Start with the purchase of a long-vacant home in serious need of repair. Add an unprecedented demand for housing and top it off with plenty of free time during a pandemic shutdown.
Add it all up and you have a Newark house on North 21st Street, between West Main and West Church streets, purchased for $72,000 in March 2020, with a sale pending for $329,000.
Local musician Jake “Barefoot” McCoy started what became a 16-month home renovation odyssey when COVID-19 changed everybody’s lives. Now, he’s waiting to see if the home sells for what would be a 357% increase.
It didn’t start out as a housing flip for enormous profit, and he acknowledges some of the improvements would not have made sense if the goal was just to flip the house.
“I definitely didn’t treat it as a flip,” McCoy said. “I didn’t have any experience flipping houses. I thought I could live there or sell it. I could have done it faster and cheaper, but it would have suffered some in the quality. I treated it as if I was going to be living there.”
The huge increase from McCoy’s purchase price to the potential sale price is a result of the massive work he did, but also a hunger for housing in a growing county with a housing supply that just can’t keep up.
In June, the average sale price of a Licking County home was $310,437. In June of 2020, home sales averaged $250,453. In 2019, the June average was $225,009 and the entire year was $220,791. Go back to 2016, and June sales averaged $183,856 and the entire year’s average $177,351.
Initially, McCoy was going to outsource much of the work, but then coronavirus shut everything down and he wasn’t playing any gigs.
“I closed on the home and drove to Georgia and that’s when the shutdown began,” he said. “You could see the panic and paranoia. Everybody was so unsure what was going on and everything was canceled for three months, and I said I’ll just dive into this house.”
The transformation of the two-story, three-bedroom home included new plumbing, furnace, air-conditioning, water heater, metal roof, gutters, downspouts, concrete driveway, and garage door.
The double-lot, the fenced-in property includes a separate guest house in the back yard with a full kitchen, bathroom, laundry, and its own electrical service.
“There were a lot of late nights and long days,” McCoy said. “It was just so big, and then you uncover more things that ought to be addressed. I feel greatly relieved to hopefully be at the end of the journey. I’m proud of myself for finishing it, but I bit off more than I could chew.”
The average days on the market were just nine in June and 12 in July. In July 2020, it was 25 days on the market. In July 2015 it was 54 days and in July 2014 it was 67 days.
McCoy first listed it for $339,000 for two weeks in July, in an effort to sell it by himself, then re-listed it with Re/Max agent Carol Marr on Aug. 5 for $329,900, for which a sale was pending on Friday.
Since the average sale price dropped from $310,437 in June, to 279,347 in July, does that mean the housing bubble has burst and prices will continue to decline?
“I think it depends on the price range and condition of the house,” Marr said. “It’s slowed down a bit, but it typically slows down this time of year.”
Phil Frye, an agent with Century 21 Frank Frye Real Estate, said he does not expect a slowdown for any extended period.
“Usually the summer months are a little bit slower,” Frye said. “Spring was extra crazy, lots of buyers. Escalation clauses and appraisal gaps have become common. Also, there are more cash buyers.
“I truly believe in Licking County, since we’re so close to Columbus, we’re going to be OK for a while. Licking County is a great place to live.”
Escalation clauses allow a bidder to automatically increase the offer up to a specified amount if there is another bidder offering more. An appraisal gap stipulates if the property doesn’t appraise for what is offered, the bidder will automatically pay the difference in cash.”
McCoy said some people scoffed at the price in an area that does not normally see a $300,000 home, but he believes it’s deserved. The cost of materials, for one thing, increased the cost of the project.
“I understand why they’d feel that way, but the general area can be improved a lot,” McCoy said. “Certainly, some people said that’s so high. I like the area a lot. It’s the most convenient area in Newark, a good residential area. Just a couple houses, if improved, basically improve everybody’s house.”
The area sits within walking distance of McGuffey Elementary School, Wilson Middle School, and Newark Catholic High School. The Heath business district is just to the south and Newark’s retail area is just to the north.