Perrysburg Blog

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.)

I get asked this question all the time – at least seemingly to me!

By my agents.   By my clients.  By my corporate clients.  My buyers.   By vendors and suppliers that work with or for me.

Everyone wants to know.

I repeat:  The downward price trend in Perrysburg real estate will not change, in my opinion, until people are making more money and taking it home.

The State of Ohio and the Federal Government can goose demand for a quarter or a year, they can push loans onto people who should not buy, they can do all sorts of tax credits . . . but the market will always trump the politician.

Always.

Look at this chart.

It is breathtaking in its simplicity.

We can talk all we want about jobs.  (Or “JOBS, JOBS, JOBS, JOBS” as our leaders put it)

We can call unemployed people “no longer seeking employment”.  We can tell part time employees that they are fully employed even as they march into Perrysburg Christians United for food to feed their families.   We can call part time seasonal workers fully hired back.

Not going to change the real estate market price trend in Perrysburg.

That chart above – it simply shows tax witholdings from working people and companies.

Zero Hedge Blog interprets it thus:

Even as the BLS and the administration are trying to cover up the real state of unemployment affairs using assorted semantic gimmicks of just what it means to be unemployed, and as companies provide adjusted EPS numbers, while actual earnings continue to collapse, the true barometer of spending, provided by the Financial Management Service, tax withholdings (net of refunds), continues to paint the truest picture of just what is really happening with both America’s consumer and the corporate world. And it ain’t pretty. On a rolling 12 month basis, individual tax withheld has dropped by nearly 8% YoY, from $1.42 trillion to $1.31 trillion, while company witholdings are down a whalloping 64%, from $274 billion to just under $100 billion! This is money that will never be used to pay down the skyrocketing US deficit, because both the US consumer and average US company are simply not collecting the required cash to line the Treasury’s pockets with the one traditional way to pad the deficit: taxes. Expect much, much, much more debt issuance in America’s short, medium and long-term future.

Wage payers- people with great full time jobs in Perrysburg are the ONLY way to get demand and prices improved.

Period.

Not wages paid to pizza delivery drivers or census takers or package wrappers for 30 days.

Wages paid to machinists and car assembly line workers and engineers and chemists.

Then Perrysburg will get better and your home will be worth more than it is today.

Yes?

Right?

Isn’t that the new word on the street.

Well, let’s dive into some of the data.

I have postulated all along, at least if you have read my blog, that the current and expanded Federal House Buying Tax Credit Stimulus Boondoggle (aka FHBTCSB) will do nothing to improve the position of sellers/homeowners today, and will hurt future sales, deform demand, mask market effects, and  . . . . in the process help to saddle our kids with debt and further bankrupt our nation.

Some have just written that Perrysburg real estate is looking up – booming in fact.

Let’s see:

Here is 2 years of MLS market data.

Let’s just look at November 2009 vs. November 2oo8.  ONLY Perrysburg single family homes.

November 08 – 340 houses for sale.   21 houses placed under contract.  20 houses closed.  Median asking price $204,900.  Median price of listings that went into contract $179,900.  And . . . the median price of the houses that closed in November of 2008 was $242,950.

Now let’s look at the loosey-goosey tax credit fueled, rebounding market in November of 2009:

November 09 – Only 241 houses for sale.   22 houses placed under contract.  27 houses closed.  Median asking price $220,000.  Median price of listings that went into contract $187,450.  And . . . the median price of the houses that closed in November of 2009 was $212,950.

Fewer for sale.

Only 1 more house “pending”.

7 more deals closed.

But … the houses are selling for $30,000 less on average.

Hello?

This is helping?   This is great program?  And the money to pay it . . . has yet to be repaid with interest?

I will note in passing that the average price per square foot has dropped from $99 to $91.

Now – the caveats.  This is a month vs. month snap shot.  The economy is different.   The numbers we are comparing are small.  The trend is more important than a slice of monthly data.

But a rebound?

A better market?

Improved prices and more equity?

Insane.

It’s not happening.

And it won’t until the jobs/employment situation is FIXED.

From a median closed sale price of $197,000 per house sold in Perrysburg in October 2007 the median price has been slowly declining.

Last month’s median price in the 43551 was $154,000.

A 21% drop.

That’s a lot.  Not as much as Toledo has seen.  Not as much as Maumee has seen (who needs the Ding Dong anyway when your house is worth more . . . ?).

32 closed residential sides last month.

The pain is coming from the huge number of bank owned/REO listings now coming onto the market.  I just put another one in Perrysburg on the market today.

A more interesting number, at least to me, is the MSI.

That’s the “Months Supply of Inventory”.

This is what I track.

How many sellers trying to sell?

How many sellers giving up?

How many buyers fighting for the same inventory.

I will give you the raw data here:

Note that we are at 8.5 months of inventory now, vs. 10 or 15 or more 2 years ago = a more balanced market.

Good homes are selling.   The better they look, the better they are priced – the better they sell.

More later . . .

First of all, my best guess.

Second – if I was that smart, I would be on Wall Street (but – I had a job offer there, and turned it down, preferring to work for IBM right after grad school and then to own my own business . . . so, maybe not!).

Third – this is for single family residential.  Not commercial.

Caveats and Suppositions:

1. Prices will follow jobs, job growth, and real wages.  NONE of those look favorable in Perrysburg now.

2. Any current month or quarter price jump is, in my opinion for the rest of this year, heavily influenced by the Federal First Time Tax Credit.   And the hangover from this will be hard to bear in 2010 and 2011.

