CINCINNATI - When Heather Wigle walks along McPherson Avenue in East Price Hill, she doesn’t notice the blighted properties and boarded up houses that are the result of foreclosure.
Instead, she senses housing opportunity.
“I see a community that’s been hit hard by recession, but is rebounding as quickly as any neighborhood could,” she said. “I see a lot of hope. I see a lot of energy. I see a lot of excitement.”
Across town, Marti Gardner strolls along the refurbished Oakley Square, just blocks from her house. Despite the housing boom and bust and the recession, her home has held most of its value. It’s the same for other homes there
“It’s people buying into Oakley. They’re looking at the price of houses,” she said. “In, the boom it went way up, but then it stabilized. It really didn’t drop that much. People saw that and wanted to take advantage of it.”
That’s the tale of housing in two Cincinnati neighborhoods from 2000 through 2010.
It’s a story that began with housing prices starting to increase in 2000 as more and more people were approved for loans.
However, the bubble burst in 2005.
Many homeowners defaulted on their loans and their property fell into foreclosure.
Lenders sold their mortgages to investment bankers. They, in turn, bundled them into securities and sold them on the open market.
Eventually, because of the risk involved, the entire system collapsed. Many firms closed. Others merged with competitors. A number received government funds to keep them afloat.
The nation’s worst recession since the Great Depression came on the heels of the collapse and unemployment levels soared.
“There’s a lot of factors that caused the downturn, but mostly it was bad loans,” said Pete Kopf, a Hyde Park Realtor and President of the Cincinnati Area Board of Realtors.
“In general, Cincinnati was affected like the rest of the country, but not as bad,” he said. “We are in a much better position than the other Ohio metro areas and we’re much better than many parts of the country.”
The 2010 Regional Indicators Report for Greater Cincinnati and Northern Kentucky showed that the vast majority of homes in the region were affordable because they could be purchased with 28 percent or less of yearly income.
HOUSING OPPORTUNITY INDEX
2008 – 82.6%
2009 - 88.2%
(NOTE: Share of affordable homes sold for a family earning the local median income.
Affordable is considered to be 28% or less of yearly income going toward housing)
(SOURCE: 2010 Regional Indicators Report for Greater Cincinnati and Northern Kentucky)
Data from the U.S. Census Bureau and the American Community Survey shows that the number of total housing units increased by nearly 9,000 from 2000 through 2009, but the percentage of them that were occupied fell by nearly nine percent. Owner-occupied structures increased more than three percent, the same amount that the number of renter-occupied units declined.
CITY OF CINCINNATI HOUSING OVERVIEW
2000 2005-2009
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TOTAL UNITS 166,012 175,343
OCCUPIED 148,095 140,750
89.2% 80.3%
OWNER OCCUPIED 39% 42.5%
RENTER OCCUPIED 60% 57.5%
RESIDENTS PER UNIT
OWNER 2.43 2.47
RENTER 1.97 2.02
(SOURCE: U.S. Census Bureau and American Community Survey data)
Kopf said that 10 years ago the Cincinnati housing market was on a steady climb.
“We were appreciating. We had great inventory,” he said. “We had fairly reasonable interest rates and everyone was able and wanting to buy a house.”
Now, Kopf said the market is in a state of recovery with numbers something similar to 2000.
“We’re a little down on units sold,” Kopf stated. “Our values are a little bit higher or equal to where they were in 2000, but we’re in a really good position in Cincinnati.”
He said that’s because people are buying houses and the market is stabilizing.
“For the first time we’ve had two months solid with increased unit sales,” he said.
CITY OF CINCINNATI
EXISTING HOME AND CONDOMINIUM SALES
2000 Sales 3,137
Average Price $131,844
Median Price $95.650
2010 Sales 2,604
Average Price $145.044
Median Price $97,250
(SOURCE: Cincinnati Area Board of Realtors)
Cincinnati’s is an aging housing stock, according to the Home Builders Association of Greater Cincinnati.
Vice-President Carolyn Rolfes, President of Potterhill Homes, said the median year of construction was 1945.
That means half the units in the city were built before that date and half since that time.
Meanwhile, the number of permits issued for new construction declined when figures for 2001 and 2010 are compared. The average price of homes built has increased significantly.
CITY OF CINCINNATI
NEW HOME PERMITS
SINGLE AND MULTI-FAMILY
2001 2010
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PERMITS ISSUED 117 82
AVERAGE PRICE $87,611 $159,226
(SOURCE: Home Builders Association of Greater Cincinnati)
What are the reasons behind the numbers?
Rolfes said the recession and Ohio’s unemployment rate are big factors.
“The fact that people just aren’t certain whether or not they’re going to have a job has certainly contributed to the fact
that they’re not out there buying houses,” she said.
Some might suggest builders don’t want to construct homes in Cincinnati, but Rolfes said that’s not the case.
“Absolutely, the climate is good enough for builders to want to come into the City of Cincinnati,” she said. “The fact that the permits are down really reflects the housing market as a whole.”
Many of the permits that have been issued have been for the annual CitiRama projects that have taken place in Westwood, Carthage, Northside and other communities. The 2011 event will held this Fall on Rhode Island Avenue at the Villages of Daybreak in Bond Hill.
