Perrysburg Blog

One of my favorite real estate writers posed a similar query in the Wall Street Journal’s excellent real estate blog – Developments.

James Hagerty posed the question: “Will the bank take my iPhone?”

Which is sobering – I have an iPhone.  You can’t have it.  You can’t take it.  It’s addictive and it’s mine . . . and I have a hard time imagining it being surrendered to a creditor.

Which made me do some thinking.

And then some investigation.

Since I deal with many homeowners today who owe the bank MORE than the market value – what can happen to their iPhones?

And their cars?

And their retirement savings?

And their other assets and possessions?

5 or so years ago this was a pointless, absurd question.

It just did not happen in Perrysburg.

Today – it’s a vital, important, timely question.

According to the Fed (specifically the Federal Reserve Bank of Richmond VA) in their monolithic report “Recourse and Residential Mortgage Default:  Theory and Evidence form U.S. States) Ohio is considered a “recourse” state.

That means that lenders may have MORE remedies against a defaulting homeowner than just taking the house back in a foreclosure.

(N.B. – for this entire post, please remember that I am not an attorney and you should and are highly recommended to hire your own attorney to answer your questions!  You need a good, honest attorney . . . call me, and I will recommend one to you)

If I am a defaulting homeowner, I do not like “recourse”.

What is interesting about the lenders right of recourse in our state is that only in Ohio and Iowa does the lender have a very short period to seek recourse – and in Ohio, and thus Perrysburg, it is only for 2 years after the foreclosure.

Y0u can download their 50+ page paper yourself and read the gory details.  The financial equations on page 10 caused me to have a regression attack and revisit my finance classes at Duke University.   I was so shook up by this I had to go out and sell 5 houses today – but that’s another story . . .

2 years.

That is the time frame for recourse that your bank has to get more coins from you.

Lose your house to the bank . . . and they get an automatic deficiency judgment against you.

But they only have 2 years to collect it.

And many banks are taking 12 months to return phone calls right now – so what are the odds they will get your iPhone?

This recourse is usually obviated when a short sale is negotiated – which reinforces my belief that 2010 and 2011 will be the year of the Short Sale in and around Perrysburg.

Because then you will get to keep your iPhone.

Especially with regards to “winterizing” your house.

I was showing a house this weekend on Saturday.  A nice house.  A big house.  An expensive house.

And as I was showing it . . . droning on with my comments for the benefit of my client . . . I know that my brain was telling me something:

“There is a noise that does not belong here.”

“There is a strange noise.”

“Heh – Look at your breathe – it is COLD in this house!”

It was, of course, the sound of running water.

Which is not a good thing to hear in what should be an empty, freezing house.

It in fact constitutes an emergancy as far as the value of the property is concerned.

Here is the actual progression of this and other incidents that I have observed:  Cold.  Expanding water in pipes.  Broken pipes.  Water shooting out of pipes.  Water filling every nook and cranny as gravity, absorption, and other physical forces work in a weird combination.  Mold spores liking the new moist environment.  Mold spores reproducing.  Huge areas of porous surfaces destroyed.  Large water and remediation bill arrives.

It’s a terrible thing to see.

It’s a tragedy if it is your house and bank account.

So – when I tell a client “you really should winterize the plumbing” (which involves a licensed professional with a bond and liability insurance draining and blowing out and filling the pipes with antifreeze . . . and then standing behind his work) —– when I tell a client that, you should listen.

Because if you have been in the houses that have not done that, gambled on our winter weather, and lost – if you have seen it go bad – I would not have to tell you even once.

Still . . . you can do it yourself if you are so inclined.   But one way or another – winterize those pipes!

You might be – because someone forgot to trademark it.

Now it is too late!   REALTORS know that the acronym MLS stands for “Multiple Listing Service”.  It’s our shared listing database wherein the local Realtors cooperate and compensate each other for helping to sell listings.

But . . . some people who play soccer use it too!

So I will make things easy.

At least on THIS blog.

I write exclusively on real estate in Perrysburg.

And local people and places that effect and influence said real estate.

But up until this week, if you wanted to look for actual houses for sale, you had to go off my site to one of many “listing” sites.  (N.B. I still recommend OnlyPerrysburg.com or MLSToledo.com)

However, if you look at the far left column of this blog – right there over on the lower left – you will see a “live feed” from the local MLS.

I have set it up so that it is only houses in Perrysburg, with the newest listings added today on top, going down in chronological order.

Only listings in the 43551.

Only active, for sale, listings.

And only here . . . . on PerrysburgBlog.com

Somethings to think about if you are planning on buying in Perrysburg:

1. Buy now, not later.

The 2009 extended tax credit for buyers is going to end this Spring.  If you are definitely going to buy in 2010 you are rather foolish to NOT take the governments free $8000 or so.  (I admit that it is borrowed from China, will have to be paid back with interest by our children, and will help to further bankrupt America – but YOUR not taking it won’t help.)

