While home prices across the U.S. fell slightly in 2011, the Dayton metro area bucked the trend, posting the largest increase in home values among 50 major metros, according to a leading property valuation firm.

Median home prices rose 11.5 percent in the Dayton area to $72,000 last year, California-based ClearCapital reported Monday.

Local home prices appreciated nearly twice as fast as the next two strongest markets, and Dayton was the only metro to post a double-digit gain in home prices, according to the market report.

Before we break out the champagne and start singing Happy Days are Here Again, allow me to be the wet blanket. First things first, this report takes the entire Greater Dayton area into consideration, and as I say with every post, neighborhoods vary so what happens in Santa Clara is not what is happening in South Park which is not what is happening in Tara Estates or Carriage Trails. Okaythen, back to the news and what this means for us as a region. I think this means we are showing signs of some stabilization. We have likely reached the bottom and can now focus on stabilizing our real estate values as a region, although some neighborhoods are going to continue to be hollowed out with foreclosures, vacancies, and demolition. As I said last week, land banking and planned demolition will become a integral part of Dayton’s future for at least the next few years, but I think we can figure longer. I wish it were not so, but I’ve not seen any other way for cities to aggressively fight the combined problems of shrinking population and deteriorating and aging  housing stock. I also think that our first-tier suburbs like Huber Heights, Kettering, Trotwood, Riverside, should start developing plans to deal with some of these issues as well. Which brings us to our second bit of news:

Compared to 2010, the number of properties with foreclosure filings in Montgomery, Greene, Miami and Preble counties fell by about 31 percent to 6,131 last year, according to a RealtyTrac’s annual market report released today. On a month-to-month basis, the number dropped nearly 45 percent from November to 525 last month, RealtyTrac reported.

In Clark County, the number of properties with foreclosure filings fell 23 percent to 1,001 last year. In Champaign County, the number fell 71 percent to 74 properties. In Warren County, the number fell 18 percent to 1,481 properties in 2011.

By comparison, the number of properties in the state hit with default notices, auctions or bank repossessions declined 27 percent to 79,422 last year.

… But researchers were quick to point out that processing delays stemming from the so-called robosigning scandal, in which some big banks admitted processing foreclosures without verifying documents, stymied foreclosure activity across the country.

In other words, while we had a respite from mass foreclosure filings, we are still dealing with this mess and will be for a few years, even if it’s not at the levels seen in 2009. Again with the wet blanket: It’s an unpopular opinion, I’m aware, however, if you live next to a foreclosed home, it is in your best interest to keep an eye on the property. I realize it’s not your home, the banks might be the bad guys, etc. however, your property values are determined by the neighborhood and a buyer’s perception is affected by the neighboring properties. You do have an interest in how that property is maintained and cared for. It might not be your job, I get that, but it is your business. I digress…

Overall, these two pieces of news would indicate that the Greater Dayton area, which got slammed hard with foreclosures, declining home values, and shrinking population, appears to have hit the bottom, and the next few years should show continued signs of stabilization to the general area, if not the beginnings of recovery in real estate. Right then, cue-up some Gloria Gaynor for you oldtimers, maybe a little Destiny’s Child for the whippersnappers.

Photos: Teri Lussier

A few things to keep in mind if you are buying a home: some markets are being driven by foreclosures or short sales. One of trends that seems to be emerging among foreclosures or cosmetically flipped homes is that are being listed at below market prices which creates a bidding war. In other words, a home hits the market priced lower than other homes and within days there are multiple offers on the property. It’s a good strategy for a seller to get at or above asking price so be prepared if you are looking at foreclosures- you may need to act fast, and might end up paying full price or more to get the home you want. Now this isn’t horrible in and of itself as long as the price supports updates you will be making so don’t panic, but also don’t get sucked into more for a home than its worth. Know what the neighborhood will support.

