Perrysburg Blog

1. The Shadow of Strategic Default

This one I hope does not come true.   It will be bad for everyone in Perrysburg.

But there CAN come a point in a market where the asset is not worth the debt.  When that happens a smart and savvy investor will simply walk away.

Oh – the moral dimension?  The ethics?  It’s wrong?

Well, the biggest foreclosure in America happened this week – a $5 BILLION collection of apartments in New York City.  And the sophisticated, intelligent, MBA-laden owners including Tishman Speyer and Blackrock Capitol – just walked away and turned the keys in.

Think about the possibilties of dozens and then hundreds of normal home owners with underwater mortgages doing the same – especially if the “little guy” in Toledo gets a loan modification (and he doesn’t really “need” it).

This could happen – and the blood will be messy.

2. The Rise of the Rental House.

Every day I am getting calls from people who need help finding rental property.

Or from owners who want to leaser their homes.

Many home owners are considering leasing because they just can’t stomach the price today’s market will pay them.  So leasing becomes a way to ride out this market.

The tax consequences of leasing can be AMAZING (more on this soon!).

3. The Rationalization of Value.

Sellers are now coming to terms with the new values in Perrysburg.

Like the proverbial “Five Stages of Cancer” or grief . . . many are now in the last stage -acceptance.  They will soon come to the point that I have – I can now rationalize the new values and price points.  I accept that the “old market” is not coming back, but that the new, current market is wonderful.  For new owners.  For buyers.  For investors.  Even for many renters.

4. The Reaction of Corporations for their Transferees.

What is a company to do?  You want to move Joe and Sally Manager to XYZ City.  B

But their home is upside down, underwater, and not worth what they paid for it.

Should they leave it behind?

Should they turn it into a rental?

Should they lose all their savings just for a promotion?

No!  Hey!  They can ask the big giant corporation to make them whole, grossing them up after taxes 4 or more times, and reimbursing them for their loss on sale.

This will be more and more common in Perrysburg.

5. The Restrictions of the Reams of Paper.

The new loan and HUD and lending regulations have taken effect.

No changes  – or you start from square one.

A typo?  10 or 20 days in the hopper again.

Lenders will most likely find new ways to “beat” the regulators . . . but that will take time.  So in 2010 get ready for delays.

6. The Fallout of the Bailouts on Property Taxes.

This is something that I hope does NOT happen in Perrysburg.

The bloom is off the rose with bailouts and budgets and Federal help to Ohio.

No more help is coming.

Our leaders at ALL levels should have used the past three years to cut spending.

They didn’t.

Now with huge revenue hits coming they may look to the homeowner for help.

By running a stream of new levies by the homeowners in the 43551 for every little program and big program will have the effect of increasing your tax bill and decreasing your home’s value as fewer and fewer can afford the tab every 6 months.

I really could go on and on about the market stats in Perrysburg.

I love this subject.

True story:  I gave a guy some stats recently.  Real estate business stats.   He HATED them.  Didn’t like what they either said or revealed or the story that they told.   So he got mad at me.  Because of the numbers that exist.

Lesson:  The numbers are the numbers.

Especially with real estate.   They are what they are.

Let the numbers, at least some of them, thus speak:

1. Seasonality is back.  The big upward trend every month – gone.   The big downward trend every month – gone.  So looking at one month vs. another, if not adjusted for the season is not accurate, IMHO.

In December of 2008 there were 413 houses on the market with a median price of $195,000.  29 went pending that month.  27 closed.  And the median price of the pendings was only $175,000.

In December of 2009, 12months later, there were 304 houses on the market with a median price of $201,000.  21 went pending that month.  30 closed.  The median price of the pendings was $239,900.

Conclusions:

#1.  The number of houses on the market substantially declined.   Sellers either got smart (didn’t really need to sell . . . ), rented out, or took off the market.  The median price of the inventory actually INCREASED by 3% to $201,000.

