Depending on who you speak to, the housing market in East Toledo is a bust, at least for those hoping to profit from flipping a home in East Toledo.
House “flipping,” refers to purchasing a home with the intent to profit from it in a short time. Fans of real estate flipping shows, see investors (flippers) purchase dilapidated, foreclosed homes or bank owned property. The flippers then put in thousands of dollars in fixing the home and adding upgrades like granite counter tops before putting the rehabbed home back on the market for thousands of dollars in profit.
According to several area realtors, although house flipping is happening in west Toledo, Sylvania, Oregon and Northwood, investors are not burning a trail to East Toledo.
Dee Cottrell, of Key Realty, said East Toledo is experiencing a much slower housing recovery since the economic downturn of 2008.
“I don’t think there is enough money to be made in East Toledo,” Cottrell said. “Flipping in East Toledo is not profitable. Between the purchase of a home and making the repairs needed to the homes, there would not be enough money to make any money.
“In order for home prices to become stable and move upward again, you have to have homeowners, not landlords,” Cottrell said. “If you have an area where people felt economically stable and where three-quarters of the homes are owned by homeowners, the house prices would be higher. In East Toledo, there are a lot of rentals now.”
Gwen Hess, also of Key Realty, agrees.
“East Toledo, in general, is a really old section of town,” Hess said. “There is also a predominance of rental properties in the area and that does not help matters. There simply is no margin in flipping in East Toledo. Even if you purchased a home for $10,000 you would have to put another $30,000 in rehab costs into the home. Many homes need structural work, new windows, electrical, plumbing and roofs. By the time you were done, you would not be able to sell the home for the money you put into it much less make a profit.”
Although flipping may help increase the property values of nearby homes, the non-existence of flipping may also be a good thing, according to Robert McIntosh, of Key Realty in Oregon.
“House flippers not going to East Toledo is not necessarily a bad thing,” McIntosh said. “In my opinion, it means the market in East Toledo is improving somewhat. When home values drop, that is when the market investors come in for a good deal. When the home values are rising, it shows the market is getting better and the investors are not coming in.”
McIntosh said home values are slowly beginning to rise in certain areas on the east side, especially near Raymer Elementary School and the neighborhoods closer to Oregon.
“Home values are up, but East Toledo is lagging somewhat,” he said. “Oregon and Northwood are doing wonderfully. More people are moving to East Toledo. Buyer confidence is up, and industry is teetering up a little bit. I believe more people are seeing the value in the homes in East Toledo although we have a long way to go.”
Robert Krompak, Director of Economic Development and Community Building at Neighborhood Housing Services of Toledo, Inc., said he believed part of the issue is that people’s perception of East Toledo needs to change in order for home values to rise.
“We have lower crime rates than north Toledo, south Toledo and parts of the west end,” Krompak said. “We have to turn around the perception of East Toledo neighborhoods. We have good schools and they are some of the highest performing schools in the Toledo Public School District. There are plenty of amenities. We have 18 parks and we are close to the central business district and the waterfront. People are not looking hard enough at the value that is already here.”
Krompak said although sales are up in the area from where they were this time last year, the market is still “anemic,” compared to sales in 2008.
“We do have a great deal of solid housing stock in East Toledo that really is a great value,” he said. “The houses for sale are nicely maintained and in quiet, stable neighborhoods. We have houses that were built as far back as the 1880’s all the way to the 1940’s. The quality of the houses built here far exceeds those built later in other areas of town. You want a Craftsman-style bungalow with hardwood floors, built-in buffets, leaded glass windows and fireplaces? They are here. We just have to do a better job of selling them. Perception is the real issue here.”