Real Estate in Columbus
There are three things that matter in real estate: location, location, location. While that adage is true, there are a couple more things to know about the Columbus real estate market.
In this week’s episode, we are talking with Marc Conte from the Downtown Special Improvement District to talk about the real estate landscape in Downtown — how it changed, how it’s growing, and why we have some catching up to do. After that, we have an in-depth conversation with local realtor Joe Peffer on the ins and outs of buying a new home, working with your realtor, and why it’s important to wash your windows.
Shownotes:
- Columbus Downtown Development Corporation & Capital South
- Downtown Special Improvement Districts
- Delicious Real Estate
Big thank you to our sponsors this week, Telhio Credit Union and Delicious Real Estate.
Read the transcript
Ladies and gentlemen, welcome to the Confluence Cast presented by Columbus Underground. We are a weekly Columbus centric podcast focused on the civics, lifestyle, entertainment, and people of our city. I'm your host, Tim Fulton. This week we are talking about real estate. First up, a conversation with Mark Conti from the Downtown Special Improvement District to talk about the real estate landscape in downtown, how it's changed, how it's growing, and why we have some catching up to do. And then an in-depth conversation with local realtor Joe Peffer on the ins and outs of buying a new home, working with your realtor, and why it's important to wash your windows. You can get more information on what we discuss in today's episode in the show notes at theconfluencecast.com. Big thank you to our sponsors this week, Delicious Real Estate and Telhio Credit Union. Enjoy the interviews. The Confluence Cast is sponsored by Delicious Real Estate, a locally owned Columbus real estate brokerage servicing all of central Ohio, but primarily downtown Columbus neighborhoods and first ring suburbs. You can find out more about why Delicious Real Estate caps their seller side commissions and will never represent both buyer and seller in the same transaction at deliciousrealestate.com. Sitting down here with Mark Conti, deputy director of research, planning, and facilities at Capital Crossroads Special Improvement Districts, which encompasses, Mark, both the- Uh, Capital Crossroads SID and Discovery SID. Great. And you've been here since 2007. Originally from Cleveland, came to Columbus to attend The Ohio State University back in 1988. Yes.
We're here talking today about downtown real estate in general. What is the general state of downtown real estate? We want, we wanna focus a lot more on residential today. We were talking before, in terms of apartments and residential, things sort of bottomed out in 2000. Yeah, that's correct. Back in, uh, 1950, that was the peak for the downtown population. It sat at around 30,000, and then it just slowly declined. Uh, we had the flight to the suburbs. We had the construction of new highways, which just bulldozed massive amounts of housing. Uh, on top of that in the 1950s we had urban renewal where big swaths of downtown, especially into Discovery District, were bulldozed. Uh, so we lost a lot of housing over the years. So d- when it came down to the 2000 census, we were down to just about 3,500 residents. Okay. And not, I, I don't wanna get too into that, but sort of- Okay
... how did the, the ... It's something I think about a lot when I happen to be on the freeway. How did this happen? Specifically, I used to live in the Milo Grogan neighborhood, which is, I think, one of the most bisected neighborhoods in the city. You know, 71 did that. Was this just all eminent domain and sort of, you know, the planners/the state/the city/the county all sorta came in and agreed and then went to homeowners/building owners and said, "Hey, we need this now"? Yeah, basically. Okay. And it, and it happened all over the country, uh, you know, starting with the National Highway Act, uh, under the Eisenhower administration.
Okay. And, and, and everybody, the, you know, government at all levels was much more aggressive at that time. So it was eminent domain. They were just taking property. Generally speaking, they weren't providing enough compensation for the property they were taking. They weren't providing- So fair ... I mean, I, I am always, I was always told as a student that fair market value was happening. That was not happening. It was not happening. And, uh, and, and they were als- there were also lots of promises about relocating people, uh, to, uh, similar types of housing. That did not happen. Uh, uh, s- promises just were not kept. There were stories of people who once they found out the highway was coming through their neighborhood, they stuck their head in the oven and killed themselves.
Is that true? Yes. Okay. Do you think that downtown was sort of kept in mind when that ... Because that, if you look back, that's the most impactful planning wise that's happened to downtown Columbus in the last 100 years. Yeah.
Which is why I'm focusing it on it, on it a little bit more. Do you think they did it right? No. Okay. What, what did they do wrong? There was, there was this idea, especially with urban renewal, there was this idea that once they bulldozed what they considered to be slums, uh, that they would, they would get developers to, to then build new buildings and they would get all the kinds of new people living there, new shops, uh, new offices, and it just never came to fruition.
Okay. And, uh, uh, uh, a counter example is German Village. German Village was also slated for urban renewal, but it was one of the last areas that the city was gonna get to for demolition, and by the time the city got there, the neighborhood had organized to save all the buildings. They formed the German Village Society, got the historic district established, uh, and- And so I'm sorry. You're, when you're talking about renewal, you're talk- this is post freeway. Yeah.
Right? And, and really, well, in combination with the freeways. Okay. Can you give an example of a neighborhood that was slated for renewal and, and sort of what happened to it? Yeah. A big example is the Market Mohawk area, the, or the Market Mohawk Urban Renewal District. So generally everything south of Town Street I would say w- Well, east of Fourth Street to the highway, that whole area was an urban renewal district-
So- ... generally speaking ... sometimes referred to as the Market Exchange District. Yes.
Okay. And so you, you look at all those four or five story office buildings ar- along Town Street, all of that came because of urban renewal. Uh, they- And also before the American with Disabilities Act. Yes.
And so those buildings are great. The Central Market was located where, uh, in this area. Okay. And so we had a Central Market downtown, so that was demolished, and in its place they were gonna build a, a modern grocery store. And so that grocery store, uh, ended up being an A&P. Uh, it, the building still stands. It's where Stanton's Sheet Music is currently.
Okay. And, uh, but if you look at the design of that building, so where the Central Market was very urban, the design of the A&P store was very suburban. The big parking lot in the front, the back of the store actually faces Fourth Street. Right. So that's where the loading is. The front door doesn't face Fourth Street, which is the main street.
Right. Fast-forward a little bit. After 2000, we sort of, you know, we hit the, uh, the low point, at least in terms of residency, right? Yes. Okay. Where are we now? We're, we're on an upswing. We've been on a 15-year upswing, really beginning with Mira Nova. So in a lot of ways, they, that's really what started a lot of this. And, and shortly after that, uh, Capital South, uh, which, which main, their main project had been, uh, the construction of Columbus City Center.
Mm-hmm. They started focusing more on downtown housing, and this was also at, at the time Mayor Coleman got elected and wanted it, wanted to see more things happening within downtown. What is Capital South working on now, then? Capital South now, uh, well, they've merged with Columbus Downtown Development Corporation. So, uh, Capital South's original mission was to redevelop the area just south of the Capitol, hence the name.
Capital South. They did, they did c- uh, Columbus City Center, and then when, when that had to get, uh, renewed, if you will- Uh-huh ... uh, it became Columbus Commons, and they sold off portions of the, the land for new development, which was always part of the plan-
Right ... for the Commons. So really Capital South is focused on managing the Commons and the Commons Garage. Uh, and then the, the, the, their sister group is Columbus Downtown Development Corporation. I would say right now that they've completed the riverfront is, is really focused on, uh, development of the Scioto Peninsula and the Veterans, the National Veterans Memorial. Okay. And we've talked on this podcast before about sort of the structure of SIDs. So you can go back to the Carless in Columbus episode if you wanna know how Mark Conte's bread gets buttered. What is the structure of Downtown South? They're not a SID. They are not a SID. They're, they're a p- uh, both Capital South and CDDC are private nonprofit redevelopment corporations.
Okay. Uh, they get their funding from different sources. Uh, Capital South, of course, is funded a lot through revenue from the Commons Garage. Okay. I guess the question is whose interest do they have in mind? City Center was demolished, and we got this beautiful park. While it was the plan the entire time, the park is slowly piecemeal being sold off and developed, which is fine. There will still be a, a park. A very large park at that.
A, a very large park still, but it will not be what it originally was. And what's p- sort of people were originally able to drive by and be like, "This is so nice," and then it becomes surrounded in condos and apartment buildings. Capital South did that. Um, again, it was al- always sort of the plan, so you... Or excuse me, I don't wanna say sort of. It was always the plan, so I don't wanna fault them for that, but whose interest do they have in mind? Is it simply the beautification of Columbus? Is it commercial development? What sort of boxes are they trying to tick off? That's a good question. I think for the best answer, of course, you need to talk to them. Okay. Just in a general sense, you, they, they are focused on very large projects, so things like the riverfront, things like the Commons, and, and they are doing these projects as catalysts for private development.
Interesting. What was our bottom out at in, in 2000? 3,500. 3,500, 3,500 people. Yeah.
Some have more friends on Facebook than the number of people that were living downtown. And that's across 1,500 acres. Okay. Which is a very large space.
Let's generally define downtown. Generally, for, for most purposes, downtown is considered the area bounded by three highways, so 670, 70, and 71, and then it goes across the river to the railroad tracks over by Spaghetti Warehouse and COSI. Okay. So how many people do we have now? We have about 7,700 right now living within that same area. So we've more than doubled the population. Uh, we estimate, the CID estimates that by 2018 we'll get to 10,000 within that boundary.
In terms of what you've seen in development in other, you know, similar cities, are we doing good? We're doing good, but we're certainly lagging. If you- Okay ... if you... There was a Brookings report, I, I wish I could remember all the statistics, but report from Brookings on downtown housing across the country f- from, like, 10 years ago, and we were lagging then. Sort of the pace, I would say the pace of development you're seeing now is what we were hoping to see in the couple of years prior to the recession. Recession, of course, got in the way.
Right. Things have now rebounded. Well, 'cause that, I mean, from where we sit right now, that was right in the middle of the timeframe we're talking about. Yes.
Okay. And I, and I think we were headed there, 'cause the, the, during the recession, the interest in living downtown has never waned. It was just people's ability to move there or the developer's ability to get credit to build a building. Right. What's the, the mix of rental and ownership? Generally, it's still mostly rental, probably, I'm gonna get the figure wrong, but probably close to 70% rental.
Okay. I imagine you've done a, a little bit of research on the price point. It's higher than other neighborhoods in Columbus. Yes. Why do you believe that is? Especially given the views are awesome, the amenities are a little bit lacking. There is now a grocery store downtown. What do you ascribe that higher rental rate to? So the, the downtown market is, is kinda funny in that when, when this all started, uh, 15 years ago, uh, Capital South and the city had commissioned a downtown housing study. Initially, the thinking was that we would see a lot of apartments get built first after the city put their incentives package together. We would see a lot of apartments, and then over time we would see, start to see more for sale product.
And these incentives are for the developer? To build it. So they're getting, like, a property tax abatement. Correct. Okay. Yeah. Yeah, the, the centerpiece of the incentives was and is a property tax abatement. If you bought a condo, that property tax abatement followed you if you were the buyer, but for the renter, it stays with the developer.
Right. And I'm sorry, everybody always talks about incentives and sort of the centerpiece being tax abatements. What other incentives could there... They're not handing out back rubs. Right. Right. There were... A- and I'm not sure how much of the city is still doing, but there were, like, water and sewer tap fee credits. Awesome. Okay. Yeah. This, this kinda gets into the weeds, but if you look at a typical block in downtown, there probably could've been 10 or 20 buildings on the block, each one with its own tap into the pipe.
Right. When you go to build a new building, you want one tap, but much larger than what it would've been for, let's say, a single family home. And so the city- And so you pay the city to do that for you. Right.
And then the city would turn around and then give you a credit for all those little taps that were getting shut off, so you weren't paying, uh, you were just paying for the net increase. Gotcha. And, and as part of that housing study, the, the whole reason for the incentives in the first place is that the study found that the cost to build a unit within downtown proper was much more expensive for how much you could get back either leasing it or selling it. Okay.
And so there was a market failure. The... And this is, this is where government should step in. When there's a market failure, they stepped in with an incentive to do a correction. Now we're starting to see a, a housing market within downtown. Right, which is viable, but again, the higher price is because it is simply more expensive to build here. Yeah. And that's by virtue of the price of the property, and also frankly, it's not that easy to build in downtown. You can't have a sprawling campus of trailers set up, you know, across the street because there's already a building there.
Right. A good example is, is, are, are the apartment buildings Lifestyle Communities is building. They, they have three different sites. The Troutman site is under construction now. That ran into problems because a- as they excavated, they ran into issues with the adjoining foundation for the building next door. Ooh. Uh, so they've... They're, they're now moving full steam ahead on that building. They're, they're using one of their development sites as construction staging for the other two.
Right. Uh, not everyone has the ability to do that. And then, then when they don't, you end up seeing, you know, lane closures on streets. Right. And, and sometimes on major streets. But that also represents the other issues that d- the downtown developers face. If they have to demolish a building, chances are there's environmental remediation-
Mm-hmm ... usually with asbestos. Even if it's a vacant lot, a lot of times when they demolish buildings, they would demolish the building and just collapse everything into the basement- And bury it ... and go for it.
Right. So now when you go to rebuild, you gotta excavate probably, and probably do environmental remediation there as well. Right. Absolutely. But going back to what you talked about with other cities, uh-
Yeah ... for example, Cleveland has about 14,000 residents downtown right now. Okay. Cincinnati has about 16,000, and I think the k- one of the key differences in both cases is that they-
Well, and I'll say that that doesn't seem like a whole lot more. They also bottomed o- out like we did. Okay. Uh, they... And they, they've had all the same economic consequences, and in a lot of cases much worse.
Okay. And so for a region like Central Ohio that's just continually grown decade after decade, as opposed to Cleveland, which has had kind of anemic growth- Right ... the, it's the fact that they have double the downtown population we do, you say, "Okay, what's happening here?"
So now I ask you, what's happening there? The big thing is, goes back to demolition. We demolished so much of our building stock within downtown Columbus, and Cleveland and Cincinnati never went down that path. Okay. And when did we do... That was before 2000, right? Yeah.
Okay. So really from the '50s up until the late '90s when we got a new downtown zoning code. Okay. The way to fill up office buildings here was to provide parking, and the way to provide parking was to demolish buildings and do surface lots.
Well, and we'll get to it in a little bit, but that is still the way things are. So they have the housing stock already. They, they kept it basically, and so it was much easier, I imagine, to simply convert buildings that may not have been used for housing and convert them into beautiful downtown lofts. Yeah. Is that the simple answer? Yeah, that's the simplest answer.
Really? Yeah. You could look at the number of historic tax credit projects, for example, that happen in each of these cities, and we have, up until recently, we've had very few within downtown Columbus, and part of the problem is they're j- we just don't have the historic buildings downtown. Who do we get to blame for this? I mean, like, how did this happen? Uh-
I wanna note here that it's a foregone conclusion that we should have housing stock and we should have a vibrant downtown. Like- And that we should blame somebody. Well, I, I just don't, I don't want somebody to be like, "Well, this is a one-sided argument." I, I, I'm making it a foregone conclusion that we want a vibrant downtown. Yes.
So... Well, I c- I can talk, I can tell you one of the things that's changed it. Okay. And in the late '90s, people were getting fed up with the demolition. There was a great mansion at the corner of Town and Grant Avenue across the street from Grant Medical Center that was targeted for demolition for a surface lot. It happened, but that, after that happened, uh, the city did a moratorium on demolition in downtown so that they would have time to come up with a new zoning code.
Right. That got created. That led to the formation of the Downtown Commission. And so now generally speaking, demolition is illegal downtown. Uh, illegal is probably too strong of a word, but you're basically not allowed to do it until you get approval from the Downtown Commission, and the Downtown Commission is really looking for are you gonna replace the building you're demolishing with something better? And to be clear to our listeners, the Downtown Commission is a area commission, all appointed, and they basically make recommendations to council about what can happen. Well, they're regulatory, so what-
Oh, okay ... it's not even a recommendation. So it's not like... 'Cause you sit on the Victorian Village Commission. We're, we're also regulatory.
What about Italian Village? They're regulatory too. Who doesn't have any power? We actually talked about this in an episode that aired last week- Okay
... about what power is associated with commissions, area commissions. Generally speaking, and I, I, I don't know this exactly, but generally speaking, area commissions will recommend zoning changes To either council or the Board of Zoning Adjustment, but either one of those bodies can overrule the commission. Right. In our-- In, in the case of the Downtown Commission, the zoning and the, the approval for the building is all wrapped up within the commission-
Okay ... itself. When you look at the historic commissions like German Village, Italian Village, and Victorian Village, the main architectural review is regulatory, uh, and rests with the commission. The zoning still rests with either BZA or council, so that still is a recommendation. Okay, so it could still be overruled basically. Yeah.
So just to go back a little bit in terms of the demolition that was happening in Columbus, it sounds like what you're saying, the code allowed it, developers wanted to do it, and so they did. Yeah. And thankfully, I guess, the city stepped in and put a moratorium on demolition and, and sort of fixed it. Yeah.
So it wasn't some terrible politician or frankly even one terrible developer come in and said, "Clear all these buildings for parking lots." It just sort of happened because we didn't have a building code that was up to date enough to look towards long-term goals and solutions. Right. Okay. Right. And, and the other good thing about that zoning, new zoning code is that it got rid of a parking requirement for downtown. So when a developer is proposing parking as part of their building, they're only providing as much space as they think as the developer they need to make it work on the market.
Okay. So it doesn't require that anymore? Right. So if you look at, um- So, like, if somebody starts a bar in Italian Village, I mean, you have to have a certain number of, like, parking spaces. Are you saying within downtown that's not necessarily true? Correct.
