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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 Grandview Yard Apartments, scheduled to open in Fall 2012.

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 Big Real Estate Trends of 2012

When we asked for anticipated trends of 2012, we quickly saw patterns emerge among the predictions of our local experts and consultants. Short sales, rental investments and urban amenities were the most prevalent.

“The tea leaves are showing several things”, says Thomas Fortin, an investment realtor and developer. “2011 will see lackluster sales of single family homes and condominiums priced over $250,000. There will be some moderate demand for select areas and price points under $200,000. There will also be increased demand for upscale residential rentals, yet further decline in deteriorating communities. And lastly, we’ll see more existing homeowners remodel to fit changing residential needs.”

To further understand what lies in store in 2012, a reflection of last year’s market is warranted.

“As the Columbus real estate market continues to readjust to a new normal, and while we’ve fared far better than most other Midwestern cities, the short sale will be the most significant trend in real estate in Columbus in 2012,” states Joe Peffer, broker in charge at Re/Max Town Center.

On Dec. 31, 2011, 14 percent of homes for sale in Columbus were listed as short sales, and Peffer expects that trend to continue into 2012. Additionally, 28 percent of the 839 homes listed as “in-contract” on Dec. 31 and in the process of closing in January were listed as short sales.

“That’s almost as many homes that sold as short sales the entire 2010 calendar year,” he explains. “In 2012, I predict that one out of every three Columbus homes will sell for less than what the home owners owe their lender.”

Todd DeHays, an agent with Connect Realty, says that more properties have made it through the sheriff sale process recently, which will be sold on the market as bank owned properties in 2012.

“The foreclosure supply should increase throughout the first half of 2012 due to the decreased supply in 2011 from the moratorium on foreclosures that was executed by lenders in 2010,” he explains. “Prepare to see some creative efforts on behalf of banks to sell or utilize their extra inventory in the form of lending incentives and possible use as rental property.”

Real estate investors looking to enter the rental investment market in Columbus will be able to easily do so in 2012 due to rising lease rates and the historically low interest rates on mortgages.

“The rental market stands out more to me from the last year because  it seemed like people were more desperate to find a rental and there was a lot more people looking for them,” says William Robbins of the Gledhill Robbins & Talis Group at Real Living HER. “The Columbus metro neighborhoods will continue to be desirable, for both renters and home buyers, for their historic qualities and easy accessibility to all Columbus destinations.”

That sentiment is shared by Christina Miller Ringley, a Realtor with Carriage Trade Realty who also sees a continued interest in certain urban neighborhoods remaining strong through 2012.

“Homeowners will be more willing to purchase homes that need some TLC rather than homes that are polished and pristine,” she says. “The reason being that there are so many homes in short sale status or in foreclosure. With a little bit of work and a small investment, these already relatively reasonably priced homes will be very attractive to home buyers.”

The trending shift comes from an buyer’s expectation for certain types of amenities located within the neighboring community, and not just amenities located within a house.

“Many clients are already thinking past the home and considering their community attributes including parks, shops, restaurants and other businesses when setting their search criteria,” says Shanna Lafontaine, real estate  consultant at RE/MAX Affiliates. “I also expect buyers’ increased interest in staying within or close to the I-270 outer belt to continue.”

Regardless of neighborhood, 2012 is largely expected to be a buyer’s market for interested and qualified homeowners.

“Value pricing has been critical and we see this trend continuing well into 2012,” says Real Estate Consultant Mike McCoy. “Buyers need to perceive properties as values and sellers need to understand their home needs to be priced at or below market value to be one of the homes that sell. Many homes are selling month in and out, but it certainly takes longer and more patience for all parties involved.”

Page 2: The Continued Upward Spiral for Downtown Columbus

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