How Hot is Hot Housing Market

[Bridget Conant]

Our mayor and his team portray the city in a manner that appears to say "look what we did!"
They claim a hot real estate market is somehow a result of their "policies" and efforts, though I fail to see exactly WHAT they have done that would do so.

In reality, the latest figures from the county paint a far less exciting picture. Instead of hype, look at the facts.


http://www.cleveland.com/datacentral/in ... all_1.html

In reality, MOST markets are up. Lakewood is following an across the board trend, but it doesn't stand out in any meaningful way.

The median home price in Lakewood is up a modest 4% this year so far after a decent 11% increase from 2015 to 2016. Hardly earth shattering when the countywide average was 5.5%.

In terms of increases, as usual, upscale suburbs are "hot" with Broadview Heights and Rocky River posting big increases in prices.

Lakewood Is holding its own, yes, but most communities in the county are, as well.

[mjkuhns]

No cognitively functioning American over 25 has any excuse for seeing "hot housing market" as anything more, or less, than a bright yellow "caution" signal, anyway.

[Bridget Conant]

Nor is lakefront property in Lakewood exactly burning it up.

Not one Lakewood property sold this year for 1 million plus while other lakefront communities to the west are doing quite well, with Bay Village having multiple million plus sales and a Rocky River lakefront was the top price getter in the entire county at 2.4 million.

Where are Lakewood's million dollar plus homes?

http://www.cleveland.com/datacentral/in ... rt_m-rpt-2

[Tim Liston]

I saw the home price numbers yesterday and was tempted to post here but it all would have been a rehash of stuff I have said before that nobody wants to hear. But it’s been a while since I last posted so what the heck….

The biggest takeaway in the cleveland.com numbers, clearly, is Shaker Heights. Shaker’s property values have fallen 10% in just two years while all other reasonably affluent cities have increased by that amount. That’s a 20% relative decline. Huge.

Residential property taxes are killing Shaker’s property values especially at the high end. Shaker Heights is finally experiencing what economists call a “positive feedback loop,” which is a self-reinforcing phenomenon. They raised their property taxes, now 4% of the presumed market value and 25% higher than Lakewood, to the point where it finally has caused property values to falter. (Lakewood is at 3.2%.) That in turn causes more revenue pressure and the need for even higher taxes. It’s colloquially known as a “death spiral.” (Shaker also has the highest commercial property tax rate in the county at almost 6%.) Property values in Shaker will continue to fall. The state of Illinois is also experiencing a death spiral, they signed their final death warrant just yesterday in fact. No taxpaying family or company in their right mind is considering a move to Illinois, especially after yesterday. All taxes and no services. Foxconn is considering 10,000 jobs in neighboring Wisconsin, they wanna build iPhones there.

Lakewood needs to do two things. One, it (city and schools) needs to dispense with any notion of residential property tax increases. That would be suicidal. And it needs to be darn careful with income taxes. Second, Lakewood needs to focus like a laser beam on what makes it unique and livable. That would be (1) its public spaces and Lakewood Park in particular, and (2) its proximity to downtown Cleveland. The solstice steps were a great addition, the best money spent in a long time. The peninsula of course would be better but the lake is Ohio public trust property and not owned by Lakewood. Forget about it. I can’t imagine why Lakewood didn’t do everything possible to acquire and knock down that strip shopping center in front of Kaufmann Park when it was in tax arrears. Book-ended by the two beautiful churches. And I’ve said before, the harder you make it for River and Bay commuters to use Lake and Clifton to get to work, the more Lakewood becomes worth. Lake Road should have about six roundabouts. Clifton should have broken down buses or something near the RR border during rush hour, at least now and then. Like Christie’s bridge-gate. Make ‘em use I-90 or move here.

(((And a bit OT but I’ll jump the shark again. If you want to increase Lakewood property values by at least 20% overnight, simply dissolve the LCSD, make every district school a public charter, and pass out the $120 million a year to Lakewood parents in the form of vouchers. Reduce that amount by at least $20 million as you wring the grift from it over the next 3-5 years and reduce property taxes. People will absolutely flock here. But any city can do that, it’s not an opportunity unique to Lakewood. And of course the vested interests would fight that tooth and nail.)))

Lakewood is a darn nice place to live, by and large. It’s why I moved my family here 32 years ago, and why I still have a home here. And the characteristics that make Lakewood unique and special have not changed. But the property taxes have, and if they go any higher people are going to cross Lakewood off as a home-buying destination in favor of Rocky River (2.5%), Tremont and Ohio City (2.8%). Like Shaker is getting crossed off. And like Illinois is getting crossed off in favor of Indiana and Wisconsin.

Thanks for reading….

[Michael Deneen]

Lakewood needs to do two things. One, it (city and schools) needs to dispense with any notion of residential property tax increases.

Sorry, but the esteemed Kellogg alum in the Mayor's office has already ruled this out.
He and Jen Pae plan to offset lost hospital money via increased money from property taxes.
As with most conservative plans, it's a tax shift. Instead of getting money from those doctors and nurses salaries, we'll suck a few extra dollars out of each homeowner.
Even if there are no new levies, City Hall plans to ride a wave of increased assessments.
It's actually a good thing, because rising property values are a good thing, right? That's what the fine folks at City Hall say.
(What happens when the bubble bursts and property values fall, you ask? Stop being so negative! Solstice steps!)