Okay. Good example is the new apartment project proposed by Crawford Hoying on the site of the Swan, uh, current Swan Cleaners. I can't remember how, exactly how many units it is, but it's a lot of units, but they're only proposing 22 on-site parking spaces. Okay. So they're proposing way more units than they have parking for, but it sits across the alley from the River South Garage, which at nighttime is c- almost completely empty.
Okay. So they, they are going to rely, I think, on their, their residents to find their own parking solution. A lot of them will just choose not- Or a different transit solution ... or d- different transit solution. So yeah, a lot of them will choose-
Which is not the subject of this episode. But it's all transportation. Is it? Yes. I'm gonna really go back in time to the-
Do it ... the 1992 Clinton election. If you go to the w- the War Room documentary, the, the mantra was, "It's the economy, stupid." Right. When it comes to cities and development, it's transportation, stupid.
Okay. Uh, you look at anything that's happening with development in Central Ohio, regardless of the neighborhood, it's all about transportation. You look at how Easton was built, how Polaris was built. Polaris, the, the exit to Polaris didn't exist 30 years ago. Right. That happened because developers asked for it and paid for a portion, but not all of it.
Right. Same, same with the, the interchange at Easton. There was an interchange at, at Morse Road, but there was no interchange for a nonexistent Easton Way. Right. That happened 'cause a developer asked for it.
I was fortunate enough to sit across from you in a presentation a couple of weeks ago, and one thing that stuck with me is we bring 87 cars downtown per 100 people every day. Yes. That's crazy. Yes.
The only city that does more than us is Indianapolis. There is obviously no one solution. Right. We've heard from a couple other people about what they believe the solution to be or a combination of solutions. Here is your soapbox. How would you fix it? What has to happen for it to be fixed? There's a lot of things. Well, one, one thing is people need to just get over themselves, first and foremost. There's a lot of people who come to work the same time every day, leave the same time every day. They leave their car warehoused all day long. They don't need it, and they, they have access to good transit, and they could be using it. That's not everybody, but there's a lot of people. And the, and the money they would save by taking the bus would more than offset the cost of parking the car on an occasional basis throughout the year. And, and now that we have Car2Go and Lyft and Uber, you have all these escape valves that you didn't have just a few years ago. So there, there's that as one part of the solution. The other part is we have a lot of employers downtown that are providing free or subsidized parking and no transit benefit. And so if you're an employee, you're gonna take the free transit benefit. I don't fault you for that.
Right. Uh, and then there's the issue of just having a more robust transit system. COTA's putting a much better product out on the road than they have in probably the last 15 years. The service has improved every year. There's more service. The next step, provided the levy passes this fall, the next step is for them to start planning for high-capacity corridors, so more BRT routes, uh, and light rail routes on top of that. And so that is issue number 60. Back to downtown residential living. Well, and then you were talking about what, what does that mean for the other types of real estate within downtown?
Right. Absolutely. And, and this where, a- again, where it comes back to transportation. We have a severe parking crunch downtown. The good news for the parking lot operators is they're making a lot of money off those spaces. The bad news is that just makes that property more valuable. So if you're a property owner of a parking lot, you are probably making so much money you don't wanna sell that lot 'cause it's a cash cow for you right now. Why would you wanna sell that to a developer to put up housing? And, and I get that. I mean, everyone's doing every, all this stuff in their self-interest, which is fine. Right. I mean- That's the private market.
But I think that hearkens back to what you said earlier. When there is a failure of the market for the common good, for the common interest, maybe it's time for an intervention. Maybe not the city, maybe not the county, but some sort of intervention to switch it. And again, it speaks to why rental and property costs in, uh, downtown are so high, and yet the vacancy rate for offices is also high. Yeah. That is something that when the market goes up, bond prices go down, and so, you know, those... The... We are not at an equilibrium, uh, in downtown. Right.
Is it fair to say that those downtown office vacancies are a result of that transportation problem as well? Yes, definitely. Looking at downtown specifically, so we have, we have some-Some buildings, especially on Capital Square, where there's a 40% availability, where, uh, the- these are places where the parking crunch is most severe. And, and a lot of this goes back to, a- again, how downtown evolved over time. When we were starting to finally see skyscrapers in downtown in the late '60s, the Statehouse underground garage had just, had just opened. Right. And so that underground garage, this was before the, was, before it was servicing the Riffe Center, 'cause the Riffe Center opened in the late '80s, before even the Rhodes Tower. That didn't open until the mid-'70s. And so we had this enormous stock of parking underneath the Statehouse, and it was these private office buildings that were taking advantage of that. On top of that, in the 1960s, we had vastly many more people taking transit.
Uh-huh. 'Cause people often wonder, the Chase Tower, the Borden Building, why didn't they build parking with it? Well, at the time, there was plenty of parking to be had- Right ... for the amount of people that needed to park.
And not as many people per capita were using it. Yeah. While it is a foregone conclusion that we want more people living downtown, more people are coming downtown, we see lots of building happening, lots of development happening, and most of that development, is that true, is residential or at least mixed use? Yes. Yeah.
Okay. Where are we going? That's a good question. I think the biggest wild card is when we might see the next recession. That is, more than anything, I think is gonna just disrupt things. I, I don't see one for several years, uh, unless the, the Fed, and this is my own personal opinion, if the Fed ra- raises inst- interest rates way too quickly, that will cause a big slowdown. Uh, but provided they don't do that, I, I think there's enough slack in the economy, uh, that things will keep chugging along here for several years. We're definitely gonna see a lot more housing. I think we're gonna see a lot more of these mixed use projects that have been proposed that are incorporating not just ground floor retail and residential, but either some office space or hotel space. We'll see more mixing of apartment and condos within the same structures. Uh, hopefully we'll see a couple of more affordable housing projects get built. Uh, downtown has had several of those get built over the last 15 years, so it hasn't just been high-end condos. Uh, and it's important that we still have that diversity of, of income of people living in downtown. Absolutely. While it's not the focus of what we're talking about, what's gonna solve the office vacancy rate downtown? I think it's, it's gonna be a combination of some type of transit solution. The Capital Crossroads CID is trying to work on one that would, uh, get transit passes into the hands of all the workers within the CID, and I think more than double the ridership. Uh, and in addition to that, COTA's, uh, transit system redesign, which will roll out in about a year, that will alone-
If Issue 60 passes ... if Issue 60 passes, that alone will boost transit ridership. I also think we'll, we're gonna see some office space come off the market. I think we'll see, uh, some office space con- get converted into housing. Okay. So lowering the divisor will help the office vacancy rate, certainly.
Right. Uh, and we continue to see a big demand from employers wanting to be downtown, and so I think the shift in thinking will percolate up more to the CEO level, and they'll realize that in order to get and retain the workers they want, they're gonna need to be downtown. And then finally, the, the fact that we do have executive level housing downtown and near downtown, in Short North and German Village, is, uh, very important. So much of where a company locates is really dependent on where the executives live, and so if the executives live downtown or close to downtown, they're gonna want their company to be there as well, and they want a short commute. Right. Don't we all? Great. Mark, thank you so much for your time today. Thanks a lot.
The Confluence Cast is sponsored by Telhio Credit Union. When you bank with Telhio, your money stays local, building homes and businesses right here in our community. Learn to believe in banking again and take the Telhio Challenge. When you do, Telhio will give $100 and match that to a local charity. Start at telhio.com. Telhio is open to all in central Ohio, federally insured by the NCUA. Sitting down with realtor Joe Peffer. Joe, how are you? I'm very good, thanks. How are you? Good. We're gonna talk today about the Columbus housing market, what it's like to buy a home in general. How long have you been a realtor? I've been a realtor since 2003.
Okay. Always in Columbus. What were you doing before that? Before that I was doing marketing, mostly for law firms. I had a, uh, bachelor's degree in communication.
Okay. And I was getting my master's degree in marketing communication. Okay. What made you choose to get into the field? Well, immediately before that, I had applied to be the marketing director at, like, a million not-for-profits around town. I was always a bridesmaid. I think people didn't like the idea that I had a director title and a master's degree.
Okay. And they thought that I would be too demanding or- Too heavy-handed ... too much of a prima donna or too overqualified, uh, or that I wouldn't really want the job.
Okay. And that I'd just use it to move on to something else. What, uh, ended up happening was I started a geographic information systems- Okay ... business to business company with a friend of mine. I left my job, and I wasn't so much the GIS portion of it as the everything else.
Right. And no sooner did we get our first client than we realized that he couldn't leave his job 'cause his family needed his benefits. Okay. So-
So you went out with the entrepreneurial spirit and realized that your business partner couldn't necessarily hold up that end? Right. So I decided that I had to do something Right I was lucky in that my wife, who is a Columbus City School school nurse, so it's great. She gets summers off. She has that schedule. We have good benefits, and that allowed me to go ahead and do what I did. It was... Which was take all the real estate classes-
Mm-hmm ... at Columbus State that summer, and it, it was, like, May when it all went down. And so- Right ... I took them all during the summer. Uh, in the fall, took the test, became a realtor. My first five years were with Coldwell Banker King Thompson. I worked out of the Bexley office.
Okay. And how'd you like that? You know, I liked it. Uh, the reason I went there, the first time I walked in and sat down to interview, 'cause, I mean, there's no, like, recruiting or anything. You take your test, you get your license, and you decide where it is you wanna go, and- Okay ... you go around, you interview people. And I talked to the manager there. He sat down with me for over three hours.
Okay. And he didn't know me when I walked in the door, really. I had all these great ideas. It was 2003. I was gonna do all these things on the internet that- Well, and with a back- ... no one was doing.
Right, and with a background in marketing, the... That's how you sorta look at the field. Right. Is it similar to other professional degrees, I'm thinking of law school in particular, where you're sort of learning, you're learning the particulars, but you're not necessarily learning how to do the job, or- Oh, so very much.
Okay. And this is what I always tell people who are thinking about being a realtor. Right. What you do in those classes has nothing to do w- with what you do in real life.
Okay. But the, the things that you need to know just to have some kind of base knowledge. You know, you're always asked, like, how many square feet are there in a, an acre? How many square feet are in an acre? You know, it's been a long time since I took those classes.
It doesn't matter anymore. Something like 52,000. I don't know, but- Okay ... things, things that just don't matter.
Right. And so after that, you, I assume, moved on to Delicious Real Estate. I did. In October 2008, right when the economy was starting to fall apart, I opened Delicious Real Estate. Uh, and my first office was, uh, on South Fourth Street, where 16 Bit is now. Okay. It was a pretty sleepy corner at the time.
Yeah. What was the impetus for starting Delicious Real Estate? A lot of it came down to wanting to do for my clients the way that I wanted to do for them. Okay. And while I certainly don't wanna disparage your former employer, what are the differences in what you're able to do? I just have free reign to do whatever I want, essentially. If I wanna give someone a discount, I, I can give them a discount without having to run it by the, the manager of the office or-
Okay ... because the big firms, they're, they're in it for the money. Right. Uh, a place like Coldwell Banker is owned by a giant real estate company that has shareholders, and they look out for their shareholders.
Absolutely. As well they should. I mean- Sure. Absolutely ... that's their role. But when it comes down to me helping my clients, it's, there's a bit of a clash there.
Okay. A- and, and also certainly came down to money. Okay. Uh, you know-
'Cause you get a bigger cut of the check ... I'm, I'm paying them a, I'm paying, I was paying them a lot of money just to be on a 90/10 split at the time. Okay. And I could have taken that money every month and opened my own place and paid a lease, which is exactly what I did.
Gotcha. For people that are considering being realtors, would you recommend that? I mean, obviously, it's probably difficult to take that route starting out, but should it be a goal of people if they're, you know, not happy with the way things are going to start their own firm? I say yes. I, I think that you're right. It's not the thing you wanna do when you're starting out. Right. It, it is very much a learn on the job kinda thing, and when you do go to a big box brokerage, you get excellent training. Uh, a- as a tiny brokerage, that's not something I can offer. I think you should do that. Every real estate agent essentially is their own company.
Right. They all are very entrepreneurial because they m- work for themselves, and it's all up to them to be motivated. And they get, I imagine, some sort of ad buy share and help with marketing. But they're the ones that are putting their feet on the pavement and getting the clients in the door. Sure.
We'll get into the, the specifics of the home buying process in a second, but what's the difference for the buyer, well, the buyer or the seller, and do you do both? Sure. Okay. What's the difference for the buyer or the seller between going to a big box, uh, brokerage and going to a boutique brokerage? Well, it's 2016, so not much.
Okay. Uh, at the end of the day, if you use a small boutique brokerage, then your listing is all over the internet, and anyone all over the world can see your listing. Is it by virtue of the use of the internet that that's why there isn't a whole lot of difference? In large part, yes.
Okay. Because once your listing is in the MLS, it propagates throughout the world, and so many more websites than you would even think to look at. Okay. And what is... I get alerts from the MLS, but I actually... What does it stand for? Multiple listing system.
Okay. And so that's something that any realtor worth their salt is subscribed to and is able to sort of show listings and put listings into. Right, and only if you are a real estate agent can you do that. Okay. So back in the day, they used to hold all the power, right? They were big gatekeepers because it was, it, there was no Zillow.
Right. If you wanted to find a house, you had to go to a big box place because they're the ones controlling the listings. Right, and the MLS was everything. But now, so there's so many MLS-like sites out there where there are lots of listings. And to be the most up-to-date, you almost need those immediate MLS listings that you get from your agent. But anybody can be essentially a big box brokerage. Right. Or, or at least appear to be.
Okay. Well, and is that because of the sort of speed of the market that's functioning here in Columbus because it's so quick? I know when I've looked at homes in the past, it was literally you find out about a listing, you schedule that very day to go and see it, maybe the next day, maybe that same day, and you kinda have to put an offer in that afternoon. Yeah. That, the, the market, uh, especially, uh, in the High Street corridor, has very much been like that, uh, over the last couple of years. Uh, this last spring especially was brutal- Yeah ... uh, in, in that regard.
Yeah. So talk about the home buying process. Say someone is at a point in their life where they're like, "Okay, I imagine I'm going to be living with this many people," whether that be children, whether that be a partner, "and we think we need-" Two bedrooms, three bedrooms, and we've got a little bit of money f- or can access a little bit of money for a down payment. How does the home buying process start? Well, the first thing I suggest is sitting down with an agent. Okay. A realtor. An, a realtor who... An agent doesn't necessarily have to be a realtor.
Okay. A realtor means they belong to National, National Association of Realtors. Okay. It's kind of a trade name. Uh, you can also be a real estate agent and not be a realtor, but almost no one is.
Okay. 'Cause then they wouldn't belong to the NLS. Got it. So you, you, you sit down with a realtor. You, you tell them what, what you're thinking, and you tell them where you're thinking.
Right. Uh, and you tell them what your price range is, and because they're out there looking at these homes every day, and they have a history of looking at these homes, they can help shape your expectations. 'Cause they're gonna know what's reasonable. They're gonna know what's reasonable.
'Cause if I come to you and say, "I want a three-bedroom house in the Short North for $200,000," you're gonna say, "That's not reasonable" but you may, if that's your budget, absolutely, th- here are other areas of town that are up and coming. Right. Uh, and, and then really just explain the process. Most transactions, although every transaction is completely different f- than the next- Mm-hmm ... they all follow the same sort of pattern, and a lot of it starts with where is the buyer at any particular point in time.
Okay. Where are they financially? Where are they mentally? Uh, like we had talked about, sometimes you have to make an offer very quickly, and if you're just kind of dipping your toe into the market- Right ... you're, you might not be ready for that.
Right. But that doesn't mean you shouldn't go see the house. Right. You... 'Cause the more houses you get in with your agent, the more likely you are to have a sense of the market.
So should a potential buyer be at all concerned about taking up their agent's time in terms of going to see a house, and, you know, they're probably not going to make an offer on it? No, and that's a good question. I get that asked a, a lot. Okay. I think that if the house is something that you would consider buying, and you feel that you're going to be buying a house, and you, you, you feel pretty sure that you're gonna be buying a house-
Right ... in the next so many months or so, by all means, go see it. Don't feel bad about wasting your agent's time because- That's their job ... his time is your time.
Right. Exactly. And like I said, the more houses you get in, the better. Now, if you can only buy a house up to $300,000, let's say- Right ... and you're curious about what a $350,000 house looks like, that's kind of something else.
Okay. You go see those open houses. Okay. And then-
Then you ta- basically you take your own time and go to those- Right ... type of things. Right, because, because you, you can't buy that house, but is it a good idea for you to understand what that extra $50,000 buys?
Mm-hmm. It, it is a good idea. So, so go ahead and look at those online, and go to those open houses. But take your agent's time to look at as many houses as you feel comfortable looking at. I always tell people, "Don't be afraid to make an offer on the first house that you physically get into," because sometimes it's the right house. Right. And your agent can help you with that. Even though he might not know you as well as certainly y- you know yourself-
Right ... they can help you understand whether it's a, a good or bad idea. You mentioned pricing a little bit and how people sort of... What is the best way for an individual to sort of figure out how much home they can afford? Is it simply here's the amount of, you know, liquid assets I have access to and am comfortable giving up for a down payment, and here's what I'm willing to pay per month, and then there's sort of a calculation based on that? Or would you recommend a potential buyer, a serious buyer, going and getting, like, a preapproval? You, you absolutely have to have a preapproval-
Okay ... before you can even get serious about looking at homes. Can someone without a preapproval even make an offer? Cer- certainly they can.
Okay. But the seller is gonna take that offer less seriously than an offer that comes in without a preapproval. Okay. Even if they say that they'll have that preapproval in the next 24 hours, it's, it's-
The seller kind of wants to make a decision before that. They, they probably do. Okay. And, and they want to feel good about the buyer, and they feel better about a buyer who is preapproved. And I always tell people the easiest thing for you to do is to walk into the place where y- you have your checking account, wherever your check is automatically deposited. They, they know you, they know your money, and you're already a customer, so they wanna help you. They, they already have an incentive to, to help you. You don't have to use that same bank at, at the end of the day.
