Wednesday, April 16, 2014

OGDEN RISING: Raze the Old, Raise the New


It seems the pace of positive transformation occurring in Ogden is increasing exponentially.  Here are a couple more projects where the wrecking ball has made its mark:

17th St. and Washington Blvd.


This structure located on the southwest corner of Washington Blvd. and 17th Street has sat fallow for years.  Once used for bustling commercial purposes, the place was most recently used as a now-defunct skate shop.


The building is being cleared for new development.  My understanding is that a convenience store will occupy a part of the property.  While not a superstar economic development project, it will at least retool the space for its best and highest use for the foreseeable future.  Clearly, a rotting warehouse benefits no one.    

  

20th St. and Lincoln Ave.

Here is a before photo of an old warehouse at the intersection of 20th St. and Lincoln Ave.:


This corner was recently demolished to make way for a new Juvenile Court building.  Construction has begun in earnest. 



When complete, the project should help alleviate concerns at the current juvenile building on 26th St. between Washington Blvd. and Adams Ave.


This structure was designed improperly for its current use in the Juvenile Court system. When the new project is finished, it will continue to be utilized but in a capacity more suited to its design.

Ogden's transformation continues!     

Tuesday, April 15, 2014

Photos of the Day: From Roof Leak Laziness to Loose Lath Craziness


Like people get regular health checkups, homes need regular maintenance and upkeep.  Knowing this, I am always surprised at what I find in some homes as owners neglect the warning signs that they have a problem.  For instance, here is a Victorian era home I viewed whose owner ignored a roof problem.


This is an example of a small problem turning into a big problem.  Lath-and-plaster construction is pretty robust.  A dose of moisture isn't going to cause catastrophic problems in the short run.  However, an unpatched roof leak can cause serious headaches if left unattended.  Clearly, the owner of this property let things go too far.


The owner did eventually perform a complete tear off of the roof and reshingled it with new wafer board and 30 year architectural shingles.  But, they didn't bother to come clean up the mess left behind from the failing plaster.

Just another example of why it is so important to fix little problems before they become giant ones.

Monday, April 14, 2014

FOR SALE: Fixer-Upper Mega-Duplex Short Sale


I just listed this property for sale in Ogden.


This property is located at 3429 Fowler Ave. and clocks in at an enormous 4400 SQFT.  The property has 10 bedrooms and 6 baths split evenly between each unit of the building.  Interestingly, this property was sold as a fourplex back in 2007.  Unfortunately, the property is not zoned for that and it does not have legal non-conforming use on record at Ogden City.  So, that means the building can only be used as a duplex moving forward.

Obviously, this means the the property has declined in value and economic utility significantly since the owner purchased it.  In this case, the decrease in value means that the owner now owes more than the property is worth in today's market.  Thus, we are moving forward with a short sale to clear the property in the market and to sell it at a price that makes sense for the next purchaser.

On top of the loss of density problem, the property also suffers from some significant deferred maintenance.  Substantive capital improvements are needed to bring the property back into line with market rents.  I estimate that repairs would cost between $25,000 and $30,000 to renovate the whole building.

After repairs are completed, rents on each unit would be around $900-$950 per month.  That kind of rent roll would place the building at a value of approximately $180,000 in today's market.  So, we have started our list price off low to attract a buyer willing to make the repairs.

Here is a video walk through tour of the south unit:

***WARNING*** 
This video contains images that are not suitable for all audiences.  If you are someone who likes looking at pictures of pretty houses, viewer discretion is advised.  

  

Obviously, this property isn't for everyone.  Nor is it for most people.  However, for those with the vision to make the proper repairs, this property could be a fantastic investment and/or owner occupied duplex.  The mid-century floorplan is workable.  The hardwood floors are able to be salvaged.  But most of all, the property is located just blocks from Weber State University.  This property could be a profitable investment for anyone savvy enough to correct the property's problems.

If you are interested in learning more about the current low list price and details on short sale status, CONTACT ME.  I have placed a contractor key box on the property for access to the vacant unit for your convenience.

Ogden Temple Reconstruction - April 2014


The Ogden Temple reconstruction project is nearly complete.  We recently heard some interesting factoids from a church official in charge of the remodel.  Apparently, the granite exterior was quarried in Egypt with any milling or refining of the pieces being done in China.  The interior is adorned in African mahogany.  The edifice should be open to the public in the Fall.

Here is what the temple looked like in April 2011:


Here is the temple in April 2014:


The new architecture is both graceful and dignified. It is truly a beautiful building.  I suspect its presence will have a lasting positive impact on downtown Ogden and the surrounding neighborhoods for decades to come.

Friday, April 11, 2014

MLS BLIND: Super Secret Sales Prices




I had the opportunity to attend a Broker's Forum at the NWAOR offices recently.  The featured guest was a gal from the WFRMLS offices who wanted to talk about the latest changes coming to our MLS system.