Short sales are a different beast altogether and while the process for buying and selling short sales has improved over the past year, you should still expect that they could take months to close. However, because short sales account for a large percentage of homes on the market, it’s worth it to plan ahead and take them into consideration. In many communities, distressed properties are driving the market, so if sweat equity doesn’t bother you, this is a good market for you. If you don’t want to do the work yourself, there are a few loan options available for owner occupants who would prefer to finance any repairs or upgrades. Programs like the 203k financing require preparation, organization, and stick-to-it-tiveness on your part, but the repairs have to be made by contractors and professionals. These trends will continue for quite some time in this area as housing stock ages and becomes more distressed.

The other big trend this year is in rentals and seller financing. People need a place to live, and while interest rates have hit record lows and there are lots of homes on the market, if you can’t get a loan, you can’t get a loan. Enter seller financing like land contracts and lease-to-own, and a market for rentals. If you are considering being a landlord, this is a good time to do that, if you are a seller looking for a way to create a niche seller’s market within this broader buyer’s market, this is a remarkable time to do that.

Speaking of trends, I want to point out that a few weeks ago it was reported that National Association of Realtors (NAR) got it wrong:

“All the sales and inventory data that have been reported since January 2007 are being downwardly revised. Sales were weaker than people thought,” NAR spokesman Walter Malony told Reuters. “

If you’ve been paying attention to what is happening in your own neighborhood, this should not be news to you. There are few established neighborhoods in the Greater Dayton area which haven’t taken a hit the last 4 years in particular, but for a number of neighborhoods in Montgomery County, this has been going on for years as those neighborhoods have been bleeding population for decades. It’s supply and demand and I don’t see us picking up in population for awhile. Now, shrinking should no longer be confused with dying, but it is a trend and that’s what we are concerned with for this post. So expect inventory to stay up. Land banking and planned demolition will be part of life in the Miami Valley. Again, this may or may not be doom and gloom, but it is change.

Still, the NAR is the national organization that is tasked with representing its members and they have become one of the most important lobbying groups on K St. When the NAR talks, our elected officials pay attention, but that doesn’t mean you should. If you want to know what is going on in your community, ask a local real estate agent to pull the stats for a particular area, because for us the market talks and in order to serve our clients, we listen to the market, not the NAR.

One more possible trend to be aware of: Because the real estate market has changed, many agents have left the business, some numbers suggest as much as 40-50% and I see this as positive. It’s anecdotal I know, but it seems that those agents who are left are highly professional and some of the best I’ve had the pleasure of working with, and to me, this is good news for everyone.

All the best to the entire DaytonMostMetro.com family- editors, readers, contributors, and here’s to finding more silver linings in 2012!

I pulled the numbers on a very specific area- Hills and Dales in Kettering. The Dayton Area Board of Realtors defines this area as generally north of Dorothy Lane, east of S. Dixie Hwy, south of Schantz, and to the west of Hills and Dales Park. I chose this area because it’s got a little bit of everything as far as housing stock goes- vintage, newer, custom-built, affordable, starter homes, move-up homes, upscale homes, it’s all represented here. Plus it’s an area that most people reading this will be at least somewhat familiar with, also, this neighborhood would have been affected by the economic issues Dayton has dealt with over the past 6 years including both GM and NCR pulling out of Dayton so we can see how the real estate market responded.

This is a year over year Market Report for Hills and Dales. I’ve searched for single family homes only, no condos, land, or multi-family homes. We are looking at the averages here- just a big picture snapshot. DOM= Days On Market. I went back to 2006 which is generally considered the peak of the real estate market. One other thing, I only searched for sales from Jan. to Oct. for each year So let’s take a look.

Pretty much what you expected? This Buyer’s Market you keep hearing about has a lot to do with the interest rates on loans, which are at historic lows. Home prices for many areas are coming back, and loans themselves are more difficult to qualify for. Buyers are still paying about 96% of asking price- that’s remained fairly consistent, and all those great deals you might hear about? They often sell within days of being listed and with multiple offers which drive up the price.

If you are selling your home, things are looking up, although whether or not home prices return to 2006 levels is anybody’s guess. But still, a well-prepared and well-priced home will sell and seller financing is still a good way to take advantage of the current market and get a better price than a sale with lender financing.

