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Spotlight on the Housing Market in Cincinnati-Middletown, Ohio-Kent U.S Department of Housing and Urban Development U.S. Department of the Treasury The Obama Administration's Efforts to Stabilize the Housing Market and Help American Homeowners The Cincinna9-‐Middletown OH-‐KY-‐IN Metropolitan Sta9s9cal Area (Cincinna9) is located along the Ohio River and includes 15 coun9es in 3 sta Cincinna9) and four other Ohio coun9es; six coun9es in Kentucky; and three coun9es in Indiana. The challenges in the Cincinna9 housing mark of the na9on. The foreclosure crisis in Cincinna9, as in other parts of the Midwest, developed much earlier than in other parts of the country. rose above the na9onal average -‐ the rise in distressed mortgage shares did not begin un9l 2007 in most other regions. The Cincinna9 MSA di bubble; yet, local house prices have fallen below their 2000 levels. Declining property values in Cincinna9 were fueled in part by excess housin crisis, but mainly by rising defaults, driven first by unsustainable mortgages , then by the economic downturn and climbing unemployment. Eco improve, but the local housing market remains fragile -‐ with high concentra9ons of distressed mortgages (those 90 or more days delinquent or and nearly 25 percent of home mortgages underwater. However, the Administra9on’s broad approach to stabilize the housing market has bee surrounding ci9es. This addendum to the Obama Administra9on’s Housing Scorecard provides a summary of trends and condi9ons in the local efforts to stabilize the housing market and help local homeowners. Spotlight on the Housing Market in Cincinnati-Middletown, Ohio-Kentucky-Indiana Population Growth, Employment, and Housing Market: Spotlight on the Housing Market in Cincinnati-Middletown, With 2.13 million people according to the most recent Census, the Cincinna9 MSA is the 27th largest in the na9on. From 2000 to 2010, popula9on growth was slow, increasing at an average rate of just 0.6 percent per year. Natural popula9on growth (births minus deaths) accounted for nearly all of that increase, as an average of only 350 more people moved into the Cincinna9 MSA each year than moved out. In Hamilton County, the popula9on declined by an average of 4,300 people, or 0.5 percent, annually. Ohio-Kentucky-Indiana Cincinnati Housing Unit Growth Outpaced Pop During the Past De Date of Census Cincinnati Population Annual Growth Rate Cincinnati Households Annual Growth Rate Cincinnati Housing Units Annual Growth Rate 4/1/00 2,009,66 -‐ 779,226 -‐ 833,067 -‐ Source: Census Bureau (2000 and 2010 Decennial) The Obama Administration's Efforts to Stabilize the Housing Market and Help American Homeowners - May 2012 inna9-‐Middletown OH-‐KY-‐IN Metropolitan Sta9s9cal Area (Cincinna9) is located along the Ohio River and includes 15 coun9es in 3 states: Hamilton in southwestern Ohio (includes City of U.S. Department ofin IHousing and Urban Development | bOffice Policy Development and Research a9) and four other Ohio coun9es; six coun9es in Kentucky; and three coun9es ndiana. The challenges in the Cincinna9 h ousing market have een more sof evere than those in many areas the dAecade spanned the Census, new housing produc9on exceeded household growth in the Cincinna9 MSA; net annual housing uni a9on. The foreclosure crisis in Cincinna9, as in other parts of the Midwest, developed much earlier than in other parts of tDuring he country. s early as 2002, bty he share of distressed mortgages greater than opula9on and ousehold rowth rates of 0.6 and 0.7 percent, respec9vely. This excess construc9on, while no ove the na9onal average -‐ the rise in distressed mortgage shares did not begin un9l 2007 in most other regions. The Cincinna9 MSA did the not corresponding see the rapid appprecia9on of thhe house pgrice evertheless contributed an opversupply f ousing housing and may have led to steeper price declines aher 2006. According to the Census B yet, local house The prices Cincinnati-Middletown have fallen below their 2000 levels. Declining Metropolitan property values in Cincinna9 wArea ere fueled in part by ena9on, xcess hn ousing construc9on the tyo ears rior tand o the oh OH-KY-IN Statistical (Cincinnati) is located along thein Ohio River includes 15 counties in 3 states: Hamilton in southwestern units in Cincinna9 increased by an average of 3,300, or 6.1 percent annually during the 2000s, higher than the na9onal rate of 4.4 percent duri ut mainly by rising defaults, driven first by unsustainable mortgages , then by the economic downturn and climbing unemployment. Economic condi9ons in Cincinna9 are star9ng to Ohiom(includes City of-‐Cincinnati) and fourof other Ohio counties; Kentucky; counties The challenges in thehome Cincinnati market have ome othree ther mlarge etro areas win as off Indiana. ueled by nvestor specula9on, investor purchases housing in Cincinna9 represented a rela9vely sma , but the local housing arket remains fragile with high concentra9ons distressed mortgages (those six 90 ocounties r more days in doverbuilding elinquent or iin n sfand oreclosure), n umbers vacant hiomes, years leading the crisis. owever, subprime lending increased significantly in the Cincinna9 MSA in that 9me, as data prepared by the Cinc rly 25 percent of been home m ortgages underwater. owever, Administra9on’s pproach to stabilize the housing crisis market been ianto real help to in Cof incinna9 and more severe thanHthose inthe many areas ofbroad the anation. The foreclosure inhas Cincinnati, as inhHomeowners other parts the Midwest, developed much earlier than innew other parts of in 2005 recei number o f s ubprime m ortgages i ncreased f rom 5 ,836 i n 1 995 t o 1 5,969 i n 2 005 a nd t hat o ne i n e very s even l ocal b orrowers ding ci9es. This addendum to the Obama Administra9on’s Housing Scorecard provides a summary of trends and condi9ons in the local economy and the impact of the Administra9on’s the country. Ashelp early 2002, the share of distressed mortgages rose above the national average - the rise in distressed mortgage shares did not begin until 2007 in most o stabilize the housing market and local as homeowners. The Obama Administration’s Efforts to Stabilize the Housing Market and Help American Homeowners | May 2012 other regions. The Cincinnati MSA did not see the rapid appreciation of the house price bubble; yet, local