Thursday, August 23, 2012

Cleveland, Northeast OH Area Real Estate Market July 2012

According to the Northeast Ohio Regional Multiple Listing Service and an article from the Cleveland Plain Dealer, homes sales in the region continue to surpass last year's sales figures. Lower home inventory, along with higher buyer demand due to low interest rates, is driving this increase in activity and increase in sales prices.

While home sales declined slightly from June 2012 to July 2012, sales comparing July 2011 to July 2012 show considerable improvement.  Among the 15 counties in Northeast Ohio, single family home sales are up 18.4% and condo sales are up 26%.  In addition to the increase in sales activity, Northeast Ohio is showing a 9% increase in single family home prices and 2.6% increase for condos. 

The key point here is that the market is starting to correct itself and balance.  Sellers are getting more for their homes than last year, with buyers paying a bit more to purchase a home to take advantage of the low interest rates.  Buyers should note that interest rates have increased over the past couple weeks (and is forecasted to continue in that direction), when deciding when to make a purchase.  The data over the past several months indicates we have seen the bottom of the local real estate market.


23fgHOMESA.jpg


Northeast Ohio is currently outpacing the nation sales increase of 10.4%.  Nationally, 4.47 million homes have sold, which is behind the 5-6 million home sales, considered to be a normal or healthy range.  The chief economist for the National Association of Realtors feels 5 million sales next year is attainable, "but it will require more sensible lending standards and strong job creation to push beyond that."



23fgHOMESB.jpg

Friday, August 17, 2012

Cities With Point Of Sales (POS) Violation Inspections in Cleveland Ohio Area

The following is a list of cities in the Cleveland, Ohio area that require a point of sale inspection before title transfer and purchase.
 

Bedford
Building Dept. (440) 735-6530
 www.bedfordoh.gov
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: Varies from $50 for single-family dwelling plus $25 for each additional rental unit; Commercial buildings are minimum of $75 and maximum of $200
Re-inspection Fee: Same as original Fees
Escrow: An amount not less than $100 and equal to 150% of the estimated cost of repairs for outstanding violations. Estimate must be provided by a company registered with the City of Bedford.

Bedford Heights
Building Dept. (440) 786-3200
www.bedfordheights.gov
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: $125.
Re-inspection Fee: N/A

Berea
Building Dept. (440) 526-5812
www.bereaohio.gov
Interior POS: No
Exterior POS: Yes
Inspection Fee: $75
Re-inspection Fee: $75.
Escrow: At the request of the owner of the property or his agent, the City may issue a letter or other document signed and dated by a Building Department Official stating that some, but not all, of the violations listed on a specific Certificate of Exterior Inspection have been completed to the City’s satisfaction.

Bratenahl
Building Dept.
www.bratenahl.org
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: $25
Certificate Expiration: Time limit for correction of minor repairs is agreed upon with owner or his agent or prospective occupant and Commissioner of Buildings. Time limit for corrections of issues that are a hazard to health, safety or welfare of occupants is determined solely by Commisioner of Buildings.
Re-inspection Fee: $35 for second inspection and $50 for each after.


Brooklyn Heights
Building Dept. (216) 749-4300
www.brooklynhts.org
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: $50
Re-inspection Fee: $25.
Escrow: N/A

Brook Park
Building Dept. (216) 433-7412
www.cityofbrookpark.com
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: No charge if in June, July, or August.
Reinspection fee: No charge
Escrow: None but requires buyer to sign waiver and agree to do repairs within 90 days of closing.

Cleveland Heights
Building Dept. (216) 291-4900
www.clevelandheights.com
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: $150 first unit, $50 each additional unit.
Re-inspection Fee: $20.
Escrow: If all Class A violations are not corrected, seller must escrow not less than $1,000 and equal to 125% of the estimated cost of repairs.
Ongoing POS: The exteriors of all owner-occupied single-family homes are inspected on a street-by-street basis on a five-year rotation.

East Cleveland
Building Dept. (216) 681-2415
www.eastcleveland.info
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: $50
Re-inspection Fee: N/A
Notes: Properties can be sold “AS IS” but the following conditions MUST be met prior to issuing of Certificate of Inspection. 1. Submit original notarized Affidavit to Building/Housing Department 2. Submit copy of Purchase Agreement to Building/Housing Department 3. Only the Building/Housing Department’s can grant compliance time frame for notarized Affidavit (NINETY (90) DAYS COMPLIANCE) prior to issuing of Certificate of Inspection.

