Home Buyers Relocation’s Weblog

Here we’d like to announce a new (and free) service available to our friends,   It’s a remarkable service intended to speak to home ownership and personal finances.   You can subscribe yourself under the “What’s New” button, directly below this “Blog” button. 

Here’s why we think you’ll find it useful.   It’s called, “My Home Management Club”.  Basically, it’s an incredibly large and sophisticated internet-based library of information and tools for managing your home and your finances.  It was developed over the last couple of years by selected realty professionals, intending a “high road” of extraordinary, trustworthy information and tools.  Users can gain access 24/7 from anywhere, with the password supplied.   Short E-alerts, pointing to topical information arrive twice monthly.  

First, it’s probably obvious that it’s a service that we purchase for our clients.  The content is lightyears more than we could accomplish ourselves.  We will have a “local” section, though.  It’s being offered to our future, present and past clients and some special friends, for as long as they want it into the future, free of course. Secondly, we’ve followed the content for many months and have been very impressed.  We’re especially amazed with the interactive stuff, where you can pull up all kinds of local information on demographics, schools, housing sales and the like…and the results are astonishingly accurate.   So that’s use # 1 for you.   

Then there’s also a great library on hundreds of subjects having to do with home ownership.  These “reports” are constantly being added and upgraded…your use # 2. Your use # 3 is to report on “hot topics”…subjects of the day that you’ll also see in print and TV media.  Again, these reports are very much on target.  These will be noticed in bi-monthly “E-alerts”….short email notes carrying this information and pointing to more.    

It’s not intended to substitute for information on our internet sites, or information from our office, but in fact designed to augment it.   Of course, you can always opt out…but we do hope you give it a try…we think it’s an amazing tool.  Finally, we would greatly appreciate your feedback…what you like and what you don’t, and how we might integrate it best into overall support.  

To Subscribe: Go to the button, “What’s New”….the lower right icon will be for My Home Management Club.  Just go there and follow the sign-up instructions. We hope you’ve noticed significant improvements to these web sites, including, even, this Blog.  But we might also tell you here about a popular service developing around “tracking” neighborhood sales.   If a resale is anywhere in your future, we can easily set up a “tracker” of sales in your immediate neighborhood that would notify you of the details of each closing as it occurs, hence you can get a feel for resale values and timing.  Call Debbie to set this up. 

Altogether, we’re trying to make OfallonHomes.com and EdwardsvilleHomes.com THE definitive relocation site for transferees into these areas.  Obviously, we would welcome referrals to these sites and to our offices, and we appreciate the many referrals that have come from our past clients.  That confidence is a most precious gift, and we’ll never betray it with less than our best service.   We do hope you “join up” and that you enjoy “My Home Management Club”. 

Paul and Merrill Ottwein, Brokers

About the “Real Estate Tax Equalization Process” currently going on in St. Clair County. 

We’ve received many inquiries about this process and how it might affect individual tax bills for county residents, especially, residents of O’fallon Township.

This morning, (June 16) I had a lengthy conversation with The St. Clair County Board of Review Director, and came away with a much better understanding.   Here is what they say is going on:

First, they flatly claim that some areas, notably all of O’Fallon Township, have been “under assessed”.   The touted (and legally required) quadrennial assessment is behind and so therefore are updates in assessments.  A review of all residential sales from 2007 (excluding foreclosures and other “distressed” sales,) by The Board of Review defined therefore, the “equalization factor” for the whole…so all residents have been increased by that common factor, 1.04, or a bit more than a 4% increase.  (Some, notably O’Fallon City execs have criticized the exclusion of foreclosures, but state law evidently allows that.  Keep in mind that these sales were from 2007, presumably a year of depressed sales values anyway.)

So the cards people have been receiving are from The Board of Review and not the Assessor’s office.  Therefore, the ordinary procedures for protesting tax assessments do NOT prevail:

Ordinary procedures for protesting individual assessments are made after the Assessor does his job and the Assessor reports to the owner, where objections are filed first with The Board of Review itself.  