house prices have fallen below their 2000 levels. Declining property values in Cincinnati were fueled in part by excess housing construction in the years prior to the housing crisis, but mainly by rising defaults, driven first by unsustainable mortgages, then by the economic downturn and climbing unemployment. Economic conditions in Cincinnati are starting to improve, but the local housing market remains fragile - with high concentrations of distressed mortgages (those 90 or more days delinquent or in foreclosure), large numbers of vacant homes, and nearly 25 percent A modest economic the recovery is underway in Cincinna?. The a local economy had homeowners expanded by an ain verage of 8,020 jobs per year since the third ation Growth, and Housing Market: of Employment, home mortgages underwater. However, the Administration’s broad approach to stabilize housing market has been real help to Cincinnati and Cincinnati Housing Unit Growth Outpaced Population and Household job losses were significant as a result Gorowth f the recent recession: during the two year period beginning the first quarter of 2008, the region averag surrounding cities. This addendum to the Obama Administration’s Housing Scorecard provides a summary of trends and conditions in the local economy and the impact of the During t he P ast D ecade economy h as m ade m odest g ains i n t he y ears s ince, w ith a n a verage o f 9 ,250 j obs a dded a nnually, o r 0 .9 p ercent. T he p rofessional and busine 3 million people according to the most recent Census, the Cincinna9 MSA is the have been the major contributors to job growth during the past 2 years, increasing jobs by a combined total of 13,000 per year. Employment d gest in the na9on. From 2000 to 2010, pefforts opula9on was slow, ncreasing market and help local homeowners. Administration’s togrowth stabilize the ihousing Date of Census 4/1/00 4/1/10 Cincinnati Population Annual Growth Rate Cincinnati Households Annual Growth Rate Cincinnati Housing Units Annual Growth Rate Population Growth, Employment, and Housing Market: same period by an average of 2,000 jobs lost each year. The na9onal unemployment rate peaked in October 2009 at 10.0 and fell to 8.2 percen 2,009,664 2,130,151 has followed a more favorable trend, improving from a high of 10.0 in March 2010 to 7.5 percent in April 2012. -‐ 0.6% 779,226 830,608 -‐ 833,067 -‐ Source: Census Bureau (2000 and 2010 Decennial) 0.7% 917,396 1.0% Job Market Conditions Improving for Cincinnati and Nation Thousands With 2.13 million people according to the most recent Census, the Cincinnati Quarterly Nonfarm Employment MSA is the 27th largest the nation. Fromhousehold 2000 to 2010, population he decade spanned by the Census, new housing in produc9on exceeded growth in the Cincinna9 MSA; net annual housing unit growth at 1.0 percent was han the corresponding popula9on and hincreasing ousehold growth rates of 0.6 and 0.7 pof ercent, respec9vely. excess construc9on, while not as great as in some parts of the 1,060 growth was slow, at an average rate just 0.6 percentThis per year. nevertheless contributed to an oversupply of housing and may have led to steeper price declines aher 2006. According to the Census Bureau, the number of vacant Natural population growth (births minus deaths) accounted for nearly all of that Cincinna9 increased by an average of 3,300, or 6.1 percent annually during the 2000s, higher than the na9onal rate of 4.4 percent 1,040 during the same period. While ding in some other metro areas as faverage ueled by investor specula9on, investor home moved purchases in Cthe incinna9 represented a rela9vely small share of total purchases in the increase, as wan of only 350 more people into Cincinnati ading into the crisis. However, subprime lending increased significantly in the Cincinna9 MSA in that 9me, as data prepared by the 1,020 Cincinna& Enquirer shows that the MSA each year than moved In Hamilton the population of subprime mortgages increased from 5,836 in 1995 tout. o 15,969 in 2005 and County, that one in every seven new ldeclined ocal borrowers in 2005 received a subprime loan. 1,000 by an average of 4,300 people, or 0.5 percent, annually. 980 960 940 Date of Census 4/1/2000 4/1/2010 128 Cincinnati Population 2,009,664 2,130,151 126 - 0.6% 779,226 830,608 - 0.7% Annual Growth Rate Cincinnati Households Annual Growth Rate Year and Quarter Cincinnati Housing Units Cincinna9 MSA Seasonally Adjusted Data Annual Growth Source: Bureau of Labor Sta9s9cs 833,067 917,396 Na9on (right axis) Rate - 1.0% 124 Millions 134 Cincinnati Housing Unit Growth Outpaced Population and 132 130 Household Growth During the Past Decade 132 130 6 4 2 0 Cincinna9 MSA Seasonally Adjusted Data Source: Bureau of Labor Sta9s9cs Source: Census Bureau (2000 and 2010 Decennial) Spotlight on Cincinnati MSA | Page 1 10 134 980 12 138 136 During the decade spanned by the Census, new housing production 960 exceeded household growth in the Cincinnati MSA; net annual housing unit 940 growth at 1.0 percent was greater than the corresponding population and st economic recovery is underway in Cincinna?. local economy had expanded by an average of 8excess ,020 jobs per year since the third quarter of 2003, represen9ng a 0.8 percent pace of growth. But household growth rates ofThe 0.6 and 0.7 percent, respectively. This es were significant as a result of the recent recession: during the two year period beginning the first quarter of 2008, the region averaged 35,900 jobs lost, or a 3.4 percent annual decline. The local construction, notwas as in parts ofathe nation, y has made modest gains in the ywhile ears since, ith great an average of 9some ,250 jobs added nnually, or 0.9 nevertheless percent. The professional and business services, leisure and hospitality, and manufacturing sectors Year Quarter en the major contributors to job during the past years, increasing jobs bhave y a combined otal of 13,000 per year. Employment declines, mainly in the government, offset job agnd ains during this contributed togrowth an oversupply of2housing and may led totsteeper price riod by an average of 2,000 jobs lost each year. The na9onal unemployment rate peaked in October 2009 at 10.0 and fell to 8.2 percent by May 2012. The uCincinna9 nemployment MSA rate for the Cincinna9 MSA Na9on (right axis) declines after 2006. According toin the Census Bureau, thein number of vacant