Right. Uh- But at least you have that letter. Yeah. And, and you sit down with them, and they'll, they'll preapprove you relatively quickly. It's easy. It's painless, and it'll give you a benchmark for how much you can spend. Now, that has nothing to do with how much you want to spend.
Got it. You spend however much you feel comfortable spending every month. You can be approved for 420, but if you're much more comfortable at a 275 mortgage payment- Right ... every month, then, then that's what you look at.
Okay. And when somebody comes to you as a potential client, do you recommend, "Hey, go out and do this before we start looking at houses"? I do. Okay. Although I'll tell you that most people come to me ready to go.
Okay. Because these days, everyone, everyone seems to look and look and kinda lurk- Well, because it's available ... a- and watch the real estate market-
Right ... because it is available. Right. You... They set up their own alerts on sites like Zillow and Trulia and realtor.com, and they've been watching the market, and they've been going to open houses, and sometimes for a couple of years. Uh, so they, they come to me pretty knowledgeable about both the market and about where they are comfortable financially. Are sort of the self-educated clients coming with any misperceptions largely? Uh, y- I would say that one of the biggest misconceptions people do come with is that you have to put a large amount of money down on a house, like let's say 20%. That, that seems to be what everyone thinks that you have to do, and certainly you don't have to do that. You can put down- A lot less. And sometimes it's a good idea to put down a lot less and make your money work harder for you somewhere else. Sometimes it's a good idea to put down more. There's such a thing as a 5% down, no PMI mortgage out there. If you could save that 15%, for example, to furnish the house-
Right ... or to work on those couple things that you know to be wrong with the house- Right ... or to just, like I said, work for you harder somewhere else.
Well, and there's the economic concept of the time value of money. It's always sort of better to have it in your account and accessible, rather than just servicing a loan. Absolutely. Now, that said, you wanna have equity in your house should an emergency come up, right? Right. Maybe your spouse gets transferred, and it's eight months i- i- into your new house, and you wanna be able to break even.
Right, because all you're doing- If you put down 20%, then y- you'll get that 20% back, and you'll, you'll probably break even. If, if you sell your house within the first year, you should have no reasonable expectation of making any money. Right, unless it's a crazy market- And, and, yeah
... or you buy it in a short sale, or you buy it at a time... 'Cause we're kind of entering into, correct me if I'm wrong, the time of year where there aren't a whole lot of home sales happening. 'Cause it tends to happen in the spring and the summer, frankly, when, you know, s- people are trying to get residency for schools. Yeah, the real estate market does tend to revolve around school schedules. Okay. Less so in the city of Columbus, and less so for young professionals.
Okay. And less so for people who maybe are retiring a- and downsizing. But for the most part, absolutely, uh, the, the colder months, there's a lot less happening. Gotcha. But it's still happening.
And I don't wanna get into sort of credit worthiness, and that sort of... That's for another, that's for a banker podcast . But is it better to have a relationship with a credit union than it is with a big bank at all, or is there ev- any evidence of that that you've seen? I will say that credit unions, being member-driven- Mm-hmm ... really wanna look out for the members.
Okay. And any time that I've had a client who is coming from a credit union, it's worked out fine. When I have clients who are working with a big bank, we've had some nightmare situations, because big banks tend to move very slow. Right. When I say nightmare, I m- it, it always ends up okay, but the appraisal will be low because they have a big pool of appraisers who sometimes don't know the neighborhood.
And don't have a good idea of the comps, the comparable sales in the neighborhood. Right. And, and banks and appraisers can't even really talk to each other these days. Okay. But that, again, that's another podcast.
Which in the end is kind of a, in my mind, kind of a good thing- Right ... because it sets a fair market va- Right
... literally a fair market value. Right. And big banks miss deadlines all the time. Okay. And sometimes the left hand doesn't know what the right hand's doing, and they ask you for the same documentation over and over, even though you've already given it to them. My preference is always local bank, small to mid-size, somewhere where the underwriter is right down the hall-
Okay ... instead of in another city or across the country. Someone who has some accountability that you can go physically speak to. Right. Frankly, the large banks don't have an incentive to make it easy or seamless, and those smaller banks do because, again, that guy's down the hall and he's accountable. Talk about sort of how things get priced, and why a home in the Short North may be vastly different from a home in Marion Village, and just sort of walk us through that process of how things get priced from the get-go. It's, it's, it's very much what you would expect it to be.
Okay. It's based on similar sales of similar homes in a similar area. Now, you mentioned Short North. Mm-hmm. Short North is a- a- always a crazy, always a very fast-paced real estate market. A home there that is a three bedroom, bath and a half, uh, let's say in Italian Village-
Uh-huh ... compared to a three bedroom, bath and a half that is maybe a quarter mile away in Milo Grogan. Well. Same zip code.
Right. Quarter mile away. They're- Obviously-
But very, very different neighborhoods ... it's going to be a very, very different home price. Right. A lot of that has to do with desirability of wanting to live in the neighborhood. Every- everything's based off comps.
Right. But certainly there's a- And when you say comps, just for clarity- Sure
... we're talking about comparable home sales- Comparable sales- ... within the neighborhood ... of similar homes in, in the neighborhood. But certainly the desirability of a neighborhood is a unknown that affects prices.
Right. It's very difficult to put a number on what being in central Clintonville can do for your home. If you're on the bike path and can walk to Whetstone without having to cross a busy street in Northmoor, what is the invisible multiplier? Right. But, but it's there.
Right. Absolutely. So you do setting those prices for sellers as well, correct? Right. And, and, and certainly it, it's an ongoing discussion. If a seller is unrealistic, because let's face it, every seller thinks their home is better than the comp. Right. Uh, well, my home has this, and my home has that. Well, that's great, but what if buyers don't care?
Right. And oftentimes they might not care. Well, and I've certainly been in homes that while the comp in terms of the rough numbers, you know, the number of bedrooms, the number of bathrooms, exactly the same, were priced the same, but then when you look at, like, the square footage, it ends up being those other homes end up being a whole lot bigger. Uh, but they've, you know, they've sort of asked for what they think they can get. Right. And, and obviously the level of doneness, we'll say-
Okay ... i- in a house has a lot to do with it. You know, how updated is the house, and, and is it just updated because it's pretty to look at, or have the mechanicals been taken care of? Is there a newer roof? Are the cabinets just painted, or are they newer? Right. Or are they original with some lipstick on them, we'll say?
Okay. Gotcha. So let's say, you know, somebody goes into a house. They say, "I wanna make an offer." That seems to be, at least from talking to people, the great unknown of, like, sort of, you know, what happens then? Well, everyone comes from a background of wanting to get the most for the least. Okay. We all, we all want that.
Right. The seller wants- The most money they can get. The buyer wants to buy the house for the least amount of money possible, and that all makes sense. The real estate market that we've been in, and I do primarily work inside of 270, but it's been the same all over Franklin County. Okay. There's not a lot of wiggle room. Uh, it used to be that a buyer could ask the seller to pay for their closing costs. Uh, "Dear seller, will you please pay, uh, what would be approximately two to 2.5% of the purchase price so that I can pay the closing costs that I've incurred from the bank, from the title company, from the county?" And, and the seller would pay maybe 1 to 3% of the, of the buyer's closing costs.
Okay. That, that just doesn't happen. Really? That hasn't happened in years because it's too brisk of a market. Sellers are getting multiple offers all the time, and they're not gonna bother with-
Well, and- ... closing costs ... and that's gonna be in the initial offer, right? Right.
The offer's gonna say, "Okay, we'll give you 295, but will you help out with closing costs? And we may come back..." I've had the experience where we put into the offer, "If the inspection comes back with items that are below $500 to fix, we won't bother you about them at all. But if there's anything that may be above $500, we're gonna ask about it, or we, we reserve the right to ask about it." Absolutely. And I would tell you that in Franklin County, what is called the list price to sales price, the amount of money that a house ends up selling for compared to what it's listed at- Okay ... is hovering right around 98%.
Okay. So wiggle room is kind of a thing of the past. In neighborhoods up and down the High Street corridor, oftentimes how, homes are selling for more than list price. So you're saying adding those clauses of closing costs, things that may come back on the inspection, anything else that they may ask for, it's sort of you're almost shooting yourself in the foot a little bit in terms of the offer? Yes.
Okay. And, and, and that's this market. This market is a seller's market. Mm-hmm. And, and in these neighborhoods, for example, last spring, it, it, it real- it wasn't even a question of how much do I offer, because you know it's gonna be above list price.
Right. It's, it's how far above list price is just paying too much, and I should let somebody else do it. Right. Because even if a list price is inflated, if you want to get the house, sometimes you have to go above list price, and you have to put clauses in there that escalate your offer $1,000 above the next guy, let's say. Or you have to say-
Which sometimes are ignored as well, right? Right. A- and, and being first isn't, doesn't mean what it used to mean. Sometimes if you're the first offer, great. You know, you would put a short deadline on the turnaround time for them to get back to you, and you would offer full price, and, and you would expect to hear back from them, and you would expect that they would say yes, because you're offering them full price. Right. Even that doesn't mean anything. Oftentimes what they would say is, "Well, we just went on the market. We wanna give it a couple of days and see how many other offers at at least full price we get."
Right. So why would they price it at such a point that they wouldn't take that offer? 'Cause it's a seller's market. 'Cause it's a seller's market- Okay ... and it goes back to the seller wanting to get as much money as possible. So buyers are putting things in their offers like, "We'll take it as is. You, you don't have to do anything at all. We're gonna have a home inspection so we know what our frame of reference is for-
Right ... what the house looks like in terms of will it need repairs." And reserve the right to then turn it down based on that inspection. Correct. But we won't ask you to fix anything. And people are, are also doing things like waiving appraisal clauses, saying that, "If the appraisal comes in low, you know what? It's okay. We'll take care of that $10,000, or we'll take care of at least $5,000 of that $10,000." Anything you can do to make your offer look better than the next guy.
Gotcha. What are some of the pitfalls that a buyer should be aware of in that process? Well, one thing that you see happen in a market like that is buyer's regret. They see the home. They get caught up in the frenzy of the multiple offer situation. Well, and there's multiple people walking through the house at the same time. It's... Y- oh, yeah. You, you're walking into a home, it's the first day it's on the market. It, it's the first few hours it's on the market. There's 30 other people there-
Yeah ... with their agents looking at the house. It's, it's, it's crazy. And you know that they're gonna make an offer, or at least some of them will. Right. But you love the house, or you think you do because you've walked through it quickly. It's the only thing on the market right now that fits your needs.
Well, and it's dressed up real nice 'cause it's the first day on the market. Right. And then so, so you make an offer, and you do go above and beyond everybody else's offer, and then they accept your offer, and then it, you sit back and you think, "Oh, my God, what did we just do? Are we way over paying for that house?" And, and you just do, you do see homes coming off the market, or coming actually back on the market- Mm-hmm ... because of that. That's why, number one, it's a good idea to be a backup offer.
Okay. If they don't take your offer the first time, but you really like the house, offer to be a backup offer, because if those people in front of you do get buyer's regret, uh, you're automatically next in line. Okay. You, you'll automatically be in contract on the house. What else? Not too many people do offer to buy the house in as is condition. A, a, a pitfall might be not asking for that thing that you wish that you had asked for.
Okay. Like what? Like, could you please fix the flashing around the chimney? Okay. You think that you'll take care of it, but-
You're never getting up there ... you move in, and, you know, yeah. You're, you're more interested in the inside of the house. You gotta paint. You gotta do these other cosmetic things that are gonna make you feel better about the, the house. And then the next spring rolls around, it starts raining a lot, uh, and you think, "Oh, my God, that flashing. We should've taken care of that." Right. I think having an agent that sets reasonable expectations for the condition of a house is important because i- in a way, and this has been the case now for, for years, HGTV has ruined home buyers.
Okay. They watch the shows on TV. They want the stainless. They want the granite. Right. Or they think, "Geez, granite. Nobody's got granite anymore. It's all about the quartz and the concrete." And- ... and they walk into a house, and that's what they want.
Right. And they, they want pristine. They want move-in ready. In the historic- I thought you were gonna go the complete opposite way with this and say that HGTV has made people think that they're more capable of doing things to their home than they actually are. I, I think that you're absolutely right on that end of the spectrum also.
Okay. The, the expectations, I think, of home buyers are somewhat unrealistic. Okay. Because especially in these older neighborhoods, despite the price of the house, I've been in a lot of million-dollar houses that you just think, "Oh, my God." This house needs so much updating. It's so much work.
Right. No matter the price of the house, this older housing stock, and that's what I love to work in, is homes with character. Mm-hmm. That often comes with deferred maintenance, e- especially, uh, in, up and down the High Street corridor because people don't live in the homes for a super long time.
Right. They might move out to the suburbs, or they might get a job transfer because they're young in their career. And, and everyone lives in the house, and when you live in the house, you're, you're more concerned with the things that you see immediately around you. Right. It, it's not fancy and, and, and you don't see-
Well, you don't- ... all the things you really need to do to the house. And you don't look up in the corner a whole lot for little bits of paint that seem to be coming off. Why is that paint coming off? Because you live in it. It's, you know, you're there in the moment. Right. You don't do the sexy repairs. You do do the sexy repairs. You, you, you don't do the things that need to be done that you don't look at all day long.
The structural stuff, the little piece of siding that's coming off- Right ... that may be damp- you know, keeping water away from the foundation, that sort of thing. The things that buyers look at and say, "Oh, I wonder what else is wrong."
Exactly. Exactly. Talk about the Columbus housing market in general and sort of, you know, where the really, uh, the Short North obviously. You keep mentioning the High Street corridor. Are there any other sort of hot neighborhoods, and are there any other neighborhoods that you would recommend people look at that maybe they haven't considered? Well, I would say the hot neighborhoods are just, they're all over this year. I mean, everything is a hot neighborhood. Dublin is hot. Gahanna is hot. Westerville's hot. Things are moving quickly, and they're moving quickly in that first-time home buyer kind of range especially. By that number, I'll say anything 250 and under. Okay. 'Cause that's a comfortable purchase. Right. Although I think that trend-wise I'm seeing older first-time home buyers-
Okay ... who have saved up more money for a more expensive house. It's, it's not the sort of starter home that it used to be. It's more of a second home, and guess what? We're gonna have our kids here, and we're gonna stay here kinda thing. Okay. Along those same lines, I'm seeing more people willing to stay in the city with kids, although oftentimes when I walk through a house for sale in the city, there's a crib.
Okay. There's one crib, and those people are on the move to- Oh, because you see them ... a, a school system that they feel they need to get to.
Okay. Uh, al- although I, I do wanna say that I think that people are, are more willing to stay and put down roots, and they already enjoy the city. Right. They like the walkability, and now they're gonna like it with their kids.
What neighborhood are you in? I'm in Olde Town East. Okay. 'Cause- And I've been in Olde Town East for a long time.
And we talked right before we started recording today. You have three kids, one in middle school, two in high school. You've f- decided to keep your kids here in the city. What would you say to somebody that was considering moving because, uh, this is not realty... Well, it is realty related to an extent. It is, sure. What would you say to somebody who says, "God, I have to get out in order to provide a quality education for my kid"? You can provide a quality education for your kid and live in the city of Columbus, and it's not as hard as you think.
Okay. I know people who want to do it because their kids are going to a school that they are standing up and saying, "We're not gonna leave. We're gonna keep our kids in school. It's a s- Columbus City School. We're gonna help make this school better-" Right "... instead of taking our kids and moving out to the suburbs." The schools are getting better. Clintonville, let's say for example, has some of the best Columbus City Schools there are.
Absolutely. There's schools in the Short North. There's schools in German Village. They're getting better and better because the parents are saying, "You know what? We don't have to move. We can stay here, and we can continue to love our neighborhood, and we can be a part of our kids' school." And b- just, just being present is so much, uh, of a school. Now, not every school is- Repairable ... repairable. You know, I would never say give up on a school.
Right. There's, there's schools that just need a lot of work. Yeah. And, and they need parents to stand up for them, too, but sometimes it's just not that easy.
Right. Uh, the elementary school, middle school, and, and the high school that my kids would go to normally, it just, it just d- did not seem viable. Right. Well, and it should be noted here that if people aren't aware, Columbus City Schools does have a lottery program for both neighborhood schools and for their alternative schools. I, being a Columbus City School kid, I never went to any of my neighborhood schools. I'm very thankful for the education I got throughout Columbus City Schools. What do you see, just turning back to realty, what do you see that homebuyers want that you wouldn't... For someone who's selling their home, what are the easy things that they can do that homebuyers are turned on by? The easiest thing you can do, and I know it sounds overly simplified, is just clean the heck out of your house.
Okay. I mean every nook and cranny. 'Cause they will look. They will look. It just makes an unbelievable difference, and I, I know that sounds easy. But you would be amazed at how many times you walk into a house, and it just feels dingy.
Okay. Maybe they didn't wash the windows. Right. Or they didn't get that cobweb in the corner, and every little thing helps. And certainly, the, the, the quick, easy cosmetic things help, too, the paint, the new carpet. Uh, you know, these things are relatively inexpensive. While you can't maybe install a new carpet yourself, you can paint.
