Perrysburg Blog

Let’s just compare this year vs. 2009.

Simple.

Elegant.

Same seasonality.  Only 12 months of time to account for.  You can ignore the median price due to sample size.

28% fewer homes pending.

38% fewer homes sold.

50% drop from May/June numbers.

Raw Data with Median Prices:

Want to sell?

1. Be motivated.  Have a good reason.

2. Be prepared.  Have a good plan.

3. Be buyer focused.  Have a good price and good terms/condition.

The sales numbers:  GRIM.

I am sure that they will be all over the news.

“Existing-home sales plunged to their lowest level in 15 years in July as inventories soared, painting a grim picture for the housing market absent government support.

“Home resales dropped a record 27.2%—nearly twice as much as analysts had expected—to an annual rate of 3.83 million in July, the National Association of Realtors said Tuesday. Meanwhile, inventories rose to 12.5 months from 8.9 months in June, pressuring already depressed home prices. Inventories are at their highest level in more than a decade.”

This is not a surprise.

Residential real estate is a game of positioning.  Of immediacy.  Of marketing impact.

Give financial incentives to lots of buyers to hurry up and buy . . .  they will and then prices and sales will crater.

Pull demand forward  . . . and there is a snap back the next quarter.

None of this was unpredicted.

Sellers in Perrysburg today have to have their home in PERFECT condition.  Priced PERFECTLY to the market.   They have to be on the top of their game.

The numbers are grim – but houses that are presented and priced well are selling.

Even in this market.

Next post: Perrysburg sales numbers . . .

Advice I am giving to potential sellers:  don’t sell unless you really need to.

Advice I am giving to sellers that really need to:  make sure you really need to sell.

Advice I am giving to sellers that are sure that they really need to sell: there are too many houses for sale given the buyer activity we have right now – let’s find out how we can work together to sell your house in this environment.

The WSJ has an interesting missive out today - about the glut of houses on the market.

Interesting reading:

“Pending sales, signed contracts on the purchase of new homes tracked by the National Association of Realtors, were down 3% in June compared to May. That month saw a 30% drop in the index, after the April 30 expiration of the home buyer’s tax credit.

The pending sales numbers point to more alarming home sales figures, wrote Credit Suisse analyst Dan Oppenheim in a note Tuesday. Mr. Oppenheim said that given the sales pace, we’re on track to sell 3.7 million homes total this year–-the lowest seasonally adjusted level of single-family existing home sales since the fall of 1996.”

I read elsewhere that a major US builder does not want anymore tax credits or Federal home buyer stimulus.  “Just let the market work” was their plea.

The housing market is tough right now – investors from out of state are buying 100 to 400 houses in a single auction.  You want to compete against that?  In Toledo? “Gird your loins” as they say.

In Perrysburg we are not at that point (and never will be . . . !) but the dynamic pressures just to the north of us still impact this market.   When housing values plummet close by it hurts us.

Great listings are still in demand.

Great buyers are still coming to PBurg.

Enjoy the Glut if you can!

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 . . .

Did you know you may have to pay a tax on your home?  When you sell it?

Because of the 2010 Obama Care Health Plan?

Yes.

It’s true.

But it’s also not likely.  At least not right away.

You will have to an income of more than $200,o00.

You will have to have a gain of more than $500,000.

Then you will owe a 3/8% “Medicare Tax” on your capital gain.

Some have called it the “Lawyers and Accountants Employment Tax”.

You can read the excellent article in the Washington Post for all the gory details.

So, unless you have a big bomber on River Road or the Sanctuary . . . and you inherited it . . . you are not going to pay the new tax.

(In fairness I must point out that the new tax is also on tanning, investment income, and many other things – which you WILL have to pay.)

But here’s the problem.

Honestly ask yourself this:  Are the big spenders in Washington D.C. going to ratchet the thresholds up or down in the future?

You and I both know the answer -  $500,000 will be $250,000 then it will be $25,000 (in the name of fairness) and then everyone selling in Perrysburg is going to have to fork over another 3.8% of their homes’ value at the closing table.

Count on it.

Macro?

Big.

A simple chart of “big numbers” that covers the whole US economy.

Perrysburg area homes would be included . . . as a tiny little subset of these big, macro numbers.

While these are national numbers . . . they are not good.

By some measures almost 1 out of every 4 new loans is headed for a future default.

This is simply unsustainable.   On many levels.   We will run out of solvent buyers.  We will run out of solvent banks.  And the capacity of the enormous American economy to absorb so much expense and bad debt will run out at some future, unknown point.

Don’t ask me for a prescription for today’s market to get better.

You won’t like it.

But I would remind you about my grandfather, Gilmer Moden, bought his first house in Albert Lea Minnesota.   When he bought his first house, he worked and saved and worked and saved and then put 25% down before the local bank, whose manager and bank president knew him, loaned him the difference.

The idea that in a declining market people can and should be buying homes with nothing down is a fallacy.  It will not work.  Someone is not helping people own homes, but rather helping them take huge bets on the velocity and direction of the housing market with other people’s money.

I have, for many years, provided MLS feeds for my customers and clients.

In the “old days” on-line we were allowed to give consumers the picture of the house and the price but NOT the physical address.

Then the National Association of Realtors got serious about data sharing rules – and promulgated them into something called “IDX”.

Many real estate companies got “IDX compliant” websites with the full data feed from the MLS.   Consumers had to register but it was all there.

Then agents got their own “IDX sites”.   Then national and regional “aggregators” jumped into the pond.