wed a more favorable trend, improving from a high of 10.0 March 2010 to 7.5 percent April 2012. Seasonally Adjusted Data Source: Bureau of Labor Sta9s9cs units in Cincinnati increased by an average of 3,300, or 6.1 percent annually during the 2000s, higher than the national rate of 4.4 percent during the same period. While overbuilding in some other metro areas was fueled by investor Unemployment Rate Remains High, speculation, investor home purchases in Cincinnati represented a relatively Job Market Conditions Improving for Cincinnati and Nation But Shows Improvement small share of total purchases in the years leading into the crisis. However, Quarterly Nonfarm Employment Monthly Unemployment Rate (Percent) subprime lending increased significantly in the Cincinnati MSA in that time, as 12 060 140 data prepared by the Cincinnati Enquirer shows that the number of subprime 138 10 mortgages increased from 5,836 in 1995 to 15,969 in 2005 and that one 040 136 in every seven new local borrowers in 2005 received a subprime loan. 8 020 000 140 Na9on 128 126 124 8 Millions erage rate of just 0.6 percent per year. Natural popula9on growth (births minus accounted for nearly all of that increase, as an average of only 350 more people nto the Cincinna9 MSA each year than moved out. In Hamilton County, the on declined by an average of 4,300 people, or 0.5 percent, annually. 6 4 2 0 Seaso Sourc nal pace between 2000 and mid-‐2006. From their peak in 2006 to the end 009, home prices fell by 18 percent in CincinnaO, approximately half the e of 31 percent. The net effect for CincinnaO has current home prices 2000, compared to current prices of where they were aand t the bUrban eginning of U.S Department Housing Development eat-‐sales HPI that excludes distressed sales shows that CincinnaO house U.S. Department of the Treasury 3 levels without these discounted sales. 35 7,000 30 6,000 25 5,000 20 4,000 15 3,000 has improved since 2010. Rental vacancy rates in CincinnaO have e naOon since the la^er part of 2008. According to Reis Inc., the overall was 4.9 percent in the first quarter of 2012, down from 6.4 percent a e in the naOonal average from 6.2 to 4.9 percent. During the first quarter ncreased by 2 percent from a year ago to $732. The average rent ent to $1,070 during the same period. 10 2,000 5 1,000 0 0 2003 2004 2005 2006 2007 2008 NaOon: ExisOng Sales (right axis) 2009 2010 2011 NaOon: New Sales (right axis) CincinnaO Mof SA: EPolicy xisOng Sales Development and Research CincinnaO MSA: New Sales U.S. Department of Housing Urban the Development | Office The Obama Administration’s Eff orts to and Stabilize Housing Market and Help American Homeowners | May 2012 Spotlighton onthe theHousing HousingMarket MarketininCincinnati-Middletown, Cincinnati-Middletown,Ohio-Kentucky-Indiana Ohio-Kentucky-Indiana Spotlight main low levels. ExisOng home sales egan a as teep steep ddecline ecline in in 22006 006 bbut ut ain at alt ow levels. E xisOng home sales bb egan A modest economic is tunderway in Cincinnati. me sales also fell sharply from 2006 through 008 and arecovery nd hhave ave conOnued conOnued e sales also fell sharply from 2006 through 22008 to o bank-‐owned properOes and seconomy hort sales remain igh at 330 0 ppercent ercent The local had expanded by bank-‐owned properOes and short sales remain hhigh at oof f an average of 8,020 jobs per market and are comparable to the naOonal rate oof f 229 9 ppercent. ercent. TThe he hhigh igh market and are comparable to the rate year since thenaOonal third representing a 0.8 percent pace of – which w ere sold deep discounts as cquarter ontributed tof to the t2003, he conOnued conOnued which wand ere sold at at deep discounts – –h h as contributed o encies Foreclosures: p t o t he p eak i n h ome p rices i n m id-‐2006, a r elaOvely s luggish e conomy, growth. But job losses were signifi cant to the peak in home prices in mid-‐2006, a relaOvely sluggish economy, as a result of the recent recession: ousing supply, and distressed sales hich egan rising rising eearlier arlier than than n in the the using swupply, and distressed sales -‐ -‐w w hich bfb egan during two year period beginning the first quarter of 2008, the uggle ith huch igh ortgage dthe and oreclosure levels. As of iM arch ncreases lm ower than nelinquency aOonal rates. The oreLogic repeat-‐sales creases mm uch lower than naOonal rates. CCoreLogic epeat-‐sales 6 m etropolitan aregion reas rianked bincinnaO-‐Middletown y share of T35,900 mhe ortgages ajobs t SA rrisk oas f foreclosure (90 percent annual decline. he r ise i n h ome p rices n t he C M w averaged lost, or a 3.4 e losure rise in phrocess) ome prices in the to CincinnaO-‐Middletown M SA dwata as also show that a ccording L PS A pplied A nalyOcs. L PS nal pace between 2000 and id-‐2006. From their peak eak in in 22006 006 to to the the eend nd al pace bietween 2000 a.1 nd mm id-‐2006. From their The economy has modest gains in the years since, with an eclosure ncreased y 5blocal ercent during the past pmade yaear, from 16,750 2009, home prices fbell 1p8 percent in incinnaO, pproximately alf itn the 09, home prices ell by y 18 pecline ercent CC incinnaO, pproximately hhalf he ompared w ith a average nfhe aOonal dffect oCf in 2.4 percent dacuring the sannually, ame of 9,250 jobs added or 0.9 percent. The professional e o f 3 1 p ercent. T n et e f or incinnaO h as urrent h ome p rices of 31 pthe ercent. Tf he net effect for CincinnaO has current home phrices w t hat r ate o m ortgages a t r isk o f f oreclosure i n C incinnaO ad b een 000, 2000, compared to current prices here they wwere ere at at the the bbeginning eginning oof f compared o current prices ww here they business services, leisure and fore m id-‐2008 btand ut ose less teeply during tshe foreclosure crisis. hospitality, In ouse the first and manufacturing sectors eat-‐sales PI hat that erxcludes dsistressed sales hows that CCincinnaO incinnaO at-‐sales HH PI elxcludes distressed sith ales shows that hhouse wthere argely associated wmajor unaffordable loan products, 3 reclosures l evels w ithout t hese d iscounted s ales. have been the contributors to job growth during the past 2 years, evels without hese discounted sales. percent of acOve mortgages ore slowly in CtincinnaO -‐ from 2.5 to 3.9 during increasing jobs by raates combined total of 13,000 per year. Employment r hthe aOon was 1.6 t2o 010. 