Finally, I can’t say this often enough- real estate is local. This one small area of Dayton and your neighborhood is going to have unique challenges and opportunities, so get informed before you make a decision about how to make the most of the current real estate market.

It’s a (sing it with me) brick, house, and it is kinda mighty mighty if you want to know the truth. The exterior is all brick and like most townhouses, the windows are big. When you only have two sides to work with, you try to grab as much natural light as you can. At the street level is an attached 1 car garage w/ storage at the back, and a gated entry with a bricked courtyard at the front. Sandwiched between the two, is what they are calling a live/work space. Most likely to be used as an office or den, it could double as a guest room, this room is approx 12’2″ x 11′ 8″ with windows that will look out on the courtyard. Those buildings that face south will get some nice natural light in this room. HVAC system is in the garage.

Next level is what Simms calls the “Living Level”, but the rest of us call it the second floor. It’s an open kitchen/ living space with large windows on one side, and patio doors that lead to an 8×6 deck on the other which overlooks the common area of the development. Owners should get some nice views from here. You’ll be able to sit out there and enjoy music festivals at Riverscape. This level has an open floor plan and exposed beam 9′ ceilings, it’s a nice loft-like feel here- very modern. The entire space is 36″ long so you could pack some people in there for entertaining, but separate areas- kitchen, dining, living are nicely designated so it lends itself to more intimate gatherings as well. The powder room on this floor.

The third level is private spaces- two bedrooms and a shared bath. The master bedroom is 13’6″ x 11′ and features trey ceilings- a nice touch. Two separate closets? Yes, please. The second bedroom has its own walk-in closet, and the laundry is on this level. The full bath can be accessed from either the master or the hall. The entire unit is pre-wired for audio on all three levels, and is 1331 sq ft, not too shabby for a townhouse in the downtown residential district.

There are some Green Building features here, of course. You can’t really build these days without incorporating some green features and this development is Energy Star qualified- generally 20-30% more efficient than standard homes.

Overall, it’s another option to the growing residential district in downtown Dayton. Patterson Square will serve a market that is looking for something new, something efficient, close to everything in downtown Dayton, but a more traditional style than the Litehouse Development. These townhouses start at $139,900, and as of the offers of this post 9-18-11, they are offering pre-construction incentives such as closing costs if financed with their preferred lender, 6 months of HOA fees paid, flooring upgrades on Living Level (that is some beautiful flooring, I will say). Note: Prices and incentives are subject to change, please consult your Realtor or Simms Development for details. Each home comes with an in-house 1 year warranty, and a personal walk-thru with Charles Simms the developer, himself.

The Simms website is here, Patterson Square is here, but since it’s a new build there are no photos yet, so go to the Twin Lakes West photos to see a very similar townhouse. The photos included in this post came from the model at Twin Lakes West and while there will be some minor changes to the floor plan to make it optimized for the downtown site, you can see what Patterson Square is going to look like. How do you find out more? Contact Sales Rep Stephanie Dietz at Simms, 937-436-2913; or contact your Realtor who can walk you through the process and act as your professional eyes and ears to any new home purchase.

Austin Landing gets a lot of attention, but north of the river is a residential development called Carriage Trails, and its proposed anchor shopping mall, The Heights, has potential to bring a new interest, money, and energy to the Montgomery/Miami County border. Development in this part of Dayton is a healthy, thing and the timing is good. We’ve watched the demise of the Salem Mall, and retail pull out of downtown- what were once the two most convenient locations for shopping for Dayton north of I-70. So the northern Dayton area could use a bold plan. Today’s Dayton Daily News has a comprehensive look at The Heights, you can read that here.

I’ve heard mixed opinions from northern residents. With limited northern retail options, some of the comments I’ve heard suggest that finally we don’t have to drive to Beavercreek, Kettering, or Centerville to shop at a mall. I’ve also heard that Huber has seen some tough times recently so why would anyone put in upscale shopping here? Someone expressed the sentiment that we already have bus service so it could fill a void that the Fairfield Commons is unwilling to address.

