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How Cleveland, Ohio is overcoming it’s six year economic crisis

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Cleveland – bankrupt in 1976

Cleveland, my hometown*, is in the news again, thanks to 60 Minutes. We aren’t usually known for awe-inspiring events here. Dennis Kucinich, former mayor, and current Congressman had to declare the city bankrupt in 1976, as the Cuyahoga River caught on fire in the summer of 1969. Pro athletes leave town as if they are on fire as soon as their contracts are over. We have had any number of sports horrors which will haunt us forever like The Decision, The 1997 World Series, The Drive, The Shot, The Fumble, The Browns decamping to Baltimore, most recently The McCoy Rule – there are more, but these are a few that have actually happened in my lifetime and physically hurt to write. There have been massive job losses, layoffs, employers leaving, and a huge decline in the population. Sub-prime loans, mortgage fraud, and the economy have gutted entire sections of town. One of our (old, outdated) unfortunate nicknames, The Mistake by the Lake is (was) kind of apt.

Maybe CBS didn’t get the memo, but we here in Cleveland, and many surrounding areas, have been dealing with the housing crisis since at least 2005, long before much of the country even knew what a housing crisis even was.  Not that it was particularly offensive or anything, but calling the segment “There Goes the Neighborhood” made it seem as though this destruction we have felt for many years is somehow recent or even news. For a lot of these places, the people who left got the hell out of Dodge a while ago – it wasn’t last month, or even last year.

Buy a part of town for $20,000

60 Minutes missed the mark when they came to Cleveland. You can buy not just a street, but entire parts of town for about $20,000. A single house that perhaps was worth $60,000 in 1995 is now, on a good day, worth $17,000 in great condition. There are high property taxes. Homes which have been to sheriff sale three, or even four times over. Houses that have siding, plumbing, all mechanicals, windows, even hardware stripped out. Many homes have become a haven for criminal activity. That is what the foreclosure catastrophe did here.

How Cleveland is overcoming the crisis

What really wasn’t mentioned are the things going on to potentially fix the whole mess and maybe make the situation better. Cleveland specifically has busted, prosecuted, and put away hundreds of individuals involved in mortgage fraud. Yes. We do this here. Mayor Jackson also attempted to go after banks for predatory lending- he failed, but it was a meaningful attempt. City Council is in the process of passing legislation to hold owners accountable for demolition costs, as well as making it a crime for out-of-state companies to buy houses in bulk and skip registering with the state.

The Cuyahoga County Land Bank offers quite a few possibilities, for example, they purchase blight properties and can demolish, rehab, or resell them. The Land Bank is also going to be offering homes to refugees, according to The Plain Dealer. Also, Reclaimed Cleveland is a furnishing shop who will upcycle and repurpose items left in a home set to be demolished. They have beds, tables, chairs, accessories, as well as custom work. How about that?

Not many preventative measures were in place to stop the foreclosure crisis from happening, but in Cleveland, we are working hard to correct the problem. The Mistake by the Lake? Hardly. The North Coast is so much more awesome.

*My actual hometown cannot even be found with a hound dog, 3 maps, and a GPS, it’s easier to just say that I’m originally from Cleveland.

Katie Cosner, occasionally known as Kathleen, or KT, is a Realtor® with Cutler Real Estate and is active in her local Board of Realtors® on the Equal Opportunity & Professional Development Committee. She has been floating around online for a number of years, and is on facebook as well as twitter. While Katie has a few hardcore beliefs, three in the Real Estate World to live and die by are; education, ethics, and the law - insert random quote from “A Few Good Men” here. Katie is also an avid Cleveland Indians fan, which really explains quite a bit of her… quirks.

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21 Comments

21 Comments

  1. Jon Eggleton

    December 26, 2011 at 10:24 pm

    Cleveland is my hometown, too. You're right – the region has been dealing with the housing crisis for well longer than the rest of the country, although the silver lining is it is also much further ahead than many in trying to move on (including several of the initiatives mentioned above). Great post.

    • Kathleen Cosner

      December 27, 2011 at 8:23 am

      As negatively as the area has been hit, I really do find it impressive the ideas, and energy people are finding to cope & improve upon all this just badness, you know? Akron, too is starting to follow suit and doing some similar things as well.

      I have had the (priviledge?) prob not the appropriate term, to be in a lot of these homes in both areas. Many of them, condition-wise are totally heartbreaking, not too mention frightening to enter. And if there are ways to make them better to enhance the communitties, that's so awesome !

  2. Denise Gabbard

    December 27, 2011 at 2:02 am

    Another native Clevelander here… yes, there are challenges, the world, and especially the United States, today is not the same as when we grew up in a thriving industrial city. Manufacturing has moved on to parts of the world where it can be done cheaply (though products are often inferior) and Cleveland is in transition… But, there are definitely positive things to be pointed to— the growing medical community, the new casino scheduled to open in just a few months, and that beautiful lake that we have not yet begun to capitalize on!

  3. Tru

    December 28, 2011 at 1:08 am

    Hard to make an argument sound credible when you get the year of Cleveland's default wrong. It was 1978, not 1976.

  4. andrew

    January 3, 2012 at 3:16 am

    i wanted the building in the picture it is for sale i take it i want the building so bad i will make it to a tv station make more money pick people back to work i live on north side 2205 n kilbourn

  5. DeniseGabbard

    November 15, 2012 at 5:41 am

    Hey Kathleen– that City-Data reference is wrong. I remember when it happened and I heard it on the radio in my first car— it was definitely 1978, or I would have been only 14:( Here is a link to an LA Times article about it— https://www.commondreams.org/headlines04/0123-04.htm

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Austin

Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?

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Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.

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aging housing inventory

The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

Click here to continue reading this story…

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Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

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zillow move

zillow move

Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

…Click here to continue reading this story…

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