Category Archives: Real Estate

Lowder Property Rezoning

Regular MML readers know that we’re closely following the debates over re-zoning in Cloverdale Five Points (the part of town with Sinclair’s and The Capri). For those not as geeked out about zoning as we are, the story so far is basically that the City wants to switch over to SmartCode in this part of town (We have collected drawings and documents here for your reference). That push is still going forward, but in the short term, the City is asking for a rezoning of the Lowder property at the corner of Boultier and Fairview. That’s the western part of the building that used to be a school. For those not totally conversant with the area, it’s near Huntingdon College (once an owner of this parcel), across the street from Sinclair’s and also from the 1048 nightclub.

As it stands, this property is zoned B-1-a. The City is hoping it can be zoned B-1-a-q. Your eyes glazing over yet? It seems the “q” stands for “qualifications.” According to City Planner Tyler Caldwell, “The addition of the q denotes qualifications that restrict potential developments on this property to conform to the standards laid out in the T4-O SmartCode Transect. The only additional qualification is the permission for 1 story structures; whereas, T4-O has a minimum height restriction of 2 stories.” Caldwell has summarized the qualifications in a document you can see for yourself – download by clicking here.

This sounds good to us. Confusing to wade through the jargon, but when you think about it, it sounds nice. This is what governments do. They prevent people from ruining neighborhoods in the name of unchecked property rights. And if you care about how your city looks and functions, this is the sort of thing you should care about.

Why the rush? Well, the property is about to be sold, and the City would like to ensure that whatever is built there maintains the look and neighborhood feel associated with SmartCode. In other words, not a big box store with a bunch of parking in the front. According to Caldwell, this rezoning does not impede the larger effort to have SmartCode for the whole Cloverdale Five Points area. That debate is still upcoming.

The Cloverdale-Idlewild Association voted unanimously at this week’s meeting to support the City’s rezoning of the Lowder property. The next step in the process will be a Planning Commission meeting at 5:00 pm on September 23. The Planning Commission meets at City Hall, Room 142 at 103 N. Perry St. Please contact Tyler Caldwell, City Planner, at 334-241-2728 or tcaldwell@montgomeryal.gov if you have any questions or concerns.

Kate and Stephen are Midtown residents with a cat, a garden, an old house and a sense of adventure. They write about life in Midtown here and about life in Montgomery at their blog Lost in Montgomery.

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How’s the Market? It All Depends!

This week, I ran across a very interesting chart that describes the various “states” possible in any given real estate market:

A severe buyers’ market means prices are extremely negotiable and may be falling. In Midtown Montgomery, it means in general that only those really needing to sell should be on the market because buyers expect and are getting discounts on sales prices and many other give-backs with dollar signs attached.

So how’s the market? Taken as a whole, Midtown is still pretty much tough sledding for sellers. Overall, we see 11.01 months of homes available for sale. That means in theory that if no additional homes go on the market, it will take just over 11 months for all the existing listings to be sold. The good news is that the inventory of homes available for sale is down somewhat from last year and appears still to be declining.

But..and it’s a big but…Midtown is not one monolithic market. It is the sum of many varied markets. Each neighborhood and price range is a mini-market within the larger Midtown market as a whole. So when you ask me (or whomever), “How’s the market?,” don’t be surprised if the answer is, “Well, it all depends!”

Let’s look at a few specifics, starting with Cloverdale-Idlewild. In the past 12 months, 13 homes were sold. And today there are exactly 13 homes on the market for sale. Clearly, there is that theoretical 12-month supply of homes, which would label Cloverdale-Idlewild a severe buyers’ market.

But for a real severe buyers’ market, we need look no further than Center City (Garden District, the two Cloverdales and Edgewood) homes priced at $200,000 or more. Currently there are 42 homes for sale and only 20 sold in the past 12 months. It’s the perfect opportunity for an old-house lover to sell his/her/their smaller home and move up to the bigger, more expensive home of their dreams! (More later on why the best time to move up is in a down market.)

Hillwood, however, is quite a different story. In the past 12 months, 13 homes sold in Hillwood/Hillwood West. And there are only 8 homes on the market today. In theory, it will take less than 8 months for those homes to sell, so Hillwood is a balanced market. This means that buyers won’t find the “deals” there that the national media has been telling them they should expect.

If you are thinking about selling and/or buying in Midtown, be sure you have the “How’s the market…my segment of the market” conversation with your agent. Then act accordingly to avoid disappointment down the road.

