Perrysburg Blog

Buyers.

The LIFE BLOOD of residential real estate.

And, as I counseled a young couple today - first time buyers - there has NEVER been a better time to be a first time buyer.

But . . . buyers have to beware!

Here are a few stream of consciousness warning signs for buyers:

- The house for sale with central heat and air . . . but there is a window air conditioner in the upstairs bedroom.  This is a CLUE.  The central HVAC does not work properly.

-The house for sale with a dirty kitchen - dishes and plates full of old food laying around, grease caked range.  This is a CLUE.  The current owners do not maintain ANYTHING in the house properly.

-The house with paneling - never moved or removed paneling over their 25+ year old basement walls.  This is a CLUE.  Perrysburg is built on soil called Hoytville Clay.  Note the word “CLAY”.  It moves and destroys basement walls.

-The house with a warning sign “Pretty Kitty Will Bite - Be Careful”.  This is a CLUE.  If the cat is allowed to bite, it is probably allowed to mark, spot, and otherwise take ownership of the physical plant of the house.

-The house where the seller dogmatically, and without any prompting states “We ain’t gonna pay your buyer’s closing costs - never did believe in that stuff.”  This is a CLUE.  An irritable and arrogant seller may also have pricing problems with the new realities of this market.

-The house that just never seems to keep long-term owners in residence - turning over every year or two and usually on a busy road or corner lot.  This is a CLUE.  You won’t like living in this house either - not unless you get such a deal that you smile everytime you pull into the driveway.

-The house - and you have two little children - that has some dogs running around in the house next door.  And in the back yard.  Big, mean dogs.  This is a CLUE.  You may not be happy with your neighbors.

-The house with the basement that smells funny. . . . wet . . . kind of damp.  This again is a CLUE about the type of soil in Perrysburg and its location on the former Great Black Swamp.  Current owners can’t fix the water problem?  And YOU are going to?

-The house that has the weird floor plan.  So weird that you do not know what to call the rooms.  “This is the annex room that leads to the bedroom.  That is the vestibule with the fireplace.”   This is a CLUE.  Anachronistic floor plans are not popular for a reason - they don’t work.

The house filled with lots of dead bugs (this really happens!).  This again, is a CLUE.   They have to live somewhere.  They do tend to reproduce.   They don’t pay rent.  You don’t want to live in their house!

Just a few observations.

Just a few clues.

It seems that any town of significance HAS to have a library.

Even in this digital, wired age.

Perrysburg has one - a GREAT one.

The local library is actually a beloved local institution in Perrysburg.

Live downtown?

You can walk or ride your bike.

Live further out?

Plenty of free parking.

It’s busy but quiet.

Big but small.

Loaded with reference works, computer terminals, FREE DVD rentals, and lots of new books.

Gripes?

Only a few - my wife always wants them open later on Friday night (they close at a too early 5:30).  They seem to be cutting back on new books - but it is a digital age, I suppose.

I wrote a few term papers there (in the old, pre-renovation building, complete with card catalogs!)

Best features?  Great staff, self-check out, you can hold books, and you can do a lot of “shopping and holding” on-line.

In fact, the main library user in our family, my dear wife, rarely if ever looks for books or asks for help - she does her research and reserving of books, etc. on line and then whisks in and grabs them.

Why buy or own a house in Perrysburg?

The Way Public Library is one great reason.

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.

The houses are great.

But what else drives so many people to seek out Perrysburg?

The Farmer’s Market.

Each Thursday, the downtown main drag - Main Street or more properly Louisiana Ave.  turns into a market.

Now, if you have ever been to Europe you know what a market day or a town market is.  It is often the very center of life in that city or village.  People from surrounding areas bring in produce and crafts and foods and other locally produced goods.  Stalls and booths and other areas are set up and people from everywhere show up to buy and trade.

But that is Europe.  We have gotten away from this sensible and down to earth activity.

Until recently.