4.4 pRercent. Beginning in i2n 009, foreclosures as inmproved since ental vacancy CincinnaO incinnaO have ave were has i mproved s ince 2 010. R ental v acancy r ates i n C h s annd were triggered by p loss oomainly f f i2ncome, unemployment, and tnhe egaOve equity declines, in theto government, offset job gains during this same e aOon since the la^er art 008. ccording to RReis eis Inc., Inc., verall naOon sf ince the la^er part of 008. AA ccording the ooverall eserve hicago. During this O2me, the hare doown f severely elinquent was 4o.9 pCercent the first quarter o 2s012, from 66d .4 percent ercent aa was 4i.9 parly ercent iperiod n in tahe fiarst quarter oaverage f rf 2emains 012, down from .4 peverely by an of 2,000 jobs lost each year. The national cent n e 2 010, nd ier d ipping, a t t hat l evel. S e the naOonal average from 6.2 to 4.9 ercent. DDuring uring the the fifirst rst qquarter uarter in in the nfaOonal aaOon, verage from 6.2 4.9 pp ercent. aOcally or bty he pfeaking t t7o .9 prate ercent in eTarly 010, but have since unemployment peaked in October 2009 at 10.0 and fell to 8.2 ncreased pnercent rom yaear ago to $732. he average a2verage rent creased by 2 2p ercent from a ay ear ago to $732. The rent ent $1,070 during the same period. percent by May t to to $1,070 during the same period. 2012. The unemployment rate for the Cincinnati MSA osure compleOon rate followed since April 2a 009 in CincinnaO, at 1.9 ptrend, ercent, is has more favorable improving from a high of 10.0 in 0 percent. Although foreclosure compleOons have been on the decline percent in April 2012. re compleOons hMarch ave been r2010 elaOvely to flat 7.5 in CincinnaO during the same Ome s conOnue to affect foreclosure compleOons locally and naOonally. ortgages in the CincinnaO MSA are currently underwater – compared to 23 Home sales in the Cincinnati MSA remain at low levels. onal homeowners and loans potenOally at risk. Existing home sales began a steep decline in 2006 but have leveled off since 2008. New home sales also fell sharply from 2006 through 2008 and have continued a slow decline. Sales of bank-owned properties enciesand andForeclosures: Foreclosures: ncies and short sales remain high at 30 percent of existing home sales in the uggle with high mortgage delinquency and foreclosure levels. s of March market are in lineAAs with the national rate of 29 percent. The ggle with high mCincinnati ortgage delinquency and and foreclosure levels. of March 6 metropolitan areas ranked by share of mortgages at risk of foreclosure (90 metropolitan areas ranked by share of of mortgages at discounted risk of foreclosure (90 high proportion deeply distressed sales has contributed to losure process) according to LPS Applied AnalyOcs. LPS data also show that osure process) according to LPS Applied AnalyOcs. LPS data also show that eclosure increased by 5.1 percent during the past yin ear, from 16,750 in the weakness home prices. closure increased by 5continued .1 percent during the past year, from 16,750 in A relatively sluggish economy, ompared with a naOonal decline of 2.4 percent during the same mpared with a naOonal population decline of 2.4 pgrowth, ercent during the same housing supply, and distressed excess w that the rate of slow mortgages at risk of foreclosure in an CincinnaO had been hat the rate of mortgages at risk of foreclosure in CincinnaO had been efore mid-‐2008 bsales ut rose seen less steeply during the fin oreclosure crisis. n the nation first earlier the rest ofIn Ithe kept Cincinnati home ore mid-‐2008 but rose less steeply during than the foreclosure crisis. the first reclosures where largely associated with unaffordable loan products, eclosures where price largely aincreases ssociated with unaffordable loan products, much lower than national rates. The CoreLogic repeatore slowly in CincinnaO -‐ from 2.5 to 3.9 percent of acOve mortgages during re slowly in Cin incinnaO -‐ from 2SA .5 to 3.9 percent of acOve mortgages during pletion ates the Cincinnati r the nRaOon was 1.6 to 4house .4 pM ercent. Beginning in 2(HPI) 009, foreclosures were the rise in home prices in the price index shows wthat the naOon was 1sales .6 to 4.4 percent. Beginning in 2009, foreclosures ere s and were triggered by loss of income, unemployment, and negaOve equity and w ere t riggered b y l oss o f i ncome, u nemployment, a nd n egaOve Cincinnati-Middletown MSA was approximately one-quarter the national ter 2012 Since April 2009 of severely delinquent equity eserve of Chicago. During this Ome, the 1s, hare erve of Chicago. During this Ome, the share of severely delinquent Foreclosure cent in early 2010, and aier dipping, r2000 emains aand t that mid-2006. level. Severely between Foreclosure atepace Foreclosure Rate nt in early 2R010, and aier dipping, remains at that level. Severely From their peak in 2006 to the end Completions aOcally for the naOon, peaking at 7.9 percent in early 2010, but have since Ocally for the naOon, peaking at 7.9 percent in early 2in 010, but have since home prices fell by 18 percent of the price bubble March 2009, 0.1% house 17,900 1.9% 0.1% 2,693,300 approximately 2.0% in Cincinnati, half the national average peak-to-low losure rate since April 2009 in CincinnaO, at 1.9 percent, is ousing cUompleOon nits; sure compleOon decline rate since of April 2009 in CincinnaO, 1.9 peffect ercent, for is Cincinnati is that home prices are 31 percent. Theat net 0 percent. osures since AAlthough pril 2009foreclosure compleOons have been on the decline percent. Although foreclosure compleOons have been on the decline re compleOons hnow ave been relaOvely flat were in CincinnaO during the same Oof me where they at the beginning e compleOons have been relaOvely flat in CincinnaO during the same Ome 2000. Without distressed sales, s conOnue to affect foreclosure compleOons locally and naOonally. conOnue to affect foreclosure chouse ompleOons locally would and naOonally. prices at much ortgages in the CCincinnati incinnaO MSA are currently underwater – cbe ompared to 23 higher 2003 levels, as seen in rtgages in the CincinnaO MSA paotenOally re currently nderwater – compared to 23 onal homeowners and loans at ruisk. national home prices. nal homeowners and loans potenOally at risk. The Cincinnati rental housing market has improved since 2011. According to Reis Inc., the overall apartment vacancy rate in Cincinnati