Perrysburg Blog

I get asked this question all the time – at least seemingly to me!

By my agents.   By my clients.  By my corporate clients.  My buyers.   By vendors and suppliers that work with or for me.

Everyone wants to know.

I repeat:  The downward price trend in Perrysburg real estate will not change, in my opinion, until people are making more money and taking it home.

The State of Ohio and the Federal Government can goose demand for a quarter or a year, they can push loans onto people who should not buy, they can do all sorts of tax credits . . . but the market will always trump the politician.

Always.

Look at this chart.

It is breathtaking in its simplicity.

We can talk all we want about jobs.  (Or “JOBS, JOBS, JOBS, JOBS” as our leaders put it)

We can call unemployed people “no longer seeking employment”.  We can tell part time employees that they are fully employed even as they march into Perrysburg Christians United for food to feed their families.   We can call part time seasonal workers fully hired back.

Not going to change the real estate market price trend in Perrysburg.

That chart above – it simply shows tax witholdings from working people and companies.

Zero Hedge Blog interprets it thus:

Even as the BLS and the administration are trying to cover up the real state of unemployment affairs using assorted semantic gimmicks of just what it means to be unemployed, and as companies provide adjusted EPS numbers, while actual earnings continue to collapse, the true barometer of spending, provided by the Financial Management Service, tax withholdings (net of refunds), continues to paint the truest picture of just what is really happening with both America’s consumer and the corporate world. And it ain’t pretty. On a rolling 12 month basis, individual tax withheld has dropped by nearly 8% YoY, from $1.42 trillion to $1.31 trillion, while company witholdings are down a whalloping 64%, from $274 billion to just under $100 billion! This is money that will never be used to pay down the skyrocketing US deficit, because both the US consumer and average US company are simply not collecting the required cash to line the Treasury’s pockets with the one traditional way to pad the deficit: taxes. Expect much, much, much more debt issuance in America’s short, medium and long-term future.

Wage payers- people with great full time jobs in Perrysburg are the ONLY way to get demand and prices improved.

Period.

Not wages paid to pizza delivery drivers or census takers or package wrappers for 30 days.

Wages paid to machinists and car assembly line workers and engineers and chemists.

Then Perrysburg will get better and your home will be worth more than it is today.

Yes?

Right?

Isn’t that the new word on the street.

Well, let’s dive into some of the data.

I have postulated all along, at least if you have read my blog, that the current and expanded Federal House Buying Tax Credit Stimulus Boondoggle (aka FHBTCSB) will do nothing to improve the position of sellers/homeowners today, and will hurt future sales, deform demand, mask market effects, and  . . . . in the process help to saddle our kids with debt and further bankrupt our nation.

Some have just written that Perrysburg real estate is looking up – booming in fact.

Let’s see:

Here is 2 years of MLS market data.

Let’s just look at November 2009 vs. November 2oo8.  ONLY Perrysburg single family homes.

November 08 – 340 houses for sale.   21 houses placed under contract.  20 houses closed.  Median asking price $204,900.  Median price of listings that went into contract $179,900.  And . . . the median price of the houses that closed in November of 2008 was $242,950.

Now let’s look at the loosey-goosey tax credit fueled, rebounding market in November of 2009:

November 09 – Only 241 houses for sale.   22 houses placed under contract.  27 houses closed.  Median asking price $220,000.  Median price of listings that went into contract $187,450.  And . . . the median price of the houses that closed in November of 2009 was $212,950.

Fewer for sale.

Only 1 more house “pending”.

7 more deals closed.

But … the houses are selling for $30,000 less on average.

Hello?

This is helping?   This is great program?  And the money to pay it . . . has yet to be repaid with interest?

I will note in passing that the average price per square foot has dropped from $99 to $91.

Now – the caveats.  This is a month vs. month snap shot.  The economy is different.   The numbers we are comparing are small.  The trend is more important than a slice of monthly data.

But a rebound?

A better market?

Improved prices and more equity?

Insane.

It’s not happening.

And it won’t until the jobs/employment situation is FIXED.

From a median closed sale price of $197,000 per house sold in Perrysburg in October 2007 the median price has been slowly declining.

Last month’s median price in the 43551 was $154,000.

A 21% drop.

That’s a lot.  Not as much as Toledo has seen.  Not as much as Maumee has seen (who needs the Ding Dong anyway when your house is worth more . . . ?).

32 closed residential sides last month.

The pain is coming from the huge number of bank owned/REO listings now coming onto the market.  I just put another one in Perrysburg on the market today.

A more interesting number, at least to me, is the MSI.

That’s the “Months Supply of Inventory”.

This is what I track.

How many sellers trying to sell?

How many sellers giving up?

How many buyers fighting for the same inventory.

I will give you the raw data here:

Note that we are at 8.5 months of inventory now, vs. 10 or 15 or more 2 years ago = a more balanced market.

Good homes are selling.   The better they look, the better they are priced – the better they sell.

More later . . .

For the month of July and as of today:  Perrysburg City and Township.

Active Listings

148 houses for sale.