Sandra Nickel has been listing and selling residential real estate for over 29 years, most with an intense focus on Montgomery’s Midtown neighborhoods. Sandra serves on the Mid-Alabama Coalition for the Homeless, the Cloverdale Business Coalition, Historic Southview, the Volunteer and Information Center, Landmarks Foundation and her own neighborhood Garden District Preservation Association.

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Intro to Green Spaces

By Andrew Cole-Tyson

Note: This piece was originally published in an e-mail sent out to members of a young professionals group called Emerge Montgomery. We reprint it here with Mr. Cole-Tyson’s permission.

On the evening of July 27, 2010, I attended the event at MAX Credit Union where Mayor Todd Strange spoke to our group of young professionals. The theme, “The Future of Montgomery,” was very relevant and timely. I believe that we are at a pivotal point in the development of our city where young professionals like ourselves can have a true impact by positively affecting the ways that downtown Montgomery will be further renewed and revitalized.

As a professional designer interested in landscape architecture and urban design working with 2WR Architects, I see that a large part of the future of Montgomery is related to urban design and architectural retrofit and infill projects as coordinated with the SmartCode. Key to these efforts is the creation of green space in our city.

Why is green space important? Some of the top reasons include:

  • economic development including increased property values and an impetus for revitalization near green areas, business and job creation, tourism management and use, and profits from programmatic entertainment events, etc.
  • psychological liberation from pressures of living and/or working in a growing city
  • more opportunities for physical activities that can reduce obesity and other health issues
  • increased programs for entertainment (water sports, hiking, cycling, etc), education, music, and the arts in and near green space
  • environmental benefits in the areas of air, soil, and water management.

It is exciting to be here in Montgomery at a time when, if combined, our voices can call attention to ways our city can become a better place for us to live and work.

EMERGE Montgomery is made of a phenomenal group of young professionals that have the capability to analyze what is good about other cities that have already made revitalization changes, and lobby for these elements to become a reality in Montgomery. In cities across the south like Chattanooga, Charleston, and Savannah, younger generations are becoming increasingly more interested in the economic and social advantages of mixed use living in urban environments — ways of living that immediately bring up the subjects of green space and the need for a connection to nature for psychological freedom from the stresses of life in the city.

Outdoor entertainment and recreation made available through the creation of green space, added to entertainment venues, make living in our city even more attractive. Typically projects like these come to reality through public/private partnerships that start with buy-in from city entities such as the office of the Mayor and the Planning Department. Here are just a few examples of green space projects:

http://www.railroadpark.org/

http://www.millenniumpark.org/

http://www.rosekennedygreenway.org/

http://www.thebattery.org/

http://www.chattanoogachamber.com/gettoknowus/riverfront.asp/

Through involvement in increasing green and open space projects, we can take even more advantage of Montgomery’s downtown and waterfront area. The Amphitheater has gone a long way in improving the number of programmed events, but part of the advantage to a large green space near downtown is the capability to enjoy nature at any time without the confines of a structured program, all close to our offices and homes. Green and open spaces are more than tree lined streets, though we do want tree lined streets as well! Green and open spaces are places to connect with nature, and specifically, places that we want close to our homes and offices for the sake of a quick escape.

One of the most valuable components of any city is its relationship of green space to the built environment. We’ve seen the impact of green space in places we’ve visited, and maybe even in other places we’ve lived. City planners agree that green space is advantageous, not only for the psychological, environmental, and social rewards, but also for the provable increase in the value of property adjacent to green areas and the other aspects of economic development that are a result of adequate green space creation.

When I think of green space, I’m not thinking just about the aesthetics of natural areas, but also about functionality and programming to include all of the things we love to do on a daily basis. Street trees are a good start, but what about interactive spaces and places that we will look forward to embracing on a regular basis? The beauty of having these larger open green spaces in cities is that we can leave our jobs and walk into a nice park that may be programmed for recreation (walking, cycling, hiking, etc.), musical events or other after-hours events.

We understand that there is a lack of public green space in Downtown Montgomery. Perhaps the reason for this is because there’s not a loud enough voice from residents of this city expressing the need for both small and large dedicated green spaces in downtown. Due to the riverfront improvement that sparked more interest in downtown entertainment venues, the perception of downtown Montgomery not being a great place to hang out is rapidly changing.

