Perrysburg Blog

“I am an out of town owner, and I want to rent my 4000 sq. foot, river front mansion in Perrysburg.  I will sign a 12 month lease for $299 per month.   I need a deposit of $2000.  Email me back on Craigslist or call 419-260-XXXX!”

Hmm.

Too good to be true?

Yes.  It is.

People are actually out there purporting to rent houses THEY DON’T REALLY OWN.

There have NEVER been more vacant houses in Perrysburg than there are today.

This weekend I had to check on 2 new assigned assets for a bank.  Both in Perrysburg.  Both long vacant.

It is neither hard to find them or to pretend to own/control/rent them.

Here is how they do it – and what it costs.

1.  Get a prepaid cell phone.  Use a false ID.  $120

2.  Find an empty house.  $0

3.  Jimmy the lock – put your own on.  $25

4.  Place a bogus Craigslist ad – $0

5.  Make the “deal” so good . . . that you have multiple takers.

6. Spend one day collecting the rental deposits.

7.  Vanish.

This is happening in many other markets – here is a report from San Diego.

I have experienced versions of this scam in Toledo with foreclosed houses.   But . . . it’s just a matter of time in Perrysburg.

Do not “leave the money on the table”.

Don’t rent from a person who is offering something too good to be true.

Don’t trust anyone who does not have a legitimate business presence in the area.

Verify the actual ownership of the property you want to rent – the Wood County Auditor is free!

Which is now a very valid and pertinent question . . . since the town’s biggest builder just recently closed up shop.

And the current level of new construction activity is, oh, about 10% of what it was a few years ago.

Suddenly, getting a nice, neat, clean, modern new(er) house is actually harder . . . but still, if you are transferring into Perrysburg/Northwest Ohio, just as important and vital.

IMO, Perrysburg continues to be the number 1 choice for incoming corporate moves – but whereas in the past I could show such a transferee 10 or 20 new homes from a diverse number of builders – that is simply not possible today.

But – do not despair Mr. and Mrs. Transferee.

We have houses like 780 Little Creek.

Subdivision still open – Forester/Wherle still building and active but only with contract in hand, no more specs/models . . .

Modern, 2 story, center hall design.

Clean.  Livable.  Not beat up.

No glaring design flaws.

Owners have upgraded with a professional build quality finished basement.  They have updated/upgraded the F/W flooring with tile/ceramic/new berber as needed.

They have upgraded the standard level F/W appliances with some new, bright stainless ones.

And, they have even fenced the yard, built a deck, and added a hot tub.

No need to write a building contract and live in a hotel for 5 months . . . this house is ready.

And it is not unique.  There are several similar like it on the market at any given time.

So the move into town from Chicago or Pittsburgh or Dayton, etc. need not be filled with disquiet at the current lack of new builds.

$189,900 as of this date – it is SHARP!

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 . . .

One thing to add is a clear, shoveled driveway and sidewalk.

But that will become less and less important as we hit March and April . . .

AVID Ratings does a big survey every year (LINK).  Here is what the survey said!

1. Large kitchen with an island
2. Energy efficient appliances, insulation, and windows
3. Home office / study
4. Main-floor master suite
5. Outdoor living room
6. Ceiling fans
7. Master suite soaker tubs
8. Stone and brick exteriors
9. Community landscaping, including walking paths & playgrounds
10. Two-car garages

Now – these all sound reasonable.

I would add a few Perrysburg-focused items that will BOOST your homes value:

1. A three car garage (you can’t “add” this, but you can plan it for your next house . . . )
2. Kitchens and Baths – update them!  There is nothing wrong with changing out a 20 year old microwave . . .
3. Do something to bring light into the house – glass front door, Solatubes, skylights.
4. Landscape lighting.
5. A “moderate” finished basement (carpet, black painted ceiling, painted walls, lights).

These features add “zing” and “POW!” to the buyers memory banks when they compare your home to another when it is time to sell it.

