Cincinnati housing follows national trends in August

August real estate activity for the Cincinnati area looked very tough if you were on the sell side of things. Market activity was down across the board relative to August of '07 and the previous month. Notably, August usually sees a bit of an uptick from July. The fact that we didn't see that suggests consumers overall are very nervous about the economy. However, when you compare the number of homes sold to historical trends, you can see in the following charts that sales activity is similar to "pre-bubble" levels.The catch is the inventory levels remain high and several months above a "balanced" market. At least the trend on inventory is moving down.

I'm often asked what is selling now. Well, there are two kinds of properties that seem to be moving in this market: 1) "showcase homes," or those are well updated and look immaculate, and 2) those that are priced as "bargains."

One thing I've seen with regular occurrence is prospective buyers that are seemingly surprised at the price of homes. Listening to the media makes some think that every house for sale is bargain priced. Not true! Prices in Cincinnati have come off their peak, but we are not seeing huge drops in most cases. The sale price of area homes has averaged approximately 94% of the final list price. Granted, many homes are priced too high when they are first listed and will see some reductions, but if the sellers are realistic about what they can get, then their homes will eventually sell. The lesson here is that if you don't have to sell right now, then you should probably stay off the market.

Homes that are truly bargain priced are actually getting multiple bids and selling quickly. I've seen foreclosures that are in good shape and priced low sell in a matter of days. Cash buyers and investors are picking off the best of the bunch. The downside? A lot of homes have been left in very poor shape and you may have to go through quite a few before finding that diamond in the rough.

10 Ideas To Be Energy Smart

1. Know the difference - Efficiency vs. Conservation. Two sides of the same coin, but definitely different approaches to saving on energy costs. Efficiency is based on improving the way we use our resources such as replacing incandescent lights with compact fluorescents. Conservation, on the other hand, requires behavioral changes in the way we use our resources such as ensuring that you turn off lights when not in use. Consider both when trying to reduce your energy use.
2. Think outside the box. Your home, that is. There’s a tendency to think that home energy use is just about things inside such as heating, cooling, and lighting. Consider things outside the home that impact your energy use: commuting, landscaping, even how your home is oriented to take advantage of passive solar energy. Your current home may not have many of these items going for it, but that doesn’t mean you can’t improve. A shade tree to give your home a break from summer heat is just one of many small improvements you can make.
3. Get a professional Energy Audit. A full evaluation of your home will pay for itself. You can get a free audit, but they are usually worth about what you paid. Once you get the audit findings, spend the money on those items that have a payback less than the time you expect to live there – it’s one of the best investments you will make.
4. Use an Energy Improvement Mortgage. If you are getting ready to buy or refinance a home, then see if you can use this method of financing to pay for energy improvements to your home. It’s a great way to reduce your monthly expenses.
5. Know your resource alternatives. Oil, clean coal, renewable biofuels. It can seem like the list expands daily. Every resource has pluses and minuses and no one agrees on one being the best. Generally, those that have the least environmental impact are also the ones that have the highest cost, but that isn’t always the case. My recommendation - If you have the opportunity and financial means to opt for using a renewable resource in your home, auto, business, etc., I encourage you to do so.
6. Know your appliance alternatives. Gas furnace, hybrid, or geothermal heat pump? Tank or tankless water heater? Gas, electric, or solar? The “cheapest” option when installing or replacing a system or appliance in your home may not really be the most inexpensive. You must consider the true total cost that includes the cost of the item itself, installation, and most importantly –operational cost.
7. Be vigilant. The technology for energy is changing rapidly, with promising improvements every day. Today, CFL bulbs are cost-effective and widely available in many forms. Yet, LEDs are quickly dropping in price and may soon be the option of choice in your home. Solar panels will continue to fall in price. Energy efficiency is not a one-time “makeover,” but requires us to take advantage of changes when they arise.
8. Be opportunistic! Take advantage of the incentives available for being energy efficient. Replacing your furnace? Check the local utility for rebates. Installing solar panels? Look for tax credits. There are more opportunities for reducing the upfront investment than you might imagine.
9. Be involved. What could be better than helping friends and family have an improved quality of life and saving them money in the bargain? Share your experiences and what you learn with them so that we can all benefit.
10. Go beyond energy. Once you’ve started applying the savings and efficiency concepts to energy use, think about applying the same principles to other resources. Think about the effects of “reduce, reuse, recycle” in other areas of your home and business. You might find it easier and more financially beneficial than you think!

Why would I invest in my home now?

With the stock market seemingly schizophrenic, it’s fair to ask – where are you investing these days?If you knew you could make at least 10% return on your investment, would you do it? What about 20%? Higher? Most of us are overlooking the easiest return on investment we can make – in our homes. And no, I’m not talking about updating your kitchen – but in the most basic place imaginable – our energy bills.

Let’s take one small example: my utility bills average $280 a month. Based on an energy audit I had done, I could spend approximately $400 to close some of the gaps in my home and save in the neighborhood of $100 a year. So in 4 years time, I’ve made my investment back and in 8 years, I’ve doubled my money. Annualized, that’s a return of 9% a year. If I did the work myself, I’d probably double my money in half the time and achieve an 18% return or more. Even better is the fact that this rate of return increases the longer I live in the home and that’s before accounting for any rise in utility costs!

My audit identified even bigger savings with a bigger investment. This is on top of the fact that I’ve already made a number of energy improvements to my home and it had a high efficiency rating. If you are an investor in stocks, wouldn’t you be happy seeing this kind of performance in your portfolio? I know I would lately.

Many people will spend 100 times this much on a kitchen makeover that will never get them their money back. But it will look fabulous – for about 10 years. (Pick up a home trends magazine though, and they will crow about how homeowners will recoup nearly 85% of the cost of a kitchen or bath makeover in 3 years. That’s, uhmm, 85% recouped.)

I don’t mean to belittle nice kitchen makeovers and other design updates we do, I am merely questioning the priorities where we put our money first. Truth be told, it is difficult at best to sell a home that looks dated or worn out. And we all want a home where you enjoy the look and feel of the surroundings. My thinking is that if I save myself money by reducing my utility costs, I might actually be able to afford those updates when I want to down the road.

I’ve really become intrigued as to why we are overlooking this simple means of making money. I think part of it may be that most people believe we have to change our habits and be more conservation conscious to make a significant dent in our utility bills (not true by the way). Maybe an investment like the example above doesn’t cause enough “wow” to feel like it’s worth the time when I might otherwise hit the next Google stock. Maybe it’s because we don’t get the immediate gratification like we do from seeing those new appliances.

So, let me hear from you. What are the roadblocks to making even simple energy improvements in our homes?