Today, my own local Board of Realtors really can’t say with any accuracy how many data sharing websites are out there with MLS data for Northwest Ohio.

So – the data is out there.  (BTW, you can see a chronological listing of new listings in Perrysburg over to the left of this post  .  .  . constantly updated.)

There is a plethora of sites.

What can an enterprising entrepreneur do?

How about provide the BEST data site?

With the most bells and whistles?

With mapping?  Alerts?  Big photos?

That might work.

It’s called www.GoToledoHomes.com

It is the absolute best, fastest, most feature rich MLS site that any consumer can use.

Some agents have even told me they like it better than our own MLS.

You have to get your own registration to try it – name and email and phone number.

But it will rock your world if you are looking for a house in Perrysburg sometime in the next 12 months.

They need the work.

They are hungry.

They can be there 24/7 for you . . .

There are so many reasons to hire the financially destitute Realtor.  It’s just that none of them accrue to your benefit.

And, seriously, there is just a little bit of downside risk.

From my observations this week, talking to dissatisfied former clients of broke Realtors, and Realtors who are unable to sell real estate today:

A. The Financially Challenged Realtor is not going to be there.  They are not going to return your call.  Or have staff and support to do so.   You are going to be on your own.

B.  The Financially Challenged Realtor is not going to invest much money in marketing your house.  They don’t have any money to invest.  And if they did they need it for themselves and their survival.

C.  The Financially Challenged Realtor is going to be distracted.   Seriously distracted.  With a new job.  With court problems.   With other career issues.   Think that won’t hurt the sale and marketing of your listing?  Sure.

D.  The Financially Challenged Realtor is not going to have the best and most up to date technology and software.   No office to take an interested potential buyer to.   No color printer to make brochures for you with.  No scanner to digitize paperwork with.   No wide angle lens for the camera that makes your home more attractive on line.  No . . . you get the picture.

E. The Financially Challenged Realtor is not going to do the right thing when they should.  They may be desperate.  And the blood of desperation in the pool with your equity is not a good mixture.

F.  The Financially Challenged Realtor is not going to have the judgment needed to effectively protect you from scams and scammers.  They will instead try to sell you on uplines, travel deals, pills and potions, and magic software that will help you pay off your mortgage early (for an investment of $3000 up front for the magic program).

Help yourself . . . if you feel sorry for a broken real estate agent, give them a donation.  Don’t donate your home’s value.

Buyers like a process.

Their process may be different from mine.

This buyers process in buying a home may be different from that buyer.

But they all like a process.

And one thing that absolutely NO buyer likes is to hear “give us your highest and best offer.”

That means that the house in question is wanted.

By other buyers.

Sometimes lots of other buyers.

Sometimes only one other buyer.

I have 2 or 3 of these “highest and best” offer negotiations going on today.

Here are a few buyer responses and results:

A. One possible response from a buyer is “I want to see the other offers!”

- No.  You can’t.  If I tell you or your agent that there is another offer – there is.  Anything else is fraud and we don’t do that.  We say it is true and it is.

B. Another possible response from a buyer is “I don’t want to bid on that house anymore – pull my offer!”

- Will do.  You can.  But then you won’t be purchasing that house.   And you may facilitate the other buyer getting it at a price much lower than you would have paid.    I try to explain to my buyers that if a multiple offer situation is occurring on a bank owned property that bank does not care about WHO or WHAT they just want to close the sale.  You can pull out but you won’t hurt their feelings or teach them anything.

C. You can do your research.  And bid accordingly.  Then you get the house or investment you want at the price you can afford.   One of the best and sneakiest tactics is real simple – offer, in writing, to bid $1000 HIGHER than any other competing written offer.   Sometimes, again in a bank owned situation, they won’t let you do this.  But other owners will, and it gets you back in control, with an effective “veto” over the final price if you write the counter offer properly.

No one likes unwanted competition.

It disrupts the buying process.

But for the BEST HOUSE at a GREAT PRICE you must be prepared for a “Highest and Best” offer scenario.

It is Monday.

72 degrees and sunny.

The Federal Tax Credit program expired on Friday last week.  Back to normal.

Sometime last month the Fed stopped buying/funding Mortgage Backed Securities.   The tap was turned off.   The world?  It did not end!   Investors still want to buy mortgages!   Back to normal.

There are no major Ohio loan/bond issues being promulgated.  Back to normal.

Two offers on Perrysburg listings today:

A buyer just submitted a conventional financing loan/offer to me.

Another buyer . . . . the same.  Back to normal.

In Perrysburg real estate, with no tax credits, special government loans, and other market deforming forces THIS, today, right now is normal.

Rules for this market, now that it is finally normalizing:

1. Price is king.  Queen.  And Jack.  It’s all about price.

2. Perrysburg still get’s the “Perrysburg Premium”.  It just does.

3. Quality of life, crime, schools will continue to be more valuable.  Perrysburg ought to not mess this one up.

4. It has to appraise.  Your wants/needs/sticker price/contract price  . . . all will be validated, satisfied, and hostage to the appraisal.

5.  It’s allright to mow your neighbors yard.  Seriously.   If they are gone – foreclosed – abandoned – you can mow it.  It keeps up appearances.  It keeps out the petty crime that vacant houses attract.  It actually may increase your homes value.   Neighborhoods have to start banding together.

Here’s a three year overview of supply and demand in the entire Northwest Ohio market:

It has leveled out – the new normal has arrived.