Cleveland Real Estate News

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According to the PD, Judge Pianka has lifted the injunction against Wells Fargo but put a new twist on requirements for them and the vacant properties they own within the City limits.  Apparently they were ordered to put up a million dollar bond which also apparently covers costs to demolish approximately 100 of their homes.

I was hoping to find more details on the Housing Court website. I did not, but did find it an interesting read for my geeky soul. For example, there are essays written by Judge Pianka, like this one about what makes a neighborhood healthy.  Hartford Connecticut’s Neighborhood’s of Hartford Inc (NHI) explains the general theory in their mission statement. You can read about it here.

Judge Pianka begins his essay talking about a neighborhood planning consulting group in Alexandria Virginia so you know I had to google CZB LLC.  Featured on their home page sidebar is an article called Tea Leaves In Cleveland about a book written in 1992 by Northwestern University Professor Alex Kotlowitz (I had the pleasure of listening to him at the Levin College Forum).  On this planning consulting firms website, they look at tools used prior to 1992 and since then, and come to this conclusion:

The Cleveland story is important not for telling us we have a problem, but that the way we have been addressing this problem has not worked and is not going to work. Tax credit housing, CBO/CDC-based real estate development, concentrated subsidy, market misidentification, housing where the jobs aren’t. These have been tried and have not worked.

I love to read, using the old fashioned method is best for me.  But isn’t it a rush to read things on line and then be able to do more investigation on line to get into more depth? Gotta love that too. But I digress…

Have you been reading the articles about Slavic Village, Housing Court and Judge Pianka, only to have questions about what exactly The Court does? Here is a link  to their FAQ page.  Better to be proactive and forewarned.  I also think knowledge is power (yes I know, original, huh).  Anyway, the FAQ page answers questions about code violations, tenant evictions, and more.

Peace Out - 3C

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Not necessarily a trend; and I wouldn’t get out the confetti as of yet.  But, it’s good to see us on a list like this, and we could always use some good news yes?

Christian Science Monitor reporter Laurent Belsie covered the story on line here. You may be thinking that one upturn doesn’t a trend make. You would be correct.  However, it’s been several years since this many (four) metropolitan areas have seen housing price values rise.  S&P Case Shiller uses stats compiled for April of this year.  The other three cities in our company? Denver, Washington and Dallas.

If you go to the Case Shiller 20 city housing index on line, they examine more than april stats. Here’s another positive Cleveland stat:

Cleveland was the one market that showed any improvement in its year-over-year returns reporting -6.4% compared to the -6.6% reported for August.

Yes, that’s a slight increase, but we’ll take it.

So I played around with the ‘closed’ sales in several east side zip codes and several west side zip codes.  Let’s compare and see if we agree with their analysis.

Zip codes 44105, 44108, 44110

78 homes sold in April of 2008. The average sale price was $12, 841 or $9 a square foot.

Advance one year and see what sold in these zips in April ‘09

47 sold with an average sale price of $18,493 and $13 a square foot.

Zip Codes on West Side (44109, 44102, 44113, 44111, 44135)

161 homes sold in April of 2008 with an average sale price of $45, 786 or $34 a square foot.

April 2009 in these same zip codes: 78 homes sold in April; average sale price is $18,493 or $36 a square foot.

Not scientific to be sure but it does what Case Shiller says it did: improved.

Peace Out - 3C

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Was the Cleveland lawsuit against 21 mortgage lenders too broad scoped or vague? Did they try to go after too many lenders at once? I don’t know the answers, but apparently the city of Baltimore is trying to learn from our loss. This Baltimore Sun article by Julie Bykowicz outlines their cities efforts as well as opinions on why ours did not work.

It’s fascinating (and I have to say the article is a lot more in depth about strategies, procedure and why suit is filed than we got in our newspaper reporting.  Because of the reporting or because attorneys for Baltimore City and City officials were more forthcoming? Or should I say transparent? But I digress…

They are participating in a trial in front of a US District Judge.  Lawyers for both Wells Fargo and Baltimore will be involved.

What do they say is different from our case?

They are charging racially biased predatory lending:

Representatives for Wells Fargo have said the lawsuit, filed in January 2008, “absolutely lacks merit” and is a wrongheaded reaction by a city that is “thirsty for revenue.”