For the past year or two the City/Chamber/et all have put together a smaller, more American version of the European Farmer’s Market (it’s more American becuase we drive to it in our cars and don’t close off the street - we are SO car-based in the USA!)

What do you find?

Flowers.  Plants.  Hormone-free meat.  Crafts.  Locally made cheeses.

Yesterday a local grower had brought in strawberries.

Fresh.  Locally grown and harvested.  Plump.  Amazing tasting strawberries.

They seem to be an entirely different species than the hot-house grown, flown in from Chile, pasteurized strawberries that you can buy in a refrigerated case in a local supermarket year round.

Every time I go to the Perrysburg Farmer’s Market I meet and greet old friends and clients.  I get to see some interesting dogs out walking their masters.  And oh - the strawberries.

It’s a great new tradition in Perrysburg, and just one more reason to own real estate in Perrysburg.

Toledo double taxing its’ citizens.

Bowling Green sending us a new corporate HQ.

Toledo laying off their police force.

All of these things tend to increase residential housing demand and values in our little town of Perrysburg.

Now I just learned that in one years time - which if you hadn’t noticed seems to arrive very much faster today than it did years ago - in April of 2010 the rules re. lead based paint are going to change.

Currently any Realtor selling any home built before 1978 has to provide a Lead Based Paint Disclosure to the buyer.   This is a trivial thing - for not once have I ever met a seller that had known that he had lead based paint in their house.  No one tests - so no one knows.

So the disclosure has what value?

Zero.

Nada.

None.

Year after year Realtors have been giving disclosures that say nothing to people who know nothing so that people can not read them but sign them anyway.

All at the behest of the Federal government.  (And you are worried about them running GM?)

But that is ALL going to change.

Starting on 4/22/2010 ALL regular consumers and normal Joes who buy investment property - duplexes, triplexes, 4-plexes, and even single family houses - for use as rental properties have to abide by the rules that giant “Market Rate” owners of thousands of properties have to abide by.

Such as:

-Testing each and every unit ($500+)

-Building and keeping and supply an audit-proof paper trail on all work done in each rental unit.  Fine for bad paperwork?  Up to $33,000!!!!

-Containing ANY work area in ANY pre-1978 rental unit just like it is an asbestos contamination zone.

-Only using  power tools with HEPA attachments in such units.

-Seeing that ALL personal that do ANY work in such units are trained and certified.

Painting more than 6 square feet of a pre-1978 built rental property?  You are most likely going to have to hire a professional  and PAY BIG MONEY.  Or else test and prove you have no lead in your unit.

How in the world does this help Perrysburg?

Think about it . . . the NEWER suburbs with NEWER rental properties are EXEMPT from this madness.

If you have a post 1978 rental property you can just smile at this insanity.  If you want to sell it, and I am your listing agent, we will make sure to point out in our marketing that it is LEAD FREE and EXEMPT from the new law.   This will, in my opinion, have a huge impact on values and investment property demand.  Most of Perrysburgs RENTAL units are post-1978.

I could go on . . . trainers need to be EPA certified, firms need to be certified, if a child comes into contact with dust from a building as they walk on the sidewalk . . . you cannot imagine what this is going to cost.

But not to the majority of Perrysburg rental units.

Duplexes “in the Boundary’s” are hit.

Some units in Southwood Park . . . maybe.

Three Meadows  - safe.

Most of the Township - safe.

The City of Toledo - in 10 months you won’t want to own so much as a stick of wood in that town if you are a property investor.

Not unless you are either a lawyer or a commercial painting contractor.

Do you see it?

Not many do.

I will share with you my current take on the Perrysburg/Northwest Ohio real estate market.

First - there are TWO markets.   Not surprisingly you may have already figured this out.  There is the REO/Bank Foreclosure market.  And then there is everybody else.

Two markets - in the same market space.

Competing with each other.  Interacting with each other.  Together making up one single market.

