Perrysburg Blog

Since I just got back from a conference in America’s most cosmopolitan, outward looking city – New York City – where you are prone to hear German or French or Russian voices as you walk on 5th Avenue – I thought about the foreign buyer in Perrysburg.

There are a lot of them!

They come here to buy.

They come here because Perrysburg real estate is a very safe buy.

They come here because of the schools, the lifestyle, and obviously the employment.

And they buy a lot of real estate -  MSNBC.com reports that foreign buyers bought over $80 billion in US property in 2010.  That was up from $66 billion in 2009.

I have sold property in and around Perrysburg to buyers from the Ukraine, Poland, Russia, France, Great Brittan, China, Vietnam, Australia, Japan, Saudi Arabia, Syria, Egypt, Italy, and Canada (is Canada that foreign?).

What are foreign buyers looking for in Perrysburg?  The exact same thing that any buyer is -  a good deal, a great floor plan, a nice lot, and no surprises.

When many foreign buyers look at our prices and values I believe that they inwardly, secretly chuckle at how cheap our prices are and how large our lots are.

The best thing to do is look at a map – maps are my favorite tool!

Here’s one view of the flow of “Euro Buyers” into the US, courtesy of Trulia.com

One thing to think about – the three largest home sales EVER in America were all to . . .  foreign buyers.  This is one, in California.  It sold for $100,000,000.  To a Russian.

I talked to a friend of mine who knows the Russian speaking Realtor who wrote the contract for Yuri Milner, the Google/Hedge Fund type investor.  I think that he was sad – he will never, ever in all of his career close on a deal that large again.  Must be sad to realize that!

Fearless 2012 Real Estate predictions from Jon:

1. Interest rates will be talked about more.  If they go up we will be screaming at how stupid we all were to NOT lock in.  If they stay at these historic, ridiculous lows it will mean that the economy is still in the tank.

2. An aging population demands “NO MORE STEPS!”.   So if you have a first floor master, a ranch, a main floor condo – all is good.

3. Perrysburg Values.  I fearlessly predict more of the same!   Values have held steady in the 43551 (more on that in a later post).  I see nothing that will change that.  You can look HERE to see the latest quarterly MSI numbers for Toleod’s Metro area.  See all those “negative signs”?  That’s bad.

4. Perrysburg Sales.  No new projects for sale.  No new plants being built.  No new big corporate moves.  More of the same  -  but note that there are several hundred new rentals opening/just opened up.  That SHOULD increase demand for single family housing the Pburg School district in the future.

5. Perrysburg REO’s.  That’s bank owned foreclosed property.  More.  Lot’s more.   Great news if you are a buyer.  Horrible news if you are a seller/owner.

6. Perrysburg Investment Property.  Blah.  The best deals extant are HUD houses in Toledo/Sylvania/Oregon/Maumee/Rossford.  Amazing deals.  But . . . HUD foreclosures are FHA loans that have gone bad.  The VAST majority of Perrysburg real estate closings now are FHA loans.  You do the math!

7. The Economy.  Holding pattern.  Solar soars/solar cools.   Autos crash/autos recover.  Caps and Snaps sell/Glass shines.  Corn and wheat are up / ethanol is cool.  Just more of the same.  And as I have repeatedly opined housing values and prices are going nowhere until the economy booms again.

8. Threat of Federal “HELP”.   The Fed wrote a big paper – about helping the real estate market.   There are ideas to lower mortgages, rent empty houses, maybe even store large amounts of newly printed dollar bills in foreclosed homes’ attics for all I know.  Lots of ideas to “help”.  If they happen – things will get worse.  There are operative laws of unintended consequences at work.

9. Best real estate search tool – Google.  More and more valuable.  It’s why I spend more money on Google advertising real property than any other broker or agent in Toledo.

10. Mobile.  If you are looking from home at houses it will most likely be on a tablet/iPad.  On the road? It’s your iPhone or Android.  Mobile tools using real estate software designed to look good and work well on mobile devices used by on the go mobile shoppers.  No looking back – mobile is the way to show/sell real estate.

