And they are interesting.    The Blade called – asking me if Toledo real estate is picking up.   I don’t see it – but Perrysburg sellers do.  They are raising their prices.

And Perrysburg buyers are buying more houses (closed sales were down March 2012 vs. March 2011 but there are many more “sale pending” deals in the pipeline.

These are MLS only numbers for single family sales – I am not putting in condos, duplexes, etc.

Upshot:  Fewer houses closed in Q1 2012 vs. 2011

Fewer houses on the market.

More houses sales pending.

Median price in Perrysburg for Q1 2012 $189k.   For $87/sq. foot.

(Just click on the images below for full size legible versions . . . )

There’s lots of buzz out there about the improving residential market.

Good stories here.  And here.

I maintain that well priced, clean and neat houses in Perrysburg that are, let me repeat, well priced – can receive multiple offers.

But the value has to be there.

And the condition has to be right.

In the City of Toledo?  A whole different scenario is playing out.   And it’s multiple offers on mortgage-less houses or REO assets.

Regular well priced listings over $100k are sell-able but not “hot” like the prototypical Perrysburg hot listing above.

The caveat I want to point out is that this is happening in effectively a 0% interest market. 

The cost of money is almost free today.

Laughable.

What will happen when that changes and rates “zoom” up to a more normal 5 or 6 or 7%?

What will happen when capital gains taxes are raised next year by our president (hint: property values will decline in the minds of investors and then real prices will fall).

What will happen when . . . . well you get the idea.

The Case-Shiller numbers from Metro Detroit are at a current level of 70.04, down from 70.95 last month and up from 67.49 one year ago. This is a change of -2.13% from last month and +2.50% from one year ago.

Is that the REAL bottom?  Is that a REAL improvement?

The Libertarian/Free Market counter argument is found HERE for your edification.

This blog is about real estate in Perrysburg  – a hyper-local look at our little tiny market.   And since “all real estate is local” it’s appropriate to note that prices in Perrysburg are firming up while the metro Toledo area, our neighbor to the north, and much of the country are in serious trouble.

I wrote an offer or two this week.  On Perrysburg properties.  Being sought after by investors.

It’s common.

And it’s getting to be more common.

Think about where you can invest your money:

1. Stocks.   Maybe smart.  Maybe painful.  Check out the history of FSLR, my favorite stock, and hold on.

2. Bonds.  The returns are not much though.  In fact, this week, large investors were willing to PAY money to invest in German government securities.  Imagine that strategy taken out enough years  – you will have NO money with a long enough investment.

3. Cash.

4. Gold.

5. Other investments.

6. Real estate.

I had to list a house in Toledo today – $12,000 or so.  My firm last sold it for $70,000.   Now there are some terrible facts and realities associated with such a market crash.

Ignore all of them.

Instead imagine you bought the house for $12,000.

What could you do with it?  What kind of rental income could you get? What is the upside?  What tools and skills would you need to make it into a great rental property?

Again – people are seeking out real property in this collapsed, depressed market.  To invest in.

Inventory is down by over 20%

Interest rates are at all time lows.

Rents are up and rising.

And multiple offers are hitting on good houses.

And I think fortunes may be made right now . . . in Perrysburg rental property.

I say “yes”.

I told a couple of my friends/acquaintances who were/are 0n Perrysburg City Council a couple of years ago to be ready.  READY FOR THIS:

To plan now on having less tax revenue on hand.

The Cleveland branch of the Federal Reserve Bank has an opinion: it’s here.

I have made many crazy real estate predictions:

A. Houses are going to get smaller.

B. Brokerages are going to radically change.

C. Agents are going to go mobile and untethered.

D. The internet is going to rule real estate advertising.

E. Shag carpeting is coming back in style.

Most of them have come true!  Well, except for the carpeting one.

But the prediction on municipal revenue is very difficult to accept.  What if the Lucas County lost 25% or 35% of it’s tax base?

What if Wood County lost 20%?  What will happen to city services and infrastructure and jobs and pensions if 50% of our tax base melts away (travel to Detroit or Flint for a view of the future . . .)

Think I am being alarmist?  Read what they are saying in Rhode Island.

Hard choices result.  Put them off . . . . and your entire city can be destroyed (see Detroit, above, which is heading for total financial meltdown with state control of it’s entire budget).

If you add in the effects of the decline in valuation and the imputed number of properties NOT paying any property tax at all in Lucas County . . . it’s a huge problem.

Tax increases are not going to work – no one will vote for them to pass and if you target businesses instead of people, they and their jobs/employees will simply decamp for Tennessee or Indiana (or Mexic0 or China).

In Wood County the property tax provides about 20% of the county’s income/revenue.   And the 2009 tax valuations are fractionally lower than the 2005 total valuation.  2005 was the last of the “boom years”.   I think that the county numbers are going to adjust down – by 20%.    The residential component is 70% of the total – so even record setting farmland prices won’t help when valuations are “normalized to the market”.

From the City of Perrysburg’s point of view it’s not that bad – real estate taxes make up about 10% of the city’s revenue.   So it’s not catastrophic.   The hit comes when the county/state feels the pain and starts squeezing the municipalities.

It’s started – and it’s going to get worse.

If you are a landlord in Perrysburg in 2011 you have much to be thankful for.

Your property is most likely rented.

Your tenants are on “good behavior mode” as they know that if they have to look for another 43551 rental house or condo it will not go well.

Your bank account is probably in better shape with rent receipts than if you had to sell and mark your asset to market on the bank/REO depressed current market.

And there are no hassles in Perrysburg from the local constabulary . . . unlike a rather large and more regulatory rapacious city just to the north that I will not mention.

