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Cincinnati neighborhoods attracting attention from investors looking to flip houses

Lots of activity in Madisonville, Price Hill, more
Posted at 12:14 PM, Mar 12, 2017

CINCINNATI -- House flipping is happening again nationally, and Cincinnati neighborhoods are seeing increased interest from investors. The question is whether they'll benefit from it.

Flipped homes -- properties sold twice within a 12-month period -- accounted for 5 percent of all single-family home and condo sales in the third quarter of 2016, according to ATTOM Data Solutions, which collects information from more than 950 counties across the U.S. The total number of flipped homes was down slightly from the second quarter of 2016, when more than 51,000 homes were flipped -- a volume not seen since 2010.

Cincinnati landed last spring on a list of the best cities in which to flip a home. According to 24/7 Wall St., the region's low housing prices means less risk for investors.

The Cincinnati housing market took an upturn in 2013 and has strengthened steadily since then. In January, 1,477 home sales were recorded in the region, according to the Cincinnati Area Board of Realtors. That's a 4 percent increase over the previous year and a new record high. In January 2005, during the housing boom, 1,376 homes sold.

The board of realtors doesn't keep records on house flipping, but bank-owned properties constituted roughly a third of the homes for sale in Greater Cincinnati from 2008 to 2013. As of January, bank-owned properties represented just 10 percent of Cincinnati's home listings. That's a sign people have been buying properties for investments, said David Welch, president of the Cincinnati Area Board of Realtors

"'Buy low; sell high.' That's the advice," Welch said. "Those are the places to look."

Realtors have reported seeing investors in redeveloping neighborhoods such as Madisonville -- "That's Oakley-near," Welch said -- and Northside, Westwood and Clifton.

Although flipping sometimes had a negative connotation at the height of the housing boom thanks to some investors skimping on materials or rushing through repairs, it also can represent a positive force in a neighborhood. According to the U.S. Census, 18 percent of Cincinnati's housing stock is vacant and 41 percent of it was built in 1939 or earlier. Investors can fill a vacant home with either owners or renters and make improvements on an aging building.

Westwood resident Leslie Rich was happy to see a house flip on her street, and she and her husband have looked at properties to flip themselves. They think of it as a community investment. Rich also is the co-founder of Westwood Works, a nonprofit community association.

Across the city, the Walnut Hills Redevelopment Foundation has seen an increase in interest from investors, with realtors calling to ask about life and development on certain streets or people calling to ask about properties owned by the Hamilton County Landbank. The foundation offers the landbank recommendations about how these low-cost properties can best serve the community.

"We prefer that people investing in the neighborhood are living in the neighborhood," said Joe Sandmann, real estate and economic development officer for the Walnut Hills Redevelopment Foundation.

Rental properties can be an important solution in providing affordable housing, Sandmann said -- provided landlords are present and active.

"We want quality affordable housing," Sandmann said. "We don't want absentee landlords or, for lack of a better word, slumlords."

That sentiment was echoed by Ken Smith, executive director of Price Hill Will, a community redevelopment agency that has revitalized more than 70 homes in the neighborhood through its Buy-Improve-Sell program.

To encourage community investment, improvement and engagement, Walnut Hills Redevelopment Foundation regularly organizes events and is working on developing a homeowner toolkit, part of a residential improvement program. Price Hill Will, meanwhile, works with a variety of social service agencies in the neighborhood to assess issues and find solutions, and community development organizations are working in most Cincinnati neighborhoods.

For homebuyers, a flipped house might be a good deal. The key is to know what you're getting, said Welch. Make sure all the inspections come back clear, check any building permits pulled for repairs and look at the property's sale and appraisal history on the website of the Hamilton County Auditor.