Right. You can put new handles on your kitchen cabinets. Right. You know, uh, you can take up that linoleum and tile the kitch- the bathroom floor yourself. You can just go on YouTube and do a multitude of things that you maybe don't think you can do, uh, which kind of goes back to the-
God bless you, HGTV. In terms of, you know, working with your Realtor, f- just finding a Realtor and being ready for that, what can buyers do? I think one good thing to do is ask your friends, "How was your experience with your Realtor? Did, did it work out well? What did, what did you like? What, what did you not like?" And- Did you feel rushed? You know, did you feel like you were aware of everything that was going on in the process? Right, and, and oftentimes not until you start talking to other people about their experience do you realize maybe your experience was s- in fact subpar.
Okay. It, it, it might be too late by, by that time. It, I'm amazed at how many people do come to me talking about how their agent wasn't showing them homes that they wanted to see, wasn't showing them homes that were in their price range. They weren't in the neighborhood they wanted. They keep showing them condos when they want single family or vice versa. I don't understand that. Yeah. It's- Kind of alarming how often that happens.
And do you think it's because those realtors are in a niche, and that's sort of what they know, and so that's what they show them? If by niche you mean rut, probably. Rut? Yeah.
Okay. Like, like that's their frame of reference. Okay. And, and they have a small world maybe-
Well, or they're inexperienced ... and that's the world that they live in, so they're gonna... Or maybe they're just inexperienced. Right. The, the bar to being a realtor is so low that there are so many realtors. Sometimes you see people using their parents' realtor just because it's what their parents keep telling them to do.
Right. Or they use their boss's wife or, or husband, and, you know, maybe it's just because it's convenient, not because it's a good fit. Right. And so what should they look for? Just someone who sort of they feel like gets them? I think getting them is, is huge, but probably difficult to ascertain-
Okay ... uh, on a first meeting. I think buyers in general don't tend to shop around. They just go with someone- Right ... who, again, is, is, is probably a referral from somebody at work or, or maybe even their parents if they're first-time home buyers.
Right. Or they go with somebody whose sign... If, if they're sellers, they go with somebody whose, the sign they see all around town. Right. "Uh, well, this person seems to have a lot of signs in my neighborhood, so I'm just gonna call them because they must do a lot in my neighborhood."
Right. They should include other people in the conversation because there's a lot more than just that agent. And, you know, listings beget listings. Right. So the more listings you have, the, the better for you, I guess, but maybe not the better for your client.
What makes Delicious different? Well, when I started my real estate company, I wanted it to be very client-focused- Okay ... because I was coming from a place I felt was very all about the company focused.
Mm-hmm. So, so one, one, one thing I do is I don't represent both sides of a real estate transaction. I don't represent both the buyer and the seller because I think it's impossible to be, for both of those clients to have the best experience possible. Well, and to be fair and impartial in that contract and make sure everything, make sure everything works out. You, you're gonna know something you wish you didn't know.
Right. So that's, that's gonna be a- There's a reason why lawyers don't get to represent both sides of an argument. Right. Someone's gonna be at a disadvantage, and, and it happens all the time. Happens all the time. Those people whose names you see on those signs all over town, they're doing it left and right. And a lot of times it's because buyers will just go to an open house maybe. They'll say, "I like this house. I wanna make an offer," and they just talk to that agent. They maybe just don't know that, that they need to have their own representation, and they don't know that it's hurting them to not have their own rep- uh, representation. And another thing I do is I just... I've been selling homes for, since 2003.
Mm-hmm. I know what it takes to sell a home, and I know exactly, more or less, how many hours I have wrapped up in that and all the tasks that I need to do along the way. And it's only gonna take me so many hours, so I can set a threshold where I know that I'm getting paid for those, that amount of work. Right. And I think that it's fair. It's fair to me. It's fair to the seller. And I'm not robbing them of their home equity. I know that I'm doing the same amount of work, more or less, for a $250,000 house as I am for a $425,000 house. I'm not gonna take 3% of their 425 when, when I know that I, I've got this much wrapped up into it.
Okay. And I know that those people are probably gonna turn around and buy a house anyway. Right. We already have an established re- relationship, and I'm gonna make money on that end.
Right. 'Cause you're not- A- And again, d- and just to drive the point home, you're not there to steal their equity. I'm not there to steal their equity. A- and I feel like that's exactly what it's doing. Real estate agents are vastly overpaid in my opinion. You know, I think we provide a great service, but when it comes on the, to the listing side, it's, it's silly to give that guy 3% a- and dip into what you should clear on your house.
Right. Money that you need to turn around and buy your next house. But you know what? If the seller on the other end wants to give me 3%, they're not my client, and I'll take it all day long. Right. That's fair. So someday, the real estate transaction, the way that real estate agents are paid, it'll be completely different.
Standardized more, you think? It, it'll be much more standardized. It, it, it'll be hourly, or it'll be just you, you'll get this for doing this, and you'll get that for doing this. The, the whole idea that the seller pays the buyer's agent right now is odd, isn't it? How, why does the seller pay the buyer's agent? A lot, a lot of times buyers do come to me and they ask me, "How, how is it that I get paid?" Right. "Do they pay me?" And it's... They're, they're always surprised when I tell them that the amount of money I get paid is built into the price of the home.
Right. They will be paying me over the course of that 30-year mortgage. Right. But they don't have to pay me. The seller pays me.
That's not in the closing costs, right. You, you asked about what neighborhoods should people be looking at. Yeah. Well, I think that as the core of Columbus becomes more and more desirable, and I, I feel like it is becoming more and more desirable.
Right. I mean, and it's been happening for years and years and years. People need to start looking outside that Worthington to Marion Village, which is what I essentially mean by when I say High Street corridor- Yeah ... for their, for their first home because they, they think that they want Grandview or they think that they want Clintonville, only to find that they're, they're really kinda priced out of it.
Right. So- At least in terms of the amount of home they want. Right, in terms of the amount of home that they want, and, uh-
'Cause you can probably afford a centrally located but really small place, small acreage, small house, but are you gonna be able to grow there, and how ll- how long could you possibly live there? Right, especially if you're coming from an apartment where you already feel a little bit crowded. Right. And, and you don't want on-street parking because, by God, you feel like you're buying a house.
Right. You should get something else. You know, Columbus is small when it comes right down to it. Okay. And there are no secret neighborhoods anymore, especially f- first-time home buyers, but even people who have moved to Columbus and they've been here a couple of years, they have a small version of Columbus.
Right. It's where they have lived, where they have played, and not much more. Right. The r- the route that they take to go to work and, and maybe what's off of that. People are gonna start looking on the other side of 71 from Clintonville.
Hopefully. Because they're gonna realize that they can get more house for the money. Once more of these neighborhoods start having- More recognizable names. Right. Because once a neighborhood has a name, things start to take off.
Well, you can reference it, right. Right. But the, the, the whole, uh, Carl Road, Maze Road area, there, there are homes over there, and they have big lots for the most part. And- Yeah ... and, and you're, you're Clintonville adjacent.
Yeah. So you can still do the same sorta things you might do in Clintonville, but you're, you're in a more affordable place. There's a lot of streets in Columbus that I like because when you drive down that street, it feels like you're in a real city. Mm-hmm. And by real city, I guess I mean older, more industrial, uh, more character. And these are all the same streets that people want to avoid. These are the Cleveland Avenues, the Parsons Avenue, the West Broad Street, Livingston Avenue, places where you feel, gosh, this is great. There's all these storefronts. There's people out. There's people about.
Right. A- and it gives you a real city vibe. Well, it's part of the reason why you live in Olde Town. Right. Along these neighborhood, along these streets, the neighborhoods will eventually be coming back, and it's going to start with closest to downtown with a better housing stock in places like south of Children's Hospital-
Mm-hmm ... east of Parsons. I mean, German Village, Marion Village, there's, there's only so many homes there. Right. Uh, and, and I, I, this year especially, I've seen homes in that area really start to take off, homes that you never would've thought would be selling for the amount of money they're selling for selling. Uh, this has been a big year for flips.
Okay. Uh, there's been a lot of... There's been a- poor first-time homebuyers, right? They have to compete with each other, and now they have to compete with people who have the money to come in and offer cash- Right ... for a home, uh-
Get it at a lower buying price, do the minimal amount of work they can, and put it back on the market. And there, there is a lot of minimal amount of work. But it, it, you walk in, and it feels and smells new. There, there's a lot of people making a lot of money. Yeah. And unfortunately, sometimes it does come at the cost of those first-time homebuyers buying that home and putting much more TLC into it. It's hard to find that, that secret place, and it's hard to think outside of the places where you really always saw yourself living. Uh, sometimes you just have to be okay with being on the fringe.
Right. Because those houses are gonna appreciate like the other houses. You'll just always be on the, the sort of edge of that community. Until you're not anymore, until it sort of, you end up in the heart of it at some point. At some point, right.
Well, and you gotta think, too, about how long you consider staying. Like you said earlier, you're certainly not gonna move into a home and leave within a year and make any money. You're probably going to lose money on that house. But if you imagine that you're able to stay there for five years, then you can think about sort of your, quote-unquote, "next home." Right. Right, yeah. I, I, I think you have to stay somewhere three to five years to, to realistically recoup the amount of money it takes to sell the house and, and maybe get a little something for a down payment for your next house. Talk with your agent about alternative neighborhoods. If you've got $225,000 you can spend comfortably, you, you, you, you're looking in Clintonville. You, it's not going as far as you want it to go. Maybe your realtor can suggest Berwick. Mm-hmm. You know, it's more house for the money. It, it's a great neighborhood. You get a much bigger lot. You might still need to do a little bit of work to, to make it your own, but you, you're gonna be happy there, and they have a, a solid Columbus alternative elementary school there that, that the neighborhood's kind of always been built around.
Right. You're Bexley adjacent, so there's things on Main Street that you can't walk to, but they're right there. Right. Including a new two-story Giant Eagle.
It's fancy. Joe, thank you so much for your time today. Really appreciate it. Absolutely, Tim. Thank you. Thank you for listening to the Confluence Cast, presented by Columbus Underground. Again, you can get more information on what we discussed today in the show notes for this episode at theconfluencecast.com. Please rate, subscribe, share this episode of the Confluence Cast with your friends, family, contacts, enemies, your favorite property owner. If you're interested in sponsoring the Confluence Cast, get in touch with us. We can be reached by email at info@theconfluencecast.com. Our theme music was composed by Benji Robinson. I'm your host, Tim Fulton. Have a good week.
Transcript14,563 words
Tim Fulton Ladies and gentlemen, welcome to the Confluence Cast presented by Columbus Underground. We are a weekly Columbus centric podcast focused on the civics, lifestyle, entertainment, and people of our city. I'm your host, Tim Fulton. This week we are talking about real estate. First up, a conversation with Mark Conti from the Downtown Special Improvement District to talk about the real estate landscape in downtown, how it's changed, how it's growing, and why we have some catching up to do. And then an in-depth conversation with local realtor Joe Peffer on the ins and outs of buying a new home, working with your realtor, and why it's important to wash your windows. You can get more information on what we discuss in today's episode in the show notes at theconfluencecast.com. Big thank you to our sponsors this week, Delicious Real Estate and Telhio Credit Union. Enjoy the interviews. The Confluence Cast is sponsored by Delicious Real Estate, a locally owned Columbus real estate brokerage servicing all of central Ohio, but primarily downtown Columbus neighborhoods and first ring suburbs. You can find out more about why Delicious Real Estate caps their seller side commissions and will never represent both buyer and seller in the same transaction at deliciousrealestate.com. Sitting down here with Mark Conti, deputy director of research, planning, and facilities at Capital Crossroads Special Improvement Districts, which encompasses, Mark, both the-
Mark Conti Uh, Capital Crossroads SID and Discovery SID.
Tim Fulton Great. And you've been here since 2007. Originally from Cleveland, came to Columbus to attend The Ohio State University back in 1988.
Mark Conti Yes.
Tim Fulton We're here talking today about downtown real estate in general. What is the general state of downtown real estate? We want, we wanna focus a lot more on residential today. We were talking before, in terms of apartments and residential, things sort of bottomed out in 2000.
Mark Conti Yeah, that's correct. Back in, uh, 1950, that was the peak for the downtown population. It sat at around 30,000, and then it just slowly declined. Uh, we had the flight to the suburbs. We had the construction of new highways, which just bulldozed massive amounts of housing. Uh, on top of that in the 1950s we had urban renewal where big swaths of downtown, especially into Discovery District, were bulldozed. Uh, so we lost a lot of housing over the years. So d- when it came down to the 2000 census, we were down to just about 3,500 residents.
Tim Fulton Okay. And not, I, I don't wanna get too into that, but sort of-
Mark Conti Okay
Tim Fulton ... how did the, the ... It's something I think about a lot when I happen to be on the freeway. How did this happen? Specifically, I used to live in the Milo Grogan neighborhood, which is, I think, one of the most bisected neighborhoods in the city. You know, 71 did that. Was this just all eminent domain and sort of, you know, the planners/the state/the city/the county all sorta came in and agreed and then went to homeowners/building owners and said, "Hey, we need this now"?
Mark Conti Yeah, basically.
Tim Fulton Okay.
Mark Conti And it, and it happened all over the country, uh, you know, starting with the National Highway Act, uh, under the Eisenhower administration.
Tim Fulton Okay.
Mark Conti And, and, and everybody, the, you know, government at all levels was much more aggressive at that time. So it was eminent domain. They were just taking property. Generally speaking, they weren't providing enough compensation for the property they were taking. They weren't providing-
Tim Fulton So fair ... I mean, I, I am always, I was always told as a student that fair market value was happening. That was not happening.
Mark Conti It was not happening. And, uh, and, and they were als- there were also lots of promises about relocating people, uh, to, uh, similar types of housing. That did not happen. Uh, uh, s- promises just were not kept. There were stories of people who once they found out the highway was coming through their neighborhood, they stuck their head in the oven and killed themselves.
Tim Fulton Is that true?
Mark Conti Yes.
Tim Fulton Okay. Do you think that downtown was sort of kept in mind when that ... Because that, if you look back, that's the most impactful planning wise that's happened to downtown Columbus in the last 100 years.
Mark Conti Yeah.
Tim Fulton Which is why I'm focusing it on it, on it a little bit more. Do you think they did it right?
Mark Conti No.
Tim Fulton Okay. What, what did they do wrong?
Mark Conti There was, there was this idea, especially with urban renewal, there was this idea that once they bulldozed what they considered to be slums, uh, that they would, they would get developers to, to then build new buildings and they would get all the kinds of new people living there, new shops, uh, new offices, and it just never came to fruition.
Tim Fulton Okay.
Mark Conti And, uh, uh, uh, a counter example is German Village. German Village was also slated for urban renewal, but it was one of the last areas that the city was gonna get to for demolition, and by the time the city got there, the neighborhood had organized to save all the buildings. They formed the German Village Society, got the historic district established, uh, and-
Tim Fulton And so I'm sorry. You're, when you're talking about renewal, you're talk- this is post freeway.
Mark Conti Yeah.
Tim Fulton Right?
Mark Conti And, and really, well, in combination with the freeways.
Tim Fulton Okay. Can you give an example of a neighborhood that was slated for renewal and, and sort of what happened to it?
Mark Conti Yeah. A big example is the Market Mohawk area, the, or the Market Mohawk Urban Renewal District. So generally everything south of Town Street I would say w- Well, east of Fourth Street to the highway, that whole area was an urban renewal district-
Tim Fulton So-
Mark Conti ... generally speaking
Tim Fulton ... sometimes referred to as the Market Exchange District.
Mark Conti Yes.
Tim Fulton Okay.
Mark Conti And so you, you look at all those four or five story office buildings ar- along Town Street, all of that came because of urban renewal. Uh, they-
Tim Fulton And also before the American with Disabilities Act.
Mark Conti Yes.
Tim Fulton And so those buildings are great.
Mark Conti The Central Market was located where, uh, in this area.
Tim Fulton Okay.
Mark Conti And so we had a Central Market downtown, so that was demolished, and in its place they were gonna build a, a modern grocery store. And so that grocery store, uh, ended up being an A&P. Uh, it, the building still stands. It's where Stanton's Sheet Music is currently.
Tim Fulton Okay.
Mark Conti And, uh, but if you look at the design of that building, so where the Central Market was very urban, the design of the A&P store was very suburban. The big parking lot in the front, the back of the store actually faces Fourth Street.
Tim Fulton Right.
Mark Conti So that's where the loading is. The front door doesn't face Fourth Street, which is the main street.
Tim Fulton Right. Fast-forward a little bit. After 2000, we sort of, you know, we hit the, uh, the low point, at least in terms of residency, right?
Mark Conti Yes.
Tim Fulton Okay. Where are we now?
Mark Conti We're, we're on an upswing. We've been on a 15-year upswing, really beginning with Mira Nova. So in a lot of ways, they, that's really what started a lot of this. And, and shortly after that, uh, Capital South, uh, which, which main, their main project had been, uh, the construction of Columbus City Center.
Tim Fulton Mm-hmm.
Mark Conti They started focusing more on downtown housing, and this was also at, at the time Mayor Coleman got elected and wanted it, wanted to see more things happening within downtown.
Tim Fulton What is Capital South working on now, then?
Mark Conti Capital South now, uh, well, they've merged with Columbus Downtown Development Corporation. So, uh, Capital South's original mission was to redevelop the area just south of the Capitol, hence the name.
Tim Fulton Capital South.
Mark Conti They did, they did c- uh, Columbus City Center, and then when, when that had to get, uh, renewed, if you will-
Tim Fulton Uh-huh
Mark Conti ... uh, it became Columbus Commons, and they sold off portions of the, the land for new development, which was always part of the plan-
Tim Fulton Right
Mark Conti ... for the Commons. So really Capital South is focused on managing the Commons and the Commons Garage. Uh, and then the, the, the, their sister group is Columbus Downtown Development Corporation. I would say right now that they've completed the riverfront is, is really focused on, uh, development of the Scioto Peninsula and the Veterans, the National Veterans Memorial.