One of the most interesting topics she mentioned was a change to MLS policy that will allow for sales prices to be unpublished.  I thought this was intriguing.  Since the one of the major missions of the MLS is to provide coherent data to help the market function in a smooth and efficient way, the transparency of reporting sales prices would seem to be one of its most basic services.  Well, as it turns out, some sellers don't want the sales price of their property to be reported.  Perhaps its a family estate issue; or, perhaps there is a rock star who is selling their home to another celebrity and they don't want the price to be known.

Regardless of the circumstances, the MLS will soon be allowing a sales price to be undisclosed.  The catch is that it can be done for the nominal fee of just $500.  So, you had better really not want to report that price.  If MLS members are caught evading this rule by 'withdrawing' a listing rather than paying the fee, they will be fined $1,500.

In my 10 years in the business, I have never had a client request that their sales price be undisclosed.  But, I have never worked with rock stars or contentious family estate sales either (but I have had many experiences working with amicable estate sales).  I guess there is a first time for everything though.

If you are a rock star, executor of a family estate, or just someone who wants to sell their property, CONTACT ME, and lets make the real estate market work for you...whether you want to disclose the final sales price or your home or not.  

Tuesday, April 8, 2014

JUST SOLD! Brick Mid-Century Rambler


I just concluded this transaction for my buyers. 

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Our story begins in November of 2013, when the home was purchased by a real estate investor after the home had foreclosed.  The property was pretty dingy and needed some TLC.  The investor paid $70,000 cash and began work on the repairs.

In February, the property was listed for $123,000.  At that time, my clients and I had been shopping in the area for an affordable home.  Unfortunately, all we could find were overpriced scratch-and-dent properties.  My clients needed either something that was ready to be lived in, or priced to accommodate any work they would have to put into it.  So, when this property came along.  We immediately recognized its potential.  


Our initial offer was $107,000 and asking for $3,500 in closing costs. Due to the winter season and the fact that the home was vacant, we decided to press our luck on what the seller would tolerate as an offer.  We expected a counteroffer and we quickly found out.  The seller countered at $119,900 while paying $3,500 in closing costs.  We countered again at $116,000 including our initial closing costs allowance.  Finally, the seller bottomed out at $119,000 with the closing cost allowance included.  

Once we finalized the agreement, we began our due diligence.  The plumbing was an obvious issue.  Low pressure and malfunctioning valves needed to be addressed. Since my clients were using an FHA loan, we wanted to avoid clouding the loan process up with a repair addendum.  Instead, we chose to verbally ask the seller to make specific repairs and extended our due diligence deadline in an addendum while we waited in good faith for the repairs to be made.  The requested repairs were made and we moved forward with the appraisal.  


That is when Pandora's Box was opened on us.  It turns out that FHA had recent rule changes that prevent a home that is being flipped, like the one my were purchasing, from being placed under contract within 90 days of the purchase date.  The home was bought by the seller on November 19, and we placed it under contract on February 12.  We were short just 7 days.  Unfortunately, this placed a red flag in FHA's case file on the home.  Per FHA guidelines, the underwriter requested a copy of the home inspection (with all its boogers) and a second appraisal was ordered.  


Due to a disgruntled neighbor who was compelled to remove all of his cars and junk from the driveway when the seller acquired the home, the second appraiser cited that the foundation needed a structural engineer's inspection based on the angry neighbor's embellished testimony of how bad the foundation had settled.  The underwriter then sent us a note indicating that a list of 20 items needed to be addressed and repaired including electrical, more plumbing, HVAC, and others.  Each required a licensed contractor specialized in their field to make the inspections.  In all, we had five specialists descend on the home.

The listing agent was perplexed as was I.  Nevertheless, we pressed forward and completed our tedious checklists. The foundation was found to be sound and all the repair items were addressed. Finally, we closed the transaction.

Congratulations to my buyers on their purchase!  

If you are in the market for a home, and need a hard working agent who will get the transaction done, CONTACT ME, and you won't be disappointed.       

  

Monday, April 7, 2014

Home Sales Finally Recover From Gov't Shutdown


In December, I wrote about how the Government shutdown had seriously affected home sale trends in Weber County.  After watching the market for the past few months, it has been interesting to see how its effects have lingered.  Here is today's chart showing the impact that event had on the real estate market:


After a two year run of solid sales increases year-over-year, the government shut down pushed sales into 20% slump during November.  The shock waves from that event carried forward and we are just now again returning to the cusp of sales growth.  Fortunately, the early numbers indicate March will see a positive growth figure.


In our second chart, you can see how the increase in sales of the last three years has leveled out with the recent month's performance coming in below last year's numbers.

