While real estate sales have ground to a halt in most areas of the country, Cincinnati seems to be relatively unaffected. Perhaps one of the reasons Forbes chose Hamilton County as one of the best places to "wait out' the recession.
But Cincinnati is not immune to foreclosures and the "hot market' seems to be in under 25K foreclosures. It would appear that the "investor types" have once again gravitated back to Real Estate, perhaps due to the miserable performance of the stock market.
There appear to be 3 kinds of people out the right now. People buying in their own neighborhood, (often to save their own property values) who want to tear down that eyesore next door to them. The "Slumlord" whose goal is to get a house cheap and then 'milk it dry', not maintain it and leave the neighborhood worse than they found it and the "Distance Investor groups" or Flippers as I call them.
There are several of these Flip groups operating in Cincinnati right now and they are buying at the "bottom end" of the range. The under 10,000.00 house. Typically these are HUD, Fannie or Freddie foreclosures and area dumped on the market. These homes are often bought for as little as 500.00!
These Investor groups then relist the property right away or in case of the government homes in 90 days (there is a restriction on relist). These homes are relisted for 10-20K , more than the purchase price. Others are 'wholesaled ' on Ebay. On any given week you will find 2-5 Cincinnati homes on Ebay by one 'discount properties' group. These sell for few thousand more than the purchase price and often are put back on the market again and again and again. I have watched one property sell 4 times in the last year. The first time for 2200.00, the second for 4450.00, the 3rd time for 8200.00 and now its on the market with a realtor for 21000.00!
This 'revolving door ' ownership is a battle for city officials and neighborhood groups who are trying to clean up their neighborhoods.
So what are your options as a home owner concerned about your property values? One strategy many home owners are using is banding together with other neighbors to buy these distressed foreclosures. Several home owners each chip in several hundred dollars, buy a house, spend a couple of weekends cleaning it up, maybe painting the outside and doing some inexpensive appearance things like planting flowers then resell the house with protective covenants.
What is a protective covenant you ask? Well a protective covenant is a covenant or legally enforceable contract that is attached to the deed. Typically it may require the owner to pull permits and begin restoration to National Preservation standards within a period of time. Usually it protects the outside elements of the house and generally prohibits the new homeowner from turning a single family to multi family home. Generally it prohibits things like vinyl siding or removal of key architectural elements, changing a porch for example.
What this does is send the investor type or slumlord in the other direction. It also means that the buyer "really wants' the house and in most cases results in owner occupancy. The neighborhood wins because the house is restored and neighborhood property values increase not decrease, most importantly it brings a neighborhood together to 'save' a part of it.
The profits from the sale are split among the group. Often the group will invest in another house and repeat the process over gain. This was a tactic we used in Indianapolis to rehab or get into the proper hands 12 houses in 4 years that otherwise might have become rentals. We were able to reverse a rental trend and turn the neighborhood around much faster. If your neighbors want to form a "Friends of the neighborhood group" I will be happy to share with you how to get it started.