was 4.9 percent in the first quarter of 2012, down from 6.4 percent a year earlier and similar to the decline in the national vacancy rates from 6.2 to 4.9 percent. During the first quarter of 2012, average rents in Cincinnati increased by 2 percent from a year ago to $732. The average rent nationwide also increased by 2 percent to $1,070 during the same period. pletion Rates in the Cincinnati MSA etion Rates in the Cincinnati MSA Trends in Mortgage Delinquencies and Foreclosures: ter 2012 Since April 1, 2009 er 2012 Since April 1, 2009 Foreclosure Foreclosure Rate Foreclosure Rate Foreclosure Completions oreclosure Rate Foreclosure Rate 0.1% Completions 17,900 1.9% 0.1% 2 ,693,300 17,900 1.9% 0.1% 2.0% Cincinnati homeowners 0.1% 2,693,300 2.0% continue to struggle with high mortgage ousing Units; using Usnits; and foreclosure levels. As of March 2012, Cincinnati osures ince April delinquency 2009 ures since April 2009 placed 111th out of 366 metropolitan areas ranked by share of mortgages at risk of foreclosure (90 or more days delinquent or in the foreclosure process) according to LPS Applied Analytics. LPS data also show that Cincinnati area mortgages at risk of foreclosure increased by 5.1 percent during the past year, from 16,750 in March 2011 to 17,600 in March 2012, compared with a national decline of 2.4 percent during the same period. CoreLogic data since 2000 show that the rate of mortgages at risk of foreclosure in Cincinnati had been consistently higher than the nations’ before mid-2008, but rose less steeply during the Sources: CoreLogic, HUD/Census Bureau, and NaOonal AssociaOon of Realtors Cincinnati Home Prices Decline New andExisting Existing Home Sales: Cincinnati Cincinnati Compared to the Nation Nation Although Did Home Not Experience Run Up Compared of Housingto Bubble New and Sales: the Annual ome ales thousands) Repeat-‐Sales House Price Index (Jan 2000 = 100) Annual HHome SSales ((thousands) 220 50 50 10,000 10,000 9,000 9,000 45 200 45 40 40 180 35 35 160 30 30 25 140 25 8,000 8,000 7,000 7,000 6,000 6,000 5,000 5,000 20 20 120 15 15 100 10 10 80 5 5 0 0 4,000 4,000 3,000 3,000 2,000 2,000 1,000 1,000 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 NaOon: ExisOng Sales (CincinnaO-‐Middletown right axis) MSA NaOon: ExisOng Sales (right axis) CincinnaO M SA: ExisOng Sales Source: CoreLogic. Metro aM rea HEPI CincinnaO SA: xisOng Sales Sources: CoreLogic, HUD/Census Bureau, and NaOonal AssociaOon of Realtors Sources: CoreLogic, HUD/Census Bureau, and NaOonal AssociaOon of Realtors 2009 2009 2010 2010 2011 2011 0 0 NaOon: New Sales (right axis) NaOon NaOon: New Sales (right axis) CincinnaO MSA: New Sales CincinnaO MSA: New Sales Distressed Mortgage SharesHome Rose Above National Cincinnati Prices Decline Decline Level in 2002; Cincinnati HomeRemain Prices Peak and Current Shares Nation Although Did Not Not Experience Experience Run Up UpBelow of Housing Housing Bubble Although Did Run Bubble Mortgages 90+ Days Delinquent (Percent of Aof ll AcOve Mortgages) Repeat-‐Sales HHouse ouse PPrice rice IIndex ndex ((Jan Jan 22000 000 == 1100) 00) Repeat-‐Sales 9 220 220 8 200 200 7 180 180 6 160 5 160 4 140 140 3 120 120 2 100 100 1 0 80 80 Source: CoreLogic Source: CoreLogic. Metro area HPI Source: CoreLogic. Metro area HPI 9 9 9 8 8 8 7 7 7 6 6 5 5 6 4 4 3 5 3 2 2 1 4 1 0 0 CincinnaO MSA CincinnaO-‐Middletown MSA CincinnaO-‐Middletown MSA NaOon NaOon NaOon RentalMortgage Vacancy Rates Trend to the Nation Distressed Shares RoseSimilar Above National Level in 2002; Distressed Mortgage Shares Rose Above National Level in 2002; Quarterly Apartment Rental Vacancy Rates (Percent) Peak and Current Shares Remain Below Nation Peak and Current Shares Remain Below Nation Mortgages 90+ Days Delinquent (Percent of All AcOve Mortgages) Mortgages 90+ Days Delinquent (Percent of All AcOve Mortgages) Year and Quarter Source: Reis Inc. Source: CoreLogic Source: CoreLogic CincinnaO Metro Area CincinnaO MSA CincinnaO MSA NaOon NaOon NaOon foreclosure crisis. In the first years of the crisis when single-family foreclosures where largely Rental Vacancy Rates Trend Similar at to the Nation associated with unaffordable loan products, mortgages riskNation of foreclosure rose more Rental Vacancy RatesRTrend Similar to the Quarterly Apartment ental Vacancy Rates (Percent) slowly in Cincinnati - from 2.5 toA3.9 percent ofVacancy activeRmortgages Quarterly partment Rental ates (Percent) during 2007 and 2008. The comparable rise for the nation was 1.6 to 4.4 percent. Beginning in 2009, foreclosures 9 9 were increasingly associated with prime loans and were triggered by loss of income, 8 unemployment, and negative equity according to research by the Federal Reserve Bank of 8 Chicago. During this time, the share of severely delinquent mortgages in Cincinnati rose 7 7 to 5.9 percent in early 2010, and after dipping, remains at that level. Severely delinquent 6 6 5 5 Spotlight on Cincinnati MSA | Page 2 metropolitan areas ranked by share of mortgages at risk of foreclosure (90 sure process) according to LPS Applied AnalyOcs. LPS data also show that losure increased by 5.1 percent during the past year, from 16,750 in mpared wU.S ith a nDepartment aOonal decline of 2of .4 pHousing ercent during and the same Urban Development hat the rate of mortgages at risk of foreclosure in CincinnaO had been U.S. Department of the Treasury ore mid-‐2008 but rose less steeply during the foreclosure crisis. In the first eclosures where largely associated with unaffordable loan products, re slowly in CincinnaO -‐ from 2.5 to 3.9 percent of acOve mortgages during he naOon was 1.6 to 4.4 percent. Beginning in 2009, foreclosures were and were triggered by loss of income, unemployment, and negaOve equity erve of Chicago. During this Ome, the share of severely delinquent nt in early 2010, and aier dipping, remains at that level. Severely cally for the naOon, peaking at 7.9 percent in early 2010, but have since 180 160 140 120 100 80 CincinnaO-‐Middletown MSA NaOon U.S. Department of Housing Urban the Development | Office of Policy Development and Research The Obama Administration’s Eff orts to and Stabilize Housing Market and Help American Homeowners | May 2012 sure compleOon rate since April 2009 in CincinnaO, at 1.9 percent, is percent. Although foreclosure compleOons have been on the decline compleOons have been relaOvely flat in