So, gratefully we can put this event behind us and move on to a much anticipated busy summer selling season.  Meanwhile, we can hope (there is always hope) that there are no further palpitations from the Federal government when it comes to making payroll and keeping its finances in order.  

If you have any real estate needs, CONTACT ME, and lets make your next real estate experience a positive one.

Thursday, April 3, 2014

HOUSE PRICES: The Surge Continues


I had time to crunch some numbers for house prices in Weber County.  Here is the latest chart:


Keep in mind that this in an indexed chart starting with a starting value of $100,000 for 1979. Obviously, that would represent a very sizable house back then.  All ships rise with the tide so even if you don't own a home that was worth $100K in 1979, you can get a relative sense of where prices have been over the past 15 years.  

As you can see, after an insane increase and miserable decline, house prices finally began a modest turn around in 2012 and reasserted themselves in 2013.  This was due to low interest rates and the fact that mortgage payments were considerably less than rent.

Homeowners who purchased after March 2007 or before June 2010 might find that their homes are still not worth what they paid for them.  However, as prices continue to increase, that window will get smaller for many people.  The trends are positive and Weber County should see a 3% increase in house prices this year.  That is less than we experienced last year but still headed in a direction and will benefit all homeowners.      

If you are thinking of selling your home or want to get a sense of what it is worth in today's market, CONTACT ME, and we can put together a complimentary Comparative Market Analysis for you.  You may be surprised at how much your home's value has increased recently.  

Wednesday, March 26, 2014

OGDEN RISING: Some Fixed Up, Some Knocked Down


In the heart of downtown Ogden there is a curious scene of activity going on.


Recently, this old commercial building, which has sat in a state of disrepair for decades, has been given a new lease on life.  It is located on the 24th block of Grant Ave. just north of Historic 25th Street.  The work on the front of the building is impressive.

Meanwhile, the property next door is experiencing a different fate.


This property is a good example of what happens when deferred maintenance is deferred too long.  The roof on this building collapsed a couple of years ago.  Rather than repairing it, the owner let it sit.  Water problems began to erode away at the structural supports of the building and this began to affect other attached structures on the street.  The building is being disassembled and in its place will be a vacant lot.

It is sad to see this building go and I wish the owner had the resources to prevent this unnecessary fate.  Nevertheless, its removal will make way for new construction opportunities.


Tuesday, March 25, 2014

LAND TAXES: Ancient Rome's Folly and Foible



Taxes have been around a long time.  They are a necessary evil to fund the basic functions of government.  However, throughout history, there have been example of the oppressive use of taxes.

One tax that can be particularly onerous is real property tax.  Today in Utah, property taxes help fund schools, county, and city government.  However, they are not the sole sources of funding since there are many various taxes that are employed to provide revenue for these entities.  

Since these other taxes exist, property taxes have been moderate in our state when compared to places like Texas, for example, who have increased their property taxes to compensate for a lack of income tax.  The result of increased real property tax in Texas has been a proportional decline in the value of real property in the state.  High tax rates tend to depress value for real property. 

So, is it possible to tax a property so much that it sinks to such a low value that owners will abandon it?  History says yes.  Lets take the example of the most fertile districts of Italy, Campania, and see what happened there.  Edward Gibbon writes:

The agriculture of the Roman provinces was insensibly ruined, and, in the progress of despotism which tends to disappoint its own purpose, the emperors were obliged to derive some merit from the forgiveness of debts, or the remission of tributes, which their subjects were utterly incapable of paying. According to the new division of Italy, the fertile and happy province of Campania, the scene of the early victories and of the delicious retirements of the citizens of Rome, extended between the sea and the Apennine, from the Tiber to the Silarus. Within sixty years after the death of Constantine, and on the evidence of an actual survey, an exemption [from taxes] was granted in favor of three hundred and thirty thousand English acres of desert and uncultivated land; which amounted to one eighth of the whole surface of the province. As the footsteps of the Barbarians had not yet been seen in Italy, the cause of this amazing desolation, which is recorded in the laws, can be ascribed only to the administration of the Roman emperors.
Gibbon, Edward (2011-10-14). History of the Decline and Fall of the Roman Empire, All 6 volumes plus Biography

  The Roman Empire in the fourth century found itself in dire straits. The population was declining and few people wanted to volunteer for military duty.  To induce people into military service, they levied taxes to pay their soldiers to serve.  As their military become increasingly ineffectual and undermanned, yet more taxes were levied.  The irony is that the land taxes became so burdensome that owners sought exemption from the tax by allowing the land to become fallow.  This fallow land deprived the nation of wealth and food which would support the existing military and population.  Thus, as Gibbon describes, the tax policy "disappointed its own purpose."  Certainly, a great lesson from antiquity.