This mall is likely to attract residents from all over the northern Miami Valley- residents from Brookville or Greenville to the west, Piqua, Troy, Sidney to the north, and Springfield from the east. It’s just off I-70 and 5 minutes east of I-75 so it could be destination for a largely under served area. The real estate side to this is that for homes in the area, this will make them more attractive and bring renewed interest and energy to the area, because the truth is that most people like to live in a somewhat concentrated area, not far from their jobs and retail, and this development will compliment a prime real estate combination- we have variety. The Huber Heights/ Bethel Twp/ Tipp City area has a wide range of older and newer housing stock, and a wide range of home prices, making for a nicely diverse selection for home buyers to choose.

With all the changes Dayton has seen in the last few years, growth is good to see, but this isn’t everyone’s idea of positive growth. I’m curious what you think? Are you looking forward to seeing a new mall in northern Dayton?

But still, you want a home of your own. You want to paint the walls with salmon-colored chalkboard paint, and put down exotic Brazilian hardwood floors. You have kids in 4-H and two horses you are tired of boarding. Or maybe you simply can no longer stand the thought of paying a cheap and stingy landlord for a roof over your head. Congratulations! You just discovered the best reasons for buying a home.

Forget about the real estate boom. For hundreds and hundreds of years, people who were smart and competent and knowledgeable were buying homes primarily for those same reasons. They didn’t buy a home because real estate was a great financial investment, because it wasn’t. They didn’t buy a home because they thought they could make money from selling it in a few short years, because they couldn’t. They bought a home because they wanted a space of their own. A space where they got to call the shots, paint with the colors that made them happy, use the land the way they wanted, not beholden to a landlord, and put down roots in a community that they loved, and if we think about the lessons of the past few years, those just might be the best reasons for buying a home.

In many respects, this is a perfect storm for home buyers: Inventory is up, interest rates are down, prices are down. The difference in the boom years and now is that there is no real indication that prices are going to up any, if at all, at least not for quite awhile, but don’t despair, you do have options. You can buy a home because you want a place of your own. You can buy a home as an investment or rental property, including duplexes and multi-units. And you can buy a home in a part of the country that is experiencing better economic times than Dayton- there is still money to be made somewhere.

I saw an interesting real estate forecast that makes sense to me, if you want to gaze into that crystal ball you can find it here. There are places where you can invest in real estate and still make (some) money. There are real estate markets and niches that are more lucrative than others, but understand that Dayton is a different market with, in my opinion, a long way to go before we see solid recovery.  What that means is for most home buyers in Dayton Ohio, a home represents a place of their own and all the joys that come with that freedom. If you think about it, “”because you want to” might be the best reason of all to buy a home.

Photo: TLussier

Recent college graduates can now receive down payment and closing cost assistance and a favorable mortgage interest rate from an OHFA participating lender through the Grants for Grads Program. Eligible borrowers can use the grant to reduce the out-of-pocket expenses associated with buying a home.

If you are an income-eligible first-time homebuyer, graduated from an Ohio high school and have earned an associate, bachelor’s, master’s, doctorate or other postgraduate degree within the last 18 months, you can take advantage of the Grants for Grads Program.

* OHFA will issue a grant in an amount for 2.5% of your home’s purchase price.
* You can use the grant to pay for the down payment, closing costs, or other prepaid expenses incurred prior to closing. Keep in mind that while the grant will help cover some of your up-front costs, you may still be required to contribute some money as well.
* The grant will be issued as a second mortgage with a 0% interest rate with no payment due. The loan is forgivable after five years. However, if you move out of Ohio prior to the five-year mark, you are responsible for paying a portion of the grant back to OHFA as indicated (on their site).

Find out all the details about Grants for Grads, here.

What if you don’t qualify for Grants for Grads? There are several other programs through OHFA that are always worth looking into: First-time Home buyers, Target Areas, Ohio Heroes (for police, firefighters, teachers, healthcare workers, veterans).