Other new housing has been built in the West End with the massive City West project. It replaced the majority of barracks-style apartment buildings with single family residences.
The Gateway Quarter development at Vine Street and Central Parkway in Over-The-Rhine is another example. Numerous other buildings in the area have been repurposed by 3CDC (The Cincinnati Center City Development Corporation).
Downtown, a new condominium tower was build at 4th Street and Central Avenue. Dozens of other buildings have been renovated into market-rate condominiums.
The first tenants for 300 apartments at the Banks are scheduled to move in around April 15th.
“I think things will continue to improve in the City of Cincinnati,” said Rolfes. “I believe there is going to be continued increase in demand for new housing in the city, particularly if the city keeps up the really progressive tax abatement program that they have.”
Foreclosure remains a big problem for Cincinnati, the region and the rest of the nation.
Working In Neighborhoods (WIN) recently released its eighth foreclosure study.
At one point bad loans were responsible for many of them, but WIN’s 2010 report indicates that unemployment and underemployment have taken over as the major reason for delinquency and foreclosure.
Cincinnati leads all communities in Hamilton County with the number of foreclosures completed.
CINCINNATI FORECLOSURES COMPLETED
2008 - 1,355
2009 - 1,151
2010 - 1,205
(SOURCE: Working In Neighborhoods)
The WIN Report said, “While Hamilton County experienced a decline in the total number of first filings, both foreclosure listings and completed sales were up from 2009. Around 67 percent of municipalities in Hamilton County and 48 percent of neighborhoods in the City of Cincinnati experienced an increase in completed foreclosures in 2010.
As in previous years, an increasing number of foreclosures have taken place outside of the low and moderate-income neighborhoods. The City of Cincinnati has seen a decreasing share of foreclosures over the past six years, while the suburban municipalities share increases.”
The Home Ownership Center (HOC) in Corryville has been working for years on foreclosure prevention efforts and counseling to connect mortgage holders directly with lenders.
HOC President Rick Williams said the only thing that will truly ease the problem is for the recession to end.
“We have to have the services of foreclosure prevention, but in the long term, we do have to have a economic recovery and we have to have employment,” he said.
PRICE HILL
Price Hill was one of the communities where the seeds of the housing problem were sown before 2000, according to resident and developer Bill Burwinkle.
“With the easy mortgage money available, people that had lived in the neighborhood for generations were moving out to the suburbs, so a lot of properties became absentee landlords,” he said. “That always causes a little bit of heartburn because properties aren’t quite kept up like a homeowner would.”
Dwight Young, who heads BLOC Ministries, one of the groups trying to revitalize the neighborhood, said he agreed with that statement.
Young said the attitude was basically, “I don’t own it. I’m not going to take care of it. I don’t care about it. If I tear it up, no big deal. If I throw trash down, it doesn’t matter.”
However, he added that’s changing because the community took a stand.
“We’re not going to let it be an unknown, forgotten place,” he said.
“This is our home. We’re going to make a difference.”
BLOC Ministries has its offices on McPherson Avenue, a street where an estimated 60 to 70 percent of the properties are in foreclosure.
Many of its employees now live in houses on the street and BLOC is renovating a nearby apartment building for 12 families. The organization has also opened the BLOC Coffee Shop at Price and Hawthorne Avenues, near Holy Family Church.
“The idea that we have is to actually change a street at a time – a block at a time – working with a family at a time to make a difference,” Young said. “You bring enough light into a neighborhood, obviously it’s going to make a difference.”
That same spirit led to the creation of Price Hill Will to help with the revitalization efforts.
“We were looking at the assets in the neighborhood and saying, ‘Wow! This is a really great place to live,’” said Ken Smith, Price Hill Will’s Executive
Director.
Price Hill Will has rehabbed 45 homes in the neighborhood. It’s also one of the partners in the restoration of The Elberon building at the corner of Elberon Avenue and West 8th Street as housing for senior citizens.
That’s not all that’s going on in Price Hill, which includes Lower Price Hill, East Price Hill and West Price Hill.
Former Cincinnati City Councilmember John Cranley is one of the developers of Incline Village on a hilltop with a spectacular view of Downtown at West 8th Street and Matson Place. It will contain 14 luxury apartments and a restaurant.
It’s part of what hopefully will be branded as the “Incline District” to help market and promote the area. Cincinnati’s Planning Commission recommended the change Friday and sent the measure to City Council for consideration.
“We think that the Incline District is a great way to brand that part of the West Side to encourage new investment, new jobs and more housing,” Cranley said.
Burwinkle has just finished remodeling a building at Price and Hawthorne Avenues into five apartments. The first tenant moved in last week.
“Last year at this time, that building was unoccupied except for squatters,” he said. “We also have a retail spot that used to be a grocery store, but we’re actively talking with several individuals about an art gallery.”
He’s convinced that Price Hill is on the rise.
“I can tell you that back in the 70’s, the price of real estate in Price Hill was exceptional,” he said. “Today, the prices are similar to what they were in the 70’s. There are some great opportunities for people to move back into this neighborhood.”