            Here, the Board of Review is leveling the “equalization factor” against every single property, (NOT the Assessor, and in fact, The Board of Review is rather criticizing the Assessor as not having done his job properly…hence the need for the overall adjustment.

And that makes a great deal of difference in how objections are made:

            Since The Board of Review is applying the “equalization factor”, an owner cannot file an objection with them, it must be done directly with a state agency called, “The Property Tax Appeal Board”, (web site: www.state.il.us/agency/ptab.)

            And the complaint there can only be with the “tax equalization factor” set.  That agency is not prepared to deal with individual assessments otherwise.

            And in my mind, that makes it nearly impossible, surely improbable, to win.  I see visions of Don Quixote’s “Windmill Tilting”.

So this “bottom line”:  Individuals should work through the math and see how it affects them.  Take the assessed value after the equalization factor is applied and multiply it times 3, (because assessed values are 1/3 of real.)  Compare that number with what you’ve paid for the home, or what you think the home is really worth.  In the several cases I’ve worked through, these new assessed values, after “equalization”, are still a bit under the purchase price, making it difficult to lodge an objection.

If the new assessed value is substantially higher, than I would go to The Board of Review and ask them what you should do to object.  I believe the advice would include preparing a case for the Board of Review based on “comparables” (valuations of homes equal to yours,) in the ordinary way in which taxes are challenged.  There’s a time window here, too, so ask about it. We can help find the comparables.

You’re going to be discouraged by The Board of Review to file the objection with the state, which would be limited in scope to objecting to the equalization factor itself.  But you probably deserve to hear that directly from them….at 277-6600, extensions are 2493, 2488 and 2489.

Sorry about the discouraging word….Merrill 6/18/08

This brief update…written on a Saturday morning where both of our offices are extremely busy…and far out of the ordinary for the last year and a half.  We have more clients “in” than we have agents for, so doing some juggling. 

But the most recently uncommon event….we’re having competition for good product.  That’s something else we haven’t had for a year and a half.   We’re winning most, as (with the client’s help) we’re staged to do, but it’s clearly a result of greatly increased general market activity.

Admitting that it’s the busiest relocation season always, the signs are nevertheless very positive that we’ve “bottomed out”.   The competition issue is one sign.    Days on the market are less…some good stuff is on the market only days.    Total inventory is down a bit.   And price reductions, both on the seller’s behalf and the buyers, are not as “expected”. 

It’s still a “buyers’ market”…but not as strongly so.   So it’s still a great time to be a buyer…the market is still skewed in your favor.  But neither do we believe it will get “better” for buyers.   The point: if you’ve been waiting for the best time…you may have missed it.  The next best time: now!

Adding to the “business” on this special weekend:  Tyler Ottwein, Paul’s youngest son, John’s brother, is graduating from high school today, with the traditional party tomorrow.   And Benjamin Ottwein, Emily’s son, turns 5, with a party tonight.  Benjamin is in that vocabulary-exploding stage and a delight to be around.   Yesterday, we heard him on the phone with his mother, announcing she would pick him up for day care…”Don’t do this to me, Mommie….Please don’t do this to me!” 

This is a note about local market conditions, to be delivered to future homebuyers in Southwestern Illinois.  It’s important to understand the local market trends early, even before you get to town for the “power search”.  Immersed as we are in these local markets, we believe the observations are valid…and of course, these observations are always from the buyers’ viewpoint.

(While we’ve been active in all of SW Illinois, we’re especially involved, and most of our clients have interest in two popular school districts…Edwardsville/Glen Carbon and O’Fallon/Shiloh.  We’ll focus on them, but  observations relate generally to all of SW Illinois.)

There’s this very practical side to buyers we intend to support. Buyers first want to be certain that when they buy a home, it will sustain its value into the future.  And they can’t overpay, making it more difficult to meet that first goal.  And they are only going to be confident of their decisions if they understand these local markets when they make comparisons.  There’s a really large pitfall that we see a lot…and that’s bringing values and opinions about other markets to these.   That leads to real frustration in the home-hunting business, and sometimes, the loss of some real cherries.  Our opinions on these facets are in essays in our Library under “Homework” ….please review that for specifics. 

