The market is in flux.

The job market is abysmal.

The broad economy in Northwest Ohio – horrible.

The stock market -

And . . . 30 year fixed money for houses 3.99%.

FHA loans as low as 3.75%.

Amazing.   We are talking record low interest rates.  Breaking ALL modern records.

Why?  It seems that with the volatility in every other part of the economy, large investors still want to have money invested that makes money and getting mortgage backed securities that have a government approved stamp and pays 3.5% to 4.5% seems like the best bet.

But . . . that does not make it “a great time to buy a house” as the National Association of REALTORS chief economist can always be faithfully predicted to spout.   It’s only a great time to buy a house if it really is for you and your family.   How is your credit?  Your savings?  Your rainy day fund?  Your other debts gone/under control/closed out?  Your job?  Your current lease ending?   Get ALL of that right . . . . get the right house . . . and with these ridiculously low interest rates . . . it might make sense to buy in Perrysburg right now.

Which is what we have in Perrysburg.

I could write about the increase of homes being foreclosed.   And I could write about the national and local statistics of homes “under water”.   And I could write and tell you about the personal trauma so many Northwest Ohioans are facing in this market.

And yet . . . there are many homes selling for MORE than asking price.

And with more than one offer coming in.

The market is bifurcated – with 2 sides.  2 halfs.  2 realities.

Case in point: the single family MSI in the 43551.  That stands for “months supply of inventory”.

It’s a measure of how balanced the market is.  How “hot” it is.  How hard buyers or sellers have to fight for each deal.  It is, in one sense, a worthless number!  Because you only buy one house.  You only have one house to sell (normally) if you are a seller.  The medians and averages and group aggregation of data mean little in one little deal.

But they do set the tone for the market.

Right now?   Just 6.1 months supply of inventory in Perrysburg.   Last August there were 260 houses for sale in Perrysburg and 7.9 months of inventory.  Last month there were only 224 houses for sale and with 37 under contract just 6.1 months supply of inventory.   MSI always drops in the Summer.  It always goes up in the Winter.   But that is a 23% drop in 12 months from August to August.   So the Perrysburg market “feels” hotter if you are a buyer.   If you are a seller?   The broken record says “it’s all about price and condition” and it is.

1. Have a finished basement without a back up plan for the sump pump.   The power does go out . . . and if your plan is to call Toledo Edison and beg for faster service . . . .

2. Get your home/budget/mortgage in trouble and not talk to people.   It’s public knowledge.  Some people are going to charge you by the hour and do nothing – some are going to pester you on the phone and do nothing.   Get some special help.

3. Buy an extra house.   Not now.  Not in this market.   Sell your current one first please.

4. Buy REO property to “flip”.  You are not going to do it.  You are not going to make money.   There are lots of good reasons to buy REO as an investment – flipping is not one of them.

5. Pay someone upfront to sell/market/advertise your house.  Just plain bad business.

6. Hire a real estate agent without asking a page or two of questions about them and for them to cogently answer.  Many agents are abandoning the business right now (that’s a good thing!).  Some are carrying on to clients like they are full time producers while they have other jobs and even live in another state!

7. Fail to understand that the first showing of your house for sale in Perrysburg will occur ON THE COMPUTER.  Via the photos that your marketing agent has taken.   Failure to understand this costs you time, money, and sales power.

8. Don’t be pressured into buying right now.   Not by anyone.   There are good deals.   There are smart buys.  There are great personal business cases to be made for purchasing a home for many families.   There are also a lot of fear-based sales tactics that can lead you into a terrible decision.

1000 words.

1 picture.

Want to get values up?

Want to slow foreclosures?

Want to get the economy fixed?

It’s really simple!  Just fix this picture: (also note that for the past 20 years Wood County and Perrysburg have almost ALWAYS HAD LOWER and therefore BETTER unemployment numbers than other major counties.  Something big has switched and or changed . . . .)

I have some heretical thoughts (about real estate), offered in a random manner:

1. The interest rates are too low right now.

2. Low ball offers don’t work . . .

3. Except when they do.   You just don’t know when they will!

4. Mold (which we cannot call mold) is the new growth industry.

5. I would arrest and incarcerate anyone who buys copper pipes or tubes or wires – not the vandals and criminals who steal/filch/pilfer it . . . the owners of the scrap metal companies are costing Toledoans millions of dollars of easily prevented damage.

6. Prices in Perrysburg are rising.   They really are! (at least up thru last week . . . )

7. The old market is gone.  Dead.  It’s NEVER coming back.

8. Buyers are buying Perrysburg because it’s close, safe, quiet, and full of great houses and excellent schools.   That’s a great combination to offer to incoming buyers.

9. If I was starting a new business it would be to install and sell cast iron bolted on high strength security grates to cover exterior central air conditioner units.  Whole systems are being looted in Toledo right now – it’s a growing problem.

10. If I was a new Realtor getting into the market I would specialize in helping people who owe too much money to the bank.   Too many people owe way too much money.   There are lots of ways to not only help them but help the creditor and make a sale too.

I am a Fannie Mae direct broker.   And a HUD listing broker. They send me a lot of business.  And I sell a lot of homes for them.   

My team and I also represent a lot of buyers who buy REO listings from Fannie and HUD and Freddie that OTHER brokers have listed.

