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Local Experts Predict the Real Estate and Urban Development Trends of 2012

Walker Evans Walker Evans Local Experts Predict the Real Estate and Urban Development Trends of 2012
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The Atlas Building is one of several Downtown apartment projects currently being planned.

A new year brings about new change, and there’s no better place to look than across our urban landscape and into communities where people choose to live their lives in Central Ohio. We asked several local real estate and development experts for their opinions, insight and predictions about what 2012 will hold for urban development and the local real estate market. Here’s what they had to say:

The Continued Upward Spiral for Downtown Columbus

When we narrow our scope to the urban neighborhoods in Columbus, the trends become a bit more specific to individual neighborhoods. Places like Weinland Park and East Franklinton are on the verge of being rebuilt from the ground up, while Downtown Columbus is seeing a quick transition away from being a hot market for condominiums.

“There will be no condo development in the city due to the high level of condo inventory and competition,” McCoy says. “Condo financing has lightened compared with the last couple years, however, it remains more challenging to finance a condominium than a single family home.”

The lack of new Downtown condos for sale doesn’t mean that interest in the area is fading, though. Instead, new urban-dwelling residents are looking for apartments before making a commitment to buy a home.

“The rental market is incredibly strong, partly because of the economy and partly because we have a lot of people in transition who are relocating to new areas,” Robbins says. “Many of those people intend to become long-term residents, but would like to get settled in Columbus before deciding on what neighborhoods are best for them.”

When it becomes time to buy, Ringley is seeing urban homeowners who are looking for what were previously considered suburban amenities, such as off street parking, gardens, and quality construction.

“It is my hope that developers will focus on renovation rather than new construction,” she says. “There are so many single-family homes, multi-family homes and commercial buildings in Franklinton, Hilltop, Westgate and Olde Towne East that need work, and would make lovely homes and rentals.”

While rentals units are certainly on the forefront of most developers’ minds, Peffer points out that Downtown still fared well with condo sales in 2011. He says 115 condos sold in the 43215 zip code in 2011.

“2012 will be more of the same, with lower prices and high interest for the more desirable locations,” he explains. “The tripping point, however, will continue to be the inability of those who want to move downtown to sell their large suburban nests, often because they are reluctant to list their homes ‘in this market’ because of the continuing negative housing market publicity nationwide.”

Interest in Downtown is expected to increase as new amenities come online in 2012, such as the new Hills Market grocery store, the new Columbus Commons amphitheater, and the new 500-room Hilton Hotel that will include public restaurant and bar venues.

“Developers now seem to be paying more attention to consumer wants,” Lafontaine says. “Buyers want to have services available within walking distance for convenience of biking or walking, eschewing owning a car.”

Fortin agrees, but remains cautiously optimistic on the rebirth of Downtown Columbus.

“Like most all urban centers across the country, there are many dysfunctional, obsolete, deteriorating structures — some can be restored, but many cannot,” he explains. “The quality of urban life in Columbus has improved in the last seven years and I hope it continues, but we have a long way to go.”

Developer John Delia emphasizes the importance of recognizing the smaller successes that Downtown has seen, which collectively make a more vibrant community for new residents.

“Events like the Reduction sale and the Food Cart Festival prove that there is demand for Downtown retailers and restauranteurs,” he explains. “Columbus has strong urban pioneers being responsive and taking action.”

Page 3: To Rent or Not to Rent. That is the question

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  • mrpoppinzs

    Totally agree that now is the time to buy some rental property. I am thinking the best bang for your buck is in Weinland Park at the moment. It is close to both campus and nightlife and is getting safer. Rents will definitely be on the rise.

  • James

    “People want to walk to restaurants, the gym, coffee houses, and grocery stores and this will become more and more evident as communities redevelop. The redevelopment of the Kingsdale shopping center in Upper Arlington is a fabulous example of this trend.”
    I don’t think Kingsdale is much more walkable since it’s redevelopment, unless he means walking from your car to the door.

  • columbusmike

    I agree, Kingsdale is a stupid example of a walkable development.  It’s just a glorified strip mall, at best.