11. Just Walk Away.  If the economy does not improve, if the employment picture is still grim, if the national debt is still exploding . . . I expect to see more and more “tactical defaults” as homeowners upside down simply leave the house empty and walk away.  Over 1/2 of the new bank assignments that I get are for abandoned houses.   I did two last week in Perrysburg – both empty houses/condos.

12. Longer and longer escrows.   We used to close in 30 days.  45 is the new 30 in 2012.   Every deal has more hoops, shunts, and landmines.  None of them are easy/fun/simple anymore.   It takes more time to close and more energy to get to the closing table.  I am writing a new special report on this very subject . . . .

Overall another challenging year.   Opportunity to buy great houses at a great discount.  Tough times to sell if you are leveraged.

I sold over 300 houses in 2011 – and it was my best year ever.   Tough market?  No.  A market you can thrive in if you know what is happening and you have ideas on where it is going.  You need help with your real estate predictions . . . you can always call me.

It’s too early (still 2011) to do a 2011 recap . . . or a 2011 statistical look at the numbers in the 43551 – you can be sure that those will be coming soon to this space.

But I was thinking about what was hard to do in Perrysburg real estate in 2011.  

So, I will try to “put lipstick on a pig” and share my problems with you in a positive and affirming manner!  

1. Getting or giving an accurate “quick sale value” was very hard to do in 2011.  In Perrysburg.  In Toledo.  The market was shifting and that made the guessing game of providing quick sale numbers very hard (you don’t want to know and you don’t ever want to need a “quick sale valuation” for your house!)

2. Real estate team management was hard.  My team?  Shifted.  One long time assistant retired.  One decided to, rather sensibly, take care of newborn twin boys!  And one just vanished!  New hires and new licensed team additions have made my team larger than ever.

3. Seeing people you sold a house to . . . . lose it to the bank.  Very, very hard.

4. Watch mold grow in great houses – very hard.  Sometimes the rules and regulations conspire to make a house sit in the shadow inventory of foreclosure-land.  And then bad things can happen.  It’s a dirty rotten shame.

5. Managing growth and the new market.   My team and I have never, ever sold more homes for more money.  And I have added several new lead systems.  Which has added a couple of thousand leads to manage.  Very hard.  

6. Telling buyer clients to be careful.  Just because rates are very, very low does not mean that you should spend all your income on that special house.  Not many people like to hear “no”.

7. Manage real estate deals.  Very, very hard.   Every part of every deal has changed in the past 4 years.  Financial rules.  Appraisal rules.  Valuation rules.  Stress levels are high.  Equity is low.  Jobs are under pressure if you are being transferred in or out.  When I have a “happy” closing – with neither the seller or the buyer under duress or stress or distress?  That’s actually notable today.

8. Telling the truth to sellers about the current and accurate value of their home.  Well . . . not hard.  But sometimes painful.  Or distressing.  But it has to be done.

9. Keeping up with the literature.   Never, ever been harder.  I maintain a few “professional designations” for my real estate career.  It’s a little inside industry inside real estate sales and management.  I have the ABR degree.  The CRP degree.  The CRS. The CDPE designation.  About 8 or 10 of them.  And they all take up biannual or triennial accreditation.  Plus my Ohio real estate broker’s license continuing education.  Plus the various real estate and sales and marketing books I love to read.  Too much in 2011.  For the first time ever I have not yet bought or even perused my favorite authors newest book – Seth Godin’s “We Are All Weird”

10. The iPad.  Love it.  Use it every day for real estate and reading (I did get tired of my dear wife hinting at me to “put that iPad down” . . . so I very cleverly bought her one!).  But it’s been a struggle to get forms and contract on it to work right.  Maybe my software engineer son can “make an app” for that in 2012.

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.

Caveat Emptor?  It’s the Latin rendering of “let the buyer beware”.

