Perrysburg Blog

My trade association!

My guild!

Wrong about the basic numbers!

Linked here at Reuters.com

Gory details:

(Reuters) – A housing trade association is examining the possibility that the data it releases underestimated the collapse of the housing industry, the Wall Street Journal reported on Monday.

The National Association of Realtors, which issues the monthly existing home sales report that is closely watched by economists and financial markets, may have over-counted home sales dating as far back as 2007, the newspaper said in an article posted to its web site.

Shoddy lending.

Shoddy underwriting.

Shoddy counting.

Shoddy tabulating.

Shoddy clean up.

Shoddy law enforcement.

Who – at any level – that has created this shoddy mess has paid for it?

No one.

And you know, if you have ever come back home to Perrysburg in the Winter from Florida, you just know what I am going to write about:

1. The blast of cold at the jetway at DTW – I mean the sobering, shocking blast of cold air INSIDE the Jetway.

2. The trek to your car in or out of the garage.  Blue Lot.  Off site.  Inside.  It doesn’t matter – your car is frozen cold. And takes time to warm up.

3. The drive back to Northwest Ohio.  Cloudy.  Frigid.  Freezing.

So, from the 79 degree sun of yesterday to the ice and blizzard of today.

And while it does make you wonder just exactly why you live here (because its’ home and because in July the tables are turned – trust me, I used to live in Florida).

S0 – I get back from Orlando . . . .

Today.

And I get to list/market a new property!

YEAH!

We Realtors love new listings.

This one is on the water.

This one has a dock!

This is a vacation home!

In Ohio!

And because it is a foreclosure I do not have any “summer” pictures.  I have one photo of the dock.

I just got back from Florida.

How sad is that?

Some important Perrysburg single family numbers for your review this week:

1. $$$ per sq. foot in Perrysburg.   It’s UP!!! By 17%.

2. Supply and Demand in the 43551.   Fewer houses FOR sale.   Fewer houses SOLD.

I get emails almost every day . . .

“Will the sellers take a land contract on this listing?”

This must be because so many people have been foreclosed or have damaged credit that precludes them from getting normal bank financing.

And people need places to live.

And they are “used” to owning a home – to the benefits of home ownership.

But I have NO clients that will offer “terms” or owner financing right now.

At least not at terms that any reasonable person would accept.

Why?

Because asset values are declining still.

A land contract locks you into a price that will most likely be wrong in a year or two.

Very wrong.

And you will be locked in!

One of two things will happen:  you will break the contract and suffer or your intended financing method will not work and you will suffer.

The seller will be upset in either case.

My remedy for land contract lookers right now?

Rent!

A 12 month lease.

No more.  No less.

Work on your finances and financial health while you are leasing.  Get your debts paid (smallest to biggest as Dave Ramsey teaches!).

Then – when the market is “better” (more stable) – then – we can get creative.  Then we can be focused on home ownership.

Land contracts do not work right now.

Buying does.

And renting does.

There are 3 or 4 houses for sale in Perrysburg right now offering “owner financing” with a land contract as a possibility.  I would be very careful if I was a buyer that I was not buying a sellers’ overly optimistic valuation.  And I would also check and make sure that my payments were not at risk if the seller defaults on their note to their bank (which begs the question: “is this land contract legal?”).

As always, caveat emptor, and get a good lawyer!

What was the REAL effect of the following:

HAMP/the foreclosure moratorium/the robo signer moratorium/”Making Home Affordable”/and HopeNow?

(these were all roadblocks to market clearing foreclosure activity or government sponsored mortgage crisis programs for homeowners in distress)

The considered net effect?

Some economists are saying it was ZERO.   It just pushed foreclosures ahead to the future.

Like this guy . . .

“It is pretty clear, however, that overall foreclosure moratoria, foreclosure delays, modifications, and other workout activity continued to keep the number of homeowners who “lost” their homes to foreclosure massively lower than one would have expected given the delinquency/in foreclosure numbers.” (Quote from economist Tom Lawler in Calculated Risk blog.)

Here is my take “from the street”.  From Main Street USA.

I just met a guy today.

Foreclosed.

I was helping him move out and securing the asset for my client.

The city/house/street do not matter – because this is happening all over Northwest Ohio.

What did he tell me?

What is the street effect of this crisis?

He has lived in the house for 4 years without making one single mortgage payment.

And with no property taxes paid by him either . . . . that equals a lot of money.

In fact it is “worth” over $50,000.

$50,000 of imputed savings/benefits/gain that he has accrued to him.

While he was being foreclosed.

I am not an economist.

But this is being repeated all over the country.  The effect is real.  The bills are going to come due.   The merry go round will stop.

“3 or 4 times MORE foreclosures”???

Hard to think about that . . .

I get asked again and again: “When will the market get better?”

or

“The market is getting better now . . . right?”

What I think does not matter.

What you think does not matter.

Reality matters.

Here . . . in a graphic form . . . is a huge hit of reality.

“Look away!” as Kramer once said.

It does not auger well for the future.