Wednesday, October 6, 2010

Smoking Part 2

Smoking Part II

In response to last week's Heres The Dirt on smoking's impact on property values, Scott Schulte, the Champlin City Planner, responded:

I think it’s worth posting this commentary on every pack of cigarettes.

I agree, “Smoking can decrease your property values” may do more to deter smokers than the health warnings they continue to ignore. Sadly, many people put money before health.

And a comment from a bank president: ” I have noticed that a very high percentage of people we deal with that have credit problems are smokers. Not only is it a health hazard, but appears to be a financial hazard as well, and we do see the effect on resale values of foreclosed properties for the very reasons you cite in this newsletter.”

I asked the banker if they don't charge higher interest or points to smokers. He replied: “ Not yet, as we are not sure if it would be considered discriminatory treatment, but it does have an effect, so should be justified.”

Last I checked, smokers were not a protected class under fair housing laws.

Here is proof on the property values:

A townhome in a desirable area sold this week, post tax credit, for $142,000. I just looked at, well smelled, an identical unit in the same development—they can't move it at $109,000.

I've lost count of how many smoked filled townhomes I've viewed this week. Plus the extra laundry from the clothes I've worn to inspect the units.

And what is really frustrating is I've been asking the listing agents about the smoke prior to viewing the homes---and they lie about the smell. Or, “the carpet was just replaced”, which only transfers the smoke from the air to the new carpet.

And while only a handful of townhomes are selling post tax credit, I did preview two under contract with contingent offers. Neither smelled like smoke.

The true victims are the neighbors in the townhome development that don't smoke, take care of their homes and pay their mortgage on time. Look at the MLS photos of these smokey units and the homes appear to be in good condition. When they sell, eventually everything sells if you lower the price enough, appraisers, hungry for sales data, will use them as comparable sales.

And the appraisers will have no way to know about the smoke as they don't view the inside of the comparables. So the responsible neighbors take a hit to their property values. And the only winners are buyers like me – assuming I can find a unit that I can breath in at a price that works for rentals.

1 comment:

  1. Smoking is really bad for the health and for our precious carpets as well. No one likes to spread their backs on nicotine-smelling carpets. That’s gross. It’s a lot of carpet cleaning! Naperville, Illinois’ weather could be dusty and smoky sometimes, so I make it up to the point that my rags, floors and carpets are properly washed during the carpet cleaning. Naperville is an industrialized place so having your window open while smoking is never a good idea.