Tim Fulton Okay. And we've talked on this podcast before about sort of the structure of SIDs. So you can go back to the Carless in Columbus episode if you wanna know how Mark Conte's bread gets buttered. What is the structure of Downtown South? They're not a SID.
Mark Conti They are not a SID. They're, they're a p- uh, both Capital South and CDDC are private nonprofit redevelopment corporations.
Tim Fulton Okay.
Mark Conti Uh, they get their funding from different sources. Uh, Capital South, of course, is funded a lot through revenue from the Commons Garage.
Tim Fulton Okay. I guess the question is whose interest do they have in mind? City Center was demolished, and we got this beautiful park. While it was the plan the entire time, the park is slowly piecemeal being sold off and developed, which is fine. There will still be a, a park.
Mark Conti A very large park at that.
Tim Fulton A, a very large park still, but it will not be what it originally was. And what's p- sort of people were originally able to drive by and be like, "This is so nice," and then it becomes surrounded in condos and apartment buildings. Capital South did that. Um, again, it was al- always sort of the plan, so you... Or excuse me, I don't wanna say sort of. It was always the plan, so I don't wanna fault them for that, but whose interest do they have in mind? Is it simply the beautification of Columbus? Is it commercial development? What sort of boxes are they trying to tick off?
Mark Conti That's a good question. I think for the best answer, of course, you need to talk to them.
Tim Fulton Okay.
Mark Conti Just in a general sense, you, they, they are focused on very large projects, so things like the riverfront, things like the Commons, and, and they are doing these projects as catalysts for private development.
Tim Fulton Interesting. What was our bottom out at in, in 2000?
Mark Conti 3,500.
Tim Fulton 3,500, 3,500 people.
Mark Conti Yeah.
Tim Fulton Some have more friends on Facebook than the number of people that were living downtown.
Mark Conti And that's across 1,500 acres.
Tim Fulton Okay.
Mark Conti Which is a very large space.
Tim Fulton Let's generally define downtown.
Mark Conti Generally, for, for most purposes, downtown is considered the area bounded by three highways, so 670, 70, and 71, and then it goes across the river to the railroad tracks over by Spaghetti Warehouse and COSI.
Tim Fulton Okay. So how many people do we have now?
Mark Conti We have about 7,700 right now living within that same area. So we've more than doubled the population. Uh, we estimate, the CID estimates that by 2018 we'll get to 10,000 within that boundary.
Tim Fulton In terms of what you've seen in development in other, you know, similar cities, are we doing good?
Mark Conti We're doing good, but we're certainly lagging. If you-
Tim Fulton Okay
Mark Conti ... if you... There was a Brookings report, I, I wish I could remember all the statistics, but report from Brookings on downtown housing across the country f- from, like, 10 years ago, and we were lagging then. Sort of the pace, I would say the pace of development you're seeing now is what we were hoping to see in the couple of years prior to the recession. Recession, of course, got in the way.
Tim Fulton Right.
Mark Conti Things have now rebounded.
Tim Fulton Well, 'cause that, I mean, from where we sit right now, that was right in the middle of the timeframe we're talking about.
Mark Conti Yes.
Tim Fulton Okay.
Mark Conti And I, and I think we were headed there, 'cause the, the, during the recession, the interest in living downtown has never waned. It was just people's ability to move there or the developer's ability to get credit to build a building.
Tim Fulton Right. What's the, the mix of rental and ownership?
Mark Conti Generally, it's still mostly rental, probably, I'm gonna get the figure wrong, but probably close to 70% rental.
Tim Fulton Okay. I imagine you've done a, a little bit of research on the price point. It's higher than other neighborhoods in Columbus.
Mark Conti Yes.
Tim Fulton Why do you believe that is? Especially given the views are awesome, the amenities are a little bit lacking. There is now a grocery store downtown. What do you ascribe that higher rental rate to?
Mark Conti So the, the downtown market is, is kinda funny in that when, when this all started, uh, 15 years ago, uh, Capital South and the city had commissioned a downtown housing study. Initially, the thinking was that we would see a lot of apartments get built first after the city put their incentives package together. We would see a lot of apartments, and then over time we would see, start to see more for sale product.
Tim Fulton And these incentives are for the developer? To build it. So they're getting, like, a property tax abatement.
Mark Conti Correct.
Tim Fulton Okay.
Mark Conti Yeah. Yeah, the, the centerpiece of the incentives was and is a property tax abatement. If you bought a condo, that property tax abatement followed you if you were the buyer, but for the renter, it stays with the developer.
Tim Fulton Right. And I'm sorry, everybody always talks about incentives and sort of the centerpiece being tax abatements. What other incentives could there... They're not handing out back rubs.
Mark Conti Right. Right. There were... A- and I'm not sure how much of the city is still doing, but there were, like, water and sewer tap fee credits.
Tim Fulton Awesome. Okay. Yeah.
Mark Conti This, this kinda gets into the weeds, but if you look at a typical block in downtown, there probably could've been 10 or 20 buildings on the block, each one with its own tap into the pipe.
Tim Fulton Right.
Mark Conti When you go to build a new building, you want one tap, but much larger than what it would've been for, let's say, a single family home. And so the city-
Tim Fulton And so you pay the city to do that for you.
Mark Conti Right.
Tim Fulton Right.
Mark Conti And then the city would turn around and then give you a credit for all those little taps that were getting shut off, so you weren't paying, uh, you were just paying for the net increase.
Tim Fulton Gotcha.
Mark Conti And, and as part of that housing study, the, the whole reason for the incentives in the first place is that the study found that the cost to build a unit within downtown proper was much more expensive for how much you could get back either leasing it or selling it.
Tim Fulton Okay.
Mark Conti And so there was a market failure. The... And this is, this is where government should step in. When there's a market failure, they stepped in with an incentive to do a correction. Now we're starting to see a, a housing market within downtown.
Tim Fulton Right, which is viable, but again, the higher price is because it is simply more expensive to build here.
Mark Conti Yeah.
Tim Fulton And that's by virtue of the price of the property, and also frankly, it's not that easy to build in downtown. You can't have a sprawling campus of trailers set up, you know, across the street because there's already a building there.
Mark Conti Right.
Tim Fulton Right.
Mark Conti A good example is, is, are, are the apartment buildings Lifestyle Communities is building. They, they have three different sites. The Troutman site is under construction now. That ran into problems because a- as they excavated, they ran into issues with the adjoining foundation for the building next door.
Tim Fulton Ooh.
Mark Conti Uh, so they've... They're, they're now moving full steam ahead on that building. They're, they're using one of their development sites as construction staging for the other two.
Tim Fulton Right.
Mark Conti Uh, not everyone has the ability to do that. And then, then when they don't, you end up seeing, you know, lane closures on streets.
Tim Fulton Right.
Mark Conti And, and sometimes on major streets. But that also represents the other issues that d- the downtown developers face. If they have to demolish a building, chances are there's environmental remediation-
Tim Fulton Mm-hmm
Mark Conti ... usually with asbestos. Even if it's a vacant lot, a lot of times when they demolish buildings, they would demolish the building and just collapse everything into the basement-
Tim Fulton And bury it
Mark Conti ... and go for it.
Tim Fulton Right.
Mark Conti So now when you go to rebuild, you gotta excavate probably, and probably do environmental remediation there as well.
Tim Fulton Right. Absolutely.
Mark Conti But going back to what you talked about with other cities, uh-
Tim Fulton Yeah
Mark Conti ... for example, Cleveland has about 14,000 residents downtown right now.
Tim Fulton Okay.
Mark Conti Cincinnati has about 16,000, and I think the k- one of the key differences in both cases is that they-
Tim Fulton Well, and I'll say that that doesn't seem like a whole lot more.
Mark Conti They also bottomed o- out like we did.
Tim Fulton Okay.
Mark Conti Uh, they... And they, they've had all the same economic consequences, and in a lot of cases much worse.
Tim Fulton Okay.
Mark Conti And so for a region like Central Ohio that's just continually grown decade after decade, as opposed to Cleveland, which has had kind of anemic growth-
Tim Fulton Right
Mark Conti ... the, it's the fact that they have double the downtown population we do, you say, "Okay, what's happening here?"
Tim Fulton So now I ask you, what's happening there?
Mark Conti The big thing is, goes back to demolition. We demolished so much of our building stock within downtown Columbus, and Cleveland and Cincinnati never went down that path.
Tim Fulton Okay. And when did we do... That was before 2000, right?
Mark Conti Yeah.
Tim Fulton Okay.
Mark Conti So really from the '50s up until the late '90s when we got a new downtown zoning code.
Tim Fulton Okay.
Mark Conti The way to fill up office buildings here was to provide parking, and the way to provide parking was to demolish buildings and do surface lots.
Tim Fulton Well, and we'll get to it in a little bit, but that is still the way things are. So they have the housing stock already. They, they kept it basically, and so it was much easier, I imagine, to simply convert buildings that may not have been used for housing and convert them into beautiful downtown lofts.
Mark Conti Yeah.
Tim Fulton Is that the simple answer?
Mark Conti Yeah, that's the simplest answer.
Tim Fulton Really?
Mark Conti Yeah. You could look at the number of historic tax credit projects, for example, that happen in each of these cities, and we have, up until recently, we've had very few within downtown Columbus, and part of the problem is they're j- we just don't have the historic buildings downtown.
Tim Fulton Who do we get to blame for this? I mean, like, how did this happen?
Mark Conti Uh-
Tim Fulton I wanna note here that it's a foregone conclusion that we should have housing stock and we should have a vibrant downtown. Like-
Mark Conti And that we should blame somebody.
Tim Fulton Well, I, I just don't, I don't want somebody to be like, "Well, this is a one-sided argument." I, I, I'm making it a foregone conclusion that we want a vibrant downtown.
Mark Conti Yes.
Tim Fulton So...
Mark Conti Well, I c- I can talk, I can tell you one of the things that's changed it.
Tim Fulton Okay.
Mark Conti And in the late '90s, people were getting fed up with the demolition. There was a great mansion at the corner of Town and Grant Avenue across the street from Grant Medical Center that was targeted for demolition for a surface lot. It happened, but that, after that happened, uh, the city did a moratorium on demolition in downtown so that they would have time to come up with a new zoning code.
Tim Fulton Right.
Mark Conti That got created. That led to the formation of the Downtown Commission. And so now generally speaking, demolition is illegal downtown. Uh, illegal is probably too strong of a word, but you're basically not allowed to do it until you get approval from the Downtown Commission, and the Downtown Commission is really looking for are you gonna replace the building you're demolishing with something better?
Tim Fulton And to be clear to our listeners, the Downtown Commission is a area commission, all appointed, and they basically make recommendations to council about what can happen.
Mark Conti Well, they're regulatory, so what-
Tim Fulton Oh, okay
Mark Conti ... it's not even a recommendation.
Tim Fulton So it's not like... 'Cause you sit on the Victorian Village Commission.
Mark Conti We're, we're also regulatory.
Tim Fulton What about Italian Village?
Mark Conti They're regulatory too.
Tim Fulton Who doesn't have any power? We actually talked about this in an episode that aired last week-
Mark Conti Okay
Tim Fulton ... about what power is associated with commissions, area commissions.
Mark Conti Generally speaking, and I, I, I don't know this exactly, but generally speaking, area commissions will recommend zoning changes To either council or the Board of Zoning Adjustment, but either one of those bodies can overrule the commission.
Tim Fulton Right.
Mark Conti In our-- In, in the case of the Downtown Commission, the zoning and the, the approval for the building is all wrapped up within the commission-
Tim Fulton Okay
Mark Conti ... itself. When you look at the historic commissions like German Village, Italian Village, and Victorian Village, the main architectural review is regulatory, uh, and rests with the commission. The zoning still rests with either BZA or council, so that still is a recommendation.
Tim Fulton Okay, so it could still be overruled basically.
Mark Conti Yeah.
Tim Fulton So just to go back a little bit in terms of the demolition that was happening in Columbus, it sounds like what you're saying, the code allowed it, developers wanted to do it, and so they did.
Mark Conti Yeah.
Tim Fulton And thankfully, I guess, the city stepped in and put a moratorium on demolition and, and sort of fixed it.
Mark Conti Yeah.
Tim Fulton So it wasn't some terrible politician or frankly even one terrible developer come in and said, "Clear all these buildings for parking lots." It just sort of happened because we didn't have a building code that was up to date enough to look towards long-term goals and solutions.
Mark Conti Right.
Tim Fulton Okay.
Mark Conti Right. And, and the other good thing about that zoning, new zoning code is that it got rid of a parking requirement for downtown. So when a developer is proposing parking as part of their building, they're only providing as much space as they think as the developer they need to make it work on the market.
Tim Fulton Okay. So it doesn't require that anymore?
Mark Conti Right. So if you look at, um-
Tim Fulton So, like, if somebody starts a bar in Italian Village, I mean, you have to have a certain number of, like, parking spaces. Are you saying within downtown that's not necessarily true?
Mark Conti Correct.
Tim Fulton Okay.
Mark Conti Good example is the new apartment project proposed by Crawford Hoying on the site of the Swan, uh, current Swan Cleaners. I can't remember how, exactly how many units it is, but it's a lot of units, but they're only proposing 22 on-site parking spaces.
Tim Fulton Okay.
Mark Conti So they're proposing way more units than they have parking for, but it sits across the alley from the River South Garage, which at nighttime is c- almost completely empty.
Tim Fulton Okay.
Mark Conti So they, they are going to rely, I think, on their, their residents to find their own parking solution. A lot of them will just choose not-
Tim Fulton Or a different transit solution
Mark Conti ... or d- different transit solution. So yeah, a lot of them will choose-
Tim Fulton Which is not the subject of this episode.
Mark Conti But it's all transportation.
Tim Fulton Is it?
Mark Conti Yes. I'm gonna really go back in time to the-
Tim Fulton Do it
Mark Conti ... the 1992 Clinton election. If you go to the w- the War Room documentary, the, the mantra was, "It's the economy, stupid."
Tim Fulton Right.
Mark Conti When it comes to cities and development, it's transportation, stupid.
Tim Fulton Okay.
Mark Conti Uh, you look at anything that's happening with development in Central Ohio, regardless of the neighborhood, it's all about transportation. You look at how Easton was built, how Polaris was built. Polaris, the, the exit to Polaris didn't exist 30 years ago.
Tim Fulton Right.
Mark Conti That happened because developers asked for it and paid for a portion, but not all of it.
Tim Fulton Right.
Mark Conti Same, same with the, the interchange at Easton. There was an interchange at, at Morse Road, but there was no interchange for a nonexistent Easton Way.
Tim Fulton Right.
Mark Conti That happened 'cause a developer asked for it.
Tim Fulton I was fortunate enough to sit across from you in a presentation a couple of weeks ago, and one thing that stuck with me is we bring 87 cars downtown per 100 people every day.
Mark Conti Yes.
Tim Fulton That's crazy.
Mark Conti Yes.
Tim Fulton The only city that does more than us is Indianapolis. There is obviously no one solution.
Mark Conti Right.
Tim Fulton We've heard from a couple other people about what they believe the solution to be or a combination of solutions. Here is your soapbox. How would you fix it? What has to happen for it to be fixed?
Mark Conti There's a lot of things. Well, one, one thing is people need to just get over themselves, first and foremost. There's a lot of people who come to work the same time every day, leave the same time every day. They leave their car warehoused all day long. They don't need it, and they, they have access to good transit, and they could be using it. That's not everybody, but there's a lot of people. And the, and the money they would save by taking the bus would more than offset the cost of parking the car on an occasional basis throughout the year. And, and now that we have Car2Go and Lyft and Uber, you have all these escape valves that you didn't have just a few years ago. So there, there's that as one part of the solution. The other part is we have a lot of employers downtown that are providing free or subsidized parking and no transit benefit. And so if you're an employee, you're gonna take the free transit benefit. I don't fault you for that.
Tim Fulton Right.
Mark Conti Uh, and then there's the issue of just having a more robust transit system. COTA's putting a much better product out on the road than they have in probably the last 15 years. The service has improved every year. There's more service. The next step, provided the levy passes this fall, the next step is for them to start planning for high-capacity corridors, so more BRT routes, uh, and light rail routes on top of that.
Tim Fulton And so that is issue number 60. Back to downtown residential living.
Mark Conti Well, and then you were talking about what, what does that mean for the other types of real estate within downtown?
Tim Fulton Right. Absolutely.
Mark Conti And, and this where, a- again, where it comes back to transportation. We have a severe parking crunch downtown. The good news for the parking lot operators is they're making a lot of money off those spaces. The bad news is that just makes that property more valuable. So if you're a property owner of a parking lot, you are probably making so much money you don't wanna sell that lot 'cause it's a cash cow for you right now. Why would you wanna sell that to a developer to put up housing? And, and I get that. I mean, everyone's doing every, all this stuff in their self-interest, which is fine.
Tim Fulton Right. I mean-
Mark Conti That's the private market.
Tim Fulton But I think that hearkens back to what you said earlier. When there is a failure of the market for the common good, for the common interest, maybe it's time for an intervention. Maybe not the city, maybe not the county, but some sort of intervention to switch it. And again, it speaks to why rental and property costs in, uh, downtown are so high, and yet the vacancy rate for offices is also high.
Mark Conti Yeah.
Tim Fulton That is something that when the market goes up, bond prices go down, and so, you know, those... The... We are not at an equilibrium, uh, in downtown.
Mark Conti Right.
Tim Fulton Is it fair to say that those downtown office vacancies are a result of that transportation problem as well?