  • While Kingsdale *is* a strip mall, there are sidewalks that lead to it from what is a fairly dense area surrounding it, and it’s not an unpleasant walk on what are generally slower pedestrian-friendly streets. That differs quite a bit from retail developments in the fringe exurbs where there is usually no continuous sidewalk connection from home-to-store, and most likely if you tried to walk you’d be walking down a major artery road where traffic moves at 50mph.

    Kingsdale is a good example of a reinvestment in the urban core, and the reuse of a site that had become underdeveloped. While it’s not 100% perfect, it’s much better than seeing this site abandoned as developers move on to new greenfield sites on farm land in contiguous counties.

  • cmhcow

    It is nice for a bunch of “experts” to give lip service to places like Southern Orchards and Franklinton, but until you actually see private money invested in those communities at some scale, it is unrealistic to for us to collectively believe these places are making a true comeback.  Unfortunately private equity would rather been around Riverside or Kingsdale – it is the same safe mediocrity that has made Columbus the city that it is.  I wonder when we will demand something better.
    Screw Michigan.

  • James

    I thought a lot of private money was being invested in Franklinton – more in the form of housing rehabilitation, rather than shopping centers.

  • cbus11

    There practically is no housing in East Franklinton and the majority of the housing in West Franklinton is in abysmal condition. East Franklinton has the best shot due to its proximity to downtown, but it will take investors with deep pockets (NRI, WagCo, etc) which have yet to materialize. It will be a lot of new construction or conversions of warehouse space. There is a lot of hope, but this will be very expensive.

  • I think the Parsons Road corridor is getting close to sparking some big redevelopment. Some nice, underutilized housing stock on the east side of Parsons, and a fairly intact retail infrastructure.

  • somebuckeye

    After having lived in Franklinton for most of my adult life, I can basically say that it is a very bad neighborhood with a very good location.  I’m fortunate to live in a fairly nice, good condition craftsman house on a really nice deep south-facing lot, but most of the housing in Franklinton is not this way.  There are diamonds in the rough for sure, but I think much of the neighborhood is going to need to be bulldozed.  In fact, quite a few of the lots around me already have been.

  • @cmhcow – What sort of large-scale private money was invested in established urban neighborhoods like The Short North and German Village? Those two are largely the result of a lot of smaller investments being made by individuals and small investors. Of course, that process takes a much longer amount of time.

    I’d also argue that the major investments being made by Children’s Hospital will have a positive impact on the Southern Orchards and Old Oaks neighborhoods. Maybe not immediately, but it will certainly help move the needle a bit faster overall.

  • swinzo1010

    People had little incentive to walk or bike to Kingsdale before redevelopment.  The new Kingsdale has led to more activity overall in the area (walking, biking, and driving) because there are more shops/services than before.   The redevelopment also helped to add density to the area with the 5 story condo developments that border it.

  • James

    They cleaned up the layout, demolished some unsightly stuff and there are better stores and more shoppers now, but its still the same kind of animal – a grocery-anchored strip surrounded by a big parking lot. I do like that they have a hardware store and (kept) the outdoor Source.
    Several years ago when they proposed a community center at Kingsdale a much nicer, town-center oriented design was floated. It’s too bad something like that didn’t happen.

  • mrpoppinzs

    2012 is too early for Franklinton, imho. It cannot be done by small private investors.

  • I don’t think anyone said that Franklinton would be “the next big thing” before the end of this year. It was referenced as a place to buy in now, while prices are still low, if you’re interested in a place that will appreciate over the next decade to come.

  • With such statistics it does make one nervous to buy.  I’m looking forward to the development in the Discovery District.  I will watch it all grow right around our gym :-)  I’ll be a regular at Hills Market downtown.

  • tdziemia

    It’s nice to see some candid talk among experts.  For a purely objective analysis, you can look at the Case-Shiller index of housing prices.  The story this index tells is that after a precipitous drop from 2006 to 2009, seasonally adjusted prices nationally have been more or less flat the last two years.  If you read “THis TIme is Different” and specifically their analysis of what happens to real estate prices during a severe financial crisis (like the one we are in the midst of) you will see that real estate prices bottom out, on average, six years into a financial crisis.  If I were in the market to buy a place to live in for some years, I would go for it (I bought in March of this year).  Real estate prices don’t tend to bounce back as quickly as, say, stock prices (for example, the returns between early 2009 and one year later), but if you wait too long, you always have the risk of missing the bottom. 

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