The Observation Deck

Curious? Wondering about real estate? Please submit any question about real estate or related topics (appraisals, inspections, mortgages, etc) and it will be answered by local professionals on the Observation Deck. It may also be in print on the new REAL ESTATE page of the Observer. The names of all persons submitting questions will be submitted into a drawing for a gift certificate in August for a Lakewood restaurant. Thanks for your input!

Hi Rick,

Thanks for forwarding the information on the house for sale. Are you the owner? A Realtor?

I was hoping that you posted with a question about real estate for our Observer column. Is there anything you might like to ask?

Maggie-

Does a home that has good wiring but is still on a fusebox diminish the sale value?

Maggie Fraley wrote:I was hoping that you posted with a question about real estate for our Observer column. Is there anything you might like to ask?

Can the number of rental units surrounding a home affect it's resale value?

dl,

Thanks for your inquiry. I'd like to use it in a future issue of the Observer, as quite a few Lakewood homes have older wiring and it is a common question. I’ll also ask an "expert" (electrician and/or inspector) for their comments.

But the short answer for now is that an old fuse box may definitely impact a home's resale value. Average Buyers commonly look for several things: price, location, and condition. Location can't be changed but condition can. It primarily includes what updates have been done in the recent past, particularly updated kitchens & baths, updated electrical and plumbing, and the age of the furnace, roof, and windows.

A home’s value (to a buyer who has many choices in the same price range) will decrease if it compares poorly to others in the same price range. So a home with an electrical system without updates would naturally impact what a buyer would offer as a purchase price. But how much? Homeowners might ask themselves "is older wiring the only item that hasn't been updated, or is the entire home in need of some modernizing?" That impacts value even more.

The key to pricing correctly, is taking the above points into consideration and carefully reviewing the ‘competition’ of what's currently for sale. Also researching the current market of what has sold and what has expired without selling. And then analyzing where does my home fit in? The fuse box is an important piece of that, but only one piece.

Rick, Thanks for your question.

When a house has been purchased, or when a buyer is considering making an offer, that purchase price reflects its location, amenities and condition. So unless the rental units are new since its previous purchase, any new sale will factor in the same location again.

Owner-occupied homes located near rentals may be priced less than a similar home in a different location. But that pricing may make it desirable to a different pool of buyers to whom more affordable pricing is a high priority. Or perhaps that home has an amazing garden & patio, or a 3rd floor office that affects its desirability.

Each Buyer has their own priorities and what is very important to one, may not matter at all to another. Location is unquestionably an important factor. But a careful comparison of more facts, such as similar homes that are currently for sale, those which have recently sold and those that have not, will more clearly define whether a home may resell at a tentatively considered price.

How important is the original listing price of a home and what percentage of the asking price are sellers typically getting these days? (90%, 80%...?)

Also, how does length of time on the market figure into the equation?

Thanks for your question.

It's extremely important to list at a carefully researched price when a home is new on the market. Just as when shopping for anything else, if a shopper compares and feels it's overpriced, then it sits without selling. Even if there's a price reduction it still loses some of its original appeal (& originally interested buyers!)

The key is to price a house competitively & fairly so that prospective Buyers feel they want to make an offer before someone else does. Pricing it right saves market time, stress and even sells a home for more money than one that has had several price reductions. The perception then may be that the Seller may take any offer because it's been on the market so long.

Lakewood's average of list price to sale price is very good, better than the county average. Please see my article in the March 20th Observer on the new Real Estate page for a more detailed discussion of Lakewood's market and for other interesting and useful information.

There is a great deal of concern at the national level about the state of subprime mortgages.

How will this issue specifically impact Lakewood? Does anyone know if Lakewood has an unusually high or low percentage of subprime mortgages?

Sorry I do not know about Lakewood but the Greater Cleveland area has led the country recently in foreclosures

Doug

DougHuntingdon wrote:Sorry I do not know about Lakewood but the Greater Cleveland area has led the country recently in foreclosures

Doug

Are home foreclosures in Cleveland turning into more rentals in Lakewood?

Here is the county web site where you can find foreclosure information.

http://sheriff.cuyahogacounty.us/propertysearch.asp

A quick glance shows the number of current foreclosures:

Lakewood: 42
Fairview: 6
North Olmsted 12
Rocky River 5
South Euclid 42
Euclid 90

It seems to me that the East side has a more serious problem than the West side and that Lakewood's foreclosure rate is about where you would expect it to be in relation to other West side communities.

National City Bank just released a report that showed that Cleveland area housing prices are about 3% over valued. Many other areas along the coasts have overvaluation rates of 30% - 79%.

What does that tell me? Probably the same thing it tells you.

Lakewood home values won't be increasing much but they won't be decreasing much either. And, in comparison to our competition, aka, the cities listed above, Lakewood real estate is still well positioned and generally a good value.

Mike Deneen wrote:There is a great deal of concern at the national level about the state of subprime mortgages.

How will this issue specifically impact Lakewood? Does anyone know if Lakewood has an unusually high or low percentage of subprime mortgages?

From the New York Times - 3/23/07:

"In a sign of the spreading economic fallout of mortgage foreclosures, several suburbs of Cleveland, one of the nation’s hardest-hit cities, are spending millions of dollars to maintain vacant houses as they try to contain blight and real-estate panic."
http://www.nytimes.com/2007/03/23/us/23vacant.html?_r=1&th&emc=th&oref=slogin