Mark Conti Yes, definitely. Looking at downtown specifically, so we have, we have some-Some buildings, especially on Capital Square, where there's a 40% availability, where, uh, the- these are places where the parking crunch is most severe. And, and a lot of this goes back to, a- again, how downtown evolved over time. When we were starting to finally see skyscrapers in downtown in the late '60s, the Statehouse underground garage had just, had just opened.
Tim Fulton Right.
Mark Conti And so that underground garage, this was before the, was, before it was servicing the Riffe Center, 'cause the Riffe Center opened in the late '80s, before even the Rhodes Tower. That didn't open until the mid-'70s. And so we had this enormous stock of parking underneath the Statehouse, and it was these private office buildings that were taking advantage of that. On top of that, in the 1960s, we had vastly many more people taking transit.
Tim Fulton Uh-huh.
Mark Conti 'Cause people often wonder, the Chase Tower, the Borden Building, why didn't they build parking with it? Well, at the time, there was plenty of parking to be had-
Tim Fulton Right
Mark Conti ... for the amount of people that needed to park.
Tim Fulton And not as many people per capita were using it.
Mark Conti Yeah.
Tim Fulton While it is a foregone conclusion that we want more people living downtown, more people are coming downtown, we see lots of building happening, lots of development happening, and most of that development, is that true, is residential or at least mixed use?
Mark Conti Yes. Yeah.
Tim Fulton Okay. Where are we going?
Mark Conti That's a good question. I think the biggest wild card is when we might see the next recession. That is, more than anything, I think is gonna just disrupt things. I, I don't see one for several years, uh, unless the, the Fed, and this is my own personal opinion, if the Fed ra- raises inst- interest rates way too quickly, that will cause a big slowdown. Uh, but provided they don't do that, I, I think there's enough slack in the economy, uh, that things will keep chugging along here for several years. We're definitely gonna see a lot more housing. I think we're gonna see a lot more of these mixed use projects that have been proposed that are incorporating not just ground floor retail and residential, but either some office space or hotel space. We'll see more mixing of apartment and condos within the same structures. Uh, hopefully we'll see a couple of more affordable housing projects get built. Uh, downtown has had several of those get built over the last 15 years, so it hasn't just been high-end condos. Uh, and it's important that we still have that diversity of, of income of people living in downtown.
Tim Fulton Absolutely. While it's not the focus of what we're talking about, what's gonna solve the office vacancy rate downtown?
Mark Conti I think it's, it's gonna be a combination of some type of transit solution. The Capital Crossroads CID is trying to work on one that would, uh, get transit passes into the hands of all the workers within the CID, and I think more than double the ridership. Uh, and in addition to that, COTA's, uh, transit system redesign, which will roll out in about a year, that will alone-
Tim Fulton If Issue 60 passes
Mark Conti ... if Issue 60 passes, that alone will boost transit ridership. I also think we'll, we're gonna see some office space come off the market. I think we'll see, uh, some office space con- get converted into housing.
Tim Fulton Okay.
Mark Conti So lowering the divisor will help the office vacancy rate, certainly.
Tim Fulton Right.
Mark Conti Uh, and we continue to see a big demand from employers wanting to be downtown, and so I think the shift in thinking will percolate up more to the CEO level, and they'll realize that in order to get and retain the workers they want, they're gonna need to be downtown. And then finally, the, the fact that we do have executive level housing downtown and near downtown, in Short North and German Village, is, uh, very important. So much of where a company locates is really dependent on where the executives live, and so if the executives live downtown or close to downtown, they're gonna want their company to be there as well, and they want a short commute.
Tim Fulton Right. Don't we all? Great. Mark, thank you so much for your time today.
Mark Conti Thanks a lot.
Tim Fulton The Confluence Cast is sponsored by Telhio Credit Union. When you bank with Telhio, your money stays local, building homes and businesses right here in our community. Learn to believe in banking again and take the Telhio Challenge. When you do, Telhio will give $100 and match that to a local charity. Start at telhio.com. Telhio is open to all in central Ohio, federally insured by the NCUA. Sitting down with realtor Joe Peffer. Joe, how are you?
Joe Peffer I'm very good, thanks. How are you?
Tim Fulton Good. We're gonna talk today about the Columbus housing market, what it's like to buy a home in general. How long have you been a realtor?
Joe Peffer I've been a realtor since 2003.
Tim Fulton Okay.
Joe Peffer Always in Columbus.
Tim Fulton What were you doing before that?
Joe Peffer Before that I was doing marketing, mostly for law firms. I had a, uh, bachelor's degree in communication.
Tim Fulton Okay.
Joe Peffer And I was getting my master's degree in marketing communication.
Tim Fulton Okay. What made you choose to get into the field?
Joe Peffer Well, immediately before that, I had applied to be the marketing director at, like, a million not-for-profits around town. I was always a bridesmaid. I think people didn't like the idea that I had a director title and a master's degree.
Tim Fulton Okay.
Joe Peffer And they thought that I would be too demanding or-
Tim Fulton Too heavy-handed
Joe Peffer ... too much of a prima donna or too overqualified, uh, or that I wouldn't really want the job.
Tim Fulton Okay.
Joe Peffer And that I'd just use it to move on to something else. What, uh, ended up happening was I started a geographic information systems-
Tim Fulton Okay
Joe Peffer ... business to business company with a friend of mine. I left my job, and I wasn't so much the GIS portion of it as the everything else.
Tim Fulton Right.
Joe Peffer And no sooner did we get our first client than we realized that he couldn't leave his job 'cause his family needed his benefits.
Tim Fulton Okay.
Joe Peffer So-
Tim Fulton So you went out with the entrepreneurial spirit and realized that your business partner couldn't necessarily hold up that end?
Joe Peffer Right. So I decided that I had to do something
Tim Fulton Right
Joe Peffer I was lucky in that my wife, who is a Columbus City School school nurse, so it's great. She gets summers off. She has that schedule. We have good benefits, and that allowed me to go ahead and do what I did. It was... Which was take all the real estate classes-
Tim Fulton Mm-hmm
Joe Peffer ... at Columbus State that summer, and it, it was, like, May when it all went down. And so-
Tim Fulton Right
Joe Peffer ... I took them all during the summer. Uh, in the fall, took the test, became a realtor. My first five years were with Coldwell Banker King Thompson. I worked out of the Bexley office.
Tim Fulton Okay. And how'd you like that?
Joe Peffer You know, I liked it. Uh, the reason I went there, the first time I walked in and sat down to interview, 'cause, I mean, there's no, like, recruiting or anything. You take your test, you get your license, and you decide where it is you wanna go, and-
Tim Fulton Okay
Joe Peffer ... you go around, you interview people. And I talked to the manager there. He sat down with me for over three hours.
Tim Fulton Okay.
Joe Peffer And he didn't know me when I walked in the door, really. I had all these great ideas. It was 2003. I was gonna do all these things on the internet that-
Tim Fulton Well, and with a back-
Joe Peffer ... no one was doing.
Tim Fulton Right, and with a background in marketing, the... That's how you sorta look at the field.
Joe Peffer Right.
Tim Fulton Is it similar to other professional degrees, I'm thinking of law school in particular, where you're sort of learning, you're learning the particulars, but you're not necessarily learning how to do the job, or-
Joe Peffer Oh, so very much.
Tim Fulton Okay.
Joe Peffer And this is what I always tell people who are thinking about being a realtor.
Tim Fulton Right.
Joe Peffer What you do in those classes has nothing to do w- with what you do in real life.
Tim Fulton Okay.
Joe Peffer But the, the things that you need to know just to have some kind of base knowledge. You know, you're always asked, like, how many square feet are there in a, an acre?
Tim Fulton How many square feet are in an acre?
Joe Peffer You know, it's been a long time since I took those classes.
Tim Fulton It doesn't matter anymore.
Joe Peffer Something like 52,000. I don't know, but-
Tim Fulton Okay
Joe Peffer ... things, things that just don't matter.
Tim Fulton Right. And so after that, you, I assume, moved on to Delicious Real Estate.
Joe Peffer I did. In October 2008, right when the economy was starting to fall apart, I opened Delicious Real Estate. Uh, and my first office was, uh, on South Fourth Street, where 16 Bit is now.
Tim Fulton Okay.
Joe Peffer It was a pretty sleepy corner at the time.
Tim Fulton Yeah. What was the impetus for starting Delicious Real Estate?
Joe Peffer A lot of it came down to wanting to do for my clients the way that I wanted to do for them.
Tim Fulton Okay. And while I certainly don't wanna disparage your former employer, what are the differences in what you're able to do?
Joe Peffer I just have free reign to do whatever I want, essentially. If I wanna give someone a discount, I, I can give them a discount without having to run it by the, the manager of the office or-
Tim Fulton Okay
Joe Peffer ... because the big firms, they're, they're in it for the money.
Tim Fulton Right.
Joe Peffer Uh, a place like Coldwell Banker is owned by a giant real estate company that has shareholders, and they look out for their shareholders.
Tim Fulton Absolutely. As well they should. I mean-
Joe Peffer Sure. Absolutely
Tim Fulton ... that's their role.
Joe Peffer But when it comes down to me helping my clients, it's, there's a bit of a clash there.
Tim Fulton Okay.
Joe Peffer A- and, and also certainly came down to money.
Tim Fulton Okay.
Joe Peffer Uh, you know-
Tim Fulton 'Cause you get a bigger cut of the check
Joe Peffer ... I'm, I'm paying them a, I'm paying, I was paying them a lot of money just to be on a 90/10 split at the time.
Tim Fulton Okay.
Joe Peffer And I could have taken that money every month and opened my own place and paid a lease, which is exactly what I did.
Tim Fulton Gotcha. For people that are considering being realtors, would you recommend that? I mean, obviously, it's probably difficult to take that route starting out, but should it be a goal of people if they're, you know, not happy with the way things are going to start their own firm?
Joe Peffer I say yes. I, I think that you're right. It's not the thing you wanna do when you're starting out.
Tim Fulton Right.
Joe Peffer It, it is very much a learn on the job kinda thing, and when you do go to a big box brokerage, you get excellent training. Uh, a- as a tiny brokerage, that's not something I can offer. I think you should do that. Every real estate agent essentially is their own company.
Tim Fulton Right.
Joe Peffer They all are very entrepreneurial because they m- work for themselves, and it's all up to them to be motivated.
Tim Fulton And they get, I imagine, some sort of ad buy share and help with marketing. But they're the ones that are putting their feet on the pavement and getting the clients in the door.
Joe Peffer Sure.
Tim Fulton We'll get into the, the specifics of the home buying process in a second, but what's the difference for the buyer, well, the buyer or the seller, and do you do both?
Joe Peffer Sure.
Tim Fulton Okay. What's the difference for the buyer or the seller between going to a big box, uh, brokerage and going to a boutique brokerage?
Joe Peffer Well, it's 2016, so not much.
Tim Fulton Okay.
Joe Peffer Uh, at the end of the day, if you use a small boutique brokerage, then your listing is all over the internet, and anyone all over the world can see your listing.
Tim Fulton Is it by virtue of the use of the internet that that's why there isn't a whole lot of difference?
Joe Peffer In large part, yes.
Tim Fulton Okay.
Joe Peffer Because once your listing is in the MLS, it propagates throughout the world, and so many more websites than you would even think to look at.
Tim Fulton Okay. And what is... I get alerts from the MLS, but I actually... What does it stand for?
Joe Peffer Multiple listing system.
Tim Fulton Okay. And so that's something that any realtor worth their salt is subscribed to and is able to sort of show listings and put listings into.
Joe Peffer Right, and only if you are a real estate agent can you do that.
Tim Fulton Okay.
Joe Peffer So back in the day, they used to hold all the power, right? They were big gatekeepers because it was, it, there was no Zillow.
Tim Fulton Right. If you wanted to find a house, you had to go to a big box place because they're the ones controlling the listings.
Joe Peffer Right, and the MLS was everything. But now, so there's so many MLS-like sites out there where there are lots of listings. And to be the most up-to-date, you almost need those immediate MLS listings that you get from your agent. But anybody can be essentially a big box brokerage.
Tim Fulton Right.
Joe Peffer Or, or at least appear to be.
Tim Fulton Okay. Well, and is that because of the sort of speed of the market that's functioning here in Columbus because it's so quick? I know when I've looked at homes in the past, it was literally you find out about a listing, you schedule that very day to go and see it, maybe the next day, maybe that same day, and you kinda have to put an offer in that afternoon.
Joe Peffer Yeah. That, the, the market, uh, especially, uh, in the High Street corridor, has very much been like that, uh, over the last couple of years. Uh, this last spring especially was brutal-
Tim Fulton Yeah
Joe Peffer ... uh, in, in that regard.
Tim Fulton Yeah. So talk about the home buying process. Say someone is at a point in their life where they're like, "Okay, I imagine I'm going to be living with this many people," whether that be children, whether that be a partner, "and we think we need-" Two bedrooms, three bedrooms, and we've got a little bit of money f- or can access a little bit of money for a down payment. How does the home buying process start?
Joe Peffer Well, the first thing I suggest is sitting down with an agent.
Tim Fulton Okay. A realtor.
Joe Peffer An, a realtor who... An agent doesn't necessarily have to be a realtor.
Tim Fulton Okay.
Joe Peffer A realtor means they belong to National, National Association of Realtors.
Tim Fulton Okay.
Joe Peffer It's kind of a trade name. Uh, you can also be a real estate agent and not be a realtor, but almost no one is.
Tim Fulton Okay.
Joe Peffer 'Cause then they wouldn't belong to the NLS.
Tim Fulton Got it.
Joe Peffer So you, you, you sit down with a realtor. You, you tell them what, what you're thinking, and you tell them where you're thinking.
Tim Fulton Right.
Joe Peffer Uh, and you tell them what your price range is, and because they're out there looking at these homes every day, and they have a history of looking at these homes, they can help shape your expectations.
Tim Fulton 'Cause they're gonna know what's reasonable.
Joe Peffer They're gonna know what's reasonable.
Tim Fulton 'Cause if I come to you and say, "I want a three-bedroom house in the Short North for $200,000," you're gonna say, "That's not reasonable" but you may, if that's your budget, absolutely, th- here are other areas of town that are up and coming.
Joe Peffer Right. Uh, and, and then really just explain the process. Most transactions, although every transaction is completely different f- than the next-
Tim Fulton Mm-hmm
Joe Peffer ... they all follow the same sort of pattern, and a lot of it starts with where is the buyer at any particular point in time.
Tim Fulton Okay.
Joe Peffer Where are they financially? Where are they mentally? Uh, like we had talked about, sometimes you have to make an offer very quickly, and if you're just kind of dipping your toe into the market-
Tim Fulton Right
Joe Peffer ... you're, you might not be ready for that.
Tim Fulton Right.
Joe Peffer But that doesn't mean you shouldn't go see the house.
Tim Fulton Right.
Joe Peffer You... 'Cause the more houses you get in with your agent, the more likely you are to have a sense of the market.
Tim Fulton So should a potential buyer be at all concerned about taking up their agent's time in terms of going to see a house, and, you know, they're probably not going to make an offer on it?
Joe Peffer No, and that's a good question. I get that asked a, a lot.
Tim Fulton Okay.
Joe Peffer I think that if the house is something that you would consider buying, and you feel that you're going to be buying a house, and you, you, you feel pretty sure that you're gonna be buying a house-
Tim Fulton Right
Joe Peffer ... in the next so many months or so, by all means, go see it. Don't feel bad about wasting your agent's time because-
Tim Fulton That's their job
Joe Peffer ... his time is your time.
Tim Fulton Right.
Joe Peffer Exactly. And like I said, the more houses you get in, the better. Now, if you can only buy a house up to $300,000, let's say-
Tim Fulton Right
Joe Peffer ... and you're curious about what a $350,000 house looks like, that's kind of something else.
Tim Fulton Okay.
Joe Peffer You go see those open houses.
Tim Fulton Okay.
Joe Peffer And then-
Tim Fulton Then you ta- basically you take your own time and go to those-
Joe Peffer Right
Tim Fulton ... type of things.
Joe Peffer Right, because, because you, you can't buy that house, but is it a good idea for you to understand what that extra $50,000 buys?
Tim Fulton Mm-hmm.
Joe Peffer It, it is a good idea. So, so go ahead and look at those online, and go to those open houses. But take your agent's time to look at as many houses as you feel comfortable looking at. I always tell people, "Don't be afraid to make an offer on the first house that you physically get into," because sometimes it's the right house.
Tim Fulton Right.
Joe Peffer And your agent can help you with that. Even though he might not know you as well as certainly y- you know yourself-
Tim Fulton Right
Joe Peffer ... they can help you understand whether it's a, a good or bad idea.
Tim Fulton You mentioned pricing a little bit and how people sort of... What is the best way for an individual to sort of figure out how much home they can afford? Is it simply here's the amount of, you know, liquid assets I have access to and am comfortable giving up for a down payment, and here's what I'm willing to pay per month, and then there's sort of a calculation based on that? Or would you recommend a potential buyer, a serious buyer, going and getting, like, a preapproval?
Joe Peffer You, you absolutely have to have a preapproval-
Tim Fulton Okay
Joe Peffer ... before you can even get serious about looking at homes.
Tim Fulton Can someone without a preapproval even make an offer?
Joe Peffer Cer- certainly they can.
Tim Fulton Okay.
Joe Peffer But the seller is gonna take that offer less seriously than an offer that comes in without a preapproval.
Tim Fulton Okay.
Joe Peffer Even if they say that they'll have that preapproval in the next 24 hours, it's, it's-
Tim Fulton The seller kind of wants to make a decision before that.
Joe Peffer They, they probably do.
Tim Fulton Okay.