CincinnaO during the same Ome conOnue to affect foreclosure compleOons locally and naOonally. tgages in the CincinnaO MSA are currently uCompleti nderwater –on compared o 2the 3 Cincinnati MSA Foreclosure Ratestin nal homeowners and loans potenOally at risk. First Quarter 2012 Area Foreclosure Completions Cincinnati MSA Nation r 2012 Distressed Mortgage Shares Rose Above National Level in 2002; Peak and Current Shares Remain Below Nation Since April 1, 2009 Foreclosure Completions Foreclosure Rate 1,300 0.1% 17,900 1.9% 185,500 0.1% 2,693,300 2.0% Mortgages 90+ Days Delinquent (Percent of All AcOve Mortgages) 9 8 7 6 5 Note: Foreclosure Rates as Percent of All Housing Units; Data through March 2012 for Foreclosures since April 2009 Source: Realty Trac and Census Bureau Spotlight on the Housing Market in Cincinnati-Middletown, Ohio-Kentucky-Indiana 4 3 The Administration’s Efforts to Stabilize the Cincinnati Housing Market: 2 tion Rates in the Cincinnati MSA oreclosure Rate Foreclosure Rate Source: CoreLogic. Metro area HPI 1 mortgages rose more dramatically for the nation, Fpeaking at 7.9 rom the launch of the AdministraEon’s assistance programs in April 2009 through the end of March 2012, nearly 34,000 mortgage assistance intervenEons have been 0 to homeowners in the CincinnaE metropolitan area. Nearly 20,000 intervenEons were offered through the Home Affordable ModificaEon Program (HAMP) and April 1, 2010, 2009 percentSince in early but have since declined tooffered 6.6 percent. the Federal Housing AdministraEon (FHA) loss miEgaEon and early delinquency intervenEon programs. An esEmated addiEonal 14,000 proprietary mortgage Foreclosure Foreclosure Rate modificaEons have been offered through HOPE Now Alliance servicers. While some homeowners may have received help from more than one program, the number of Completions Emes assistance has been offered in the Chicago MSA is nearly double the number of foreclosures completed during this period (17,900). In addiEon to offers of Realty data indicate that the foreclosure completion rate since April Trac 17,900 1.9% MSA and Hardest Hit Fund have NaOon to homeowners, the AdministraEon’s Neighborhood StabilizaEon PCincinnaO rogram (NSP) helped to stabilize the Chicago housing 2in ,693,300 2.0% 2009 Cincinnati, at 1.9 percent, is slightly less mortgage than theaid national market. Source: CoreLogic 0.1% 0.1% using Units; rate ures since April 2009 of 2.0 percent. Although foreclosure completions have been on the decline nationally over the past year, foreclosure completions have been relatively flat in Cincinnati during the same time period; however, lender process reviews continue to affect foreclosure completions locally and nationally. CoreLogic reports that 25 percent of mortgages in the Cincinnati MSA are currently underwater – compared to 23 percent nationally - representing additional homeowners and loans potentially at risk. The Administration’s Efforts to Stabilize the Cincinnati Housing Market: Mortgage Aid Extended More an 34,000 Times to Mitigate Rising Foreclosures Rental Similar the Nation CincinnaE MSA: CVacancy umulaEve Rates Offers Trend of Aid by Source Cto ompared with Foreclosure Quarterly A partment Rental Vacancy Rates (Percent) Since April 1, 2009 (Thousands) 40 9 35 30 Mortgage Aid Offers in CincinnaE MSA from April 2009 through March 2012: 34,000 Foreclosure CompleEons Over Same Period: 17,900 8 25 20 7 15 10 6 5 0 5 4 FHA Loss MiEgaEon Hamp ModificaEons EsEmated Hope Now ModificaEons Foreclosure CompleEons From the launch of the Administration’s assistance programs in April 2009 through the end of March 2012, nearly 34,000 mortgage Note: Data on HOPE Now proprietary mortgage modificaEons a re n ot a vailable a t t he m etropolitan a rea l evel. However, HOPE Year nd Quarter Now Alliance reports 139,300 non-‐HAMP modificaEons since April 1, 2009 in the states of OH, KY, and IN of which 10 percent assistance interventions have been offered to homeowners in the CincinnaO M etro A rea NaOon are esEmated by HUD to have occurred in the CincinnaE MSA. Cincinnati metropolitan area. Nearly 20,000 interventions were Sources: Departments Source: Reis Inc. of HUD and Treasury, HOPE Now Alliance, and Realty Trac. offered through the Home Affordable Modification Program (HAMP) and the Federal Housing Administration (FHA) loss mitigation and early In addition to stabilizing neighborhoods and providing affordable housing, NSP funds have delinquency intervention programs. An estimated additional 14,000 helped save jobs. Each home purchased, rehabilitated and sold through the NSP program is proprietary mortgage modifications have been offered through HOPE the result of the efforts of 35 to 50 local employees. Now Alliance servicers. While some homeownersGiven may have over three received rounds, the Neighborhood StabilizaJon Program has invested $7 billion naEonwide to help work with non-‐profits orporaEons to turn has tens obeen f thousands of The City of Middletown was awarded $2.1 million under NSP1. help from more than one program, the number oflocaliEes times assistance has and community Overall,development a total of c$52.7 million awarded to five• blighted NSP grantees in the Cincinnati abandoned and foreclosed homes that lower property values into homeownership opportuniEes and the properEes and to rehabilitate properEes that are funcEo been offered in the Cincinnati MSA is nearly double the number of that communiEes MSA:need. the cities of Cincinnati and Middletown, OH; the counties and Butler, OH; affordable rental housing The city hof as Hamilton a large vacancy problem, with nearly 3000 vacant ho In addition to offers eliminates led their by destabilizing effect on neighborhoods. The NSP1 foreclosures completed during this period (17,900). and one consortium, the Cincinnati-Hamilton County Consortium, Hamilton County NSP1 funds were granted to all states and selected local governments on a formula basis under Division B, Title rehabilitate, and sell properEes that were deterioraEng, vandaliz of mortgage aid to homeowners, the Administration’s Neighborhood andAct including Cityuof Cincinnati, Housing III of the Housing and Economic Recovery (HERA) of 2as 008; members NSP2 funds athe uthorized nder the American the Cincinnati income Metropolitan families. and Reinvestment Act (the RAuthority ecovery Act) (CMHA), of 2009 provided grants to