of buy over the last 8-10 years but are now looking to buy.  So you see this huge uptick in prices as supply of homes on the market is very low, but demand is coming back up to pre-2008 levels.

 

It will be interesting to see if this changes - new regulations were put in place last year that force underwriters to account for 1% of a borrower's student loan balance in their monthly DTI ratio, regardless if that's how their payment plan is actually set up.  So grad students who have $200K+ in student loans are immediately hit with $2K in monthly debt, and that doesn't even factor in paying off a car or any other loans.  Their DTI ratio needs to be under 40% or 45% w/good credit with the mortgage payment to qualify.  So you take on a $1,500/month mortgage and suddenly that's $3,500 in debt, again without ANY other loans being taken into account.  So they need to be making ~$94K annually to qualify.  That might be a ~$290K house on a 30-year mortgage.  But paying off a car, appliances, or anything else would immediately throw their DTI out of whack.

 

That new regulation is especially hard on those with student loans who are going through the public service forgiveness program.  It will be interesting to see if that has any ramifications.


Very Stable Genius

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The Cool Crescent of Columbus is on fire with even parts of the Uncool Crescent such as Grove City and Groveport gaining traction. Canal Winchester and Pickerington are far enough outside the Uncool Crescent to be negatively affected and are seeing big gains.

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Even here in Akron, which is about as non-wave-riding a burg as Ohio has to offer, there have been signs of things picking up.  I've had real estate agents unsolicited ask me if I were considering selling.  I live in a suburban-style (single-use residential single family detached homes) part of Akron, not exactly what I'd think of as an in-demand market.

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^^^ I spoke with some bankers and mortgage brokers recently who told me the 1% requirement of student loan balances is only if the loans are in deferment or forbearance. When you have a payment amount set, they take the payment amount just as with any other debt.

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https://finance.yahoo.com/news/u-existing-home-sales-unexpectedly-140244848.html

 

The number of homes on the market rose 2.1 percent, but supply was down 8.4 percent from a year ago. Housing inventory has dropped for 24 straight months on a year-on-year basis.

 

The median house price increased to an all-time high of $252,800, a 5.8 percent jump from one year ago, reflecting the dearth of properties on the market.


Very Stable Genius

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^^^ I spoke with some bankers and mortgage brokers recently who told me the 1% requirement of student loan balances is only if the loans are in deferment or forbearance. When you have a payment amount set, they take the payment amount just as with any other debt.

 

Hmmm...we just went through this.  Loan is being paid back via IBR - hopefully the PSLF stays in effect.  But every mortgage broker we spoke to said they had to take 1% of the total balance, regardless of the payment amount.


Very Stable Genius

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Cleveland-area house prices up 3.6 percent in May from a year before (interactive graphics)

By Michelle Jarboe, The Plain Dealer

on July 25, 2017 at 10:54 AM, updated July 25, 2017 at 11:00 AM

 

CLEVELAND, Ohio -- Local house prices kept rising in May, but the annual pace of gains has been slowing.

 

An index tied to prices of single-family homes in the Cleveland-Elyria-Mentor area was up 3.6 percent in May, when compared with a year before. That growth rate has been slipping since February. And the metropolitan area continues to lag the nation, which posted a 5.6 percent yearly increase in May, according to the S&P CoreLogic Case-Shiller Indices.

 

MORE:

http://realestate.cleveland.com/realestate-news/2017/07/cleveland-area_house_prices_up_1.html


"Save the planet. Move to the city." -- The Downtowner podcast

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Are there any resources to get this information on the neighborhood level?  Would be interesting to see data on "hot" neighborhoods like Detroit-Shoreway.

