August 28, 2014

Buckeyes Ready For Football Season

Football season is here! Bring out your OSU gear to cheer the Buckeyes on this fall. They play next at noon on Saturday, August 30th, when they take on Navy, who they beat 31-27 in 2009. Watch the game on CBS Sports Network. View the complete game schedule and buy tickets here.

Fast Facts:


  • Braxton Miller, senior quarterback, will miss the 2014 season after re-injuring his right shoulder at practice on Monday, August 18th. He spent the spring recovering from his February surgery necessitated by an injury  acquired in the 2014 Discover Orange Bowl. His more recent injury will also require surgery. Miller has seven Big Ten Conference individual awards--the most in conference history. Sports analysts say that Miller's absence will noticeably hurt the team. Kirk Herbstreit with ESPN states that now, Michigan State is the Big Ten team to beat.  OSU teammates remain positive, pointing out that there are many more play-makers and that the team should not be discarded after the loss of their star competitor. 

August 22, 2014

Housing Market Update

Jim Weiker writes in The Columbus Dispatch that recent trends continue: home shortages, increased home prices, reduced time on the market, and declining home sales. Why is the imbalance between buyers and sellers so persistent? Weiker reports that roughly 20% of central Ohio homeowners still owe more than the value of their home.  Others are worried that their house will sell too quickly, that they won't have anywhere to live when it does sell, and that interest rates (despite being relatively low) are not as good as the ones they are currently sitting on. Another problem is minimal new home construction. According to Lawrence Yun, the chief economist with the National Association of REALTORS, claims that new-home construction needs to increase by at least 50 percent in order to create a balanced market. Is this market the new normal, or is it just facing a slow recovery? Columbus REALTORS reports in a recent article that the number of central Ohio homes and condos sold in July 2014 increased by 11.4% from June 2014, but is still slightly down from June 2013 (by 3.3%). Promisingly, inventory is up 5.5% from May 2013.  Unfortunately, price increases usurp inventory gains: the average sales price of a home rose by 9.1% since just this May.

Overall, it's impossible to predict the housing market. It seems that gains have been made in past couple of months, but that the market is not as healthy (as of June 2014) as it was one year ago (June 2013), when central Ohio sales were 3.3 percent higher (2,952 compared to 2,856), the median price was 3.8% lower ($159,400 compared to $165,500), and the average number of days on the market was 16.7% higher (72 compared to 60). Despite a market that tends to favor sellers, 100% of central Ohio REALTORS classify the housing market as moderate to strong, and expect it to remain so over the next six months, according the latest Housing Market Confidence Index.

August 19, 2014

Factory Buildings Converted Into Residential Lofts

It's not uncommon to repurpose old factory buildings. In 2010, developer Kevin Lykens purchased the Wonder Bread Factory in Italian Village with the intention of converting the building into an arts center. When that did not materialize, Lykens decided to instead transcend the space into modern residential lofts. The building now contains 48 different layouts, thanks to the fact that the factory was constructed at different times (part in 1916 and part in 1952). To maintain the building’s historic charm, some of the elements were repurposed. For example, dough troughs are used for planters in the courtyard. Other elements were left in place, including brick floors and ceiling pulleys. Some features are new, including the security system and the restaurant Cray, which opened on site this year.  Residents enjoy spacious apartments—some of which are two stories.

The Columbus Buggy Co. has also been renovated into residential apartments. The company was the largest manufacturer of buggies in the word when the factory was constructed in 1902. Kyle Katz, the developer, worked to keep much of the building’s original features, such as large, industrial windows, exposed wood and support beams, and open floor plans. Now called The Buggy Works, these Nationwide Boulevard lofts blend old and new to provide residents with a truly unique home.

In San Francisco, Ghirardelli's chocolate factory has been transformed into Fairmont Heritage Place, Ghirardelli Square-a luxury hotel with ownership options. Domingo Ghirardelli's sons bought the property in 1893 and used it to produce chocolate until the factory was relocated in the 1960s. Now, guests and residents alike can take in the city's history from the building's rooftop terraces or the comfort of their spacious rooms.

August 14, 2014

Pre-Qualify for a Loan

House hunting is exciting, but the idea of financing a home is not. Meet with a mortgage officer to pre-qualify for a home loan. A pre-qualification, AKA prequal, illustrates a borrower's ability to get a loan. It's easier to obtain than a pre-approval because someone can get a pre-qualifcation online or over the phone; however, it is not as in depth as a pre-approval, which requires paperwork to back up your claims. Ideally, homebuyers should 1) get pre-qualified, 2) get pre-approved, 3) shop for a home based on their pre-approval, and 3) apply for the home loan. If your pre-qualification application isn't accepted the first time around, follow these three steps to improve your situation:
  • Increase your credit score. You can improve your credit score in a number of ways. Order a copy of your credit history from TransUnion, Equifax, or Experian. Dispute any errors you come across--they will be removed within 30 days. Paying down your debt also helps, as debt accounts for 30% of your FICO credit score. Finally, pay your bills on time to slowly but steadily increase your score. 
  • Don't change jobs. Lenders like to see that you've been with the same employer for at least two years, because this gives them confidence that you are stable and able to repay your mortgage. 
  • Build income and financial assets. The simplest ways to afford the home you want are to get a pay raise and search for a lower priced home. Perhaps less obvious, you can find a co-borrower with good credit, hoping that your combined incomes will make the loan feasible. Build your assets by keeping a contingency fund--money reserved for emergencies with unexpected cash outflows. The fund should equal two or three months of your mortgage payments, and you must be able to prove (with bank statements) that this money has been in your account for at least 60 days prior to pre-qualification. 
Want to see if you will be approved before you visit a lender? Visit's free online loan pre-qualification calculator. If you prefer to do the math yourself, the first step is the same--get your credit score. lenders prefer credit scores of 680+. Next, you should calculate the front-end ratio and the back-end ratio.
  • Front-end ratio: proposed monthly mortgage payment / gross monthly income before taxes. This tells you how much of your monthly income goes toward mortgage payments and is not recommended to exceed 28%.
  • Back-end ratio: total monthly debt obligations / gross monthly income. This tells you how much of your monthly income goes toward paying debts and is not recommended to exceed 36%. Note: debt obligations include credit cards, student loans, car loans, etc.
Finally, ensure that you have enough money for a down payment. As with contingency money, lenders like to see down payment funds in your bank account for a least 60 days. They also like for people to have their own money saved for a down payment--not the money of their friends or family.
As of July 2014, the average 30-year fixed rate mortgage was 4.13%

