Remodeled Foreclosures Raising Values?
Remodeled Foreclosures Raising Values?
Columbus, OH in Worthington School District (Near Polaris Fashion Mall) :
The small detached condo community of Worthington Heights contains about 250 detached condos. The community is located in the city of Columbus, Ohio near Polaris Fashion Mall but the residents children attend Worthington Schools. This community has been hit with foreclosures similar to many other communities across Ohio and the entire country in recent months. The interesting trend is that these foreclosures which initially hurt home values are being remodeled and are selling for more than similar "non-remodeled condos" have been selling and actually raising neighborhood values.
Although this phenomenon was rampant during the boom years of pre-2006, the foreclosure "issue" has been billed primarily by the media as an appreciation killer and as a general rule that is accurate. Let's take a look at one street in Worthington Heights, on this street alone there have been two foreclosures that sold for well below market at $94,000 and $75,000. The $94,000 condo was rehabbed and resold in less than two months for $130,000 with a list price of $135,000 for a 3 bed, 1.5 bath,finished basement, 2 car attached garage and fenced backyard in Worthington Schools. The $75,000 sale was recently purchased from the bank, rehabbed and went into contract in 23 days at a list price of $137,000 (actual sales price unknown until sale is complete). The latter condo has 3 bed, 1.5 baths, finished basement, 1 car attached garage and a fenced in back yard.
This neighborhood is already a great value due to its proximity to Polaris Fashion Mall as well as being located in Worthington Schools and Columbus taxes, but especially in the situation of the 1 car garage the historical price for these units has been under $130,000. So, unless the seller took a very large amount less than list price, this should do give a nice bump to neighborhood prices. It is only fair to note that the rehab was done very well with Brazilian cherry wood floors installed as well staggered 42 inch cabinets and granite counter tops with stainless steel appliances. This is a bit of an "over improvement" for the neighborhood, but will still allow for that home to bring values up throughout the neighborhood and give a basis for higher appraisals in the future.
In a neighborhood of detached condos in which the individual owners are responsible for the replacement of exterior items such as the roof and the siding a complete rehab by a real estate investor also forces the replacement of these very important parts of the home. This brings the overall aesthetic look of the neighborhood up and also instills a certain amount of neighborhood pride among the other owners to bring their homes up to that level.
Overall the effect of foreclosures in this particular neighborhood, due to the quick sales at higher than average numbers has had a positive effect on homes values overall. It has taken homes that were an eyesore before the foreclosure and turned them into some of the best looking homes in the neighborhood.
Troy Marsh, ePro & ABR