Early 2008 experiences: 

Generally, 2007 is “down” from 2007, but it’s extremely spotty.  April sales in both Madison and St. Clair Counties were more than 20% under sales of a year ago, but with mean and median prices up slightly.  (We think the latter doesn’t mean much, however.)  These stats are from the Illinois Association of Realtors.

The U. S. Department of Commerce reported a nationwide rise of 3.3%, and that the Midwest showed an increase of 5.8%, (over March of 2008.)

April had our best traffic so far in 2008, even a little higher than a year ago, but because of our emphasis upon relocations, our traffic is considerably higher than the industry norm, (we believe!)

We’ve noted that there has been little erosion in values however, especially in good product, where it’s well located and well maintained.  We’ve even had a bit of competition on a home or two.  That used to be common but isn’t in these “times”.   These “cherries” are still attracting buyers…and we think that’s still very much a buying goal…to pick on the very best with careful attention to the resale factors….”picking cherries”.

Builders are very cautious with “production” homes, (built on “speculation” they will sell.)  There are some starts that are waiting for buyers to direct completion…and some are good buys.  But almost all of the excess inventory of a year ago has been worked off, and we did find quite a few bargains among them…at least a willingness to discount to move them on the part of the builders.   New builds continue to be an important part of our searches, however.

We’re noting a new circumstance however; when new buyers come to town having difficulty in selling their present home in another town, many need to rent out their former home and so feel they need to rent here.  Hence they’re not buyers locally.  To accommodate, some local sellers having trouble selling their homes in a timely manner and having to move on, rent out their homes to these families.  So there is a building reliance upon rentals as opposed to home ownership.  It does help solve some of the inventory buildup problems.  Two things need to be said about that:

First, many could become buyers even if they have to rent out their former home.  A rental home with a lease almost always becomes a “washout” on cash flow studies.  Many lenders would lend on a new home when the family has a rental home in another town…so at least it needs to be considered.

And that phenomenon explains why we’ve been seeing, especially in military families, so many buyers coming from overseas.  Most of them have no home to sell.  That makes buying a lot easier and removes that factor from the new home equation.   First home buyers have the same situation.

A situational summary of the current real estate market: 

As you probably know, many of the last years have been classified as a “Sellers’ Market” in the whole nation, including SW Illinois…too many buyers were chasing after too little inventory and the result was constant upward pressure on prices.   It became very difficult for builders to keep inventory together, and so, higher prices often accompanied fewer options.  That scene was pretty much repeated nationwide, but here, on a much more modest level than in most larger markets, and on both coasts.

The last two years of course were different….nationwide, yet differences exist in every market.  We, too have become much more of a “Buyers’ Market”.  For the first time in many years, we had inventory that is exceeding demand, and prices have become stabilized.  That’s especially true in “new builds” where builders started a huge number of homes in 2006, anticipating more of the same demand as existed in previous years, although they’ve slowed greatly since.

But these characteristics prevail:

While the market has “softened”, it is still very active.  There may still even be competition especially for the better product…the “cherries” we generally search for.

• But you might expect prices that are at least stabilized.   In pre-owned homes, we have not seen prices reduced, especially in the “cherries”…but they have leveled off and pressure is “down.”

• In new homes, we have seen some softening.  While builders have tried to maintain previous pricing, we have seen some incentives in the form of upgrades mostly, with a few actual buyer credits.  (And here, we believe we are receiving better treatment than most…a couple of the best builders are giving our clients better-than-average deals, encouraging us to bring repeat business to them.)

• It does appear as if the local housing markets have been outperforming the national averages, (in maintaining values,) and southwestern Illinois is certainly holding its own in the St. Louis market.  And
  St. Louis has been outperforming the nation.

• We don’t see, (along with advisors nationwide that we trust,) that much more additional softening of the markets, or serious declines in prices.  There’s too much demand locally, and we (and others) are aware of a great deal of “demand” waiting in the wings for the picture to clear a bit, (or hoping for a serious drop in prices.)