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Childless millenials increasingly make home-buying decisions based on the needs of their dogs:

http://time.com/money/4876151/millenials-homes-dogs-children-marriages/

 

 

Dogs are gigantic -- HUGE expenses.  As the Mr. Money Mustache blog calculated -- the opportunity cost of owning a dog in your 20s means you must work 12 more years to retire:  http://www.mrmoneymustache.com/2015/09/07/great-news-dog-ownership-is-optional/

 

 

 

 

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^ I wonder if the savings that developers may achieve through building with fewer parking spaces in the cities be offset by the space requirements for dog parks and other pet friendly amenities

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Dogs are gigantic -- HUGE expenses.  As the Mr. Money Mustache blog calculated -- the opportunity cost of owning a dog in your 20s means you must work 12 more years to retire:  http://www.mrmoneymustache.com/2015/09/07/great-news-dog-ownership-is-optional/

 

I guess that's true IF you are making exactly the median income ($51k as of the article writing in 2015) and IF you are only saving 5% and IF you spend $2k annually on dogs.

 

https://www.moneyunder30.com/the-true-cost-of-pet-ownership

 

We have a dog and spend much less than the $695 figure referenced as the average annual expenses of owning a dog.  It's probably $400 or even a bit less.

 

So yeah, I guess if you want to make up figures to fit your narrative and conclusion, you can just say, "$2,000 annually" even though that's not remotely close to the average people spend.


Very Stable Genius

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^ pets are expensive as people want to make them. If you choose to give expensive doggy washes and pampering, they are more expensive. If you choose to wash them with a hose it saves money. There is nothing that requires you to give them the most expensive medical care either. Pets are not people and thus no where near as expensive.

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http://www.cincinnati.com/story/money/2017/07/27/some-first-time-home-buyers-hit-affordability-wall-cincinnati/512157001/

 

 

We just sold our house and the amount of first time buyers coming through with only 5% down was scary

 

 

Of course that Enquirer article is West Chester-centric.  West Chester and Mason are hideously overpriced and boring places to live.  I get updates all the time on my phone for move-in ready houses selling inside I-275 for well under $100k.  It's a shame that people don't think they can raise 1 or 2 kids (or a puppy) in the sort of Cape Cod that people used to raise 5+ kids in.  They're wasting huge sums of money on "updates", 4-5 bedrooms, "good schools", etc. 

 

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^Well there is an argument out there for skipping the "starter home" phase and going straight to the "forever home", but nobody seems to just be content with the starter home. 

 

My brother and his wife bought a flipped bungalow two years ago and already are talking about buying a bigger home.  It's like, um, you're just not coming out ahead camping out in a starter home for 2-4 years.  It's not just the realtor and loan origination fees, it's the furniture and the move. 

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^ What most people consider to be starter home used to be family homes for people. 

 

This is pretty small even by "starter home" standards, but it illustrates my point.  We're 8 years removed from the housing collapse and you can still buy a move-in ready home in Hamilton County on a decent street for 1980s prices.  WAY under $100k, quite often: https://www.sibcycline.com/Listing/CIN/1532616/7349-Forest-Ave-Mt-Healthy-OH-45231

 

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Here in Cuyahoga County that seems similar to Parma or Euclid.  Historically blue collar areas with lots of mid century bungalows. Still relatively livable and quite affordable.

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Low-ceiling '50s bungalows also have super-low HVAC costs. Mine has '90s era insulation and '80s windows and my bill is never over $200/mo even in the ridiculously A/C-intensive summers seen south of US 30. This is in contrast to the '20s thing I had in Oakley which was even smaller, had newer windows and hit close to $400/mo regularly. Cincinnati isn't much hotter than Columbus since Cincy doesn't get the hot wind blasts and angry, soupy storms that we constantly face in Columbus. There's a reason why upper Canadian towns are Bungalow Central. But Cincinnati has lizards and Columbus doesn't.

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Low-ceiling '50s bungalows also have super-low HVAC costs. Mine has '90s era insulation and '80s windows and my bill is never over $200/mo even in the ridiculously A/C-intensive summers seen south of US 30. This is in contrast to the '20s thing I had in Oakley which was even smaller, had newer windows and hit close to $400/mo regularly. Cincinnati isn't much hotter than Columbus since Cincy doesn't get the hot wind blasts and angry, soupy storms that we constantly face in Columbus. There's a reason why upper Canadian towns are Bungalow Central. But Cincinnati has lizards and Columbus doesn't.