They have both a high “return” in that you can enjoy the improvements while you live there and then get some resale value out of them when it’s time to move.

Somethings to think about if you are planning on buying in Perrysburg:

1. Buy now, not later.

The 2009 extended tax credit for buyers is going to end this Spring.  If you are definitely going to buy in 2010 you are rather foolish to NOT take the governments free $8000 or so.  (I admit that it is borrowed from China, will have to be paid back with interest by our children, and will help to further bankrupt America – but YOUR not taking it won’t help.)

2. Don’t Buy JUST Because of the Tax Credit.

Sorry – many people are buying now who should NOT be buying.   There is a TOTAL COST of owning in Perrysburg that many buyer’s gloss over with stars in their eyes as they swoon for a great listing.  Taxes.  Insurance.  Upkeep.  Please consider carefully ALL of these costs.

3.  Lock In Today’s Great Rates!

The $ multi-billion dollar mortgage buyback program that the Fed has been running will be winding down soon. When it does most experts are forecasting a .5 to 1.5% increase in nominal interest rates for all fixed rate loans.

4. Buy A Short Sale.  If You Can.

I believe that in 2011 we will look back and say that 2010 was the beginning of the short sale bloom.

Short sales are right now:  the best deals, the greatest value, the best kept property, and surprisingly hassle free if you have patience.   You can call me and I will “evaluate” you for short sale tolerance.

5. Save Your Cash.

Start saving $$$$.  You are going to need at least 10% down for an FHA loan if your credit is not spotless.   And, by the way, you ought to have at least that much down or you should not even be buying a house in this volatile market, IMHO.

6.  At Least Consider an REO Listing.

These poor lenders are trying so hard to move this inventory . . . and many of the bank owned listings I have in Perrysburg are GREAT buys.   You can usually get a great deal.  We can often find a good loan program that meets your needs.  There is no shame in buying one!  You can find ALL the active Perrysburg REO’s at my REO site - www.ToledoBankOwned.com

7.  Forget About Flipping For Fun and Profit.

Not unless you are a seasoned investor professional with experience, cash, and contacts.  You are also probably on a first name basis with me so that I can feed you the one or two deals that are “flippable”.   Otherwise do not try this – way too dangerous.  And you are competing with the banks, HUD, and the myriad of REO’s in the “shadow inventory”.

8. Get a High Deductible Insurance Policy.

I have learned a few things from my insurance selling brother www.ModeneInsurance.com.  And one is that you are not really going to use your home owners policy anyway – not for anything small.  (If you do – they are watching and will JACK YOUR RATES UP!)  You are going to use your property insurance for a really big claim.  So get a high deductible policy and save some serious money.  Those insurance guys – they make enough money anyway and will gladly sell you a cheaper, high deductible policy.  (If you talk to my brother Dave . . . ask him what lovely desk accessory I bought for him).

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.

Heads up.

Hold on.

Some would say . . . that sales are up.

And that means that . . . the real estate crisis is over.

Let me share some “field notes” with those who are predicting an imminent real estate recovery.

1. I just listed 3 new REO’s today.

2. I just received a heads up from 2 different REO Asset management firms to get ready for 10 or more new assignments.  Today.

3. One of my team members is showing homes to an out of country, non-US buyer.  With cash in his pocket.  Here from overseas to pick up 10 to 20 REO homes in Toledo.  Today.

4. I just completed an appraisal on a Perrysburg REO listing.  Today.

5. My team is also showing houses and selling houses – in Perrysburg – to regular “retail” buyers – and they remain motivated to buy.  But price and value are always in mind.

6. I was just given 3 new REO listings to start processing.  Today.

The upshot – look for more inventory to be on the market.   More pressure on prices.  More lenders moving foreclosed property.  More pressure on homeowners who need to sell.  More appraisers who are being tight with value.

Hold on.

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.

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.