#2.  The median price of homes getting an accepted offer (“HI, we are buyers and we really like you!”)  that number increased from $175k to $239k.  Hmmm.  Many possible reasons – my experience tells me that many sellers who are selling are in fact selling the best houses in the best condition.   The banks?  They are taking back some nice, large listings – which moves this number up too.

#3.  The median price of the houses that sold?  Up 8%.   Amazing.  Values are up!

Well – that’s half the story.   The median price a couple of years ago was over $200k.   Go back 4 years and it was close to $220k.   With the normal dynamics of a small sample size (and that is what the 43551 marketplace really is . . .) and the return of seasonality, and the market deforming effects of the housing bubble and the bank inventory . . . let’s just say that prices are not in free fall anymore.   But let’s be honest and not say that prices went up 8%.

There are fewer houses on the market in Perrysburg, with more serious sellers, in better condition, with fewer buyers competing for them.

The market is back in balance.

(N.B. footnote:  for this report I am using the data from the Toledo MLS, which does not have all real estate activity, for the period 12/1/2008 to 12/31/2009.)

No – it’s not “come remove your sign”.

It’s not “we sold it ourselves just before we called you”.

It’s not “don’t worry – you won’t have to show me any more homes . . . I bought one”!

(N.B. —- I have had those calls.)

No.

The call you do not want to get is “you better get over to your listing – it’s on fire.”

Which is the call I got today.

On one of my Perrysburg listings.

Lovely.

But . . . this being Perrysburg – with an excellent fire department . . . an entire BATTALION of fire trucks, pumper trucks, ladder trucks, firemen, assistant fire chiefs, and real fire chiefs (whose house I had sold them many a moon ago . . . ) and police cars was at the listing in about 90 seconds.

The damage – not as bad as I had feared.  But bad enough.

And if it was not in Perrysburg . . . let’s just say the end result might have been hotter.

The best news?

The horrible orange colored awnings are no longer going to deter any buyers . . . .

They are all good . . . but which one is best?

Which is very bittersweet.

It’s the best meeting I go to every year.  I will not miss it.

I will miss NAR.  I will miss RE/MAX’s convention.  I will miss, rarely, StarPower.  I will miss Inman.  But I will not ever miss Cyberstars.

And today the leader and founder and my friend, Alan Hainge, just announced that he has terminal cancer and is retiring – literally walking off the stage at the end of the last day.   Bittersweet.  (He is a positive, always positive guy – and a great leader too . . . )

On the way here, I was able to “check off” the State of New Mexico.

You see, I have a list – a shrinking list – of states that I have NOT been to.

Now it’s 4.  Thanks to a computer.

Because while flying here on an Airbus A320 the great flight crew of the USAir flight I was on had to make an emergency landing in Albuquerque New Mexico as the flight instruments failed.  “Safety First” is their charge I was told – and with the computers failing they had to land.  Rather ironic since I was on my way to a computer meeting.

We waited at the airport for about 3 hours as they fetched a new jet for us – but there was one store open – and some good reading material.

We made it safe.

But this meeting is a reminder that everyone is heading towards a final landing.  It is just a matter of time.  I hope my friend is prepared.

5 acres.

2 stories.

4 beds and 2.5 baths.

8 minutes outside of town . . . . and about 100 miles away as far as stress goes.

I live very close to this listing – it’s at 22800 Ault Road in the Township.

And it is priced LOW to sell NOW.

I need a patient buyer – call or email me and I will explain why.

But you will get a fantastic country estate with room for a pond, horse, pole barn – whatever you want to do.

For the price of a much smaller, less blessed house.

$200k is all it takes.

Why live in the city when for MUCH LESS you can have a 5 acre mini estate?

With sunrises and sunsets.

With peace and quiet.

The snow does tend to drift.   The wind does get a little heavy sometimes.

But we put up with these negatives – because the living is really good in the Township.