Joe Peffer And, and they want to feel good about the buyer, and they feel better about a buyer who is preapproved. And I always tell people the easiest thing for you to do is to walk into the place where y- you have your checking account, wherever your check is automatically deposited. They, they know you, they know your money, and you're already a customer, so they wanna help you. They, they already have an incentive to, to help you. You don't have to use that same bank at, at the end of the day.
Tim Fulton Right.
Joe Peffer Uh-
Tim Fulton But at least you have that letter.
Joe Peffer Yeah. And, and you sit down with them, and they'll, they'll preapprove you relatively quickly. It's easy. It's painless, and it'll give you a benchmark for how much you can spend. Now, that has nothing to do with how much you want to spend.
Tim Fulton Got it.
Joe Peffer You spend however much you feel comfortable spending every month. You can be approved for 420, but if you're much more comfortable at a 275 mortgage payment-
Tim Fulton Right
Joe Peffer ... every month, then, then that's what you look at.
Tim Fulton Okay. And when somebody comes to you as a potential client, do you recommend, "Hey, go out and do this before we start looking at houses"?
Joe Peffer I do.
Tim Fulton Okay.
Joe Peffer Although I'll tell you that most people come to me ready to go.
Tim Fulton Okay.
Joe Peffer Because these days, everyone, everyone seems to look and look and kinda lurk-
Tim Fulton Well, because it's available
Joe Peffer ... a- and watch the real estate market-
Tim Fulton Right
Joe Peffer ... because it is available. Right. You... They set up their own alerts on sites like Zillow and Trulia and realtor.com, and they've been watching the market, and they've been going to open houses, and sometimes for a couple of years. Uh, so they, they come to me pretty knowledgeable about both the market and about where they are comfortable financially.
Tim Fulton Are sort of the self-educated clients coming with any misperceptions largely?
Joe Peffer Uh, y- I would say that one of the biggest misconceptions people do come with is that you have to put a large amount of money down on a house, like let's say 20%. That, that seems to be what everyone thinks that you have to do, and certainly you don't have to do that. You can put down- A lot less. And sometimes it's a good idea to put down a lot less and make your money work harder for you somewhere else. Sometimes it's a good idea to put down more. There's such a thing as a 5% down, no PMI mortgage out there. If you could save that 15%, for example, to furnish the house-
Tim Fulton Right
Joe Peffer ... or to work on those couple things that you know to be wrong with the house-
Tim Fulton Right
Joe Peffer ... or to just, like I said, work for you harder somewhere else.
Tim Fulton Well, and there's the economic concept of the time value of money. It's always sort of better to have it in your account and accessible, rather than just servicing a loan.
Joe Peffer Absolutely. Now, that said, you wanna have equity in your house should an emergency come up, right?
Tim Fulton Right.
Joe Peffer Maybe your spouse gets transferred, and it's eight months i- i- into your new house, and you wanna be able to break even.
Tim Fulton Right, because all you're doing-
Joe Peffer If you put down 20%, then y- you'll get that 20% back, and you'll, you'll probably break even. If, if you sell your house within the first year, you should have no reasonable expectation of making any money.
Tim Fulton Right, unless it's a crazy market-
Joe Peffer And, and, yeah
Tim Fulton ... or you buy it in a short sale, or you buy it at a time... 'Cause we're kind of entering into, correct me if I'm wrong, the time of year where there aren't a whole lot of home sales happening. 'Cause it tends to happen in the spring and the summer, frankly, when, you know, s- people are trying to get residency for schools.
Joe Peffer Yeah, the real estate market does tend to revolve around school schedules.
Tim Fulton Okay.
Joe Peffer Less so in the city of Columbus, and less so for young professionals.
Tim Fulton Okay.
Joe Peffer And less so for people who maybe are retiring a- and downsizing. But for the most part, absolutely, uh, the, the colder months, there's a lot less happening.
Tim Fulton Gotcha.
Joe Peffer But it's still happening.
Tim Fulton And I don't wanna get into sort of credit worthiness, and that sort of... That's for another, that's for a banker podcast . But is it better to have a relationship with a credit union than it is with a big bank at all, or is there ev- any evidence of that that you've seen?
Joe Peffer I will say that credit unions, being member-driven-
Tim Fulton Mm-hmm
Joe Peffer ... really wanna look out for the members.
Tim Fulton Okay.
Joe Peffer And any time that I've had a client who is coming from a credit union, it's worked out fine. When I have clients who are working with a big bank, we've had some nightmare situations, because big banks tend to move very slow.
Tim Fulton Right.
Joe Peffer When I say nightmare, I m- it, it always ends up okay, but the appraisal will be low because they have a big pool of appraisers who sometimes don't know the neighborhood.
Tim Fulton And don't have a good idea of the comps, the comparable sales in the neighborhood.
Joe Peffer Right. And, and banks and appraisers can't even really talk to each other these days.
Tim Fulton Okay.
Joe Peffer But that, again, that's another podcast.
Tim Fulton Which in the end is kind of a, in my mind, kind of a good thing-
Joe Peffer Right
Tim Fulton ... because it sets a fair market va-
Joe Peffer Right
Tim Fulton ... literally a fair market value.
Joe Peffer Right. And big banks miss deadlines all the time.
Tim Fulton Okay.
Joe Peffer And sometimes the left hand doesn't know what the right hand's doing, and they ask you for the same documentation over and over, even though you've already given it to them. My preference is always local bank, small to mid-size, somewhere where the underwriter is right down the hall-
Tim Fulton Okay
Joe Peffer ... instead of in another city or across the country. Someone who has some accountability that you can go physically speak to.
Tim Fulton Right. Frankly, the large banks don't have an incentive to make it easy or seamless, and those smaller banks do because, again, that guy's down the hall and he's accountable. Talk about sort of how things get priced, and why a home in the Short North may be vastly different from a home in Marion Village, and just sort of walk us through that process of how things get priced from the get-go.
Joe Peffer It's, it's, it's very much what you would expect it to be.
Tim Fulton Okay.
Joe Peffer It's based on similar sales of similar homes in a similar area. Now, you mentioned Short North.
Tim Fulton Mm-hmm.
Joe Peffer Short North is a- a- always a crazy, always a very fast-paced real estate market. A home there that is a three bedroom, bath and a half, uh, let's say in Italian Village-
Tim Fulton Uh-huh
Joe Peffer ... compared to a three bedroom, bath and a half that is maybe a quarter mile away in Milo Grogan.
Tim Fulton Well.
Joe Peffer Same zip code.
Tim Fulton Right.
Joe Peffer Quarter mile away.
Tim Fulton They're-
Joe Peffer Obviously-
Tim Fulton But very, very different neighborhoods
Joe Peffer ... it's going to be a very, very different home price.
Tim Fulton Right.
Joe Peffer A lot of that has to do with desirability of wanting to live in the neighborhood. Every- everything's based off comps.
Tim Fulton Right.
Joe Peffer But certainly there's a-
Tim Fulton And when you say comps, just for clarity-
Joe Peffer Sure
Tim Fulton ... we're talking about comparable home sales-
Joe Peffer Comparable sales-
Tim Fulton ... within the neighborhood
Joe Peffer ... of similar homes in, in the neighborhood. But certainly the desirability of a neighborhood is a unknown that affects prices.
Tim Fulton Right.
Joe Peffer It's very difficult to put a number on what being in central Clintonville can do for your home. If you're on the bike path and can walk to Whetstone without having to cross a busy street in Northmoor, what is the invisible multiplier?
Tim Fulton Right.
Joe Peffer But, but it's there.
Tim Fulton Right. Absolutely. So you do setting those prices for sellers as well, correct?
Joe Peffer Right. And, and, and certainly it, it's an ongoing discussion. If a seller is unrealistic, because let's face it, every seller thinks their home is better than the comp.
Tim Fulton Right.
Joe Peffer Uh, well, my home has this, and my home has that. Well, that's great, but what if buyers don't care?
Tim Fulton Right.
Joe Peffer And oftentimes they might not care.
Tim Fulton Well, and I've certainly been in homes that while the comp in terms of the rough numbers, you know, the number of bedrooms, the number of bathrooms, exactly the same, were priced the same, but then when you look at, like, the square footage, it ends up being those other homes end up being a whole lot bigger. Uh, but they've, you know, they've sort of asked for what they think they can get.
Joe Peffer Right. And, and obviously the level of doneness, we'll say-
Tim Fulton Okay
Joe Peffer ... i- in a house has a lot to do with it. You know, how updated is the house, and, and is it just updated because it's pretty to look at, or have the mechanicals been taken care of? Is there a newer roof? Are the cabinets just painted, or are they newer?
Tim Fulton Right.
Joe Peffer Or are they original with some lipstick on them, we'll say?
Tim Fulton Okay. Gotcha. So let's say, you know, somebody goes into a house. They say, "I wanna make an offer." That seems to be, at least from talking to people, the great unknown of, like, sort of, you know, what happens then?
Joe Peffer Well, everyone comes from a background of wanting to get the most for the least.
Tim Fulton Okay.
Joe Peffer We all, we all want that.
Tim Fulton Right.
Joe Peffer The seller wants- The most money they can get. The buyer wants to buy the house for the least amount of money possible, and that all makes sense. The real estate market that we've been in, and I do primarily work inside of 270, but it's been the same all over Franklin County.
Tim Fulton Okay.
Joe Peffer There's not a lot of wiggle room. Uh, it used to be that a buyer could ask the seller to pay for their closing costs. Uh, "Dear seller, will you please pay, uh, what would be approximately two to 2.5% of the purchase price so that I can pay the closing costs that I've incurred from the bank, from the title company, from the county?" And, and the seller would pay maybe 1 to 3% of the, of the buyer's closing costs.
Tim Fulton Okay.
Joe Peffer That, that just doesn't happen.
Tim Fulton Really?
Joe Peffer That hasn't happened in years because it's too brisk of a market. Sellers are getting multiple offers all the time, and they're not gonna bother with-
Tim Fulton Well, and-
Joe Peffer ... closing costs
Tim Fulton ... and that's gonna be in the initial offer, right?
Joe Peffer Right.
Tim Fulton The offer's gonna say, "Okay, we'll give you 295, but will you help out with closing costs? And we may come back..." I've had the experience where we put into the offer, "If the inspection comes back with items that are below $500 to fix, we won't bother you about them at all. But if there's anything that may be above $500, we're gonna ask about it, or we, we reserve the right to ask about it."
Joe Peffer Absolutely. And I would tell you that in Franklin County, what is called the list price to sales price, the amount of money that a house ends up selling for compared to what it's listed at-
Tim Fulton Okay
Joe Peffer ... is hovering right around 98%.
Tim Fulton Okay.
Joe Peffer So wiggle room is kind of a thing of the past. In neighborhoods up and down the High Street corridor, oftentimes how, homes are selling for more than list price.
Tim Fulton So you're saying adding those clauses of closing costs, things that may come back on the inspection, anything else that they may ask for, it's sort of you're almost shooting yourself in the foot a little bit in terms of the offer?
Joe Peffer Yes.
Tim Fulton Okay.
Joe Peffer And, and, and that's this market. This market is a seller's market.
Tim Fulton Mm-hmm.
Joe Peffer And, and in these neighborhoods, for example, last spring, it, it, it real- it wasn't even a question of how much do I offer, because you know it's gonna be above list price.
Tim Fulton Right.
Joe Peffer It's, it's how far above list price is just paying too much, and I should let somebody else do it.
Tim Fulton Right.
Joe Peffer Because even if a list price is inflated, if you want to get the house, sometimes you have to go above list price, and you have to put clauses in there that escalate your offer $1,000 above the next guy, let's say. Or you have to say-
Tim Fulton Which sometimes are ignored as well, right?
Joe Peffer Right. A- and, and being first isn't, doesn't mean what it used to mean. Sometimes if you're the first offer, great. You know, you would put a short deadline on the turnaround time for them to get back to you, and you would offer full price, and, and you would expect to hear back from them, and you would expect that they would say yes, because you're offering them full price.
Tim Fulton Right.
Joe Peffer Even that doesn't mean anything. Oftentimes what they would say is, "Well, we just went on the market. We wanna give it a couple of days and see how many other offers at at least full price we get."
Tim Fulton Right. So why would they price it at such a point that they wouldn't take that offer? 'Cause it's a seller's market.
Joe Peffer 'Cause it's a seller's market-
Tim Fulton Okay
Joe Peffer ... and it goes back to the seller wanting to get as much money as possible. So buyers are putting things in their offers like, "We'll take it as is. You, you don't have to do anything at all. We're gonna have a home inspection so we know what our frame of reference is for-
Tim Fulton Right
Joe Peffer ... what the house looks like in terms of will it need repairs."
Tim Fulton And reserve the right to then turn it down based on that inspection.
Joe Peffer Correct. But we won't ask you to fix anything. And people are, are also doing things like waiving appraisal clauses, saying that, "If the appraisal comes in low, you know what? It's okay. We'll take care of that $10,000, or we'll take care of at least $5,000 of that $10,000." Anything you can do to make your offer look better than the next guy.
Tim Fulton Gotcha. What are some of the pitfalls that a buyer should be aware of in that process?
Joe Peffer Well, one thing that you see happen in a market like that is buyer's regret. They see the home. They get caught up in the frenzy of the multiple offer situation.
Tim Fulton Well, and there's multiple people walking through the house at the same time.
Joe Peffer It's... Y- oh, yeah. You, you're walking into a home, it's the first day it's on the market. It, it's the first few hours it's on the market. There's 30 other people there-
Tim Fulton Yeah
Joe Peffer ... with their agents looking at the house. It's, it's, it's crazy. And you know that they're gonna make an offer, or at least some of them will.
Tim Fulton Right.
Joe Peffer But you love the house, or you think you do because you've walked through it quickly. It's the only thing on the market right now that fits your needs.
Tim Fulton Well, and it's dressed up real nice 'cause it's the first day on the market.
Joe Peffer Right. And then so, so you make an offer, and you do go above and beyond everybody else's offer, and then they accept your offer, and then it, you sit back and you think, "Oh, my God, what did we just do? Are we way over paying for that house?" And, and you just do, you do see homes coming off the market, or coming actually back on the market-
Tim Fulton Mm-hmm
Joe Peffer ... because of that. That's why, number one, it's a good idea to be a backup offer.
Tim Fulton Okay.
Joe Peffer If they don't take your offer the first time, but you really like the house, offer to be a backup offer, because if those people in front of you do get buyer's regret, uh, you're automatically next in line.
Tim Fulton Okay.
Joe Peffer You, you'll automatically be in contract on the house. What else? Not too many people do offer to buy the house in as is condition. A, a, a pitfall might be not asking for that thing that you wish that you had asked for.
Tim Fulton Okay. Like what?
Joe Peffer Like, could you please fix the flashing around the chimney?
Tim Fulton Okay.
Joe Peffer You think that you'll take care of it, but-
Tim Fulton You're never getting up there
Joe Peffer ... you move in, and, you know, yeah. You're, you're more interested in the inside of the house. You gotta paint. You gotta do these other cosmetic things that are gonna make you feel better about the, the house. And then the next spring rolls around, it starts raining a lot, uh, and you think, "Oh, my God, that flashing. We should've taken care of that."
Tim Fulton Right.
Joe Peffer I think having an agent that sets reasonable expectations for the condition of a house is important because i- in a way, and this has been the case now for, for years, HGTV has ruined home buyers.
Tim Fulton Okay.
Joe Peffer They watch the shows on TV. They want the stainless. They want the granite.
Tim Fulton Right.
Joe Peffer Or they think, "Geez, granite. Nobody's got granite anymore. It's all about the quartz and the concrete." And- ... and they walk into a house, and that's what they want.
Tim Fulton Right.
Joe Peffer And they, they want pristine. They want move-in ready. In the historic-
Tim Fulton I thought you were gonna go the complete opposite way with this and say that HGTV has made people think that they're more capable of doing things to their home than they actually are.
Joe Peffer I, I think that you're absolutely right on that end of the spectrum also.
Tim Fulton Okay.
Joe Peffer The, the expectations, I think, of home buyers are somewhat unrealistic.
Tim Fulton Okay.
Joe Peffer Because especially in these older neighborhoods, despite the price of the house, I've been in a lot of million-dollar houses that you just think, "Oh, my God." This house needs so much updating. It's so much work.
Tim Fulton Right.
Joe Peffer No matter the price of the house, this older housing stock, and that's what I love to work in, is homes with character.
Tim Fulton Mm-hmm.
Joe Peffer That often comes with deferred maintenance, e- especially, uh, in, up and down the High Street corridor because people don't live in the homes for a super long time.
Tim Fulton Right.
Joe Peffer They might move out to the suburbs, or they might get a job transfer because they're young in their career. And, and everyone lives in the house, and when you live in the house, you're, you're more concerned with the things that you see immediately around you.
Tim Fulton Right.
Joe Peffer It, it's not fancy and, and, and you don't see-
Tim Fulton Well, you don't-
Joe Peffer ... all the things you really need to do to the house.
Tim Fulton And you don't look up in the corner a whole lot for little bits of paint that seem to be coming off. Why is that paint coming off? Because you live in it. It's, you know, you're there in the moment.
Joe Peffer Right. You don't do the sexy repairs. You do do the sexy repairs. You, you, you don't do the things that need to be done that you don't look at all day long.
Tim Fulton The structural stuff, the little piece of siding that's coming off-
Joe Peffer Right
Tim Fulton ... that may be damp- you know, keeping water away from the foundation, that sort of thing.
Joe Peffer The things that buyers look at and say, "Oh, I wonder what else is wrong."
