The Federal Hosing Bill that is working through the Senate and House right now are expected to have sizable impacts on local economies and real estate markets like Cincinnati. The Housing Bill provides financial incentives like mortgage negotiation perks, $7,500 interest free short term loans, and Jumbo loan borrowers.

For those currently in debt and in trouble with their mortgage here are the incentives the government has set out for you to renegotiate with lenders:
1. Your loan must be at least 31 percent of your monthly household income.
2. Lenders, however, are not required to give you a better deal under the new law.
3. If you manage to get a new loan, you cannot take out a home equity loan for at least five years. 4. 4. You will also have to pay a 1.5 percent fee each year on the remaining balance.
5. Finally, you have to hand over no less than 50 percent of any appreciation on the home to the government once you sell. Sell the house in less than five years, and you will have to turn over as much as all of the gain.

Now about those $7,500 interest free loans being handed out. Well they are for first time home buyers and come in the form of a tax credit. How ever if your income is over $75,000 ($150,000 married) the credit begins to phase out. You will pay the loan back in 15 equal payments over the next 15 years to the Internal Revenue Service. The tax credit is retroactive to home purchases on April 9, 2008, and expires on July 1, 2009. Ask your accountant about this benefit in your 2008 return.

The Bill will also allow Fannie Mae and Freddie Mac to purchase and securitize loans up to $625,000 where in previous years the cap was $400,000. This increase comes in line with the increase of home prices over the decades.

                                                          Do you have children going to college next year? If you do let them learn another lesson. Let them become property manager of their own building. That’s right. They can live rent free if you shop smart and make a good investment.

Think about it? If you have a child attending UC or Xavier you could buy a two or four family building in or around Clifton, North Avondale or Norwood. Your child could have free rent if they find 2 or 3 other students or friends to rent to.

If your total investment was $200,000. With FHA financing you only need 3% down payment. That would be $6,000.00. It will cost you about $2,000.00 closing costs and about $500.00 for inspections. Your total investment would only be approximately $9,000.00 - $9,500.00.

If you finance $194,000 at 7.5% interest your Principal & interest payment will be $1,356.48. Factor in estimated taxes at $200.00 per month and $100.00 for insurance.

If you have 3 other students pay $550.00 per month that will make your PITI (Principal, interest, tax & insurance) payments for you. Your child lives rent free and you have a nice future investment. Let your child collect the monthly rent and make the payments. You could even have the building put into their name. This is a great way for a young person to get a firm start in a future of real estate investing. They graduate and already have an income coming in not to mention the education they will learn by being a property manager for 4 - 5 years…through their college years.

The numbers used in this post are only for demonstration purposes. They are estimated and not intended to represent any firm real prices or terms. The examples used in this post are just that. They are examples, not to say the example used couldn’t become a reality.

Everyone I know has been asking us “So how is the market doing … really.” The honest answer is that it is not as bad in Cincinnati as other place but of course, we would like it to be better. When we pulled up numbers and took a statistical look at both sale price and units sold the number show a decline, but not the catastrophic drop some other parts of the country have seen.

Cincinnati saw a decrease in sales of 14% (3137 to 2697) in the first five months of 2008 compared to the first five months of 2007. In the same time period sale price fell slightly by 11% ($169,617 to $152,360).

The challenging part about these numbers, particularly the sale price is that there are so many bank owned homes being sold now at a fraction of their market value. With fewer overall sold properties, the higher volume of bank sales is having a greater impact on the average sale price in Hamilton County.

CNN Money published a study today on the future value of homes all over the nation. After looking through the home value tool, the outlook for Cincinnati real estate is fairly similar to that of the rest of Ohio. The state will see about a 5% drop in home values over the course of 2008 with the depreciation slowing to a less than 1% fall in 2009.

What this means to the average home buyer is that if you are looking to move up market, it is time to take a look and make a move. Moving up market in a housing slowdown is a financially rewarding thing if you are in a position to take advantage of the value changes and potentially save money in the equation.

If you are moving from a $150,000 home to a $250,000 that is a $100,000 jump. If both homes sell for 5% less due to the market you are moving from a $142,500 home to a $237,500 home in a $95,000 jump. Same homes in question. $5,000 savings. Moreover the new house property tax will be assessed at the 5% lower sale price.

If you watch the news to often you hear the consistent drone that home prices are down! The real estate market is in the tank! Well that may be true in some areas but not all. The fact is that in select Cincinnati neighborhoods the average SOLD price is up 20% or more including parts of Amberley, Indian Hill, and Mariemont. The area around Symmes Township and Dry Run / Mt. Carmel have seen better than 9% increase in sold price.

On the other hand some zip codes drop in sold prices up to 25% in the same time period. There could be dozens of reasons for this including tax abatements, inflation, inventory, and normal cyclical changes in neighborhoods. Paramount is that when looking for a home or an investment property your agent has a sense of the overall market trends in that particular area. Nothing is ever a guarantee for valuation but this is the kind of information you should ask for and expect from a Cincinnati real estate professional.

The accuracy of information in this post is dependent on the MLS system for time periods. The analysis included 31 zip codes comparing the previous 6 months with the same six month period one year prior. The analysis is a useful tool for estimating value trends and is not guaranteed to be applicable to all properties in the areas aforementioned.

We have seen an extreme amount of rain throughout the Greater Cincinnati area over the last couple of days.  Many home owners that have never seen water intrusion into the home before are now dealing with wet basements or other rain related issues.

 When listing a home for sale, every home owner is required to fill out a State of Ohio Residential Property Disclosure form.  Section D of this form deals with Water Intrusion into the home.  Many current home sellers who previously had not experienced water intrusion may need to update their property disclosure form.  Home buyers should be sure to ask their agent to inquire if any water was found in the home during this week.