Perrysburg Blog

It seems that every day either I or someone on my team meets a person/family/transferring couple who want to rent and not buy in Perrysburg.

And, there is, in my opinion, a substantial inventory of “hidden listings” that are not on the market but are leased by their Perrysburg owners simply because they cannot sell them in this current market.

The two sides – property owners and property renters – come together and a market is made.

Caution was advised for renters by me in a prior post – - the Craigslist Scam.

Now some advice for homeowners who can’t sell and have been pressed into the often uncomfortable roll of “landlord”:

1. Trust but ALWAYS verify.

2. Check and recheck your deed restrictions.  Some condos in Perrysburg forbid a 12 month lease.  Sometimes your nice new tenant will buy a trailer and you will get into hot water with your neighbors.

3.  Use a lawyer to approve/review/draft your lease.

4.  Never let the potential tenant bring THEIR lease to the party.  This should be a little alarm bell that rings . . . .

5. Trust but verify.  Oh, did I say this before?  Well, you cannot trust anyone anymore.   Sorry.  You have to check the veracity of the phone numbers on the application.   You have to check the ID of the tenant.  You have to check the funds behind their check.  You have to check and check and check.   And the ONE TIME you don’t do it, because you just KNOW that the family moving in, with their little girl Daisy being treated for Hypoemetholema . . . the nice family that is moving here from Heart of Gold Texas where they were pastors and choir singers . . . that family?  That’s the one that will GET YOU GOOD.

6. Lead based paint.  Know the rules.  Embrace them.  Follow them.  Or get ready to get sued into oblivion.

7.  Never, ever listen – and I mean don’t even LISTEN to the excuses and reasons and rationale from a tenant who cannot pay.  Seriously.  Can I call my tenants up and reasonably expect them to listen to me about my problems and my family issues?  At its’ base – the landlord / tenant relationship is a commercial one.  It’s a business transaction.  With multiple payment points.  And a written contract.   Homeowners of the shadow inventory of unsold homes in Perrysburg who indulge in being a professional landlord cannot then ALSO become lenders/enablers/counselors etc. for their tenants.  It does not work.

You can be a landlord.

Just think about it first.

Or, you can hire me.

Just consider my free advice.

A empty shell.

Crabs like them.

But they are terrible for helping homeowners to pay their mortgage.

And if you drive along Alt20 – aka Illinois Ave. in Maumee, you will see a lot of empty shells.

And “FOR LEASE” signs.

And vacant factories, offices, and businesses.

It’s a vivid reminder of what has happened and what has helped residential real estate to collapse in value.

The collateral damage from this one street’s empty and shuttered businesses and factories is felt in every subdivision in Perrysburg.  I know clients that have lost jobs in Crandenbrook and other Perrysburg neighborhoods who used to work on this street.

But now their jobs are gone.

You want reports of the economy getting better?  You want to know when the residential market is better?  You better go for a drive . . .

ALWAYS asked at every listing appointment.

The answer is . . . “it depends”.

On your price.  Your motivation.  Your vacuuming.  Your pets.   Your kids.  Your collection of stuff.

Overall, in Perrysburg, the average DOM or “days on the market” is right about 90 as of last month.

However it changes month vs. month and week to week.

Why?  Houses are coming on the market.   They are going pending.  They are coming BACK on the market.  And with a 300 to 500 house sample population it does not take much to whipsaw the numbers for one month.

So the TREND is what I look at.

With REO sales red hot right now (so says this report from California and my own Perrysburg REO’s are pretty much all sold or under contract). . . is that activity helping move other, non REO houses?

Inquiring minds want to know:

You can too – on this chart.

And the trend is that houses are selling FASTER (fewer average days on the market) and there is less “wait” (which we call MSI or “months supply of inventory”)   The Perrysburg MSI is now 1/2 of what it was a year or two ago – down from 21 months to a more manageable 7.1 months supply of inventory.

Price still rules.

So get your house priced right, cleaned up, and then the numbers will play out good for you.

Which meant that my clients were all invited to pick up a Schmucker’s Pie . . . . (which is highly rated it seems).

And not many could resist!

Since they are acknowledged to be the best pies in Northwest Ohio . . .

