Perrysburg Blog

It’s secret.

It’s above top secret.

But if you are doing a short sale you need to change where your checking and savings accounts are.  Banks are now using language in their checking and savings policies that you have agreed to when you opened your account to PULL MONEY OUT of accounts that are not linked to your mortgage.

Now, in polite society, this is called STEALING.

Or THEFT.

In bank terms it is called the “Right of Offset”.  You can go here and do a search for that term if you want to get real mad.

But the average consumer does not have a copy of what they signed, can’t remember, and probably can’t hire a lawyer to look at all their agreements.

So – the simple solution that I am telling ALL my short selling clients is this:  MOVE YOUR MONEY TO A TOTALLY DIFFERENT BANK.

Simple.

Sweet.

Ends the drama.

I won’t name any banks – I am assuming some are not doing this.  But some are.  And the solution to protect you is as simple as the pain of the unauthorized monetary removal is great if it happens to you!

I do get phone calls.

“I have a couple of questions about . . . ”

And I try my best to answer them.

I also have a couple of questions about Perrysburg Real Estate:

1. What is the future of home values in Perrysburg?  Will we ever see an “automatic 3%” increase every year like we did for many years?

2. What is the impact on the continued meltdown in Toledo home values going to do to our prices/values in Perrysburg residential real estate?

3. How much/many new taxes and property tax levies can the citizens of Perrysburg keep passing and paying until the stigma of “too many taxes” hits the top of mind thinking of buyers and they discriminate AGAINST Perrysburg listings/houses?  Will the City ever STOP spending more each year?

4. Who is going to rent/lease in Levis Commons?

5. What is the “BEST” subdivision in Perrysburg?  The one that people, irrespective of price point, love the most?

6. What can Perrysburg do to better leverage one of the greatest downtown districts in Ohio?  More car shows?  More parades?  Getting more people to a bigger/better Thursday Farmers’ Market?

7. How many homeowners are “underwater” in Perrysburg today?  Right now?  And how does that realization change their spending?  Change their planning?  Change their involvement with the community?  Change their desire to stay/work here?

I do not have the answers . . . . not on these.  I’m just asking . . .

“Unexpectedly”

People are always surprised.

Chagrined.

Shocked!

To discover that paying buyers to buy backfires.

We really didn’t pay the buyers.   WE PAID THE SELLERS.

We inflated values by $8000.   With money we don’t have.  That the Germans and Chinese have kindly loaned us.  That our kids and grandchildren will pay back.

And, “unexpectedly”, sales of existing homes declined.

CNBC has details here.

“Sales of previously owned homes fell unexpectedly in May as delays in processing mortgage applications hampered the closing of contracts benefiting from a popular homebuyer tax credit, an industry group said on Tuesday.

AP

The National Association of Realtors said sales fell 2.2 percent month over month to an annual rate of 5.66 million units from an upwardly revised 5.79 million-unit pace in April.

Analysts polled by Reuters expected May sales to rise 5.5 percent to a 6.12 million-unit pace from the previously reported 5.77 million units in April. Sales were up 19.2 percent compared to May last year.

Sales were expected to rise as transactions for existing homes are measured at contract closing.

Although the tax credit for home buyers expired in April, qualified home owners have until June 30 to close contracts.

“There hasn’t been much of a rebound in housing. We are growing from the extremely low levels of last year. On average, we are looking for a moderate advancing trend,” said Stephen Stanley, chief Economist at Pierpont Securities in Stamford, Connecticut.”

Shocking!

But not unexpected.

A contrarian view here:

“Things are looking worse on the housing front, with a severe drop-off in existing home sales following the expiration of the home-buyer tax credit. It’s hard to overstate how stupid this policy was. The government marketed it as a measure to boost residential real-estate prices by providing new home-buyers with a tax credit in the neighborhood of $8,000. Did you see the ubiquitous ads featuring the couple that gets an envelope full of cash from Uncle Sam? The idea was to convince potential home-buyers that they were the ones who would benefit from the subsidy, when in fact the opposite was true. The tax credit was a subsidy for sellers, not buyers, allowing them to increase their asking price (or avoid decreasing it) by $8,000.

The government’s “gift” to new home-buyers? A house immediately worth $8,000 less than they paid for it, and falling fast thanks to the sharp drop-off in demand that accompanied the expiration of the tax credit. Gee, thanks, Uncle Sam! I’m not sure the “predatory lenders” Obama likes to talk about ever did anything that sketchy.”

Because I was off with my lovely Dear Wife on a 2 week holiday.

Important stuff:

Checking out real estate . . .

And visiting the village of Modene in the south of France.

As the reigning Duke of Modene . . . . well, let’s just say we had a grand time and I am back to work, recharged, rejuvenated, and fully rested by 14 days of travel and sightseeing.

In all their gory glory . . .

In their totality . . .

Median price change in Northwest Ohio over 36 months is -$30k.

Median price change in Northwest Ohio of closed single family homes is -$31.5k over 36 months.

EVERY house on average lost 20% to 30% in value.

My observations -

1. Ranches in the suburbs have resisted this trend more than anything else.

2. 80% of the “active” real estate agents have an idea this has happened, but are in “pricing denial”.   They eventually seem to be running out of money after 3 years of not selling any houses they have listed.