City officials are making a two-part argument in their assertion that Wells Fargo violated the federal Fair Housing Act. They allege in court documents that Wells Fargo disproportionately gave its black customers “abusive subprime loans that are, in effect, designed to fail.” And those bad mortgages, the lawyers say, left the city with a glut of foreclosed homes that have cost tens of millions in lost property taxes and in city services such as public safety and sanitation.

How Baltimore says they differ from us:

The city expects Wells Fargo to raise a recently dismissed lawsuit in Cleveland. The Ohio city had sought damages against Ameriquest Mortgage Securities on the theory that it had violated state public nuisance laws by providing secondary market funding for subprime loans. The judge who granted Ameriquest’s motion to dismiss in May said Cleveland would not be able to prove direct harm.

We (Cleveland) were interested in making sure that the 21 lenders/vacant and foreclosed property owners were not just dumping low cost housing on the market but were going to be required to demolish or fix up the homes and not  further devalue neighborhood properties. See my last post on the topic.

Kudos to reporter Bykowicz. It will be interesting to see how much further along in the process Baltimore gets in their approach against lenders.

Peace Out - 3C

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Of course it’s not worth it, and this is reiterated again and again with stories of people trying to steal copper wiring or pipes. Sometimes the furnace explodes (and they die), and sometimes they get electrocuted (and die) as reported in this article on the newnet5 website.   It happened in Warren. The thief lost his life and thousands of people lost their power.

I haven’t (knock on wood) seen as much evidence of copper pipe or wiring theft in the last few months.  Thankfully.  Peace Out - 3C

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If you live in Lakewood I’m sure you have an opinion one way or another.  Should leashed dogs be allowed to walk with their owners in Lakewood parks?  Since 1972 there has been a ban.  Now a group is trying to reverse the decision since it doesn’t seem to meet the ‘common sense’ rule for laws and coordinator of the group, Mark Schulte, says no one at Lakewood Council has historical info as to why law was passed in first place.

There is going to be a meeting on July 11th at 9:30 AM at the  main branch of the Lakewood Library (on Detroit).  If you live in Lakewood, you might want to go to voice your opinion.

For more information you can contact the group organizing the efforts to change the law Leased Dogs in Lakewood Park.   Peace Out - 3C

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Sometimes real estate issues are specifically local. Sometimes it’s a national trend. This article  in the Wichita Business Journal  discusses appraisal issues that ring true in my business experiences here.

The bottom line is that appraisals should always be accurate within  one percent. That’s my opinion.  I’ve never understood why people are allowed to buy a home astronomically over priced by buying down the mortgage amount with cash.  It ruins the market valuation abilities for a neighborhood just as much as foreclosures selling for 15k ruin them.

But, appraisers, like the rest of us in real estate, need to know what they are doing. They need to know how to evaluate a neighborhood. An appraiser from Portage County may not really do the best job in Tuscarawas, no? Just like I don’t know the neighborhoods near Columbus, if someone wanted to buy a home there, I would refer them.  Why can’t appraisal company  have a network of experienced appraisers in each county so they can refer as well.

The changes in practice of what appraisers are used is not a change in law, but a ‘rotation’ system that should have always been in effect. But you know how things go…lenders, in some cases, were using their usual appraisers and appraisers then felt ‘beholdin’ and apparently would adjust appraisals.

But using a valid rotation system makes sense. All of us, especially home owners and buyers, expect professionals to know what they are doing.  It’s not too much to ask!

What do you think!  Peace Out   3C

Update: not a rah rah NAR person (by any means) but here  is a blog post from their site, written by an Ohio real estate agent, to add to the Wichita perspective. Good links on this post as well.

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You may recall my home seller’s limbo status. He is having trouble selling his four unit multi family home because the land on which the house sits is zoned two family not four — even though the City has been granting occupancy certificates to this property for decade, as a four family.

Teresa Dixon Murray posted a question from another person looking to refinance their home. Interest rates are lower, refinancing could not only give people more breathing room in monthly payments but maybe even keep a few people out of foreclosure.  That is supposed to be the goal yes? Not so fast. Read Teresa’s weekly Q & A column and see why that refi might not happen.

Apparently changing a two family to a four family home used to be easier (what wasn’t!) but now some master plan changes call for certain things to be in place, like lot size, for that to happen. Zoning variances make sense to me because of all the grandfathering of laws and existing structures.