states, Support local governments, Stabilization Program (NSP) and Hardest Hit FundRecovery have helped to Local Initiatives Corporation (LISC), and the Model Group. The nonprofits and a consorEum of nonprofit enEEes on a compeEEve basis; and NSP3 funds authorized under the • The CincinnaJ-‐Hamilton County ConsorJum has targeted NSP2 stabilize the Cincinnati housing market. government jurisdictions received a total of $22.7 million in NSP1 funds and $6.0 and a weak housing mar Dodd–Frank Wall Street Reform and Cfour onsumer ProtecEon Act of 2010 provided neighborhood stabilizaEon populaEon growth, high unemployment, grants to all states and select governments on ain formula basis. The fmillion unds have in been used ffunds. or the acquisiEon, demoliEo million NSP3 funds, and the consortium received a total vacancy. of $24.1 NSP2 owner-‐occupied units across seven communiEes. One example o Given over three rounds, the Neighborhood Stabilization Approximately 513 hhouseholds have benefi ted from NSP, and activities In addiEon to stabilizing neighborhoods and providing affordable ousing, NSP funds have already helped save jobs. Each rehabilitaEon of the Elberon, a funded landmark aby partment building in C Program has invested $7 billion nationwide to help work and sold home plocalities urchased, rehabilitated the NSP program is the result of the efforts of 35 to 50 lto ocal prominence in the East Price Hill community. thethrough program are expected to provide assistance an additional 920 owner-occupied and Ajer years of negle employees. to turn tens in foreclosure. In partnership with the local non-‐profit Price Hill, t with non-profits and community development corporations renter households. Examples of how these funds have beenconjuncEon put to use are below. with low iprovided ncome housing tax credits to redesign the h of thousands of abandoned and foreclosed homesOverall, that alower total of property $52.7 million has been awarded to five NSP grantees in the CinncinaE MSA: the ciEes of affordable senior housing. In another ConsorEum development, k and M iddletown, OH; the counEes of Hamilton and Butler, OH; and one consorEum, the CincinnaE-‐ struggling community was transformed into a desirable neighbor values into homeownership opportunities and the CincinnaE affordable rental • The City of Cincinnati and Hamilton County were awarded a total of $10.5 Hamilton County ConsorEum, led by Hamilton County and including as members the City of CincinnaE, the member, Model Group, demolished 15 dilapidated mulE-‐family b housing that communities need. CincinnaE Metropolitan Housing Authority (CMHA), Local niEaEves funds. Support CA orporaEon and the Model has been two detached rental conages for income million in INSP1 portion(LISC), of these funds targeted towards tenlow city andseniors, thirty-‐five m Group. The four government jurisdicEons received a total of $22.7 million in NSP1 funds and $6.0 million in families, and four single-‐family units for homeowners. In a third C 15 county neighborhoods which were statistically identifi ed as having the greatest NSP3 funds, and the consorEum received a total of $24.1 million in NSP2 funds. Approximately 513 households Metropolitan Housing Authority (CMHA) put NSP2 funds to use b NSP1 funds were granted to all states and selected local governments need. The funds have theto effect stabilizing communities three have already benefited from NSP, and acEviEes funded by the program are ehad xpected provide of assistance to an these senior living facility in through Mt. Healthy. Known as the Reserve on Sout on a formula basis under Division B, Title III of the addiEonal Housing920 and owner and renter households. Examples of how these funds have been put to use are provided rental units for residents 55 years and older when completed in 2 major activities: the purchase and redevelopment of properties to increase affordable below. affected more than 100 blighted and foreclosed properEes across Economic Recovery Act (HERA) of 2008; NSP2 funds authorized homeownership, the creation of affordable rental housing, and hazard abatement and under the American Recovery and Reinvestment Act (the Recovery Act) nder Naffected SP3, the City of CincinnaJ nd Hamilton County were demolition of blighted properties. In total, NSP1 funds• Uhave more than a621 and county are using a part of these funds in six local communiEe of 2009 provided grants to states, local governments, nonprofits and a blighted and foreclosed units across this region. stabilizaEon acEviEes iniEated under NSP1 and NSP2. The city an consortium of nonprofit entities on a competitive basis; and NSP3 funds profit development organizaEons in this endeavor. authorized under the Dodd–Frank Wall Street Reform and Consumer • The City of Middletown was awarded $2.1 million under have • Using NSP1 NSP1. and NSP3 The funds, funds Hamilton County is also working w Protection Act of 2010 provided neighborhood stabilization grants to single-‐family properties homes for low income been used to demolish blighted properties and to rehabilitate that arefamilies in targeted commun Cincinnati MSA NSP Activity (Housing Units) Projected Completed homeowners volunteer their labor in renovaEng the homes, allow all states and select governments on a formula basis. NSP1 Total 654 477 functionally obsolete and visibly deteriorating. The citybenefit has aa greater largenumber vacancy problem, of households. Clearance and demolition Construction of new housing Rehabilitation/reconstruction of residential structures NSP2 Total Clearance and demolition 513 15 126 127 19 Spotlight on Cincinnati MSA | Page 3 417 13 47 32 15 U.S Department of Housing and Urban Development U.S. Department of the Treasury U.S. Department of Housing Urban the Development | Office of Policy and Research | May 2012 The Obama Administration’s Eff orts to and Stabilize Housing Market and HelpDevelopment American Homeowners with nearly 3,000 vacant housing units; removing blighted properties eliminates their destabilizing effect on neighborhoods. The NSP1 funds have also been used to purchase, rehabilitate, and sell properties that were deteriorating, vandalized, and a source of frequent crime to low income families. • • • The Cincinnati-Hamilton County Consortium has targeted NSP2 funds to areas where stagnant population growth, high unemployment, and a weak housing