Perrysburg Blog

A new upcoming listing on Indiana . . .

An old REO listing on Indiana . . .

And . . . a sharp split level on secluded, hidden, hard to find Carolin Ct.

I will not sugar coat it. REO is a huge business opportunity and a huge American tragedy.

Hundreds of thousands of REO’s are coming. The main issue is will it be a firehouse or a more manageable stream. I don’t know. No one does.

I can tell you this: the financial institutions, banks, and their owners are planning to monetize and securitize the various and sundry loan deficiencies, liens, contigent obligations, and busted walked away from loans. They are going to come after everyone they can. “TANSTAAFL” means there ain’t no such thing as a free lunch. And they mean to collect.

(iconic and meaningless photos courtesy of the Ft. Worth Museum of Modern Art — which was the highlight of my trip)

This REO-focused meeting used to be held at the Loes Anatole in Dallas.

Not a small hotel – a fair sized convention venue.

Today?

It has taken over the Ft. Worth Convention Center – a large place.

This class was in the Omni Hotel across the street from the Convention Center.

Any reasonable appraisal of the state of the US real estate market would take the size of this meeting into account. The national real estate market is now REO-focused.   And expanding.

SRO with keynoter Steve Forbes. He is the total common sense antithesis of all current political leaders. Nothing but bad news.

Just leaving the Gala Awards Breakfast.

Gala?

Suits and ties enforced. Full orchestra. Classical pianist in lobby.

CEO of Safeguard Properties was the main award winner thanks to his efforts to clean up blighted inner city Cleveland.

Gala and REO normally don’t go together. But American capitalism is a strange and powerful force.

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.

There are 74.8 million dogs and
88.3 million cats in the US. 

Many people who have lost their homes have taken
their animals to shelters, or the less responsible ones let them lose, locked
them up in the backyard when they move away. 

People are to blame, not the
animals.

I know – the economy is in the tank.

I know – people are cutting back and cutting costs.

And some are even walking away from houses.  In the City and in the Township.

But don’t hurt your animals!

Sometimes THEY, the little innocent dogs and cats, get foreclosed too.

Some resources:

Toledo Humane Society.
http://www.toledohumanesociety.com/tahs/

Maumee Valley Save a Pet.
http://www.maumeevalleysaveapet.org/

Paws and Whiskers Cat Shelter
http://pawsandwhiskers.org/

Toledo Animal Shelter
http://toledoanimalshelter.com/

Wood County Animal Shelter
http://www.woodcountyhumanesociety.org/

These shelters are immune from the economy with more than enough space, money, and food.

RIGHT.

They are hurting too – and the pets they help are in more danger than ever.

You can help by adopting a stray (and by spaying and neutering your own pets).

One of RE/MAX Master’s REO/foreclosure listings recently generated this benefit:  a cute, nice, starving cat.  Renamed Hobbs by my daughter Hannah (I think Reo is a better name).  He was alone.  Starving.  And desperate for someone to love.

Shots and neutering were extra.  But we now have a great barn/outside cat.   

Somehow, and most amazingly, he has even won over Mr. Buster, our Maltepoo and the Jon Modene Team Mascot (he even has his own business cards!).   They are now friends.

Maybe some good will come out of the REO crisis . . .

• 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.

You don’t have to pay anyone money!

You don’t have to go to the Wood County courthouse – although the Sherrif personally runs the auction.

You don’t have to drive around and look for “Bank Owned” or “Foreclosure” sign riders.

Not any more.

You can just go to my newest website- www.ToledoBankOwned.com and you will see a map.

A simple map of Northwest Ohio.

But it is so much more than a regular map!

It’s a Google Map “mash-up” that combines all of the current Realtor listings for bank owned, HUD, and REO status listings.

You can pick you area or look at them all.

Toledo looks a little crowded, n’est pas?

Anyway, it only shows active listings.  The REO’s that are sold or pending or off the market don’t show up.

So this is a tool for buyers and investors.

I hope that you enjoy it!

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.