Perrysburg Blog

I sell houses.  And I have been blessed to sell a lot of houses in 2011.  More, in fact, than any other Realtor in this market.

And I have sold some amazing mansions this year.  And some houses that should have been torn down.

But they all sell – at some point.  Given enough time and the right effort.

Many sellers/homeowners ask me “what can we do to get our house sold”?

Clutter matters.  Decluttering can help sell us sell your house.

Condition matters.   Fixing your houses’ problems can help us sell your house.

Location matters.  So . . . picking up or repairing your neighbors problems can help us sell your house.

And marketing matters.  Getting the word out about your house to the most potential buyers and then actually answering their inquiries really matters in selling your home.

But – in THIS market – the number one determining factor in selling your house is price.

Price can fix everything in selling your house.

It fixes clutter.

It fixes your bad basement.

It fixes your neighbors messed up garage and yard and gutters and weeds.

It fixes your current Realtors’ utter lack of marketing and salesmanship — like the house in Perrysburg without a for sale sign that I wrote an offer on this week (whose out of town owner has NO idea what her agent is up to . . .) to the listings with recorders and voice mail that “answer” every call that buyers make.

Price fixes ALL of those sins.

With mortgages at amazing levels . . .

With prices in Perrysburg leveling off . . .

With buyers always looking – even this Winter – for good listings to buy . . .

Pricing can fix your home.

Just one thought – work on the other factors first!

They are much cheaper and will put more money in your wallet.

Which, as I remember, used to be about 10 developments/projects/unit types that I could memorize/almost perfectly know, has transmogrified into a huge amount of property and property types.

Which is a good thing.

If you want a condo/zero lot line/downsized property.

But . . .

If you are a buyer you have to deal with a SUBSTANTIALLY reduced inventory.   There are 10 to 20 to 30% fewer condos on the market for sale than in the recent past, depending on how/when you measure it.

If you are a buyer you have to deal with SUBSTANTIALLY tougher loan regs and rules.   You cannot just waltz in with your FHA loan approval to pick any condo project.  It has to be “approved”.  And certified.  And the number of tenants known/capped.

If you are a buyer you are going to perhaps pay more too.  Because of the small sample size and the disparate values of condos in the 43551 a quick and dirty $/sq. foot analysis or median price analysis is not a good way to find value.  You really have to go unit vs. unit for comparable properties.   And it “seems” to me that some values have been seriously hit hard . . . in the lower end price range.  And some values have firmed up . . . paradoxically in the higher price range.

If you want a new condo you have a problem.  Only one or two projects are building – and you will most likely need to ink a contract for a custom property.  One of my clients who just did such a building contract “set a new record” in the Perrysburg condo project they are buying in . . . imagine that!

So . . . fewer properties on the market.

More properties selling (I think I sold 2 this week in Perrysburg. . . )

And weird, wonky prices.

The Perrysburg Condo Market.

The question is: “Are local city and county budgets going to get slammed by falling property values and the corresponding hit on property tax revenue?”

I say “yes”.

I told a couple of my friends/acquaintances who were/are 0n Perrysburg City Council a couple of years ago to be ready.  READY FOR THIS:

To plan now on having less tax revenue on hand.

The Cleveland branch of the Federal Reserve Bank has an opinion: it’s here.

I have made many crazy real estate predictions:

A. Houses are going to get smaller.

B. Brokerages are going to radically change.

C. Agents are going to go mobile and untethered.

D. The internet is going to rule real estate advertising.

E. Shag carpeting is coming back in style.

Most of them have come true!  Well, except for the carpeting one.

But the prediction on municipal revenue is very difficult to accept.  What if the Lucas County lost 25% or 35% of it’s tax base?

What if Wood County lost 20%?  What will happen to city services and infrastructure and jobs and pensions if 50% of our tax base melts away (travel to Detroit or Flint for a view of the future . . .)

Think I am being alarmist?  Read what they are saying in Rhode Island.