2. Don’t Buy JUST Because of the Tax Credit.

Sorry – many people are buying now who should NOT be buying.   There is a TOTAL COST of owning in Perrysburg that many buyer’s gloss over with stars in their eyes as they swoon for a great listing.  Taxes.  Insurance.  Upkeep.  Please consider carefully ALL of these costs.

3.  Lock In Today’s Great Rates!

The $ multi-billion dollar mortgage buyback program that the Fed has been running will be winding down soon. When it does most experts are forecasting a .5 to 1.5% increase in nominal interest rates for all fixed rate loans.

4. Buy A Short Sale.  If You Can.

I believe that in 2011 we will look back and say that 2010 was the beginning of the short sale bloom.

Short sales are right now:  the best deals, the greatest value, the best kept property, and surprisingly hassle free if you have patience.   You can call me and I will “evaluate” you for short sale tolerance.

5. Save Your Cash.

Start saving $$$$.  You are going to need at least 10% down for an FHA loan if your credit is not spotless.   And, by the way, you ought to have at least that much down or you should not even be buying a house in this volatile market, IMHO.

6.  At Least Consider an REO Listing.

These poor lenders are trying so hard to move this inventory . . . and many of the bank owned listings I have in Perrysburg are GREAT buys.   You can usually get a great deal.  We can often find a good loan program that meets your needs.  There is no shame in buying one!  You can find ALL the active Perrysburg REO’s at my REO site - www.ToledoBankOwned.com

7.  Forget About Flipping For Fun and Profit.

Not unless you are a seasoned investor professional with experience, cash, and contacts.  You are also probably on a first name basis with me so that I can feed you the one or two deals that are “flippable”.   Otherwise do not try this – way too dangerous.  And you are competing with the banks, HUD, and the myriad of REO’s in the “shadow inventory”.

8. Get a High Deductible Insurance Policy.

I have learned a few things from my insurance selling brother www.ModeneInsurance.com.  And one is that you are not really going to use your home owners policy anyway – not for anything small.  (If you do – they are watching and will JACK YOUR RATES UP!)  You are going to use your property insurance for a really big claim.  So get a high deductible policy and save some serious money.  Those insurance guys – they make enough money anyway and will gladly sell you a cheaper, high deductible policy.  (If you talk to my brother Dave . . . ask him what lovely desk accessory I bought for him).

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 . . . .

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.

The pies have been picked up.

The snow is falling.

The year has sped on by.

What is left?

That would be the final 2009 Real Estate Stats for my little town of Perrysburg.

Come back after 12/31 and I will show/tell you the “real” truth.

What was the highest priced sale?

The lowest priced house?

The average appreciation/depreciation?

The number of houses in default as of 12/31?

The number of days until Mr. Freeze opens again?

These are vital numbers – at least to me.   The last one is vitally important to my youngest child, Hannah, and our dog Buster.  Something to do with ice cream . . .

Always asked by many of my clients and future clients and potential clients.

The trade off of showing during the holidays vs living normally.

The hassle of keeping your house “specially clean” during a busy time.

Well, unlike my guild, the NAR, I don’t always tell you “NOW IS THE TIME TO BUY!”.  Or sell.

It may be.  It may not be.

You need to be REALLY and seriously motivated to sell and move today.   You need to have a plan.  You need to know your numbers.

But . . . . and this is my caveat . . .  IF you know you are going to sell/move in Perrysburg in the next 4 to 6 months . . . you should list now.

Some reasons:

13 Reasons to List During the Holidays in November and December

1.      There is less competition for buyers.
2.      Winter prospects are more serious buyers.
3.      Your home looks better during the holidays.
4.      One of the highest percentages if “the listing sold” to “listing taken” occurs during this time of year.
5.      Expanded Home Buyer Tax Credit, for First-Time Home Buyers and Existing Home Buyers (specified criteria applies as defined by law).
6.      You may receive more money for your home now because you have less competition.
7.      Throughout the holiday season, you may restrict showings during your personal family events.
8.      Buyers have more time to look at homes during the holidays, especially during vacations.
9.      January is traditionally the biggest transfer month and you must be on the market to capture that market.
10.  By selling now you can have a delayed closing or extended occupancy until the beginning of the following year if you want it.
11.  When you sell during the winter you have an opportunity to buy during the spring, when many homes are on the market.
12.  You may have fewer actual showings, but more qualified and motivated prospects.
13.  Corporate transfers, who need to buy a home now, can’t wait until spring.

As always you can look at all the houses for sale in Perrysburg here.