However, when I look at our parks downtown, I rarely see anyone using them for recreational or nature focused activities. And even though as kids most of us enjoyed cycling, I rarely see people cycling. My suspicion is because while the downtown parks that we do have are nice, they are either designed for sitting or programmed events. A person living or working downtown must drive to parks designed for more active pursuits. While the change that has occurred thus far is excellent, my hope is that we can continue to create more green space in our city and maximize its utilization by taking input about its design from younger residents.

Andrew Cole-Tyson is a landscape architect at 2WR, a 40-person architectural firm with offices in the historic Anderson Block Building on Commerce Street in downtown Montgomery, and in Columbus, GA. He views the landscape as an enormous canvas for experimentation and expression of ideas. A naturalist, he is particularly interested in relationships of people to nature and public park spaces. His work includes environmental and site analysis, site and community master planning, horticultural and planting design, irrigation design, graphic design, horticultural consulting and landscape architectural construction document production.

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Fixer-Upper Homes: Opportunity in Work Clothes!

By Sandra Nickel

This week I visited a neat 3 bedroom, 2 bath Midtown Montgomery brick cottage just east of Old Cloverdale. While it was not in move-in condition, it would hardly qualify as “rode hard and put up wet,” either. It comes complete with walk-in closet in the master bedroom and a jetted tub in the master bath!

Hardwood floors are stained and need to be refinished. New appliances are needed in the kitchen. And to become a really attractive rental, the home needs a good paint job. Assuming no hidden issues, I’d guess a renovation budget of $5,000 would handle it all. So for a total of just under $65,000, the house could be yours.

Because it is a FNMA foreclosure, you would be eligible even as an investor for FNMA HomePath Renovation Financing with only a 10% down payment (only 3% if you are going to live there!). Let’s break down some numbers quickly. The cost of acquisition of the house I’m talking about would, therefore, look like this:

Purchase price: $59,900 (assuming you can’t negotiate a better deal)
Improvements: $5,000
Total acquisition: $64,900
10% down payment $6,500
Loan amount: $58,400
Interest rate 15Yr: 4.25%

Payment
Principal & interest: $439.33
Tax: $34.50
Insurance: $50.00
Total: $523.83

You should be able to rent this property for at least $750.00 per month, giving you plenty of room to hire a property manager if you choose and to build a good cash reserve for the inevitable repairs and vacancies.

So where does the dirt come in? My $5,000 renovation budget did not include what I call “industrial strength” cleaning. That, if you will do it (down-on-your-hands-and-knees behind the commode, for example), you will attract a much better tenant. Folks with high standards appreciate cleanliness and they take care of your property!

The other thing not covered in the $5,000 is landscaping. Right now the yard needs some fluffing up, something else you can do yourself to build equity.

Fifteen years from now, your tenants will have bought you this house. At that point you can sell it to pay for college (or whatever). OR you can just use the monthly income to pay for whatever you’re dreaming about today.

Last month, 96 of the 272 total homes sold in the Montgomery marketplace were foreclosures — over one out of three! That means at least 96 folks looked past the “needs work” label and took advantage of the tremendous values available in our marketplace. As of today, August 21, there are 77 FNMA foreclosures available, most of which you as an investor can buy with as little as 10% down.

Over 200 years ago, poet John Greenleaf Whittier wrote, “For all sad words of tongue and pen, the saddest are these, ‘It might have been.’” Where will you be financially 15 years from now? Will you have capitalized on today’s Midtown Montgomery real estate opportunities? Or will you just be wishing for “what might have been?”

Sandra Nickel has been listing and selling residential real estate for over 29 years, most with an intense focus on Montgomery’s Midtown neighborhoods. Sandra serves on the Mid-Alabama Coalition for the Homeless, the Cloverdale Business Coalition, Historic Southview, the Volunteer and Information Center, Landmarks Foundation and her own neighborhood Garden District Preservation Association.

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Time to Buy?

By John Herzog

For 15% to 20% of Americans, the past few years have been a time of great economic difficulty due to loss of employment or dramatically reduced income. Nothing in this post is meant to diminish or ignore the economic hardship faced by this group. In the Great Depression of the late 1920’s and early 1930’s even a higher percentage were unemployed or suffered severe economic set backs. There is however, as there was in the case of the Great Depression, an economic opportunity for the 80% to 85% who have not yet been negatively impacted by the recent economic downturn.