OAKLEY
Few Cincinnati neighborhoods have weathered the housing boom and bust cycle better than Oakley.
“Oakley did a great job in the past 10 years,” said Kopf. “People saw Oakley as an opportunity. The values were good. It was insulated by some very nice neighborhoods like Hyde Park, Mount Lookout and Pleasant Ridge. Oakley was an opportunity for buyers to get in and be near those areas.”
Work on renovating Oakley Square is nearly finished, giving the neighborhood a focal point for businesses and residents.
Those are some of the reasons that Megan Marshall, her husband and four children were attracted to their house on Minot Avenue.
“We looked at houses for about six months in different neighborhoods and we really felt Oakley was a good, solid neighborhood,” she said. “It has some stability to it. It’s always been slowly growing and it had all the little pieces of the different neighborhoods that we were looking for in Cincinnati.”
The Marshall’s bought their house in 2000 for $140,000 and thought about moving recently to obtain more space for their family. They put the home on the market for $219,000, but withdrew the listing after they couldn’t find another house they liked as much.
So, they refinanced it for an appraised value of $175,000 to $180,000. They’re in the process of remodeling the kitchen.
“We really feel like the value is holding, which is great for us,” Marshall said.
Marti Gardner grew up in Hyde Park, but when it came time to buy a house, she said she couldn’t afford to move back there.
She looked in Mount Lookout and Pleasant Ridge before finally finding the perfect house in Oakley. Her family is also in the process of remodeling.
“I bought it in 1991 for $68,000,” she said. “It went up as high as $180,000 during the boom and now it’s about $160,000 to $165,000.”
Gardner and Marshall are typical of Oakley residents who buy older homes and remodel them.
“I don’t like the new houses,” Gardner said. “I prefer the older. They have more character.”
PRICE HILL AND OAKLEY
Existing home sales figures and foreclosure rates for Price Hill and Oakley support the notion that the boom and bust cycles hit Price Hill very hard and Oakley to a lesser amount.
CITY OF CINCINNATI
EXISTING HOME AND CONDOMINIUM SALES
Price Hill Oakley
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2000 Sales 436 316
Average Price $75,104 $48,183
Median Price $72,700 $35,000
2010 Sales 125 156
Average Price $128,845 $202,305
Median Price $130,000 $192,500
(SOURCE: Cincinnati Area Board of Realtors)
(NOTE: Price Hill includes East, West and Lower Price Hill plus Covedale)
CITY OF CINCINNATI 2008-2010
COMPLETED FORECLOSURES
2008 2009 2010
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Price Hill 239 189 201
Oakley 8 18 16
(SOURCE: Working In Neighborhoods)
THE FUTURE OF HOUSING IN CINCINNATI
If you ask real estate and homebuilding experts what the future holds for their industries, they’ll say things are slowly looking up.
“Cincinnati is stable. We’ve never seen the peaks. We’re never going to see the valleys,” said Kopf of existing home sales. “I can tell you in the biggest downturn in real estate since the Great Depression, Cincinnati has fared fairly well.”
“The housing recovery will happen,” he added. “We are in a trough now and stabilized. In think in three to five years you’re going to see moderate appreciation.”
Kopf said inventory of houses is between nine and 11 months right now.
Six months is considered to be a balanced market.
“There’s a ton of inventory right now and not as many buyers,” he said.
“Instead of having in 20 properties in 2000 to pick from, today they might have 40 so each property is scrutinized more and more.”
Industry analysts predict that 2011 will remain relatively flat for homebuilders.
“We will actually see the bottom and start climbing out slowly, but surely in 2012 and 2013.
One thing Rolfes said will continue to drive new construction in the city is the tax abatement program.
“If you get a LEED certified house in the city, you get a 15 year tax credit – a tax abatement on your new construction,” she said. “If you just build new construction in the city, it’s a 10 year tax abatement.
So, it’s a very good incentive for people to move in.”
Surging fuel prices may be another reason people might opt for the city instead of suburbs, according to Rolfes.
As far as Oakley is concerned, Gardner and Marshall see steady improvement in home prices and the quality of life in the neighborhood.
“I think it can only improve,” Gardner stated.
“I don’t think it could go anywhere but up as long as the neighbors and the people stay involved in their community,” Marshall said.
The people behind the redevelopment of Price Hill believe their community could be the next Mount Adams.
Cranley said that 30 years ago Mount Adams used to be blighted and run down with the same sort of issues facing Price Hill today. However, it rebounded.
“We have similar assets. We have the views. We have the proximity to downtown. We have huge houses. Unbelievable value,” Cranley said. “We see this as one of the last frontiers of view property that can still be developed.”
Price Hill Will’s Smith said he thinks Price Hill is ripe for investment and reinvestment.
“In 10 years I want people to say Price Hill is THE place to be in Cincinnati,” said Price Hill Will’s Smith. “In a few years this is going to be one of the trendy places to live in Cincinnati.”
Burwinkle said it’s going to take time.
“If you think it’s going to happen in a year or two, you’re sadly mistaken because it’s decades,” he said. “But, if you never start, you’re never going to finish.”
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