market have led to high foreclosure and vacancy. The funds have been used for the acquisition, demolition, and redevelopment of rental and owner-occupied units across seven communities. One example of the Consortium’s work is the rehabilitation of the Elberon, a landmark apartment building in Cincinnati that had once held a place of prominence in the East Price Hill community. After years of neglect, the building was blighted, vacant and in foreclosure. In partnership with the local non-profit Price Hill, the Consortium utilized NSP2 funds in conjunction with low income housing tax credits to redesign the historic building into 37 units of affordable senior housing. In another Consortium development, known as “Villas of the Valley,” a struggling community was transformed into a desirable neighborhood. In this project, the Consortium member, Model Group, demolished 15 dilapidated multi-family buildings and replaced them with 42 detached rental cottages for low income seniors, 35 multi-family rental units for low income families, and four single-family units for homeowners. In a third Consortium project, the Cincinnati Metropolitan Housing Authority (CMHA) put NSP2 funds to use by beginning construction on an affordable senior living facility in Mt. Healthy. Known as the Reserve on South Martin, the complex will include 60 rental units for residents 55 years and older when completed in 2012. In total, the NSP2 funds have impacted more than 100 blighted and foreclosed properties across the region. Under NSP3, the City of Cincinnati and Hamilton County were awarded a total of $4.6 million. The city and county are using a part of these funds in six local communities to continue the implementation of the stabilization activities initiated under NSP1 and NSP2. The city and county are collaborating with local non-profit development organizations in this endeavor. Using NSP1 and NSP3 funds, Hamilton County is also working with Habitat for Humanity to rehabilitate single-family homes for low income families in targeted communities. As part of the program, the future homeowners volunteer their labor in renovating the homes, allowing the NSP development subsidy to benefit a greater number of households. As part of the State of Ohio’s housing recovery efforts, the Restoring Stability: A Save the Dream Ohio Initiative helps Ohio homeowners struggling to make their monthly house payments or those who have already fallen behind on their mortgage. Through the program, the Ohio Housing Finance Agency (OHFA) is administering $570 million from the Administration’s Hardest Hit Fund to help families avoid foreclosure. The Restoring Stability programs include: Rescue Payment Assistance: The Rescue Payment Assistance program provides payments to mortgage servicers to help delinquent homeowners who can demonstrate a financial hardship become current on their mortgages. The payments can cover principal, interest, fees, delinquent taxes or escrow shortage and homeowners insurance. Homeowners need to demonstrate the ability to make future mortgage payments for at least six months. Rescue Payment Assistance are structured as a zero-interest, deferred payment loan that is forgiven over five years, or repaid from sales proceeds if the home is sold sooner. Cincinnati MSA NSP Activity (Housing Units) NSP1 Total Clearance and demolition Construction of new housing Rehabilitation/reconstruction of residential structures NSP2 Total Clearance and demolition Construction of new housing Rehabilitation/reconstruction of residential structures Projected Completed 654 477 513 417 15 13 126 47 127 32 19 15 4 1 104 16 139 4 Clearance and demolition 80 4 Rehabilitation/reconstruction of residential structures 59 0 NSP3 Total Mortgage Payment Assistance: This program provides up to 15 months of mortgage payments for unemployed and underemployed homeowners. Mortgage Payment Assistance is structured as a zero-interest, deferred payment loan that is forgiven over five years, or repaid if the home is sold or the loan is refinanced sooner. Mortgage Modification with Contribution Assistance: The program provides a payment to mortgage servicers to reduce a participating homeowner’s mortgage principal in connection with a modification. As a result of this assistance, the homeowner should be able to qualify for a loan modification through the Administration’s Home Affordable Modification Program (HAMP) or other programs that can make the monthly mortgage payment more affordable. The assistance provided by Restoring Stability is structured as a zero-interest, deferred payment loan that is forgiven over five years, or repaid if the home is sold or the loan is refinanced sooner. Transitional Assistance: The Transitional Assistance program provides homeowners who cannot sustain homeownership with an alternative to foreclosure by offering an incentive to mortgage servicers to complete short sales or deedin-lieu of foreclosure agreements. Transitional Assistance allows homeowners to exit their homes if they have exhausted all other options for maintaining homeownership or if they need to relocate to gain meaningful employment. If necessary, the plan may also make an incentive payment to a second lien holder to release other liens on the property. Lien Elimination Assistance: This program provides a payment to a participating homeowner’s mortgage servicer and other lien holders to extinguish existing liens. To qualify for Lien Elimination Assistance, the servicer must agree to release the lien and the homeowner must demonstrate the ability to stay current on any remaining liens attached to the property, property taxes and homeowner’s insurance. The assistance provided by Restoring Stability is structured as a zerointerest, deferred payment loan that is forgiven over five years, or repaid if the home is sold or the loan is refinanced sooner. To date, over 150 mortgage servicers have agreed to participate in at least one of the Restoring Stability programs. The programs make extensive use of local HUDapproved housing counseling agencies to help homeowners access the program and apply for assistance. Ohio homeowners who believe they may be eligible can visit www.savethedream.ohio.gov. Ohio has these funds available until 2017 (or until all funds are utilized to assist struggling homeowners) to prevent avoidable foreclosures. Spotlight on Cincinnati MSA | Page 4