(N.B. Cherry was the number one pick . . .)

Had a great time – meeting about 100 “old clients” and friends.

And many asked me . . . . well you know what they asked me.

“When will the market in Perrysburg turn around.”

The short answer was . . . not now.

The long-winded, blogy answer is when Dr. Holly Beard is out of a job.

Who?

What?

Dr. Holly Beard.

You and I just hired her.   With our precious tax dollars.

She now works for the “Ohio Housing Finance Agency”.

And her job is to do research on how to help “deeply understand the affordable housing world.”

Seriously.  Having an entire AGENCY is not enough.  We need MORE state employees.

And the New OHFA Office of Affordable Housing Research Director (the aforementioned Dr. Holly Beard) is going to do some research on “finding the number of homeless or newly homeless in need of permanent support for housing.”

Which I, being an MBA and a 20 year veteran of the housing business can translate for you to English:  “We are going to help people who are homeless buy homes with your tax money.”

Now you think about that.

Because I have.

Homeless men don’t need to increase their rates of home ownership.  They don’t need help with mortgages.  They don’t need studies.  They need help.  Usually with drug and alcohol issues.  With a job.  With someone to help them make wise choices.

But they DO NOT NEED a house with a mortgage.   Especially one funded by your tax dollars.

Because I can practically guarantee you, with no research costs, that each and every homeless person you give a mortgage to is going to be a “future foreclosure” as we call them.

I am certain that the people at OHFA mean well.

But as long as it is a government mission to get homeless people mortgages, this current real estate crisis is not over and it seems to be increasing in volume and pain.

The homeless could use a pie I suppose.

So, if you are at the Cherry Street Mission tonight – enjoy the Schmuckers Pies from the Jon Modene Team.

They are mortgage free.

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.

More words than I am going to write.

“When is the market turning around?”

“Is it getting better in Perrysburg?”

Many questions . . . . and I continually believe that until the job market changes, nothing will change for the better in Perrysburg real estate.

The data from all the various states has been combined into an info-packed graph:

When companies are expanding, hiring, and adding employees that is when real estate will turn around.

Not until then.

I love reading. (Off on a rabbit trail here, but I LOVE the free book catalog www.Librarything.com.  AMAZING.  Get yourself an account and put your own books in there . . . )

Books about history.  Books about business.  Books about science.  Even about birds.

The Dodo bird was friendly with humans – even fearless.  Dodo’s were known to man – one was even captured and brought alive to Europe.  Then they were dead.  Extinct.  In the 1600’s.   A testimony to man’s thoughtlessness for the wonderful creation we have been given.

But I digress.   Because just as quickly, just as suddenly, and with just as little fanfare – the local mortgage broker has become endangered and now almost extinct.

Where there was once 20+ mortgage brokerages in Toledo, there is now only 1 or 2 that I can find.

90% extinct.

In 2 years.

(N.B. A mortgage BROKERAGE is different from a mortgage BANKER and both are different from a full service BANK that makes mortgages.   I am only writing about mortgage brokers)

Where did they go?  Why are they gone?  What does this mean?

First of all I don’t know.  Some went into other businesses.  Some joined banks to sell mortgage products.  Some vanished -  POOF -  no forwarding address.

Why?  The great loan fiasco / mortgage crisis has caused their extermination.   Making Liar Loans, No-Doc Loans, Alt-A loans, and what I call “Pre Foreclosure” Loans and then selling them to Fannie Mae and Freddie Mac was great sport.  Until the music stopped and the light got turned on and the party was over.

What does this mean?  No one knows yet.   Most likely a little less competition for consumers.  Hopefully higher quality loans that will not be in danger of failure/foreclosure in the future.

The closing of mortgage broker is not a Toledo phenomenon.  All over America the lights have been turned off at hundreds of these firms.   The pipelines they filled are empty and now torn up.  The giant industry they built has crashed.

And hardly anyone noticed.  Just like the Dodo Bird.

There is no inflation.

Now.

There is the threat of DEFLATION.

And the powers that be want to “goose” the economy as any person awake knows.

So what?

Just a thought – interest rates are very, very low right now.  In fact the 30 year fixed rate a week ago was the lowest ever recorded according to the MBA.