Details are available on the OHFA site, or contact a participating lender. And best of luck to all 2011 graduates!

This communication is provided to you for informational purposes only and should not be relied upon by you. Teri Lussier and Exit Realty Central are not mortgage lenders and so you should contact your own mortgage lender directly to learn more about mortgage products and your eligibility for such products.

Photo credits:
Graduate: Andrew Mackenzie
Fire fighters: Brett Gustafson

Let’s talk honestly. Sometimes buyers are a little wary of visiting Open Houses because they assume, rightly or wrongly, that they are going to be accosted by pushy Realtors, so let me give you some tips for making an Open House trip more productive, less painful.

1) Don’t try to avoid the Realtor. We do need a record of who is visiting the home, it’s something we are obligated to do for the sellers.  You wouldn’t want random folks walking in and wondering around your home, would you? No one does, and an Open House doesn’t change that. We know there are a plethora of reasons why people visit Open Houses- we are okay with that, but realize you are a guest and will be expected to sign in with at least a name.

2) About the reasons you are there? Whatever they are, it’s fine. The best thing to do, as always, just be honest about why you are there: You are a neighbor and always wanted to see the home; or you are looking for decorating tips; or you are looking for a home for yourself or a family member- whatever your reason, it’s okay for you to admit it up front. The Realtor will appreciate the honesty, and then she can be helpful. If you are there for decorating tips, the Realtor can find out where items were purchased, what the color the master bedroom walls are painted, and who does the landscaping.  

3) If you are looking for a home, either for you or someone else, you can tell the Realtor this information upfront. Realtors have cooperating agreements with each other, which means that even if you are working with another Realtor, we will be happy to give you details about the property, because ultimately we are there to sell the home. Just remember that hosting Realtors work for the seller, so be careful about what you say- it could be shared with sellers.

4) If you are not currently working with a Realtor, you can use Open Houses to interview them. When an Open House is busy, you may not get the time to talk in private or indepth, but you will certainly get a good indication of whether or not you want to have that Realtor help you with such an important transaction.

Don’t pass up a great Open House just because you don’t want to talk to a Realtor. Understand the dynamics of situation, be clear about your goals going in, and above all, have fun!

For a list of Open Houses on this or any given Sunday, try this link.

Consider: Everybody needs a place to live, and Daytonians are no different. So while you may have heard about changes in lending practices and how this will make it more difficult for buyers to obtain a loan through a lender, what this really means is that other options have now opened up for both buyers and sellers, but particularly for sellers.

Once upon a time (way, way back in the 80′s) a typical home loan came with a double digit interest rate of 12-18%. Shocking and unheard of today, but it was the norm 30 years ago. Buying a house was difficult and there was a real barrier to home ownership, but this meant a few things happened: One is that you really had to work at purchasing a home. You had to want it, value it, understand the implications of a loan and how it would impact your life. That’s not a bad thing, is it? The other thing that happened is that home sellers could actually compete against banks by financing the loan themselves. Seller financing, lease to own, lease to purchase, and land contracts, these were common alternatives to a conventional loan.

Once interest rates dropped and loans became easier to obtain, owner financing become less attractive to buyers and almost impossible to compete against for sellers, but that niche market has come back as an attractive alternative for sellers looking for options in this market.

Seller or owner financing can provide value to those sellers who might be looking for a way to aggressively compete in a strong buyer’s market because your buyer pool is going to increase significantly. It’s one of the most frequent requests I receive from home buyers. Or, maybe as a seller you are looking for a different way put your investment money to work? Well-planned seller financing could produce a higher return than a traditional rental or other investment. And you might consider seller financing if you simply want another stream of income, but are looking for an occupant who is a little more serious about the property than a renter.

But seller financing can benefit buyers in a few ways as well. Buyers who might have a poor credit score now and therefor can’t get a traditional loan, but are well on the road to recovery, can still buy a home and enjoy the benefits of home ownership.  And the purchase process itself is much quicker, and possibly less expensive, without the added participation of a lender and all the added fees. One thing for a buyer to be aware of- there is a huge demand for seller financing right now. That particular niche is a strong seller’s market, which means you could be paying a premium for the property. In all things financial- caveat emptor.