One of the areas of economic opportunity is in the real estate market. While the focus of the majority of the media has been on the suffering of those who have been negatively impacted by the recession, and consequently have lost their homes (or much of the equity they had built in their home over the years), there is another story — the opportunity for a generation of new household formations to enter the housing market at the most affordable level since the 1950s.

According to statistics compiled by the Alabama Center for Real Estate at the University of Tuscaloosa, in the first quarter of 2005 in Alabama, it took an income of $27,104 per year to purchase the median priced home of $120,425. The median income that quarter in Alabama was $48,650. In the first quarter of 2010, surprisingly, the median income has actually risen in Alabama to $54,100, while the income to purchase the median priced home of $121,773 has declined to $25,360.

So as not to get caught up in numbers and statistics, let’s focus more on why real estate has become the most affordable it has been in over a generation. Now that one of every three sales is a house that had been foreclosed, all sales have to compete in price with the house being sold by the lender at rock bottom prices to get it off their books. This serves to bring down all real estate values, making prices the lowest they have been in decades. At the same time, in an effort to stimulate recovery, the Federal Reserve and U.S. Treasury have taken steps to drive interest rates down to levels not seen for over a generation. The 30 year fixed rate mortgage rate is hovering at 4% which is the lowest since Freddie Mac and Fannie Mae began to keep records in 1971.

With the combination of the lowest rates in modern history, the lowest prices in a generation, and a median income that continues to trend higher in Alabama, it is no wonder that real estate for the average Alabama family (not impacted by the economic downturn), is more affordable than it has ever been.

Since approximately 80% of the population has been able to hang on to their jobs, and many are actually making slightly more than in previous years, why has there not been a rush to new home ownership? The federal government understands that real estate values and sales have led the U.S. economy into every recession we have experienced and have also led us out. The feds are very focused on trying to maintain this environment of affordability and are struggling to understand why the real estate market has yet to gain traction toward recovery.

The only plausible answer can be summed up in a single word, and that word is fear. While 80% have kept their jobs and are doing well, the constant barrage of negative press concerning the economy keeps people in fear that they may be the next victim of the recession. People afraid of losing their income simply do not make major purchases like housing, even though it might be the best investment they could possibly make at the present time.

My conclusion that it is fear alone holding back resurgence in home purchases has to do with the sales that are taking place. Every month young people are coming of age, marrying, and forming new households. It is these new families that have been purchasing real estate at all time affordable rates because they have just been hired and did not experience the downturn personally over the past 24 to 36 months. In short, things have gone pretty well for them over the past 24 to 36 months and they believe the worst is over. Those of us who are older are much more cautious and much less convinced.

So what if these young families are wrong, the recession continues to drag on, and it finally reaches them? Will they have made a bad decision to buy a home rather than rent and wait to see when the economy will be in full recovery? I don’t think so. By waiting, only two things can change once the recovery really takes hold. First, prices will rise as the inventory of homes for sale declines and the number of buyers increases. Second, to avoid runaway inflation, the Federal Reserve will have to quickly and dramatically raise interest rates. The combination of rising prices and rising interest rates will cause affordability to dramatically decrease as incomes do not keep pace with the rising costs of purchasing. Those who have purchased already will have fixed payments and see their property values rise from the level they purchased the home, creating instant equity.

But, you may ask, what if the recession does hit those who purchase and they do lose their income? Everyone who loses a job (and consequently their income) is in danger of losing the roof over their head during the period of unemployment, but does it really matter if you own or if you rent? Will a landlord allow a renter to stay in a rental property indefinitely if they stop making the rent payment? Of course the answer is no, just as a mortgage company will not indefinitely allow an owner to stay in the property if they stop making their house payment.

However, it has been my observation that mortgage lenders have become much more patient than landlords in allowing the homeowner time to find new employment and catch up on their payments once they regain employment. So owning may actually be safer than renting in this economic environment. Mortgage companies do not want houses back in inventory and are often much slower to foreclose than in past years, while landlords know there are many more folks looking to rent than ever before, so they are becoming quick to evict those who get behind.

If a family has ever had the desire to own their own home, there may never be a better time. And in the words of Franklin Delano Roosevelt, “there is nothing to fear but fear itself.”

John Herzog is one of less than 350 Master Certified Mortgage Bankers designated by the Mortgage Bankers Association of America and holds their Master Faculty Fellow designation for their School of Mortgage Banking. He has taught continuing education classes for Realtors and Homebuilders throughout the southeastern states for over 20 years.