So I see the velocity and behavior of the local market from both sides.

Some thoughts for you if you want to be a buyer of the “great REO wave”:

1. Know what you want to pay – for a particular house – and no matter what happens or who says what, stick with that price/offer/valuation.

2. Be prepared to be disappointed.   The best houses in REO Land get multiple offers.   Some of my best assets get 3 or 5 or even 7 offers.   One family is happy.   The others are crestfallen.   Be prepared to be disappointed.

3. Know in advance the newest tactic that banks are using.  It’s simply called “highest and best offer”.   You are told there are multiple offers.   You are given a deadline.   You have one chance to put in your offer, your “highest and best” offer.   Why do the banks do this?   It gets them higher sales prices, obviously.   And paradoxically it flushes investors out of the pipleline.

4. Investors beware. Fannie, Freddie, and HUD all actively discriminate against . . . investors.  It’s the only type of legal housing discrimination that I know of.   It’s designed to penalize investors who often just “flip” a house after making cosmetic changes or rent out a nice house and often contribute to a decline in housing values in a specific area.

5.  Beware that some banks are artificially, and on purpose . . . deliberately underpricing some assets. By many thousands of dollars.   That helps the banks often get many thousands of dollars more than their list price.  And that’s why you and your agent (hopefully me and my team!) have done our homework up front.   Because it may be wise and financially smart to spend $5k MORE on a house than list price (if, for example, it was underpriced by $30k as I have just seen . . . ).

The rules are different in REO Land.

But the results and the home you can buy . . . they can be spectacular!

The owner lost his job.

The mortgage went unpaid.

Everything started being delayed – repairs, etc.

The bank foreclosed.

The house went for sale.

I sold it.

A local family bought it  . . . because they cared about the street/neighborhood/city.

They have repaired and renovated it . . .

Here is the “before and after” shot . . .

Do you think that the neighbors are happy?

Why buy?

Why buy in Perrysburg?

Realtors were taught to say that houses were/are/will be “investments”.

There was the “Perrysburg Premium” you paid to live here.

And the guaranteed 2 to 3% annual house appreciation in the 43551.

The guaranteed appreciation is gone.  The near “risk free” nature of Perrysburg property is gone.

You want real estate that is an investment?  We need to examine/measure the actual cash flow.

You want real estate that is guaranteed to go up every year?  I can’t help you.

This just ran in the WSJ:

At the risk of heaping more misery on the struggling residential property market, an analysis of home-price and ownership data for the last 30 years in California—the Golden State with notoriously golden property prices—indicates that the average single family house has never been a particularly stellar investment.

In a society increasingly concerned with providing for retirement security and housing affordability, this finding has large implications. It means that we have put excessive emphasis on owner-occupied housing for social objectives, mistakenly relied on homebuilding for economic stimulus, and fostered misconceptions about homeownership and financial independence. We’ve diverted capital from more productive investments and misallocated scarce public resources.

Between 1980 and 2010, the value of a median-price, single-family house in California rose by an average of 3.6% per year—to $296,820 from $99,550, according to data from the California Association of Realtors, Freddie Mac and the U.S. Census. Even if that house was sold at the most recent market peak in 2007, the average annual price growth was just 6.61%.

So a dollar used to purchase a median-price, single-family California home in 1980 would have grown to $5.63 in 2007, and to $2.98 in 2010. The same dollar invested in the Dow Jones Industrial Index would have been worth $14.41 in 2007, and $11.49 in 2010.

Which I do from time to time.

Like today.   I just listed 3 homes in Toledo.   1 in Elmore.  1 in Oak Harbour.  And 2 in Perrysburg.

One in Perrysburg is on Eckel Junction – just down the road from where I used to own a house.  So . . . I know the neighborhood quite well.

You can walk over to Rivercrest Park – with or without the kids.  With or without the dog – but he ALWAYS wanted to go because there are always a lot of little and big dogs to sniff and or wag your tail at.    There are ball games going on.   The Y is right down the street.   And, of course, your kids can walk or ride to Ft. Meigs Elementary.

So it’s a pretty nice area to live in.

This house?  One owner.  Center-hall floor plan.  3 car garage.  And these are all very good features.   It feels “big” and has 2 laundry rooms – one up and one down.  The basement is finished too.

$280′s.   With a, did I mention it already . . . 3 car garage.

It is in true mint condition.

‘Double-Dip’ in Housing Prices Even Worse Than Expected

U.S. single-family home prices dropped in March, dipping below their 2009 low, as the housing market remained bogged down by inventory and weak demand, a closely watched survey said Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas declined 0.2 percent in March from February on a seasonally adjusted basis, in line with economists’ expectations.

The price index was below the low seen in April 2009 during the financial crisis. The glut of houses for sale, foreclosures, tight credit and weak demand have kept the housing market on the ropes even as other areas of the economy start to recover.

The 20-city composite index was at 138.16, falling below the 2009 low of 139.26.

“This month’s report is marked by the confirmation of a double-dip in home prices across much of the nation,” David Blitzer, chairman of the index committee at S&P Indices, said in a statement. “Home prices continue on their downward spiral with no relief in sight.”

You can read about it here . . . . but this is what I have feared and been warning about.