3. We really did not destroy 30% of the housing stock in either Afghanistan or Iraq.   But we managed to do it here.   Thanks!

4.  Toledo now has some of the cheapest housing prices in America, for what that is worth.

5.  This has caused some of the strongest and most well capitalized builder/developers to throw in the towel.   I have developed land, sold land, marketed new subdivisions, and done market research for new projects . . . . and I no longer can tell you who is going to do future non-condo/villa development in the suburban market.

Details?

Can’t give them to you.

But in a recent meeting with a Perrysburg homeowner, I realized that they were in denial.

Which can be a serious emotional state that is impervious to reason, evidence, and logic.

These potential clients want their 2005 price.

They “NEED” it as an old mentor, Howard Brinton, used to say.

But it is 2010.

Chrysler is BK.   Toledo, City of, is BK.   Ohio, State of, is broke.   GM has filed for BK.  The entire giant mortgage brokerage that loaned them their money . . . BK and gone.

2005 is long gone.   What you or I paid is immaterial.  What you or I “NEED” is not important.

We should be moving beyond denial to truth.

In fact, we actually have more practice and experience at distressed markets than anyone else in America.

Seriously.

We (Northwest Ohio) went into this market first – along with Cleveland and Detroit.    (“Why?”, o student of history, you ask.  I will tell you:  we shipped our manufacturing jobs over to China first.  Before we shipped our tech jobs and info jobs and pharma jobs.  We – first!, but I digress.)

So – no excuses.   We are experienced in these matters.   Or we should be.

Nationally, 30% of the ENTIRE U.S. market is distressed.

Perhaps 50% of the total market activity in Toledo is now “distressed”.   That means short sales, REO, foreclosures, deed in lieu, and upside down, underwater sellers who have to bring cash to the table just to close.

Half.

One out of two.

We have to move beyond denial now.

There are some very good Realtors that I know that have not closed a single deal yet this year.

They are in denial.

There are some very good homes that will not sell for their owners.

Denial.

“But . . . the tax credit!”

“But . . . ”

Denial.

It hurts.

But you have to move on.

If you want closure.

Not because anyone wants them to.

Not because it is good for us.

Not because they should.

But they will.

Because, as I have been warning and predicting, interest rates are moving up.

Fast.

Read about it here.

WASHINGTON (AP) – The era of record-low mortgage rates is over.The average rate on a 30-year loan has jumped from about 5 percent to more than 5.3 percent in just the past week. As mortgages get more expensive, more would-be homeowners are priced out of the market—a threat to the fragile recovery in the housing market.

AP says it is because the “economy is improving”.  Right.

It’s because the market for mortgages is busted, broken, and destroyed.

Get ready for much higher rates.

Soon.

Here, there, and everywhere there is an inverse correlation with mortgage interest rates and property values.

My lovely, Dear Wife asked me . . . “WHY?!”

I already have an Apple laptop . . . an iPhone . . . a desktop computer . . . an Dell MLS/Windows only machine . . . and a Kindle.

“You don’t need one”, she further opined.

I disagree.

So I bought one. Even though . . .

I have never held an iPad.

I have not yet seen one.

But I have a few thoughts:

1.  I have an implicit trust in Apple.   They build it right.  They support it right.  They add value and quality.  (One great lament about Northwest Ohio?  No Apple Store here.  This must be rectified.  But the Mac Cafe is growing on me . . . )

2. I am constantly trying to be a better “virtual” Realtor.  Virtual?  Able to provide help and answers and information in the field . . . where my clients are located.   Many, many years ago I outfitted a Ford Econoline van to be my “Mobile Office Vehicle”.  Why?  There were no portable tiny hand held computers.  No wi-fi.  I needed a big power supply to power the big CD disk that held the comparable sales data in the big computer in the back of the van . . . so that I could price houses in the field.  Now?  I have that data on my Mac book Air and my iPhone.

3.  I am trying to embrace the paperless real estate deal.  We now digitize EVERYTHING at RE/MAX Masters and the Jon Modene Team.   I have used an HP Tablet before – to write contracts and sign them in the field.  Cumbersome.  Clunky.  Now with my new iPad . . . !

4. Apps.  It is all about the applications.  My technogeek son does not yet understand this -  it’s not about gigahertz and flops and GB of RAM.  It’s about the mobile applications that you can buy and use to do work – to generate accurate, reliable, valuable “work product”.  My need is for apps that simply help me generate work product.  Apple is the absolute leader in this.  Just ask anyone with an iPhone.

5. I truly believe that the iPad is going to revolutionize residential real estate sales.  At least for those agents who embrace change and embrace new tools.   I was the first in this area to use a lot of different and unconventional marketing tools and tactics.  The iPad is, I believe, not revolutionary.  Not incendiary.  But it will be great for productivity, professionalism, and the ability to offer more help and counsel to my clients in the field.

I’ve already sold 10 houses this week.

My Team and I are hungry for more.

A new upcoming listing on Indiana . . .

An old REO listing on Indiana . . .

And . . . a sharp split level on secluded, hidden, hard to find Carolin Ct.