Perrysburg Blog

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.

Bad news follows bad news. (GM is gone, FIAT buys Jeep!, and rates are up).

Followed by more bad news.

What can a motivated seller do?

I had meetings today with many potential clients.

And they all asked me “THE QUESTION”.

(Well, actually it is one of two “The Questions” that you always hear as a Realtor, the other one being “How Long Will It Take To Sell My Home.”  That is the OTHER “the question”.)

What was “THE QUESTION”?

Here it is: “When Will The Market Turn Around?”

That is THE question of day and the hour and the year.

When?

Since I approach my work from a consultative, educational mindset I try to NOT dogmatically answer “THE QUESTION”.

Rather I try to help every home owner come to the right answer with some guidance.

“Why does it matter?”

“Since no one knows, and I don’t know, how does that information effect your position?”

“It might get worse if we don’t stop destroying jobs and spending our nation into oblivion!”

There is not a simple answer.

But today, in meeting with a diverse range of potential clients, I can tell you that irrespective of WHEN and IF the local market comes back, the wisest thing for any homeowner to do is to cut their spending, cut up their credit cards, cut back on their luxury purchases, and prepare and live as if the market is NEVER coming back.

Because it might, in fact, get worse.

And as I observe this nascent government - if it gets worse, they are going to subsidize buyers more, subsidize interest rates, subsidize payments, etc.

And just like they are destroying the automobile industry, they might harm the residential real estate market EVEN MORE than it has been hurt already.

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 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.

Why?

The casino is coming . . . details here.

Why is that bad news?

Inevitably, after a 2 year latency period, the incidence of crime against people and crime against property increases.

Every time.

Everywhere a casino is built.

You can count on it.

Build one in Wood County?  Along the Maumee.  Or in the “Golden Triangle”.  And there will be negative, deleterious effects on the values of Perrysburg homes.

You can “BET” on it.

The scholarly  paper on this is interesting reading.  And sobering reading.

Here is the paper by Earl Grinols and David Mustard.

The casino lobby will never stop.  They will try and try and try - stopping only when they have fooled enough people.

Things will be great.  For a couple of years.

Then the neighborhoods closest to the “Crossroads Casino” will start to be negatively effected.

That negative trend will then metastisize and spread.   From Starbright to Belmont to Three Meadows and beyond.

Theory?  Supposition?  Hardly.  Read the literature.  (page 14 shows how MILLIONS in lost property values is the result of the “jobs creating casino”.

Bring on a casino I say.

But build it RIGHT NEXT to the Toledo Correctional Institution on East Central.

Crimes against people.

Crimes against property.

Visitor crimes.

Criminal gambling.

Costs of addiction to gambling.

Increased rapes.

Increased police costs.

We neither need nor want these things in Wood County.

The day they get their way is the day we start to pay.

Not one bit.

There are going to be income phase outs.

There are going to be all kinds of government red tape requirements.

But don’t believe me.

Read the experts.

A real economist, James Hamilton, opines:

“If my hunch is correct, then all the house purchase tax credit will do is to modestly increase the number of houses sold each month… with no noticeable impact on house prices.

That doesn’t mean that the tax credit would have no impact. In particular, it may be a boon to some cash-constrained households that want to buy a house right now but can’t borrow enough. And it should help to reduce inventories of unsold houses by a bit. But if you’re hoping that it will make house prices rise, with all of the beneficial economic effects on home equity that such a rise might have… think again.”

Do we really want to be encouraging “cash constrained households” to buy houses they really cannot afford today?

Seriously.

Is not that “solution” somehow related, at least tangentially, to the problem we find ourselves in?

With a GM and Chrysler bankruptcy imminent . . . with declining real property values in Perrysburg . . . with our regional banks failing . . . might I suggest a tax cut?  A payroll tax cut?  A tax holiday?  A tax cut for business?  Something to goose employment?

I will encourage every American to pray for our leaders.  Pray that they have wisdom.  They are lacking it right now by borrowing or printing a TRILLION DOLLARS that we don’t have for things that will not work.

I don’t.

Not in business.  Not in real estate.

I was surprised to see naked, shameless shilling.  By two public figures.

Begging for miracles.

The first was Toledo’s mayor, Carleton Finkbeiner begging for people to please help Toledo and to go buy GM, Ford, and Chrysler automobiles. (What about the Honda’s made in Ohio?  Too bad!)