Owner financing isn’t an option every situation, but if you are buying or selling a home in Dayton, you might want to educate yourself to all the possibilities- which is beyond the scope of this one article. Take your time and talk to experienced professionals. Lawyers, real estate agents, tax accountants, can all provide you with information, and often guide you through the process to help you make solid decisions about any real estate transaction.

The real estate market continues to change, in fact it will always be changing, but as I’ve said before, the key to making the most out any real estate market is by keeping your eyes open for whatever new opportunities the most current market presents.

By now we are all aware that the foreclosure crisis is many layers deep, touches every person in America, and the impact will be felt for at least a few generations. The stories of those most affected by foreclosure are frequently discussed in any news medium you care to look. But there’s another story out there and it’s just as important to tell. There are new and beneficial real estate opportunities that have suddenly presented themselves to those people who have decided to move beyond fear and look at Dayton Ohio real estate with new eyes. I’d like to share a few of those stories.

Did you ever see the video of the baby elephant who gets stuck in the watering hole? The baby needs help, the mama needs help, the extended family works together to get this baby unstuck. Most mothers will tell you that once you become a mother, all children are your children. Your kid’s friends are extended family, and that was the situation with recent buyers.

Their daughter’s friend had become family and needed a place to live. The buyers- middle class folks who lived in a modest 3 bdrm, 1 bath brick ranch home in Clark County- were in a position to help. It was good timing for them. They saw a need, saw the opportunity, figured out a way to make it work. They looked at several homes, made a few low ball offers, and we found a seller who was willing to negotiate. They purchased an outdated property for cash, fixed it up, and are now renting it to the friend. A simple business transaction? On paper, yes. But emotionally, this was an extremely satisfying transaction for everyone involved, including the seller. The property was an estate sale, so there was a lot of emotion involved from the seller’s side as well, and they were very happy to know how the property was going to be cared for.

I’m seeing more parents purchasing homes for their kids. Lower home prices mean that the parents, who often have more cash, have better credit, and have the skills and ability to take a distressed property and renovate it, can do that for their extended families, and that’s good, but there’s more to this story because the other thing that’s happening is that it’s creating some continuity in the Dayton area. Young families are putting down roots.

This is happening across economic lines. Cash buyers are looking in neighborhoods that were once neglected. You can buy a big home in the Dayton area for under $15,000 and absentee owners are getting some competition from Dayton area families who want to own a home but can only pay cash.

I have a client who lost a good job. He has access to cash, and has become an attentive landlord, using real estate to provide income for his family. One of his purchases was located around the corner from his home, it’s a short sale that he is now renting back to the previous owners. In this transaction, everyone made the most of a difficult situation. Local people are becoming conscientious landlords; renting to their own children, or are purchasing property in their own communities. This can create a vested interest in making sure that rental property is maintained and cared for. Not only does the landlord benefit, but neighborhoods and communities can benefit from this as well.

First time home buyers are another buyer niche that can create wealth through real estate even in this market. This is not the same wealth that the market sustained prior to 2007, this is slow, steady and purposeful planning by using low interest rates to purchase very specific investment properties in just the right locations, in order to create another stream of income for these younger home buyers.

I don’t know what the long term effect of the upheaval and resulting change in attitudes and opportunities will be, but in the short term it means that there are families moving into neighborhoods that need the stabilization families often bring. It means Dayton can have communities in which there are renters and landlords who have ties to each other and to the neighborhoods in which they live. Each of my clients has taken a crisis and found the positive opportunities available. There is no denying that doors have closed to many people, and I’m not here to proclaim the old Realtor’s saw about “This is a great time to buy!” because obviously that’s not the case for many people, but, every change and challenge bring an opportunity for someone, and right now there are plenty of doors that have just been thrown wide open for a whole new group of people; doors could have only opened in a real estate market like Dayton, circa 2011.