Tim Fulton Exactly. Exactly. Talk about the Columbus housing market in general and sort of, you know, where the really, uh, the Short North obviously. You keep mentioning the High Street corridor. Are there any other sort of hot neighborhoods, and are there any other neighborhoods that you would recommend people look at that maybe they haven't considered?
Joe Peffer Well, I would say the hot neighborhoods are just, they're all over this year. I mean, everything is a hot neighborhood. Dublin is hot. Gahanna is hot. Westerville's hot. Things are moving quickly, and they're moving quickly in that first-time home buyer kind of range especially. By that number, I'll say anything 250 and under.
Tim Fulton Okay. 'Cause that's a comfortable purchase.
Joe Peffer Right. Although I think that trend-wise I'm seeing older first-time home buyers-
Tim Fulton Okay
Joe Peffer ... who have saved up more money for a more expensive house. It's, it's not the sort of starter home that it used to be. It's more of a second home, and guess what? We're gonna have our kids here, and we're gonna stay here kinda thing.
Tim Fulton Okay.
Joe Peffer Along those same lines, I'm seeing more people willing to stay in the city with kids, although oftentimes when I walk through a house for sale in the city, there's a crib.
Tim Fulton Okay.
Joe Peffer There's one crib, and those people are on the move to-
Tim Fulton Oh, because you see them
Joe Peffer ... a, a school system that they feel they need to get to.
Tim Fulton Okay.
Joe Peffer Uh, al- although I, I do wanna say that I think that people are, are more willing to stay and put down roots, and they already enjoy the city.
Tim Fulton Right.
Joe Peffer They like the walkability, and now they're gonna like it with their kids.
Tim Fulton What neighborhood are you in?
Joe Peffer I'm in Olde Town East.
Tim Fulton Okay. 'Cause-
Joe Peffer And I've been in Olde Town East for a long time.
Tim Fulton And we talked right before we started recording today. You have three kids, one in middle school, two in high school. You've f- decided to keep your kids here in the city. What would you say to somebody that was considering moving because, uh, this is not realty... Well, it is realty related to an extent.
Joe Peffer It is, sure.
Tim Fulton What would you say to somebody who says, "God, I have to get out in order to provide a quality education for my kid"?
Joe Peffer You can provide a quality education for your kid and live in the city of Columbus, and it's not as hard as you think.
Tim Fulton Okay.
Joe Peffer I know people who want to do it because their kids are going to a school that they are standing up and saying, "We're not gonna leave. We're gonna keep our kids in school. It's a s- Columbus City School. We're gonna help make this school better-"
Tim Fulton Right
Joe Peffer "... instead of taking our kids and moving out to the suburbs." The schools are getting better. Clintonville, let's say for example, has some of the best Columbus City Schools there are.
Tim Fulton Absolutely.
Joe Peffer There's schools in the Short North. There's schools in German Village. They're getting better and better because the parents are saying, "You know what? We don't have to move. We can stay here, and we can continue to love our neighborhood, and we can be a part of our kids' school." And b- just, just being present is so much, uh, of a school. Now, not every school is-
Tim Fulton Repairable
Joe Peffer ... repairable. You know, I would never say give up on a school.
Tim Fulton Right.
Joe Peffer There's, there's schools that just need a lot of work.
Tim Fulton Yeah.
Joe Peffer And, and they need parents to stand up for them, too, but sometimes it's just not that easy.
Tim Fulton Right.
Joe Peffer Uh, the elementary school, middle school, and, and the high school that my kids would go to normally, it just, it just d- did not seem viable.
Tim Fulton Right. Well, and it should be noted here that if people aren't aware, Columbus City Schools does have a lottery program for both neighborhood schools and for their alternative schools. I, being a Columbus City School kid, I never went to any of my neighborhood schools. I'm very thankful for the education I got throughout Columbus City Schools. What do you see, just turning back to realty, what do you see that homebuyers want that you wouldn't... For someone who's selling their home, what are the easy things that they can do that homebuyers are turned on by?
Joe Peffer The easiest thing you can do, and I know it sounds overly simplified, is just clean the heck out of your house.
Tim Fulton Okay.
Joe Peffer I mean every nook and cranny.
Tim Fulton 'Cause they will look.
Joe Peffer They will look. It just makes an unbelievable difference, and I, I know that sounds easy. But you would be amazed at how many times you walk into a house, and it just feels dingy.
Tim Fulton Okay.
Joe Peffer Maybe they didn't wash the windows.
Tim Fulton Right.
Joe Peffer Or they didn't get that cobweb in the corner, and every little thing helps. And certainly, the, the, the quick, easy cosmetic things help, too, the paint, the new carpet. Uh, you know, these things are relatively inexpensive. While you can't maybe install a new carpet yourself, you can paint.
Tim Fulton Right.
Joe Peffer You can put new handles on your kitchen cabinets.
Tim Fulton Right.
Joe Peffer You know, uh, you can take up that linoleum and tile the kitch- the bathroom floor yourself. You can just go on YouTube and do a multitude of things that you maybe don't think you can do, uh, which kind of goes back to the-
Tim Fulton God bless you, HGTV. In terms of, you know, working with your Realtor, f- just finding a Realtor and being ready for that, what can buyers do?
Joe Peffer I think one good thing to do is ask your friends, "How was your experience with your Realtor? Did, did it work out well? What did, what did you like? What, what did you not like?" And-
Tim Fulton Did you feel rushed? You know, did you feel like you were aware of everything that was going on in the process?
Joe Peffer Right, and, and oftentimes not until you start talking to other people about their experience do you realize maybe your experience was s- in fact subpar.
Tim Fulton Okay.
Joe Peffer It, it, it might be too late by, by that time. It, I'm amazed at how many people do come to me talking about how their agent wasn't showing them homes that they wanted to see, wasn't showing them homes that were in their price range. They weren't in the neighborhood they wanted. They keep showing them condos when they want single family or vice versa. I don't understand that.
Tim Fulton Yeah.
Joe Peffer It's- Kind of alarming how often that happens.
Tim Fulton And do you think it's because those realtors are in a niche, and that's sort of what they know, and so that's what they show them?
Joe Peffer If by niche you mean rut, probably.
Tim Fulton Rut?
Joe Peffer Yeah.
Tim Fulton Okay.
Joe Peffer Like, like that's their frame of reference.
Tim Fulton Okay.
Joe Peffer And, and they have a small world maybe-
Tim Fulton Well, or they're inexperienced
Joe Peffer ... and that's the world that they live in, so they're gonna... Or maybe they're just inexperienced.
Tim Fulton Right.
Joe Peffer The, the bar to being a realtor is so low that there are so many realtors. Sometimes you see people using their parents' realtor just because it's what their parents keep telling them to do.
Tim Fulton Right.
Joe Peffer Or they use their boss's wife or, or husband, and, you know, maybe it's just because it's convenient, not because it's a good fit.
Tim Fulton Right. And so what should they look for? Just someone who sort of they feel like gets them?
Joe Peffer I think getting them is, is huge, but probably difficult to ascertain-
Tim Fulton Okay
Joe Peffer ... uh, on a first meeting. I think buyers in general don't tend to shop around. They just go with someone-
Tim Fulton Right
Joe Peffer ... who, again, is, is, is probably a referral from somebody at work or, or maybe even their parents if they're first-time home buyers.
Tim Fulton Right.
Joe Peffer Or they go with somebody whose sign... If, if they're sellers, they go with somebody whose, the sign they see all around town.
Tim Fulton Right.
Joe Peffer "Uh, well, this person seems to have a lot of signs in my neighborhood, so I'm just gonna call them because they must do a lot in my neighborhood."
Tim Fulton Right.
Joe Peffer They should include other people in the conversation because there's a lot more than just that agent. And, you know, listings beget listings.
Tim Fulton Right.
Joe Peffer So the more listings you have, the, the better for you, I guess, but maybe not the better for your client.
Tim Fulton What makes Delicious different?
Joe Peffer Well, when I started my real estate company, I wanted it to be very client-focused-
Tim Fulton Okay
Joe Peffer ... because I was coming from a place I felt was very all about the company focused.
Tim Fulton Mm-hmm.
Joe Peffer So, so one, one, one thing I do is I don't represent both sides of a real estate transaction. I don't represent both the buyer and the seller because I think it's impossible to be, for both of those clients to have the best experience possible.
Tim Fulton Well, and to be fair and impartial in that contract and make sure everything, make sure everything works out.
Joe Peffer You, you're gonna know something you wish you didn't know.
Tim Fulton Right.
Joe Peffer So that's, that's gonna be a-
Tim Fulton There's a reason why lawyers don't get to represent both sides of an argument.
Joe Peffer Right. Someone's gonna be at a disadvantage, and, and it happens all the time. Happens all the time. Those people whose names you see on those signs all over town, they're doing it left and right. And a lot of times it's because buyers will just go to an open house maybe. They'll say, "I like this house. I wanna make an offer," and they just talk to that agent. They maybe just don't know that, that they need to have their own representation, and they don't know that it's hurting them to not have their own rep- uh, representation. And another thing I do is I just... I've been selling homes for, since 2003.
Tim Fulton Mm-hmm.
Joe Peffer I know what it takes to sell a home, and I know exactly, more or less, how many hours I have wrapped up in that and all the tasks that I need to do along the way. And it's only gonna take me so many hours, so I can set a threshold where I know that I'm getting paid for those, that amount of work.
Tim Fulton Right.
Joe Peffer And I think that it's fair. It's fair to me. It's fair to the seller. And I'm not robbing them of their home equity. I know that I'm doing the same amount of work, more or less, for a $250,000 house as I am for a $425,000 house. I'm not gonna take 3% of their 425 when, when I know that I, I've got this much wrapped up into it.
Tim Fulton Okay.
Joe Peffer And I know that those people are probably gonna turn around and buy a house anyway.
Tim Fulton Right.
Joe Peffer We already have an established re- relationship, and I'm gonna make money on that end.
Tim Fulton Right. 'Cause you're not-
Joe Peffer A-
Tim Fulton And again, d- and just to drive the point home, you're not there to steal their equity.
Joe Peffer I'm not there to steal their equity. A- and I feel like that's exactly what it's doing. Real estate agents are vastly overpaid in my opinion. You know, I think we provide a great service, but when it comes on the, to the listing side, it's, it's silly to give that guy 3% a- and dip into what you should clear on your house.
Tim Fulton Right.
Joe Peffer Money that you need to turn around and buy your next house. But you know what? If the seller on the other end wants to give me 3%, they're not my client, and I'll take it all day long.
Tim Fulton Right. That's fair.
Joe Peffer So someday, the real estate transaction, the way that real estate agents are paid, it'll be completely different.
Tim Fulton Standardized more, you think?
Joe Peffer It, it'll be much more standardized. It, it, it'll be hourly, or it'll be just you, you'll get this for doing this, and you'll get that for doing this. The, the whole idea that the seller pays the buyer's agent right now is odd, isn't it? How, why does the seller pay the buyer's agent? A lot, a lot of times buyers do come to me and they ask me, "How, how is it that I get paid?"
Tim Fulton Right.
Joe Peffer "Do they pay me?" And it's... They're, they're always surprised when I tell them that the amount of money I get paid is built into the price of the home.
Tim Fulton Right.
Joe Peffer They will be paying me over the course of that 30-year mortgage.
Tim Fulton Right.
Joe Peffer But they don't have to pay me. The seller pays me.
Tim Fulton That's not in the closing costs, right.
Joe Peffer You, you asked about what neighborhoods should people be looking at.
Tim Fulton Yeah.
Joe Peffer Well, I think that as the core of Columbus becomes more and more desirable, and I, I feel like it is becoming more and more desirable.
Tim Fulton Right.
Joe Peffer I mean, and it's been happening for years and years and years. People need to start looking outside that Worthington to Marion Village, which is what I essentially mean by when I say High Street corridor-
Tim Fulton Yeah
Joe Peffer ... for their, for their first home because they, they think that they want Grandview or they think that they want Clintonville, only to find that they're, they're really kinda priced out of it.
Tim Fulton Right.
Joe Peffer So-
Tim Fulton At least in terms of the amount of home they want.
Joe Peffer Right, in terms of the amount of home that they want, and, uh-
Tim Fulton 'Cause you can probably afford a centrally located but really small place, small acreage, small house, but are you gonna be able to grow there, and how ll- how long could you possibly live there?
Joe Peffer Right, especially if you're coming from an apartment where you already feel a little bit crowded.
Tim Fulton Right.
Joe Peffer And, and you don't want on-street parking because, by God, you feel like you're buying a house.
Tim Fulton Right.
Joe Peffer You should get something else. You know, Columbus is small when it comes right down to it.
Tim Fulton Okay.
Joe Peffer And there are no secret neighborhoods anymore, especially f- first-time home buyers, but even people who have moved to Columbus and they've been here a couple of years, they have a small version of Columbus.
Tim Fulton Right.
Joe Peffer It's where they have lived, where they have played, and not much more.
Tim Fulton Right.
Joe Peffer The r- the route that they take to go to work and, and maybe what's off of that. People are gonna start looking on the other side of 71 from Clintonville.
Tim Fulton Hopefully.
Joe Peffer Because they're gonna realize that they can get more house for the money. Once more of these neighborhoods start having- More recognizable names.
Tim Fulton Right.
Joe Peffer Because once a neighborhood has a name, things start to take off.
Tim Fulton Well, you can reference it, right.
Joe Peffer Right. But the, the, the whole, uh, Carl Road, Maze Road area, there, there are homes over there, and they have big lots for the most part. And-
Tim Fulton Yeah
Joe Peffer ... and, and you're, you're Clintonville adjacent.
Tim Fulton Yeah.
Joe Peffer So you can still do the same sorta things you might do in Clintonville, but you're, you're in a more affordable place. There's a lot of streets in Columbus that I like because when you drive down that street, it feels like you're in a real city.
Tim Fulton Mm-hmm.
Joe Peffer And by real city, I guess I mean older, more industrial, uh, more character. And these are all the same streets that people want to avoid. These are the Cleveland Avenues, the Parsons Avenue, the West Broad Street, Livingston Avenue, places where you feel, gosh, this is great. There's all these storefronts. There's people out. There's people about.
Tim Fulton Right.
Joe Peffer A- and it gives you a real city vibe.
Tim Fulton Well, it's part of the reason why you live in Olde Town.
Joe Peffer Right. Along these neighborhood, along these streets, the neighborhoods will eventually be coming back, and it's going to start with closest to downtown with a better housing stock in places like south of Children's Hospital-
Tim Fulton Mm-hmm
Joe Peffer ... east of Parsons. I mean, German Village, Marion Village, there's, there's only so many homes there.
Tim Fulton Right.
Joe Peffer Uh, and, and I, I, this year especially, I've seen homes in that area really start to take off, homes that you never would've thought would be selling for the amount of money they're selling for selling. Uh, this has been a big year for flips.
Tim Fulton Okay.
Joe Peffer Uh, there's been a lot of... There's been a- poor first-time homebuyers, right? They have to compete with each other, and now they have to compete with people who have the money to come in and offer cash-
Tim Fulton Right
Joe Peffer ... for a home, uh-
Tim Fulton Get it at a lower buying price, do the minimal amount of work they can, and put it back on the market.
Joe Peffer And there, there is a lot of minimal amount of work. But it, it, you walk in, and it feels and smells new. There, there's a lot of people making a lot of money.
Tim Fulton Yeah.
Joe Peffer And unfortunately, sometimes it does come at the cost of those first-time homebuyers buying that home and putting much more TLC into it. It's hard to find that, that secret place, and it's hard to think outside of the places where you really always saw yourself living. Uh, sometimes you just have to be okay with being on the fringe.
Tim Fulton Right.
Joe Peffer Because those houses are gonna appreciate like the other houses. You'll just always be on the, the sort of edge of that community.
Tim Fulton Until you're not anymore, until it sort of, you end up in the heart of it at some point.
Joe Peffer At some point, right.
Tim Fulton Well, and you gotta think, too, about how long you consider staying. Like you said earlier, you're certainly not gonna move into a home and leave within a year and make any money. You're probably going to lose money on that house. But if you imagine that you're able to stay there for five years, then you can think about sort of your, quote-unquote, "next home."
Joe Peffer Right. Right, yeah. I, I, I think you have to stay somewhere three to five years to, to realistically recoup the amount of money it takes to sell the house and, and maybe get a little something for a down payment for your next house. Talk with your agent about alternative neighborhoods. If you've got $225,000 you can spend comfortably, you, you, you, you're looking in Clintonville. You, it's not going as far as you want it to go. Maybe your realtor can suggest Berwick.
Tim Fulton Mm-hmm.
Joe Peffer You know, it's more house for the money. It, it's a great neighborhood. You get a much bigger lot. You might still need to do a little bit of work to, to make it your own, but you, you're gonna be happy there, and they have a, a solid Columbus alternative elementary school there that, that the neighborhood's kind of always been built around.
Tim Fulton Right.
Joe Peffer You're Bexley adjacent, so there's things on Main Street that you can't walk to, but they're right there.
Tim Fulton Right.
Joe Peffer Including a new two-story Giant Eagle.
Tim Fulton It's fancy.
Joe Peffer It's fancy.
Tim Fulton Joe, thank you so much for your time today. Really appreciate it.
Joe Peffer Absolutely, Tim. Thank you.
Tim Fulton Thank you for listening to the Confluence Cast, presented by Columbus Underground. Again, you can get more information on what we discussed today in the show notes for this episode at theconfluencecast.com. Please rate, subscribe, share this episode of the Confluence Cast with your friends, family, contacts, enemies, your favorite property owner. If you're interested in sponsoring the Confluence Cast, get in touch with us. We can be reached by email at info@theconfluencecast.com. Our theme music was composed by Benji Robinson. I'm your host, Tim Fulton. Have a good week.