 

Damn what's up with the utility bills in Cinci?  I have a 2500 sq ft centry home in Cleveland and even with the air running every day I am usually in the low $200 range.  Same goes for the dregs of winter--gas is usually around $200 in the worst month, and that's with the thermostat set to a comfortable 70.

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I think I'd cry if my electric bill was $200. I don't use my A/C more than a few days a week and only after 7 or 8:00 set at 77 degrees. My unit is undersized though and barely cools the upstairs bedrooms, which is the only place I really even want to be cooler anyway, so I keep it off most of the time.


“To an Ohio resident - wherever he lives - some other part of his state seems unreal.”

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Maybe 10 years ago I remember hearing somebody say something like "the market pays a premium to get exactly what it wants".  Effective flippers do this -- they know exactly what the market wants and they buy the homes that can make that happen at minimal cost.  When these "we're priced out" articles appear, what they mean is we're priced out of getting exactly what we want.  Exact neighborhood, exact type of house, exact type of renovations. 

 

Obviously, in red-hot housing markets that have crossed the threshold into housing crisis (i.e. Seattle or Nashville), then people start throwing ridiculous money at the cape cods.  But even there they're often tearing them down or putting 1,000 sq foot additions off the back. 

 

In Ohio the best bargains if you live alone or are married with no kids or one kid are the ubiquitous cape cods.  Nobody wants them and they're all over the place, usually on busy streets.  I remain unconvinced that long-term appreciation on the more sought-after housing types will offset the much high purchase price, property tax, and motivation to tart the place up. 

 

Look at this gem that has been on the market now for about six months...looks like it's going to go for about $40k.  Needs a new paint job and new flooring.  It won't impress your facebook friends back home but it'll keep you out of the rain:

https://www.sibcycline.com/Listing/CIN/1520320/4534-Winton-Rd-Spring-Grove-OH-45232

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I have a 2500 sq ft centry home in Cleveland and even with the air running every day I am usually in the low $200 range.  Same goes for the dregs of winter--gas is usually around $200 in the worst month, and that's with the thermostat set to a comfortable 70.

 

Sounds like my 108 year-old wooden house. I had monster utility bills, with high gas in the winter, high electricity in the summer.  Adding exterior wall insulation took about 15% off the bills. New windows, the real surprise, took about 30% off.

 


There's nothing wrong with optimism, as long as you don't get your hopes up.

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I have a 2500 sq ft centry home in Cleveland and even with the air running every day I am usually in the low $200 range.  Same goes for the dregs of winter--gas is usually around $200 in the worst month, and that's with the thermostat set to a comfortable 70.

 

Sounds like my 108 year-old wooden house. I had monster utility bills, with high gas in the winter, high electricity in the summer.  Adding exterior wall insulation took about 15% off the bills. New windows, the real surprise, took about 30% off.

 

 

Yeah I have zero insulation.  I've gotten a couple quotes--they were crazy expensive, and due to the construction of my house the first floor can't really be done without risking blowing out all the plaster/lathe walls (basically on furring strips attached to the brick). 

 

Are you Cleveland-based?  Who did you use for insulation?

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^^^ Aside from the bargains all over town for houses that are in "uncool" neighborhoods, there are bargains in Cincinnati for mansions, too. Some of these houses I see listed would cost millions in other markets, and in the majority of the country they're simply aren't houses like them. Despite my architecture license, I was recently unable to convince my wife this house, for example, was much easier to salvage than it initially appears to be:

 

https://www.coldwellbankerhomes.com/oh/cincinnati/3950-winding-way/pid_18654989/

 

Someone is going to drop a little bit of cash on repairs and end up with a world class home, for the price of a cookie cutter suburban house. That one isn't even in a rough or unpopular place, either, it's probably one of the nicest streets in North Avondale.

 

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