I believe that every single buyer and seller has to understand this in all its’ implications.

Second:  There is a giant elephant standing the corner of the Perrysburg market.

Many agents are willfully blind.  Many sellers are deluded.  Many people don’t want to talk about him.

But I will.

That giant elephant in the corner?  He is representing the lack of “move up” buyers in the current Northwest Ohio real estate market.

Move up buyers?  They have been Perrysburgs’ bread and butter.  People “move up” out of their Toledo/Sylvania/Maumee/Point Place home to a larger, better, more expensive house in Perrysburg.

These move up buyers made our market work.   They bought the $189,900 house.  The $320,000 house.  The $499,900 house.

Now we have a market in NWO full of first time buyers ($8000 tax credit) and full of investors (Heh!  This is better than my stocks!).     This dearth of move up buyers is NOT unique to Perrysburg - see this story.

I talk to many homeowners today - they CANNOT afford to sell and move up.

I can also report, in an anecdotal manner, of buyers who buy who tell me that this is their last house.  They plan on being buried in the yard of their home!   A mental shift has occurred-  houses in Perrysburg are no longer investments, or financial stepping stones on the upward path to The Sanctuary.  No - they are hard-nosed financial purchases that have to work in a families budget.

The upshot - the lack of move up buyers is felt especially hard in Perrysburg and other former “move up” suburbs (Sylvania, Monclova, et all)  and shows no signs of abating.

People who bought at the peak of the market have no reason to sell now and then “lock in” their paper losses.

People who bought and have mortgage problems?  They can’t move up.

Seniors and older buyers?  They are not buying up - they are buying down.

First time buyers?  They ARE buying in Perrysburg, but not in the traditional move up price ranges.

If you have a “McMansion” that you HAVE to sell - I can sell it.  It is salable.  But the price will have to be compelling to attract buyers.

I have sold close to 40 homes in the past 60 days - the highest number in my career.   But that is because I and my team are pricing to today’s market.

Most people know that Perrysburg prices have dropped (a few Realtors surprisingly have not gotten that memo - but I don’t want to be snarky . . .)

But what of taxes?

Property taxes should be coming down too, n’est pas?

I do not believe that the County automatically adjusts taxes down.   They must have missed that memo too!

So what can I do to find out the history of taxes.  Not that hard if you have a record of old MLS comparable sales . . . and here is what we find:

We find that property taxes in Perrysburg have relentlessly increased.

The 3 bed, 1.5 bath house in the Southwood Park subdivision of Perrysburg would cost you $393 in 1/2 year taxes back in 1984.

In 1994 that same house would cost the owner $557.

In 2004 your 1/2 tax bill would have been $1076.

Today?  You are may be looking at almost $1400 per 1/2 year for a 3 bed, 1.5 bath in Southwood Park (Edgewood, Southwood, etc. by the big blue city water tower for those who do not think in terms of subdivisions like I do!) (Caveat: Not everyone pays the same tax amount for the same home - it depends when you were last assessed/appraised by the County, how accurate your assessment is, and if you have recently filed for a reappraisal).

$393 to $1400.   I think that is an increase.

But - property values have declined in 2006, 2007, 2008 and this year.

I wonder if property taxes have gone down since 2007?

What is your experience?

Enjoy your tea!

I love reading. (Off on a rabbit trail here, but I LOVE the free book catalog www.Librarything.com.  AMAZING.  Get yourself an account and put your own books in there . . . )

Books about history.  Books about business.  Books about science.  Even about birds.

The Dodo bird was friendly with humans - even fearless.  Dodo’s were known to man - one was even captured and brought alive to Europe.  Then they were dead.  Extinct.  In the 1600’s.   A testimony to man’s thoughtlessness for the wonderful creation we have been given.

But I digress.   Because just as quickly, just as suddenly, and with just as little fanfare - the local mortgage broker has become endangered and now almost extinct.

Where there was once 20+ mortgage brokerages in Toledo, there is now only 1 or 2 that I can find.