Euclid
Building Dept. (216) 289-2703
www.cityofeuclid.com
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: Single Family $225; Two Family $260; Three Family $295; Multi-Family $225 per building + $35 per suite. One suite per building not charged.
Re-inspection Fee: $112.50
Escrow: 50% of the estimated costs of repair.
Notes: Assumption of Class A violations and assumption of Class B violations shall require the payment of one hundred fifty dollars ($150.00) by the purchaser at the time the affidavit is presented to the Housing Manager.

Garfield Heights
Building Dept. (216) 475-3171
www.garfieldhts.org
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: $75
Re-inspection Fee: $25
Escrow: 150% of the estimated repairs.

Gates Mills
Building Dept. (440) 423-4405
www.gatesmillsvillage.com
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: N/A
Re-inspection Fee: N/A
Ongoing POS: Every septic tank shall be inspected at least once every three years by a licensed company engaged in the business of cleaning and servicing septic systems. It shall be the duty of the owner of the property whereon such septic tanks are located to keep such septic tanks in proper working condition at all times and to notify the Building Inspector, at least once in every three years, by certificate from the inspecting company, that such system is in proper operating order.

Highland Hills
Building Dept. (216) 283-3003
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: $25
Re-inspection Fee: None
Escrow: Attached to the Certificate of Inspection shall be a written agreement signed by the seller and purchaser identifying the party who will be responsible to correct all violations listed with the Certificate of Inspection and, not withstanding any outstanding or new mortgage indebtedness or lien upon the premises, providing that all necessary funds shall be deposited or retained in escrow sufficient to pay for the costs to correct all violations, which funds may be released totally or partially, as the work progresses, upon the authority of the CBO so long as funds are retained to complete unfinished work. In lieu of said funds, being retained in escrow, a payment or performance bond may be approved by the Law Director.
Notes: All violations shall be corrected within thirty (30) calendar days of the issuance of the Certificate of Inspection as required herein, unless an extension is granted. (ii) If the transferor does not correct the violations contained in the Certificate of Inspection prior to the transfer of title, then the purchaser or transferee of the property shall be required to correct the violations contained in the Certificate of Inspection within the time allotted by operation of these Ordinances or within any extension of time permitted

Hunting Valley
Building Dept. (440) 247-2807
www.huntingvalley.net
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: N/A
Re-inspection Fee: N/A

Lakewood
Building Dept. (216) 529-6270
www.lkwdpl.org
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: $50
Re-inspection Fee: N/A
Notes: Repairs are the responsibility of the seller of the property. If the buyer wishes to assume some (or all) of the violations, then he/she will need to come to the Lakewood Building Department (with his/her valid driver's license) to sign a notarized Affidavit stating that they will be legally responsible for the repairs. There is no cost for this affidavit.
Ongoing POS: An Annual Inspection is required by law for non-owner occupied properties and to be done every three years. Annual inspections are done (most of the time) on a per-street basis.

Maple Heights
Building Dept. (216) 663-4094
www.mapleheights.cuyahogacounty.us
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: Single-family $ 75; Single condominium $50; Two-family dwelling $85; Three-family
dwelling $95
Re-inspection Fee: $25
Escrow: 150% of the estimated cost of repairs
Notes: Any prospective Buyer of a residence who intends to assume some or all of the violations listed on the Certificate of Inspection must deposit 150% of the estimated total cost of all required repairs into an escrow account and written confirmation of such escrow account shall be provided to the Building Department before the Building Department will issue a Certificate of Occupancy. Funds may only be released from this account by written approval of the Building Commissioner. Written estimates of the total cost must be submitted from a minimum of two contractors registered to perform work in the City of Maple Heights.

Mayfield Heights
Building Dept. (440) 442-2626
www.mayfieldheights.org
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: $50
Re-inspection Fee: N/A
Escrow: Escrow funds are required when violations remain at the time of title transfer. Funds must be set aside to assure that violations are corrected at a later date. The amount listed on the front page of the inspection report is the amount required to be held as “escrow.” This amount is determined by the housing inspector. This amount does not guarantee to be the cost to cover repairs.
Notes: If the buyer agrees to assume some or all of the violations, they will need to fill out a notarized statement of assumption and an escrow account will need to be created.

Newburg Heights
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: $40 Single Family, $50 Two-Family
Re-inspection Fee: $15
Notes: The owner of the property to repair, improve or demolish the structures or premises concerned within ninety days of the date of issuance of the Certificate.