There are – at least according to my Mark 1 Eyeball – fewer for rent signs up in Perrysburg now than in recent memory.   Only 1 of my managed properties and 0 of my own properties has a vacancy.

The WSJ has a nice piece on the situation here.

Implications?

If you are fully invested in the stock market . . . . you must be addicted to risk.   Diversify into some nice multifamily in Perrysburg or Sylvania.

If you are fully rented out . . . now is the time to raise your rents.

If you are looking to get out of the rental market . . . not a bad time to sell your multifamily property in Perrysburg (since values are based on cash flow imho).

Which leads me to the current market stats.

I am expecting the worse . . . and hoping for the best in the Perrysburg real estate market.  It SEEMS like things are more “back to normal” . . . but IMO things are not going to go back to what used to be.   There has been too much economic disruption and movement and change.    Values and taxes and employment have changed and shifted.   But every dollop of good news comes with a side order of bad news . . . so please do not accuse me of parroting the NAR line of “now is a great time to . . . .”

Here are this month’s single family and condo sales and numbers in Perrysburg:

Closed Sales: 82

Median Price: $204,500 (that’s the second highest monthly median price in 2 years)

Average Price/Sq. Foot (sold): $95

Sold House Average Days on the Market: 152

October 2011 Number of Houses Listed: 339

Number of Houses Pending: 41

Months Supply of Inventory: 6.6 (which is why the market seems better this month . . . )

So there you have it.   Things are getting more balanced.   But the market is still very price sensitive and buyers are still in the drivers seat.

I could write about the increase of homes being foreclosed.   And I could write about the national and local statistics of homes “under water”.   And I could write and tell you about the personal trauma so many Northwest Ohioans are facing in this market.

And yet . . . there are many homes selling for MORE than asking price.

And with more than one offer coming in.

The market is bifurcated – with 2 sides.  2 halfs.  2 realities.

Case in point: the single family MSI in the 43551.  That stands for “months supply of inventory”.

It’s a measure of how balanced the market is.  How “hot” it is.  How hard buyers or sellers have to fight for each deal.  It is, in one sense, a worthless number!  Because you only buy one house.  You only have one house to sell (normally) if you are a seller.  The medians and averages and group aggregation of data mean little in one little deal.

But they do set the tone for the market.

Right now?   Just 6.1 months supply of inventory in Perrysburg.   Last August there were 260 houses for sale in Perrysburg and 7.9 months of inventory.  Last month there were only 224 houses for sale and with 37 under contract just 6.1 months supply of inventory.   MSI always drops in the Summer.  It always goes up in the Winter.   But that is a 23% drop in 12 months from August to August.   So the Perrysburg market “feels” hotter if you are a buyer.   If you are a seller?   The broken record says “it’s all about price and condition” and it is.

I admit it has been hard — for there are 2 markets in my world right now.

There is the Toledo Residential Market.   You know the one.  Lot’s of downward price pressure.   Some serious real estate problems that a lot of serious people are doing their best to fix.   That’s one market.

Then there is, at least in the scope of this blog, the Perrysburg market.   Fewer houses than normal on the market.   Less price pressure.   But still the buyers who are buying are not dumb.   They look over the Maumee River or back to whatever market they are moving here from . . . and they want a deal.   Even in little old Perrysburg.

They want the house to be in perfect condition.

With everything working perfectly.

And they want to move in right now.

Both markets are functioning but they are functioning differently.

Perrysburg buyers need to be very careful with the pricing strategy they are using and very sure of not only their financing options but also the ceiling they want to be at in any competitive bid situation (especially for REO houses in Pburg . . . ).

More and more loans are getting rejected.   Appraisals are a problem even in Perrysburg.   The old “throw ‘em an offer and see if it sticks / hood of the car pricing approach” does not work out very well in these times.

So – how do I read the market?

It’s really the same as it ever was!

The best homes in the best condition sell for the best price at the best timing possible.

If your house is on the market and no one is looking – it’s probably a pricing problem and not a marketing problem.

My guess is that the buyers are already aware of your house – they have just rejected it before getting inside of it.

I don’t know.

2012?  2011?  2021?

No one does.

We are in need of a new model now.

A new model of buyer behavior.  Lender response to buyer default.  And seller behavior.   The old models are no longer working.  The chart has flaws.  Case-Shiller numbers are the best we have, but still flawed.  The new model of tactical defaults, bank “unforeclosures” to get TARP rebates, buyers who are REO’d or BK’d and have huge monthly incomes – they are all helping to rewrite the rule book.

Out and about in Perrysburg today.   Foreclosing and securing new bank owned properties in the city and township.

Then out to Toledo and Rossford – to snap some photos on a rare sun-shiney day of some new listings.

Then back to work on offers and new listings.

And everywhere I go . . . . “is the market getting better?” is the question.

Not based on what I am seeing.

Then I read this from Marketwatch.com

BOSTON (MarketWatch) — If you thought the housing crisis was bad, think again.

It’s worse.

New data just out from Zillow, the real-estate information company, show house prices are falling at their fastest rate since the Lehman collapse.

Average home prices are down 8% from a year ago, 3% over the quarter, and are falling at about 1% every month, according to Zillow.

And the percentage of homeowners in negative-equity positions — with a home worth less than its mortgage — has rocketed to 28%, a new crisis high.

Zillow now predicts prices will fall about 8% this year and says it no longer expects the market to bottom before 2012.

“There’s no way we can get to flat, from these depreciation levels, in the last nine months of the year,” says Zillow economist Stan Humphries. “Demand is a lot more anemic than we had previously thought.”

Just lovely.