What doesn’t make sense is letting people feel comfortable that they own or buy a multi family home when in fact a disaster like a fire will not allow you to rebuild and give home to the same people who lived there before the fire. Not to mention the fact your loan, in my opinion, winds up being a house of cards.

I’ve been fortunate to be involved in discussions with OCNW (since my client owns a home in Ohio City) and the city Planners. But no one seems able to resolve what I think is a very serious issue. Do you own what you really think you own? In my client’s case, he thinks (or did) he owns a four family home.  In reality he owns a two family home that is allowed to be a four family but not by everyone. Confusing? Of course lol. I was not even aware that two family zoning still existed in Cleveland. That will have to be another post: how it relates to zoning tags those of us utilize in our profession to try to make educated decisions about what we are doing. Silly us lol.

Since my client purchased his home decades ago and through a conventional lender, there were no ‘rebuild’ red flags given to him when he purchased it. Now FHA standards raised the issue for us. I suspected there might be conventional lenders who would raise that same red flag. Now I see, through Teresa Dixon Murray’s article, that is true.

Like I say, real estate is never dull, but sometimes frustrating.  I’m trying to figure out a way to resolve this issue. Any ideas?  Peace Out - 3C

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Something tells me it might not matter that the lawsuit brought against those 21 lenders was thrown out. Why? Judge Pianka of Cleveland’s Housing Court has issued what sounds to me like a precedent setting decision.  An injunction again, this time just against Wells Fargo. They are to bring their foreclosed houses up to code or demolish them, before trying to sell them. And they better prove they are up to code if they are trying to sell them for less than $40,000.   You can read about it here   in Sandra Livingston’s PD article.   Peace out - 3C

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Unless you live in a cave, you know the Ohio Supreme Court ruled that the City of Cleveland (and Akron et al) could not require workers to live where they work. I sat on my hands, wanting to blog about the issue yesterday, but feeling like it might be better to wait to see what else might go on because of the decision.

I expected the cities involved in the suit to say the fight was not over, it would go on through the court system.  I was wrong, at least as far as Cleveland is concerned. Mayor Jackson says okay we are done.

The idea that people have a right to live where they want makes sense to me.  Unfortunately so does the idea that a city might have the right to require residency for a job. Another reason why I didn’t blog, so many issues, not an easy answer, at least to me.

But today,PD through reporter Henry Gomez, is reporting that Cleveland City Council members reacted strongly at their meeting and a few good ideas (to me) came out of it.

The most intriguing one to me was the idea of a questionnaire to state candidates, asking them where they stand on various issues important to Cleveland residents. Quote from Gomez article:

Councilman Joe Cimperman said council members should send questionnaires to candidates and put together a voters guide to their positions on a range of meaty policy issues.

“I’m not going to tell you who to vote for, but I’m going to tell you where they stand,” he said. “Why shouldn’t we do something based exclusively on the rights of people in Cleveland?”

I’m thinking saying ‘based exclusively on the needs of people in Cleveland’ covers it better. The idea of ‘rights’ is what’s in question around this whole issue and ‘rights’ seem to be in conflict here.

Here is another PD post by Michele Jarboe and one of my colleagues, is interviewed.  I know many of the people I’ve spoken to in the neighborhood have relatives living in Kamm’s and the general area so moving may not be as attractive as some might think.  I guess we will find out.  Peace out - 3C

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Good morning everyone. Wanted to post some  general Cuyahoga County housing data before I head out to my brokers open house ina a few minutes.  These stats reflect sales with area brokerages and they compare April and March sales info for this year. The May results are not yet in, I have a feeling they may reflect a similar path, if sales in my office are any indication.

Between March and April, number of homes listed for sale rose 1.3%. Since January, 21,246 homes have been listed for sale. (Keep in mind this includes bank owned homes.)

The median sale price rose from $67,000 to $69,279

The average sale price for single family homes sold in Cuyahoga County rose 11% between the two months. And the average number of days on the market for these sold homes was 93 (that three month time frame is one of the things holding true over the last three years).

The average sale price for condominiums sold in Cuyahoga County in 2009 (through April) was $113,881.

I’ll be glad when we can get the stats for three months, it’s a better indicator.  So I will do this again for April through June.

Peace Out - 3C

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