3. Inventories continue to be high – in spite of the almost total absence of new construction product in Perrysburg.

4. More and more new bank-owned properties are coming on the market in Perrysburg.  I had to go to 3 new REO’s that I am personally handling in Perrysburg in the past 7 days.  One agent, one week, one city.  I have close to 100 upcoming REO listings in Wood and Lucas Counties coming on-line.  This inventory is looming and will impact the market and its’ price situation.

5. Mortgage Positions.  Short sales, resets, renegotiations – they are huge variables in any price forecast.   More and more Perrysburg sellers are defaulting, or are starting out with a short sale position.

6. Actual Incentives to Default.   This is utterly unknown territory for me . . . and for the market.  Why pay when you not only owe more than your house is worth, but add in the non-recourse nature of residential mortgages and the declining job market – and it actually becomes the wise, prudent, smart thing to do for many homeowners.  By that I mean NOT pay your monthly mortgage.

Those are my caveats.

My forecast?  Here it is:

I am expecting a further 10% drop in values, generally across the board, in Perrysburg in 2010.

If your house is great – in great condition, on a great lot, with a great floor plan, with great decor, and it is priced right you may escape the 2010 decline in value.  But that is hard to do.  Hard – but not impossible.  Great houses are getting great offers.   Buyers want value but there is a segment of the market that always will pay for quality.

Americans, and Perrysburg owners and buyers need to change their mindset about a lot of things.  One of which is that your house is NOT guaranteed to go up in value every year.  Your house is NOT a component of your retirement plan.  Your house is NOT a piggy bank to borrow against to buy this years toys and vacations.

It is a place to live.  It is your home.   And if you treat it right and buy it right and mortgage it right, it will be a great home.

I reserve the right to change my Perrysburg Price Forecast if our wise leaders further raise taxes on businesses, extend the tax credit, or institute national health care.   Any or all of those actions will cause the economy more harm and lower prices and demand.

Here’s a snapshot of August’s real estate activity for Perrysburg (City and Township):

Available Homes
# Available: 385
Average Days on the Market: 153
Median Asking Price: $215,000

Pending Sales
# Pending: 40
Average Days on the Market: 117
Median Asking Price: $182,900

Closed Sales – August 2009
# Closed: 43
Average Days on the Market: 87
Median Sales Price: $159,000
Months Supply of Inventory: 6.4

My take:  We have just seen the beginnings of the return to normalcy.  What?  Normal Summer sales increases.   I will take that.   Prices are still dropping.  And the market is still very, very price sensitive.

Notice how well priced homes sell much quicker . . .

Welcome back – seasonality.  I have missed you for the past 6 or 7 years.    What is unknown is the effects (most likely bad) of the $8k home buyer tax credit on this market and the continuing effects of more and more lender owned inventory coming on line, and the effects of the the incredibly inept leaders we have on jobs and exports.

But NONE of that is in either my control or purview- I just sell houses in Perrysburg.

For the month of July and as of today:  Perrysburg City and Township.

Active Listings

148 houses for sale.

Price Range $59,500 to $650,000

Contingent Listings

7 houses contingent on another house closing

Pending Listings

17 houses went pending in July.  $89k to $265,850

Sold Listings

49 Houses closed in July.  $52k to $480,000

Withdrawn Listings

8 Houses withdrawn from the market in July

Failed to Sell / Expired

19 Houses failed to sell in July and went off the market.

Median Price

$185,000 in July 2009

Days on the Market

95 Days on the Market for SOLD listings in July

Months Supply of Inventory

6.2 months in Perrysburg

My oh my!

Some better numbers!

Green shoots?

Nope.

Buyers remain very, very cautious.

We are seeing sellers who MUST sell and who are VERY motivated.

They can easily sell in today’s market.   But then – they always could.

I think we are back to a more seasonal pattern of sales.  I think that the panic is now gone out of the market.

I am always asked  “When will _____ (you fill in the blank: prices, sales, values, etc) come back?”

I always will answer:  when the JOBS come back.

Everything else is window dressing.  Goosing today’s sales with $8k credits, looser FHA standards, cheap money – not going to help in the long run and will help bankrupt our country oh, in about 2 years.

Jobs.  Get that right and the real estate market will ROAR back.

I imagine that being a police officer is NOT an easy job.

You have the obvious stuff to contend with:  rude citizens, dangerous drivers, inclement weather, nasty domestic disputes.

And you have the non-obvious stuff to contend with:  office politics, union politics, city politics, etc.

Now, amazingly, you even risk being arrested and incarcerated for doing your job.  See Ottawa Hills and Lima for info.

But what if you have a reputation for quality policing.

For great police service.

For dedication and sacrifice (Kip Boulis, etc.)

That’s what the Perrysburg Police have.

We have a great police force.  It actually becomes an asset to the community.   People who call me and talk to me about Perrysburg real estate usually get around, if they are moving from Toledo, to mentioning that Perrysburg is safer and has less crime.

That salient factor is a HUGE reason to own real property in the City of Perrysburg and Perrysburg Township.

For that, reason alone – it’s positive impact on resale and residual value – our Perrysburg Police deserve not only their paychecks, but our thanks.

Down 40% . . .

Thanks for asking!

But I am having a great month . . .

Ouch.

Good homes?  They are still slowing.

Overpriced, underwhelming homes?  You can only imagine!

-44% drop in NUMBER of closed sales means that you need an agent who knows the market, knows how to market, and knows how to sell your home to a buyer, a bank, and an inspector.

I like stats.

This stat – brokerage market share – is more of an esoteric one that real estate professionals pay attention to.

It has nothing to do with prices and current valuations.  At least not much . . .  but it does say a lot about who is working, closing, marketing, and selling the most.

I therefore like this chart.

The real story – Just Call Jon if you want to get your Perrysburg house sold.