Really?  People with unknown employment futures?  With too much personal debt?  With rising taxes?  We need to go out and buy a new car?  With OPM?  (Other People’s Money)

With car loans?

I have a message for Mayor Finkbeiner- Toledo’s problems stem from TOO MUCH debt.   Simply taking on more debt will never help Toledo, its corporations, or its citizens.

Then I heard real estate broker/celeb Barbara Corcoran shilling about 12 houses all around the country on the Today Show with Al Roker.

Corcoran opined that with Obama’s inauguration that in real estate “Everyone in my field is feeling really good”!  Really?

Oh my.

This is delusional.  Amazing.  And hard to stomach.

Again, pushing homes on people who cannot afford them - not the recipe for economic revival America needs.

The market needs shillers, politicians, and lawmakers to leave it alone.

Let it work.

Stop goosing lending.  Stop incentivizing debt. Stop trying to “fix” the market.

No one can fix the market.  Ask the citizens of Iceland.  They tried.  They are all broke.

Prices will find their own level - honest prices.

Some people will suffer.

Some people will go broke.

Some people will be hurt.

But that is the only way to fix things.

For people with a really strong stomach - please read what always happens when dishonest people with ulterior motives try to sell you something you don’t need and cannot afford -  Michael Lewis’ “End of Wall Street”.

Pass it along. (N.B. Lewis writes with real quotes and strong language - you are thus warned)

These lessons need to be learned - and learned fast.

And the shillers need to be silent.

Sigh.

The end of another year.

And most real estate brokerages will try to find some way to claim to be “Number 1″.

In something.

“We are Number 1 in single family homes sold in Perrysburg with 3 beds and 3 car garages!!” “NO! We are Number 1 in houses sold by brokers with RED SIGNS!”. “NO! We are!!!”

Sigh again.

Well, I have an MBA. From Duke University. And we learned a lot about stats. And one thing they teach you is that if you try hard enough, you can make the stats say just about anything.

So, I personally, a long time ago, stopped worrying about who is “Number 1″. I can make anyone Number 1 in something.

But should not the customer be “Number 1″?

I can make the stats say anything.

But I can only listen in shock when customers who are not being treated like they are important call me.

And today I got a phone call or two. AMAZING phone calls. From buyers (who, by the way, are ALMOST worth their weight in gold in this market!). Buyers - who had called Realtors for help and who got no return call.

Which I find amazing. And which I was more than happy to help solve this terrible problem of wanting to look at a house and not be helped. Yes - I can help you . . . I think . . .

Number 1? The customer.

But if you are interested in what brand of brokerage sells the most homes . . . I offer you the following chart for your edification with the 2008 year end numbers. RE/MAX is the leader. And that’s just the way I like it to be!

The inmates that caused this real estate crash are now rearranging the chairs/jobs that they hold.

This article by one of my favorite authors - Micheal Lewis (his baseball book that is really not about baseball, Money Ball, remains in my office in a position of honor and to remind me to read it every once and again) wrote this magnum opus on the Great Real Estate/Wall Street Crash of 2008.

You really should read this article by him that ran in the New York Times.

Amazing. It will make you mad.

Here is the link: The End of the Financial World As We Know It.

Do you own real property in Perrysburg? In Wood County?

Then send a thank you note to the solons in Lucas County. Because in the real world, when transfer costs and holding costs increase, the value of an asset . . . DECREASES.

And in Lucas County both have happened.

And their actions up in Lucas County make Wood County and Perrysburg real estate MORE VALUABLE by direct comparison.

Recently the geniuses in Toledo increased the transfer tax due when a property sells. It’s paid by the seller and they upped it by 33%.

Smart. That $800,000 in planned revenue? It will cost them a couple of million in lost value of property sold.

Then Lucas County went and sold their outstanding tax liens to a New Jersey company. For cash. On the barrel head.

The plan was something like this: You give us cash. We give you the liens. You talk to the people who used to owe us money.

The REALITY was this: We give you cash. You give us liens. We immediately file foreclosures on EVERYONE who has a tax lien. Of any amount. Today. And we are going to pile on with attorney costs

Brilliant!

What a way to treat your citizens.

A New Jersey firm? Maybe the lawyers are from Cicero Illinois.

ALL of this activity makes owning real estate harder, more painful, and more expensive.

In Lucas County.

The real property owners of Perrysburg and Wood County will benefit.

I estimate you just made $1000 per property.

Thanks Lucas County