Perrysburg Blog

Could be!

This chart shows that there is a move toward a more balanced supply of houses:

In the cold, cold months of Winter the 43551 had about 10 to 13 months of inventory on the market and moving off the market.

That was too much obviously.

Now?

May MSI (Months Supply of Inventory) was 4.7 months.  It was 6.5 last month.

It always drops in the Spring and Summer (mine is a seasonal business – like picking strawberries).

But the current numbers are indicative of strong demand from buyers, the continuing popularity of Perrysburg real estate, realistic sellers, and sellers moving houses off of the market.

How about prices?

Behold the numbers:

Ignore the bank numbers – and median prices for closed Perrysburg homes are right – almost exactly – where they were last year in May.

In fact, they have declined from this past Winter, which speaks of sample size issues.  The trend is steady – perhaps we have reached the end of the pricing cliff in Perrysburg?

“Unexpectedly”

People are always surprised.

Chagrined.

Shocked!

To discover that paying buyers to buy backfires.

We really didn’t pay the buyers.   WE PAID THE SELLERS.

We inflated values by $8000.   With money we don’t have.  That the Germans and Chinese have kindly loaned us.  That our kids and grandchildren will pay back.

And, “unexpectedly”, sales of existing homes declined.

CNBC has details here.

“Sales of previously owned homes fell unexpectedly in May as delays in processing mortgage applications hampered the closing of contracts benefiting from a popular homebuyer tax credit, an industry group said on Tuesday.

AP

The National Association of Realtors said sales fell 2.2 percent month over month to an annual rate of 5.66 million units from an upwardly revised 5.79 million-unit pace in April.

Analysts polled by Reuters expected May sales to rise 5.5 percent to a 6.12 million-unit pace from the previously reported 5.77 million units in April. Sales were up 19.2 percent compared to May last year.

Sales were expected to rise as transactions for existing homes are measured at contract closing.

Although the tax credit for home buyers expired in April, qualified home owners have until June 30 to close contracts.

“There hasn’t been much of a rebound in housing. We are growing from the extremely low levels of last year. On average, we are looking for a moderate advancing trend,” said Stephen Stanley, chief Economist at Pierpont Securities in Stamford, Connecticut.”

Shocking!

But not unexpected.

A contrarian view here:

“Things are looking worse on the housing front, with a severe drop-off in existing home sales following the expiration of the home-buyer tax credit. It’s hard to overstate how stupid this policy was. The government marketed it as a measure to boost residential real-estate prices by providing new home-buyers with a tax credit in the neighborhood of $8,000. Did you see the ubiquitous ads featuring the couple that gets an envelope full of cash from Uncle Sam? The idea was to convince potential home-buyers that they were the ones who would benefit from the subsidy, when in fact the opposite was true. The tax credit was a subsidy for sellers, not buyers, allowing them to increase their asking price (or avoid decreasing it) by $8,000.

The government’s “gift” to new home-buyers? A house immediately worth $8,000 less than they paid for it, and falling fast thanks to the sharp drop-off in demand that accompanied the expiration of the tax credit. Gee, thanks, Uncle Sam! I’m not sure the “predatory lenders” Obama likes to talk about ever did anything that sketchy.”

It is Monday.

72 degrees and sunny.

The Federal Tax Credit program expired on Friday last week.  Back to normal.

Sometime last month the Fed stopped buying/funding Mortgage Backed Securities.   The tap was turned off.   The world?  It did not end!   Investors still want to buy mortgages!   Back to normal.

There are no major Ohio loan/bond issues being promulgated.  Back to normal.

Two offers on Perrysburg listings today:

A buyer just submitted a conventional financing loan/offer to me.

Another buyer . . . . the same.  Back to normal.

In Perrysburg real estate, with no tax credits, special government loans, and other market deforming forces THIS, today, right now is normal.

Rules for this market, now that it is finally normalizing:

1. Price is king.  Queen.  And Jack.  It’s all about price.

2. Perrysburg still get’s the “Perrysburg Premium”.  It just does.

3. Quality of life, crime, schools will continue to be more valuable.  Perrysburg ought to not mess this one up.

4. It has to appraise.  Your wants/needs/sticker price/contract price  . . . all will be validated, satisfied, and hostage to the appraisal.

5.  It’s allright to mow your neighbors yard.  Seriously.   If they are gone – foreclosed – abandoned – you can mow it.  It keeps up appearances.  It keeps out the petty crime that vacant houses attract.  It actually may increase your homes value.   Neighborhoods have to start banding together.

Here’s a three year overview of supply and demand in the entire Northwest Ohio market:

It has leveled out – the new normal has arrived.

In all their gory glory . . .

In their totality . . .

Median price change in Northwest Ohio over 36 months is -$30k.

Median price change in Northwest Ohio of closed single family homes is -$31.5k over 36 months.

EVERY house on average lost 20% to 30% in value.

My observations -

1. Ranches in the suburbs have resisted this trend more than anything else.

2. 80% of the “active” real estate agents have an idea this has happened, but are in “pricing denial”.   They eventually seem to be running out of money after 3 years of not selling any houses they have listed.

3. We really did not destroy 30% of the housing stock in either Afghanistan or Iraq.   But we managed to do it here.   Thanks!

4.  Toledo now has some of the cheapest housing prices in America, for what that is worth.

5.  This has caused some of the strongest and most well capitalized builder/developers to throw in the towel.   I have developed land, sold land, marketed new subdivisions, and done market research for new projects . . . . and I no longer can tell you who is going to do future non-condo/villa development in the suburban market.

The pies have been picked up.

The snow is falling.

The year has sped on by.

What is left?

That would be the final 2009 Real Estate Stats for my little town of Perrysburg.

Come back after 12/31 and I will show/tell you the “real” truth.

What was the highest priced sale?

The lowest priced house?

The average appreciation/depreciation?

The number of houses in default as of 12/31?

The number of days until Mr. Freeze opens again?

These are vital numbers – at least to me.   The last one is vitally important to my youngest child, Hannah, and our dog Buster.  Something to do with ice cream . . .

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!