90% extinct.

In 2 years.

(N.B. A mortgage BROKERAGE is different from a mortgage BANKER and both are different from a full service BANK that makes mortgages.   I am only writing about mortgage brokers)

Where did they go?  Why are they gone?  What does this mean?

First of all I don’t know.  Some went into other businesses.  Some joined banks to sell mortgage products.  Some vanished -  POOF -  no forwarding address.

Why?  The great loan fiasco / mortgage crisis has caused their extermination.   Making Liar Loans, No-Doc Loans, Alt-A loans, and what I call “Pre Foreclosure” Loans and then selling them to Fannie Mae and Freddie Mac was great sport.  Until the music stopped and the light got turned on and the party was over.

What does this mean?  No one knows yet.   Most likely a little less competition for consumers.  Hopefully higher quality loans that will not be in danger of failure/foreclosure in the future.

The closing of mortgage broker is not a Toledo phenomenon.  All over America the lights have been turned off at hundreds of these firms.   The pipelines they filled are empty and now torn up.  The giant industry they built has crashed.

And hardly anyone noticed.  Just like the Dodo Bird.

I do hear this.

Probably at least once per week.  Maybe more.

The buyer calls me or emails me and has the address of a specific house that is REO (”real estate owned” aka bank owned) and wants to see/buy said house.

But the problem is . . . THIS house is not for sale yet.

It is bank owned.  But NOT for sale!

It is part of the “Shadow Inventory”.

“We believe there are in the neighborhood of 600,000 properties nationwide that banks have repossessed but not put on the market,” said Rick Sharga, vice president of RealtyTrac, which compiles nationwide statistics on foreclosures. “California probably represents 80,000 of those homes. It could be disastrous if the banks suddenly flooded the market with those distressed properties. You’d have further depreciation and carnage.” (San Francisco Chronicle)

Many people cannot understand why it is not for sale.

There are many reasons.

1.  The foreclosure process may not be completed.

2. The former home owner may still be occupying the house.

3. A tenant may be in the house.

4. The home is being appraised/prepared for market.

5.  The lender is simply overwhelmed and CAN’T get it on the market.

6. The lender is not willing to sell it - so that it does not have to be written off as bad debt on their balance sheet.

And amazingly the most common reason is that the bank is simply not going to put it on the market right now.

Which seems to make no sense.

But if ALL the REO homes hit the market right now . . . their values would be very depressed.  So it makes financial sense for banks to parse them out “slowly” or at lease more slowly then they can be marketed.

And think about this - up until this year, in Perrysburg, we have MAINLY been dealing with “Alt-A” and Sub-prime foreclosed loans.

But there is a giant “clot” of OTHER types of bad loans/foreclosures coming right for us.

Look at this chart:

It is a forecast of the future REO inventory.

And it is a sobering picture.

You know, stats / statistics are dangerous things.

Easily manipulated.

Slice the data in the time frame/price range/criteria you want . . . and you can make it say “BLUE”.  Do it in the way I want and I can make the same data say “RED”.

Very dangerous.  Deceptive.  At least that’s what my statistics teacher at Duke told us before he taught!

N.A.R.  (the National Association of REALTORS) comes out with some stats.   Sales are UP in the past month!!!  Yeah!!!

But comparing one month against another . . .

When you know that the current months’ “bump” is solely due to depressed REO assets selling . . .

When many local markets are cratering . . .

Highly dubious.  Almost deceptive.  Even though technically true.

But what of the big, national statistical picture?   Can we look at ALL the numbers?  What will that tell us????

Here is the picture:

National numbers are both up 4.7% but they are also down by 41.1% over the past year.

There is no honest way to say that sales are up.

The days of a million or 1.2 million homes selling per year in the USA?  Gone.  For a long time.

Pricing and your homes’ pricing strategy are all important in this market.

In Perrysburg and everywhere else apparently.