Hard choices result.  Put them off . . . . and your entire city can be destroyed (see Detroit, above, which is heading for total financial meltdown with state control of it’s entire budget).

If you add in the effects of the decline in valuation and the imputed number of properties NOT paying any property tax at all in Lucas County . . . it’s a huge problem.

Tax increases are not going to work – no one will vote for them to pass and if you target businesses instead of people, they and their jobs/employees will simply decamp for Tennessee or Indiana (or Mexic0 or China).

In Wood County the property tax provides about 20% of the county’s income/revenue.   And the 2009 tax valuations are fractionally lower than the 2005 total valuation.  2005 was the last of the “boom years”.   I think that the county numbers are going to adjust down – by 20%.    The residential component is 70% of the total – so even record setting farmland prices won’t help when valuations are “normalized to the market”.

From the City of Perrysburg’s point of view it’s not that bad – real estate taxes make up about 10% of the city’s revenue.   So it’s not catastrophic.   The hit comes when the county/state feels the pain and starts squeezing the municipalities.

It’s started – and it’s going to get worse.

If you are a landlord in Perrysburg in 2011 you have much to be thankful for.

Your property is most likely rented.

Your tenants are on “good behavior mode” as they know that if they have to look for another 43551 rental house or condo it will not go well.

Your bank account is probably in better shape with rent receipts than if you had to sell and mark your asset to market on the bank/REO depressed current market.

And there are no hassles in Perrysburg from the local constabulary . . . unlike a rather large and more regulatory rapacious city just to the north that I will not mention.

There are – at least according to my Mark 1 Eyeball – fewer for rent signs up in Perrysburg now than in recent memory.   Only 1 of my managed properties and 0 of my own properties has a vacancy.

The WSJ has a nice piece on the situation here.

Implications?

If you are fully invested in the stock market . . . . you must be addicted to risk.   Diversify into some nice multifamily in Perrysburg or Sylvania.

If you are fully rented out . . . now is the time to raise your rents.

If you are looking to get out of the rental market . . . not a bad time to sell your multifamily property in Perrysburg (since values are based on cash flow imho).

Wow.  It snowed last night.   Which caused me to order snow tires.  I am expecting the worse . . . and hoping for the best this Winter.

Which leads me to the current market stats.

I am expecting the worse . . . and hoping for the best in the Perrysburg real estate market.  It SEEMS like things are more “back to normal” . . . but IMO things are not going to go back to what used to be.   There has been too much economic disruption and movement and change.    Values and taxes and employment have changed and shifted.   But every dollop of good news comes with a side order of bad news . . . so please do not accuse me of parroting the NAR line of “now is a great time to . . . .”

Here are this month’s single family and condo sales and numbers in Perrysburg:

Closed Sales: 82

Median Price: $204,500 (that’s the second highest monthly median price in 2 years)

Average Price/Sq. Foot (sold): $95

Sold House Average Days on the Market: 152

October 2011 Number of Houses Listed: 339

Number of Houses Pending: 41

Months Supply of Inventory: 6.6 (which is why the market seems better this month . . . )

So there you have it.   Things are getting more balanced.   But the market is still very price sensitive and buyers are still in the drivers seat.

You know I love numbers if you read this blog.   More numbers!   More stats!  More graphs!

And you might think that I therefore believe that you figure out the Perrysburg real estate market by reading the statistics reported by the media.

But, the numbers aren’t always the numbers and here’s why!

Sales Prices

• May include seller-paid buyer’s closing costs and/or bonus commissions paid to buyer agents that distort the true property value.
• On FHA loans that close today . . . almost ALWAYS includes 3.5% credits to the buyer.
• May include major repairs and or other credits on cash sales.
• Often use funky/wonky things like tax prorating methods to shove more cash to a buyer.

Average Prices

• Can be influenced substantially (higher or lower) according to the mix of properties sold during the time period.
• In a small sample size – one or two large sales can skew the numbers.