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A Midtown Montgomery house can send your kid (or grandkid) to college!

By Sandra Nickel

In 1984, I bought a townhouse in Woodley Park. Ever since then, the tenants have been making my payments by paying me rent. Sure, I have had to invest a few dollars along the way, but not much. Probably not over $5,000 total. If I sold the property today, I’d clear about $35,000. That’s a 700% return on my $5,000. Where else could I have made such a tremendous profit? Nowhere that I know of!

Midtown is full of great deals right now. For example, on Boultier in Old Cloverdale a 3 bedroom 2 bath home is offered at $99,900. It would rent easily for $900-$1,000 per month. Then there’s the house at 2133 Felder Terrace, also in Old Cloverdale, on the market at $100,000. It has rented in the past for $800 and the garage apartment out back brings $400 per month.

Midtown Montgomery residents wanting to invest in a property can obtain financing today at incredibly attractive rates—in the vicinity of 4% for a 15-year loan. Assuming a 20% down payment on that $100,000 house, the payment would be $591.75 for loan repayment and not more than another $200 per month for tax and insurance. Call it a total payment of $800 and rental income of $1,200. Even with money set aside for future repairs and vacancy and 10% of the rent paid for a professional property manager, the 2133 Felder Terrace house would still produce a positive cash flow each month AND would be paid off by tenants!

Imagine having a $100,000 paid-for house today. Wouldn’t that make a dandy dent in the cost of educating your college-age child! Or how’s about adding another $100,000 to your retirement funds…or your “trip around the world” fund…or whatever?

“But,” you say, “I don’t have $20,000 lying around for a down payment!” Good news here: you may have untapped resources. You can borrow from your 401k plan or a life insurance plan with cash value. Or how about getting those doting grandparents to partner with you, putting up the down payment as a “gift” that could then be repaid when the investment property is sold as Junior gets ready for college?

The point is that real estate is the only big-ticket investment you’ll ever be able to own that some else (tenants) will “buy” for you. Not stocks, not bonds, not mutual funds—only real estate. And the climate in Midtown Montgomery is perfect right now for you to chalk up a truly great buy on an investment property. Next time I’ll talk about how you can come out even better by being willing to get your hands dirty. Until then…

Sandra Nickel has been listing and selling residential real estate for over 29 years, most with an intense focus on Montgomery’s Midtown neighborhoods. Sandra serves on the Mid-Alabama Coalition for the Homeless, the Cloverdale Business Coalition, Historic Southview, the Volunteer and Information Center, Landmarks Foundation and her own neighborhood Garden District Preservation Association.

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Cloverdale SmartCode Update

By Stephen and Kate

Last Thursday and Friday the City of Montgomery’s Planning Department held public meetings in the basement of the Cloverdale Playhouse. The meetings were open-ended, come-when-you-can affairs, designed to share information about the Planning Department’s proposal for implementing SmartCode in the Five Points business district. Like many folks from all over Midtown, we wandered down to the Playhouse last week to look at the City’s various ideas.

The meetings were informal, with various exhibits on tables and walls throughout a big room in the basement. Residents were invited to move between the exhibits and talk to City personnel who were available to discuss any concerns. When we were there, folks were involved in a dozen conversations about their ideas for the neighborhood – sometimes with City personnel, sometimes with each other. Everyone was invited to leave comments using a standard form. Most people seemed to be very interested in giving written feedback.

The overheard comments ranged from the uninformed, strongly-held opinion (everybody has feelings of some sort about property rights and the aesthetics of buildings) to the expert-level conversation about implementation and origins of smart code (we had no idea what a “transect” was).

Here at MML, we’re delighted to be able to host copies of the drawings and exhibits from the meeting – in fact, we are the only site on the Internets with these pictures. Tremendous thanks to City Planner Tyler Caldwell for sharing with us. He’s also given us a copy of the results from the original 2006 design plan by Historic Southview, Old Cloverdale Business Coalition, AIA and countless other concerned citizens. Again, we believe that we are the only place online that you can download the document. If you care about the livability and look of your community and Midtown Montgomery, familiarity with this conversation is a crucial part of municipal participatory citizenship.

For the convenience of our readers, we have put all the images and documents from the meeting on this page here at MML. You can browse and download everything on this page.

Kate and Stephen are Midtown residents with a cat, a garden, an old house and a sense of adventure. They write about life in Midtown here and about life in Montgomery at their blog Lost in Montgomery.

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