Because buyers need to beware.   At least in Ohio they do!  A quick Google.com scan shows thousands of entries for “caveat emptor” in Ohio real estate.   It shields the real estate seller.  It protects the real estate agent.  It immunizes the real estate broker.  A good example, from a Realtor trade rag is here.

I had to put a house on the market that made this very painfully real.

The “buyers”, who shall remain nameless, simply relied on what the “seller” told them.   They trusted.  But did not verify.

Big mistake.

The “seller”?  He did not have real title to the property.  It was not his to sell.   There was a bank somewhere – not getting paid.   The “buyers” gave their rather sizable down payment to this Perrysburg-based con artist.   Their “down payment”?   Gone.  Scammed.   Stolen.

They were buyers – and they were not careful.

The damage to them – emotionally, financially, and more was and is terrible.

The seller/agent was neither a real seller or a real real estate agent.

Nothing was as it seemed.

I would trust . . . but then verify:

1. Who are you?

2. Why are we not using a title agency?

3. You allright with my lawyer looking at this?

4. Why isn’t your deed recorded?

5. Why don’t you have an office?

Just a few things to consider and learn to ask so that you can avoid some of the scams that are being done right now on innocent, trusting, unaware buyers!

I have blogged about basements.

Basement repairs.

And back up power generators.

Which all are predicated by the nasty and deleterious effects of simple dihydro-oxide (aka water) in our basements.

Here – in Perrysburg – on the border of the land once known as the Great Black Swamp.

To recap:

1. A wet basement is not a rare occurrence.   It will happen to you.

2. A wet basement is not something to hide, conceal, ignore, or gloss over.  It needs to be dealt with now (which is cheaper) rather than later (which is equity destroying).

3. A wet basement is generally not something you should make an insurance claim on.   Please believe me on this.   Go ahead.  Make the claim.  Make two claims.   Observe the likely future results: 

A.  Your insurance agent will NOT renew your policy. 

B.  The insurance agents you call will look up your house address on the magical internet roster of insurance claims with predictable results  and

C.  The putative buyers of your house someday will arrange for property and casualty insurance coverage of their new house just before the closing . . . which will cause item “B” above to be invoked with not so good results for all parties.

4.  For homes in Perrysburg and the Township I suggest a good quality sump pump.   A back up water driven-type back up if you have city water.  And a back up generator if you have a finished basement.   (N.B. – I have a finished basement and reside in the Township without city water – we have a primary sump pump, a back up sump pump, a whole house generator, and a back up portable generator . . . with a THIRD back up sump pump, new and in the box – just in case.  Do you think that I have seen some expensive basement hydrological events?).

5. Run the downspouts away – far away.   5 or 6 feet away.  This will cover a multitude of sins.

6. Don’t store anything porous below the water table that you can’t live without – see “sewer backups” on google.

7. If/when your basement floods – act fast.  Very fast.  The enemy is mold.  The enemy will hit hard and fast.  Summer or Winter.  And that is a whole different topic!

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.

Disclaimer:  no snarky comments or inferences in this post should be construed as anything but an endorsement for my Dentist – Dr. Christopher Clark.  I like him.  He is incredibly talented.  He knows the ins/outs and tools/tactics to do any dental procedure with elan and skill and care.

But . . . sometimes selling a house in Perrysburg today IS like going to your dentist and getting root canal.  Which I just did with Dr. Clark.

It takes time.

It takes multiple appointments.

It takes effort.

It takes reasonable skill and training.

The dentist has to have the right tools and facilities.

The dentist has to have the right support staff.

You want your dentist to be . . . actually working full time in and on dentistry.  

All of these things are similar in my pursuit of helping clients sell their real estate and my dentists skill and care at removing dental problems.

(But . . . I sadly note . . . that I cannot give you laughing gas or an anesthetic shot to make your pain fade for a couple of hours).

As with the average root canal . . . in selling a home today there is perhaps going to be some pain involved.

Some emotional conflict.

Some stress and or trepidation.

But . . . if it has to be done and needs to be done and the situation and circumstances tell you to get it done . . .  what else can you do?

You get it done.