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The Hubbard is an example of a new development being built first as apartments with plans to convert to condos in the future.
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:
To Rent or Not to Rent. That is the question
The average rate on a 30-year fixed mortgage recently dipped to a record low of 3.91 percent, a level not seen since the 1950s. With rates so low, homeownership is a very attractive option right now, but that doesn’t necessarily make it a bad time to rent either.
“We will still see a renters market in 2012 with potential homeowners being very cautious,” says Katie McCartney, real estate consultant with Cam Taylor Co. Realtors. “People who want to eventually be homeowners will continue to rent to save money for down payments.”
DeHays agrees, but sees the rental market changing as the year progresses.
“Rent rates will continue to rise due to the competitiveness of the rent market caused by the increased rental demand,” he says. “Yet as unemployment remains high, we will notice the ability to pay the increased rent will go down. It will be more important than ever for landlords to thoroughly screen their applicants.”
The flexibility of renting is something that appeals more strongly to certain populations, such as young professionals.
“There are a lot of 20 and 30-something professionals that are on the fence about buying,” LaFontaine says. “They continue to extend their leases, waiting for the right time to jump into home ownership.”
Once again, a reflection on the trends of previous years can help shed light on what to expect this year. In 2011, Franklin County saw 3,586 foreclosure sales, which was a 15 percent increase over 2010.
“Those one-time homeowners have to live somewhere,” Peffer says. “Additionally, helping to push the notion of renting, there seems to exist a malaise regarding the one-time American Dream of homeownership as buyers see their friends and co-workers complain that their investment isn’t appreciating.”
From a personal standpoint, McCoy agrees that the title of homeowner has lost some of its significance, but the numbers are telling a different story on paper.
“The bottom line is home ownership is not for everyone,” McCoy says. “That being said, we are also in a market where, for the most part, it fiscally makes more sense to purchase than lease. I’ve worked with many buyers this year who are now owning a home that would have cost them $500 more per month had they leased the same property.”
Page 4: Hot Neighborhoods of 2012: Weinland Park, Franklinton & More
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.
“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.
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.
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.
I thought a lot of private money was being invested in Franklinton – more in the form of housing rehabilitation, rather than shopping centers.
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.
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.
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.
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.
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.
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.