August 11, 2014

MHA Program for Distressed Homeowners Extended

The Making Home Affordable (MHA) program was introduced by the U.S. Department of the Treasury in April 2009 and has recently been extended through December 31, 2016. Broadly, the program aids homeowners who struggle to pay their mortgage payments and who lack the equity to refinance. The MHA program includes the Home Affordable Refinance Program (HARP) and the Home Affordable Modification Program (HAMP), among other options.

HARP allows homeowners with loans guaranteed or owned by Fannie Mae and Freddie Mac who are underwater on their loans to refinance into mortgages with lower interest rates. Through HARP, over 3.1 million homeowners have refinanced their loans. Nearly a quarter of all refinances were part of the HARP program in the first quarter of 2014.

HAMP is designed to aid homeowners who can no longer afford their home loan payments and took out a loan before January 1, 2009 that is owned, insured, or guaranteed by Fannie Mae, Freddie Mac, the Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA) or the U.S. Department of Agriculture (USDA). Upon showing evidence of financial hardship and on-time loan payments during a trial period, HAMP has enabled over 1.3 million homeowners to permanently modify their mortgage loans. Homeowners save roughly a third of their monthly mortgage payments, or $544.

Both HARP and HAMP work to reduce the number of foreclosures, which fell to the lowest level since 2005 in May 2014. Recently, military resources for military homeowners and families who are permanently displaced by a job-related move have been incorporated into the MHA program.

August 7, 2014

China Dominates Foreign Purchases of U.S. Homes

Foreign purchases of U.S. residential real estate increased by 35% last year, with Canadians accounting for the largest segment of international buyers by sales volume at 19%. However, China has emerged as the largest source of transactions on a dollar basis, at 24%. The median price the Chinese pay for a U.S. home is over $500,000, and California real estate agent Maggie Navarro even reports that many Asians buy $3 million+ homes and pay in all cash. The Chinese also represent the fastest growing buyer segment: the National Association of Realtors reveals that the Chinese spent $22 billion on U.S.  housing in the past year through March, which is 72% more than they spent the preceding year. This trend can be partially attributed to favorable exchange rates, a possibly overvalued Chinese housing market, increased access to credit, the desire for secure investments, and political instability at home.  Many Chinese immigrants settle in Irvine and L.A.'s San Gabriel Valley, which has a long-standing Asian population. This is supported by the fact that commercial air traffic between L.A. and mainland China has risen by over 400% since 2003. Other popular destinations are cities in New York (especially Manhattan) and Washington state.

August 4, 2014

Zillow to Buy Trulia for 3.5 Billion

If you've bought a home in the past decade, you're probably familiar with Zillow and Trulia. Both are residential real estate online databases founded in 2005 that list information on homes available for sale and rent. While this information is free to the public, real estate agents must pay to advertise their listings, and have the option of paying more in order for their listings to show up toward the top of search results. This is made evident by Zillow's "Premiere Agent" program.
The two sites currently account for 48% of listings web traffic (excluding local sites), and have the potential to control over 70% of online real estate searches. Both sites are already industry leaders. In June,  Zillow and Truila together had 68.4 million unique users. ComScore reports that Zillow-Trulia traffic is 3.5 times greater than traffic. However, is known for more accurate prices than both Zillow and Truilia, because it is run by the National Association of Realtors (NAR) and thus can access the multiple listing service (MLS).

The deal was announced Monday, July 28th and is set to close next year. Zillow's cheif executive officer, Spencer Rascoff, maintains that both sites will retain their separate brands and web presences. Investors are happy and consumers are not yet drastically impacted; however, agents have another story.

While many agents accept these online sites, others do not support them. For example, some agents disagree with Zillow's "Zestimates," claiming that they inaccurately portray home values. However, the merger leaves little bargaining power for disgruntled agents. Bradley Safalow, Founder of PAA Research in New York, warns against Zillow increasing agent advertising costs, noting that some brokers may take their listings off of third party sites all together in an attempt to increase traffic to their own webpages and reduce advertising expenses. Indeed, gaining a larger advertising share is the primary motive behind this acquisition--Los Angeles Times cites that $12 billion is spent on real estate advertising each year. Sissy Lappin, founder of, claims that Zillow seeks only to buy out its competition, not improve information accuracy. While neither Zillow nor Truila is profitable yet, Zillow hopes to save $100 million annually by cutting repetitive costs. It will be interesting for all parties involved to see how this deal changes the real estate playing field.