Days On Market

• Can be gamed by pulling the property off the market for 30 days, then re-listing.
• Can also be gamed by changing the address spelling (North First Street vs. N. First Street or N. 1st Street, for example).
• Often covered up by switching brokers.

So . . . the numbers you read are not always truthful.

But I still love analyzing and sharing them!

Here is a tabular report of the MSI – Month’s Supply of Inventory – for Perrysburg as of 30 days ago.

Seasonality is stronger than it was 5 years ago.

20% or so fewer houses active on the market vs. 2 years ago and WAY down over 5 years ago.

8 months or so of inventory?  Pretty balanced in my opinion – as I am hearing from more and more buyers who are NOT getting the house they bid on – which was unheard of last year.

Why?  I only write about one listing – a “listing post” – when it’s A. In Perrysburg.   And B. Special.

So I will write about 1752 Horseshoe Bend.

Because it’s a great house.  3 beds, side-load garage, Corian counters, fenced yard, big basement ready to finish, and as neat and clean as a pin.   $207k tax value.  Today’s price?  $185k.

Oh, the location?

Check out this aerial photo – it’s the house/lot just above the “H” in Horseshoe Bend.   Oh – that’s Perrysburg High School off to the west . . . . so no excuses about it being too cold or wet to walk to school!

And I am not sure that I like it . . .

Because I just wrote an offer and got a home sale pending for the “child” of a client.

Yep.   Someone’s “little kid”.   Whose dad I sold a house for many, many moons ago.

Now buying a home with me and my team.  Taking out a mortgage.  Signing legal documents.

Great.

Which means:

1. Either I have been selling houses for over 20 years. Or,

2. There is a time warp and a dimensional shift has occurred since I don’t feel that old.

In any event it is always a compliment to be chosen to help a man/woman/family find and buy their new home.

It’s a compliment to have loyal, faithful clients – who often turn into friends.

But really – your kids are growing up way to fast!

The numbers are firming up . . .

The casino is hiring . . .

The sun is shining nice and warm in October . . .

And my team and I are selling lots of property . . .

So what do the numbers say?

Fewer Perrysburg houses on the market.

More houses in Perrysburg pending sale.

More houses in Perrysburg closed.

And fewer houses in Perrysburg failing to sell.

What’s not to like about these numbers as seen on this chart?  (you can click on it for a full size view . . . )

A recovery?  I think not.   Not until more and better things happen on the employment front.   We are seeing natural market forces balancing out a bloated inventory.   I am seeing cash investors moving in to buy good deals (I personally wrote 4 cash offers today, and negotiated a cash offer on a Perrysburg listing . . .).   I am seeing sellers who can’t afford to sell call the bank, or lease the house out and move to Florida or S. Carolina anyway.

No.   Not a recovery.   But something better than what we had last third quarter in 2010.

Practice.

Preparation.

Organization.

Research.

All equal to success in lots of endeavors.   Like in baseball.   And in real estate.

Do it . . . and your ducks are in a row.

Fail?  You will whiff.  You will miss.  You will not win.

If you strike out in baseball . . . you get another at bat . . . usually.

In real estate?  You may lose the home you HAD to have.  The “perfect house”.

And, not surprisingly, real estate agent batting averages, proficiency, and skill set strength might seem to matter.

Especially in light of the new NAR report on recent sales.

If you peel away the data . . . you will find that the percentage of pending sales that blew up – busted out – failed to close . . . has DOUBLED.

That’s a HUGE increase.

I believe there are a couple of reasons:

1. More and more appraisal problems with pending sales.

2. More REO transactions which are very hard to get closed.

3. More part time / old timey real estate agents who don’t sell anymore and don’t swim in these treacherous waters anymore.

4. Short sales – the modern bane of buyers, sellers, and agents.

Add them all up . . . . and it’s a miracle MORE deals than the 18% reported are not blowing up!

(by the way – it was 9% of all pending deals blowing up just a year ago . . . )

What to do?

Get accurate market data.

Thinking about buying a short sale?  Open your eyes, get the facts, and get some help.

Only hire an experienced, competent, skilled agent.