Perrysburg Blog

Advice I am giving to potential sellers:  don’t sell unless you really need to.

Advice I am giving to sellers that really need to:  make sure you really need to sell.

Advice I am giving to sellers that are sure that they really need to sell: there are too many houses for sale given the buyer activity we have right now – let’s find out how we can work together to sell your house in this environment.

The WSJ has an interesting missive out today - about the glut of houses on the market.

Interesting reading:

“Pending sales, signed contracts on the purchase of new homes tracked by the National Association of Realtors, were down 3% in June compared to May. That month saw a 30% drop in the index, after the April 30 expiration of the home buyer’s tax credit.

The pending sales numbers point to more alarming home sales figures, wrote Credit Suisse analyst Dan Oppenheim in a note Tuesday. Mr. Oppenheim said that given the sales pace, we’re on track to sell 3.7 million homes total this year–-the lowest seasonally adjusted level of single-family existing home sales since the fall of 1996.”

I read elsewhere that a major US builder does not want anymore tax credits or Federal home buyer stimulus.  “Just let the market work” was their plea.

The housing market is tough right now – investors from out of state are buying 100 to 400 houses in a single auction.  You want to compete against that?  In Toledo? “Gird your loins” as they say.

In Perrysburg we are not at that point (and never will be . . . !) but the dynamic pressures just to the north of us still impact this market.   When housing values plummet close by it hurts us.

Great listings are still in demand.

Great buyers are still coming to PBurg.

Enjoy the Glut if you can!

All markets are local.

They are all different.

I talked to a Long & Foster agent in suburban D.C. today.  He said that 65% to 75% of the houses for sale in one of his marketing counties are “REO” aka foreclosed.

Perrysburg?  Not even close.

The most recent Case-Shiller Home Price study came out on Friday.  The average home lost 19% in their study.   Which is made of matched pair sales in major metropolitan areas.  Toledo is not included.

But Detroit is.  And the average house value in Detriot is now what it was in 1997.

An “11 Year Drop”.   A regression.  A retreat.  A decline.

What of Perrysburg?  The median sold price for Perrysburg Single Family homes in March of 2009 was $146,450 according to our local MLS.

This represents a -25.7% decline in the past 24 months.

Which is a 1% drop in value per month over the last 2 years.

Which is a lot “better” than 1.5% per month that a lot of other markets have experienced.

If you NEED to sell, you need to understand these numbers.

These numbers might influence your decision.

Your houses’ potential buyer, appraiser, and lender understand them!

Sadly there is no Case-Shiller study for Perrysburg.

Our market is too small.

And too nice.

And too friendly.

But I digress.

The Case-Shiller study of residential home prices, which I have written about before, is a matched pair study.

Only the exact same houses are included, when they have sold and resold.

So it is pretty accurate as least as far as the lack of “adjustments” that applied by appraisers when trying to make different houses look and act and price the same.

But I digress.

Which I am doing a lot of this month when thinking about the Case-Shiller numbers.

Why?

Because I operate on a couple of standard assumptions.

1. You reap what you sow.

2. Practice and hard work make you succesful, not MLM’s.

3. Detroit = Toledo.  At least as far as real estate values go.  Generally.  Mostly.

And the 12/2008 Case-Shiller numbers say that Detroit real estate lost, on average, 21.7% in value during the previous 12 months.

The latest Case-Shiller chart?  Reminds me of Deer Valley in Utah.  And that’s a beginner hill there!

Which kind of takes your breath away.

And makes you want to digress and diverge and divest and maybe even weep.

But – I have to remember and remind my clients that Detroit is not Perrysburg.  And that if you waited to buy, congratulations, you just made more money.  And that you and your 401k probably would be ECSTATIC over a 21.7% decrease.

But still – that’s a huge, unprecedented decline.

Is it over?

Are values firming up?

Time will tell.

I don’t think that there is another -21% left to give.

But then almost no one thought this COULD happen 4 years ago.

Our local paper was kind enough to interview me for a comment on their story about the recent NAR housing price numbers - which show that Toledo is now a very, very affordable town to buy a home in.

One number that I shared with them was the huge price drop in one zip code in Toledo.  A 75% price drop in January 2009 vs. 2007.

How can that be?

75%???

The answer is that over 50% of the sales in the City of Toledo in January were distressed sales.

So these numbers – these horrible numbers are skewed.

Because of WHO is selling and WHY they are selling.

After all, it’s not “regular owners” who are selling.

It’s the banks that they now own!

Median prices of homes in Toledo – which depending on how you measure them – can actually NOT indicate their current value.    These numbers represent the average disposal prices that it takes to clear them in this market in view of their status as assets that need to be disposed of by financial owners.

A better measure of value is the Case-Shiller index of RESOLD HOUSES.

More on that later . . .

Sellers need not despair.  Not now.