In any case, property tax increases will be needed for the schools, because of our antiquated state funding system. Folks will approve more money for schools, but the county and city will take a cut of that cash....thereby keeping schools in need.

As for abolishing public schools, another NU alum is trying that in Chicago. I don't expect it to go well.
Here in Lakewood, the public schools are still currently seen as a positive.......for now. Closing or privatizing them merely turns Lakewood into "Cleveland with higher taxes".

[Stan Austin]

Tim--- you've posted some darned interesting concepts- ones that are "out of the box". I think they are all worth discussion if for no other reason than to get us out of these old bloomers that we've been wearing for the last several decades.
Stan

[Brian Essi]

My neighbor's lakefront home--which won awards--its a beauty---not one offer in over one year on the market.

It would be gone in a month in River of the Baaa Villaage

How hot is Lakewood?

[Bridget Conant]

My neighbor's lakefront home--which won awards--its a beauty---not one offer in over one year on the market.

It would be gone in a month in River of the Baaa Villaage

How hot is Lakewood?

Here is another lakefront home that has been on the market over 430 days:

https://www.zillow.com/homedetails/1025 ... 1094_zpid/

[Tim Liston]

Bridget the property taxes on that house at that price are about $50,000 per year. It's not hard to imagine that as a deterrent to purchasing it. Unless you have about 12 school-age kids.

The stream of property taxes, year after year, are worth more than the home. The same is true for every home in Lakewood. It became true as (1) property taxes increased relative to market value, and (2) interest rates decreased. Annuity math....

By the way, home prices in Lakewood and elsewhere have "increased" when measured in dollars. When you measure home prices in another unit of value, say shares of stock or hours of your time, home values have decreased. Increasing home prices are at least as much a reflection on the value of a dollar as on the value of a home. I know it seems like jabberwocky but it's not. It's very real and by design....

[Brian Essi]

Bridget the property taxes on that house at that price are about $50,000 per year. It's not hard to imagine that as a deterrent to purchasing it. Unless you have about 12 school-age kids.

The stream of property taxes, year after year, are worth more than the home. The same is true for every home in Lakewood. It became true as (1) property taxes increased relative to market value, and (2) interest rates decreased. Annuity math....

By the way, home prices in Lakewood and elsewhere have "increased" when measured in dollars. When you measure home prices in another unit of value, say shares of stock or hours of your time, home values have decreased. Increasing home prices are at least as much a reflection on the value of a dollar as on the value of a home. I know it seems like jabberwocky but it's not. It's very real and by design....

Mr. Liston,

Agreed.

This is why Tom Bullock is an idiot:

“Many families don’t own much in the way of stocks on Wall Street. Their home is their biggest investment,” noted Bullock. “Increasing Lakewood property values means that for many families, their economic future is getting stronger.”

My home in Lakewood is the worst return on investment I've every made---holding it and paying $17K in annual real estate taxes is a sucker's game---the monthly tax bill is higher than my original monthly mortgage payment.

While you can't "drink Tom Bullock pretty" on an intellectual stage, he does play the role of Ted Baxter well---straight faced looking into the camera and reading "Take off glasses and look concerned." Bullock is selling manure of a shingle--and people eat it up.

No cognitively functioning American over 25...

Mr. Kuhns,

Cmager must have missed your post, so I am filling in: That's the quote of the week. Priceless!

BTW, what percentage of Americans over 25 do you think are "cognitively functioning"?

[mjkuhns]

No cognitively functioning American over 25...

Mr. Kuhns,

Cmager must have missed your post, so I am filling in: That's the quote of the week. Priceless!

BTW, what percentage of Americans over 25 do you think are "cognitively functioning"?

Thanks. I would say a substantial majority. Which doesn't mean an inability to be fooled.

But as regards housing market hype, I just think that we're currently still within the statute of limitations for "fool me once, shame on you; fool me twice…"

[Michael Deneen]

While you can't "drink Tom Bullock pretty" on an intellectual stage, he does play the role of Ted Baxter well---straight faced looking into the camera and reading "Take off glasses and look concerned." Bullock is selling manure of a shingle--and people eat it up.

Ted Baxter is far too kind a comparison. Ted was harmless and even charming in his own goofy way.
All Ted ever cared about was keeping his cushy job....he wasn't smart enough to have an agenda beyond that.

Bullock is far more dangerous....he's a devious schemer that will say or do anything to anyone at any given moment if he thinks it's to his advantage.
Lonesome Rhodes is a better comparison....Rhodes was willing to be used by powerful people to advance an agenda.

[Don Schmitz]

“The median price of a Lakewood one- or two-family home has increased 50.9 percent from 2012 to 2017. That’s a growth rate a lot of investors would be envious of,” said Bullock. (Quoted from the latest Lakewood Observer)

Are you kidding me???? Show me the data, Tom.

[Bridget Conant]

From a 2015 article, prices rose 8% from 2012 to 2015. That's 8% OVER THREE YEARS. The latest figures are modest, as well.

https://www.google.com/amp/amp.clevelan ... e_by_n.amp

Bullock must be on something if he thinks values rose 50%

[Bridget Conant]

He's definitely WRONG.

http://www.cleveland.com/datacentral/in ... 4230038171

IMG_6791.PNG (470.16 KiB) Viewed 3150 times

He's using a year that could be called an anomaly. The bottom of the recession. Yes, they've rebounded from that but still barely are increased from 2007. Not a great return for 20 years of home ownership.