I send out a “Buyer Intelligence” newsletter every Friday (just email me if you want to get on the list . . . jon@modene.com)

And I quote the current interest rates in a variety of programs each week.

I have NEVER seen them this low.  Never.

National averages here:

Here are Northwest Ohio’s LOCAL INTEREST RATES:

Conventional:  4.875% with 0 points.
FHA:  5.5% with 1/2 point.
VA: 5/5% with 1/2 point.
OFA (State of Ohio $$): 6% with 0 points (grant cost paid by seller).

How long will these rates last?

Will they go lower?

Will inflation decimate them next year?

I have no idea.  As someone said – “That’s above my paygrade”.

But I do know this – they are a great bargain for anyone borrowing to buy real property today.

Case history:

1842 Watermill Lane in Perrysburg.   Great house. Great street.  Great neighborhood (disclosure: my brother lives right around the corner – which is no reflection of the quality of the other people in Rivercrest).

New in 1997 with a $366,000 price tag – 4700 sq. feet.

1842 Watermill in better times . . .

Refinanced for $488,000 in 2001, just 4 years after it was sold.   An indicated 33% gain!?!?

A new loan added to the tab in 2003.  For $100,000.  New imputed value $588,000.

Refinanced again in 2004.  $535,000 loan.

And then a second mortgage with First Franklin for an ADDITIONAL $125,000 in 2004.

AND:  new debt of a nature that the records I have access to make it difficult to fully ascertain, but a new $197,000 loan from Irwin Union Bank and Trust.

I will be conservative and HOPE that the $197 paid off the $125 2nd mortgage.

Which means in 2004 as our local market started melting down in flames, this $350,000 house had $732,000 in federally insured mortgages on it.

You think about that for a moment.

For the story gets worse.

Much worse.

Somehow the home went into foreclosure.  Oh my!  What a surprise!

And then, abandoned, cold, lonely, and without anyone paying the electric bill (and thus the juice for the sump pump) – bad little invisible gremlins moved into this house.

The basement filled with water.

The mold grew and grew and grew.

The banks that foreclosed on it put it on the market for $400,000 in November of 2007.

It finally sold, for $225,000 in December of 2008.

All that time it went down in value, the mold went up the walls, and the neighbors watched a good house become a drag on their homes’ values.

Let’s look at the math:  some collection of banks loaned AT LEAST $700,000 on this house.

They sold it for $225,000.

They had to pay lawyers, Realtors, tax bills, some insurance, internal management and holding costs – all told at least $25,000 over 2 years.

That represents a $500,000 loss.

And SOMEONE has to eat it.

Someone has to pay it.

This represents one of those “assets” you are hearing about.   Bank assets that no one wants to value.   Except that this one already hit the books because Northwest Ohio was first into the real estate recession.

Ignore the lost income tax, the lost property tax to our schools/city/county, the impact on the immediate neighbors.

Ignore it all.

The people who MADE the loans have passed their mistakes onto the taxpayers.

THAT is how close Perrysburg is to the real estate financing implosion.

Here is a new listing I have just taken in Perrysburg.

But who is the owner???

Great house.

Great property.

Great location.

Actually a really great price – $279,900 in Belmont Farms. With a den and a great yard, and a finished basement, and a sideload garage. In PERFECT condition.

The picture? What does it say? What does it mean?

You have to admit that it LOOKS good. Look at the yard. Look at the landscaping!

YOU now own this house.

Congratulations!!!!!

It is an “REO” – “real estate owned”. Foreclosed. Bank owned. Someone could not or did not pay the mortgage. And it was sold at auction at the Sheriff’s Sale. The bank took it back. Now it is for sale.

And in the Great Mortgage Crisis of last week our feckless leaders decided that the 95% of us that actually pay our mortgages on time should pony up $1,000,000,000,000 in new taxpayer money to cover the banks that loaned money to the 5% that did not pay their house payments.

This house and many, many more are now part of the problem. And our money is the solution. You feel free to call me if you want to tour your new property.

When nice, clean, great houses like this are being lost to foreclosure, and then sold at a massive discount . .

(FYI: Here it is on Realtor.com)

…and we, the 95% have to pick up the tab, then something is seriously wrong with this nation.