Orange Village
Building Dept. (440) 498-4400
www.orangevillage.com
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: $50 Single Family
Re-inspection Fee: N/A

Oakwood
Building Dept. (440) 232-9980
www.oakwoodvillageoh.com
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: $20 Single Family; $20 plus $5 per unit for multi-family
Re-inspection Fee: N/A

Shaker Heights
Building Dept. (216) 491-1400
www.shakeronline.com
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: A fee of $100.00 for the first dwelling unit and $25.00 for each additional unit.
Re-inspection Fee: $25 after first two requested re-inspections
Escrow: 150% of the estimated cost of repairs
Notes: Funds held in escrow shall be disbursed only upon written authorization from the City. If the amount held is less than $5,000, no funds shall be released until all violations are corrected. If the amount is $5,000 but less than $20,000, the City may authorize one (1) partial release of funds from escrow if it is determined that substantial progress has been made in correcting the violations and that sufficient funds remain in escrow to correct all remaining violations. If the amount is $20,000 but less than $40,000, two (2) partial releases may be approved. If the amount is $40,000 but less than $60,000, three (3) partial releases may be approved. On escrow accounts equal to or exceeding $60,000, four (4) partial releases may be authorized. The purchaser is responsible for correcting all violations remaining at transfer of title within ninety (90) days unless, for good cause, an extension of time is approved by the Housing Inspection
Department.

University Heights
Building Dept. (216) 932-7800
www.universityheights.com
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: $75 single family; $125.00 two family
Re-inspection Fee: N/A
Notes: The buyer(s) must sign an “assumption form”, and funds must be escrowed to cover the cost of correction of any outstanding violations. Upon receipt of the signed assumption form and a letter of verification from the escrow company stating the amount of funds held for violation correction, the building department will issue a “transfer release” (usually to the escrow company) stating that our requirements are met and releasing the property for transfer. Ordinance states that violations must be corrected within 30 (thirty) days of the date of the report. However, the building department grants requests for extensions on a “progress-made” basis.
Ongoing POS: The Building Department requires an exterior housing inspection, once every three years, for one and two family homes.

Warrensville Heights
Building Dept. (216) 587-1230
www.cityofwarrensville.com
Interior POS: Yes
Exterior POS: Yes
Inspection Fee: $50 Single Family; $30 per multifamily unit; $90 commercial structures
Re-inspection Fee: No Fee Within 1 Year
Escrow: 150% of the estimated cost of repairs
Notes: Code violations noted on the certificate, except in a case of danger to the public health or safety, to be corrected by the owner of the property within sixty (60) days of the issuance of the certificate unless, for good cause, the Building Commissioner has extended that time for compliance. If the owner of a property does not correct the violations enumerated in the certificate of inspection prior to the time the title is transferred to the purchaser, then the purchaser of that property shall be required to correct the violations contained in the certificate of inspection within the time allotted in the notice given to the prior owner or within the extended time permitted by the Building Commissioner

Thursday, August 9, 2012

Home Purchase Closing Costs In Ohio

In the past year, closing costs in the state of Ohio have reduced by 6%. With that reduction Ohio is still the 11th-highest in closing costs nationwide.  On average, for a $200,000 home purchase mortgage in Ohio, it now costs $3,933, down from $4,165 last year. 

The U.S. average is $3,754, a decline of 7 percent from 2011.

The reduction in costs can be attributed to new regulations that require lenders to be more accurate when estimating closing costs for borrowers.  The regulation, which was put in place two years ago as part of the Real Estate Settlement Practices Act requires lenders to provide a "good faith estimate" of third-party fees that is within 10% of the actual amount the buyer will pay.

In addition, the mortgage crisis drove a lot of the high-cost mortgage brokers out of business.  The collapse of the housing market means that dramatically fewer people are buying homes, so banks and title companies have to be more competitive.

Saturday, August 4, 2012

U.S. Real Estate Market Improved For Buyers And Sellers

According to an article in the Wall Street Journal, S&P's David Blitzer indicated that nearly seven years after the housing bubble burst, most indexes of house prices are bending up. "We finally saw some rising home prices."  Nationally, the number of existing homes for sale has fallen close to the normal level of six months' worth despite all the foreclosed homes. 

This national trend is something I'm seeing locally in many of the Northeast Ohio suburbs, where as the inner-ring suburbs and Cleveland areas are still seeing a considerable supply of homes versus buyer demand.  When we see lower supply and higher demand for homes (due to historically low interest rates), we will begin to see an increase in sales prices.

We're also seeing improvements in new home construction on a national and local level, but it still has a long way to go from what construction was like in 2002, which we may never see again. 

As the economy and employment rate improves, so will the real estate market.  As a Seller, the great news is that there are less Homes For Sale compared to last year, and there is higher buyer demand.  Again, in that scenario, that means sales prices will remain where they are or show modest increases.  As a Buyer, the great news is that interest rates are at or near record lows and the lenders have relaxed their approval criteria a bit over the past year or so.

I don't know what the future will hold in regards to the economy, real estate market or interests rates.  What I do know, is that this local market in Northeast Ohio has shown significant improvement, and it's a great time to consider making a move.