Price Range $59,500 to $650,000

Contingent Listings

7 houses contingent on another house closing

Pending Listings

17 houses went pending in July.  $89k to $265,850

Sold Listings

49 Houses closed in July.  $52k to $480,000

Withdrawn Listings

8 Houses withdrawn from the market in July

Failed to Sell / Expired

19 Houses failed to sell in July and went off the market.

Median Price

$185,000 in July 2009

Days on the Market

95 Days on the Market for SOLD listings in July

Months Supply of Inventory

6.2 months in Perrysburg

My oh my!

Some better numbers!

Green shoots?

Nope.

Buyers remain very, very cautious.

We are seeing sellers who MUST sell and who are VERY motivated.

They can easily sell in today’s market.   But then – they always could.

I think we are back to a more seasonal pattern of sales.  I think that the panic is now gone out of the market.

I am always asked  “When will _____ (you fill in the blank: prices, sales, values, etc) come back?”

I always will answer:  when the JOBS come back.

Everything else is window dressing.  Goosing today’s sales with $8k credits, looser FHA standards, cheap money – not going to help in the long run and will help bankrupt our country oh, in about 2 years.

Jobs.  Get that right and the real estate market will ROAR back.

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.

• 1.8% of all U.S. homes are in foreclosure
• Therefore, 98.2% are NOT in foreclosure
• 33% of all owner-occupied homes don’t even have a mortgage!
• 18% of all U.S. mortgages are upside with 2/3 of them located in 7 states (Arizona, California, Florida, Nevada, Ohio, Michigan, Georgia)
• 2.8% of all U.S. mortgages are three or more months in arrears.
• There are 18.6 million vacant homes in the U.S. now.
• 25 MLS closed sales, single family, in Perrysburg, February 2009
• 305 MLS closed sales, single family, in Lucas and Wood Counties, February 2009
• Average Toledo Board of Realtors agent sold just .25 of a home in February 2009
• Jon Modene closed 11 transactions in February, 2009.
• Perrysburg number of listings for sale on MLS, end of February, 2009 = 305
• Perrysburg number of listings that went “pending” in February, 2009 = 30
• Perrysburg median SOLD price, February 2009 = $172,000
• Total number of houses for sale in Lucas and Wood Counties in February 2009 = 4838
• Total number of houses that went pending in Lucas and Wood Counties in February 2009 = 363
• 11.1 Months supply of inventory in Wood and Lucas Counties

When Will The Market Thaw??

I am asked by about every client or customer: “When is it going to turn around (in real estate)?”

I don’t know the answer.

I used to say “If I did have the answer to that question I would be working on Wall Street” – but that’s not a good place to work anymore!

Here’s what I think:  when the number of new bank owned properties starts to dry up, then the market will change course.

But you must know this – Fannie, Chase, Freddie, Bank of America, et al have all had a moratorium on new foreclosures and evictions for the past 60 days – and that “REO HOLD” has NOT slowed the pace of new REO properties coming on the market.

Well, that was fun.

If you were a buyer!

Median Prices in Perrysburg:

12/2008

Median Price, Active Listings – $199,900

Median Price, Pending Listings – $175,000

Median Price, Closed Sales – $180,000

409 Single Family and Condo Properties on the Market

29 Pending in Dec.

23 Closed in Dec.

11.4 months of inventory remains on the market as of 12/31/2008

Residual Inventory DOWN to 288 vs. 356 on 12/31/2006.

My comments:

More and more sellers are quiting.   Just taking their houses off the market.   Many are renting.  Some are short – selling.  Some are being foreclosed.

Many sellers are actually SELLING.

Amazing but true!   You have to have some equity and a plan (and a good agent – but I digress!) and a healthy respect for current market conditions.

Here is the chart – what is the truth?   The chart tells the truth.

Some key information . . . .

446 MLS Properties for Sale on 10/16.

38 Properties Closed/Sold in September.

27 Properties went Sale Pending in September.

42 Properties Expired in September.

92 New Single Family and Condo Listings in September.

Comparing September 2008 vs. 2007

2007 vs. 2008

For Sale 503 vs. 446 -11%

Under Contract 35 vs. 27 -22%

Sold 35 vs. 38 +9%

14.0 Months Supply of Inventory now on hand, up 18% from 2007

Average Days on the Market now 97, up 41% from 2007

Interesting Chart #1 – Median SOLD Price in Perrysburg. Note that the median selling price is down 10% in the past year, on average, from $195,000 to $175,000, a HUGE $19,500 decrease. Own property in Perrysburg and need to sell today? Ouch!

Interesting Chart #2, for your edification -

This shows the graphical representation of current supply/demand trends in residential real estate in Perrysburg (43551 zip code only).

11% fewer houses on the market vs. 1 year ago.

23% drop in average “Sale Pending” price vs. 1 year ago.

And . . . 9% more homes sold vs. 1 year agon (month to month comparison).

Some thoughts and conclusions:

A. Price matters.

B. Price really matter!

C. The buyers will buy – if the price is right.

D. Some people have “given up” and taken their houses off from the market. This is good – because they will not sell unless they price to market, and if they do not NEED to sell today, why try to sell and fail?

E. The residual inventory is trending down, thus the absorption rate is trending higher, and that means that the local Perrysburg residential market is now rapidly moving to a more balanced position, however now at the new price points that this market demands.