• So there may be some short term benefits in buying now, because most observers, including us, believe that rest of 2008 will again bring increased demand and upward pressure on prices.

• And one of the silver linings is that mortgage rates have tailed off.  Loans under 6% are now common.

So this note is intended to be generally encouraging, with a realistic market assessment….we believe it’s a good time to be entering the housing market, and new-builds continue to be viable options.  And we don’t see much further degeneration of values nor of demand.  And we’ll be there to help build wise decisions.

Tari Jacobs, President of the Belleville Area Board of Realtors and a student of the local market, believes we are at the “bottom” and that it’s a great time to buy a home.   “The supply is plentiful, prices are very affordable, and housing remains a good long-term investment.  Now is the time to hop off the fence and take advantage of this buyers’ market,” she said.

(There’s a good resource on the internet, www.yourillinoishome.com.)

And it’s delivered with the warning that we still don’t want to create expectations of big discounts and low prices.  Good properties, (the “cherries” we search for,) are still going to attract multiple buyers and pricing pressure…and while we will try for the best deal possible, we’re not in the position to promise discounts and “bargains”, nor do we believe that’s the most important buying goal.  (We’re a bit more optimistic than that in getting some benefits from builders.)

Our buying philosophy remains unchanged.  It’s not a sin to pay a fair price for a great home, with resale built into the equation.  It’s a definite sin to pay too much for a disadvantaged home that you can’t resell well.   And this principal will always prevail: buying a home should be approached like purchasing a growth stock…it’s the appreciation that counts….counts far more than modest benefits you might gain with hard bargaining, while concurrently risking losing the “perfect” property.

For more about “philosophy”, you might visit “Homework” in the Library on all sites.  (It’s the only element on this site where a password is required.  Developed with other “exclusive” agencies, we’ve simply agreed to protect the content, but the user ID and password are easy to obtain with an email to homework@homerelo.com.   

Of course we’ll try to make sure buyers don’t overpay, and we’ll help with objective offerings and careful evaluation of resale factors, attempting to make the best decisions possible.  Remember our old principle…it’s not our objective to “sell” you anything.  Instead, it’s to carefully build intelligent selections, as a consultant to the process.   

For information on how we approach new-builds, please go to the “New Build” button on OfallonHomes.com, or EdwardsvilleHomes.com.   We’ll see you with another report next month. 

This morning, Friday, April 18, 2008, the local area felt a significant earthquake…the first in many years.   About 4 in the morning, most of us were awakened with shaking from a genuine earthquake…5.3 on the Richter Scale.  It was centered in a small town near the Indiana border, about 125 miles away, but it was clearly felt for several seconds.  Residents as far away as Chicago felt the tremors.   Then just about 20 minutes ago (like 10:30 central) an aftershock was felt that measured 4.3 or so.  Unusual circumstances all for the midwest, and we have heard of no damage anywhere, just a jiggling or shaking.  The last earthquake most remember was in 1968, when a 5.4 earthquake occurred, centered in about the same area.

 With no connection whatsoever, that comes on the heels of an unusually wet (so far) springtime.   March saw a record rainfall of over 10 inches, (where we have perhaps an average of 38 inches per year.)   The ground is the most saturated it’s been for many years…so that’s good for crops and lawns.  But the wet fields are still impossible to “farm”, and obviously, that’s not good.   Some rivers in Missouri flooded, but flood levels quickly subsided.  Here, high on the bluffs, we were not threatened at all.

A year ago, we had a record-late freeze that ruined most of the local peach crop and many apples.  We appear to have missed that event this year…..so far.

We’re getting ready to post a group of weather “records” on the Trivia site…watch for them.  We think they’re interesting, including the great New Madrid Quake of 1812…the most powerful the midwest ever felt in recorded history….and the big rain of 1957, where 13 to 15 inches fell overnight on most of the St. Louis area…an astonishing amount.  

Home Buyers Relocation Services Wins Three “Best in Client Satisfaction” awards. 

(This article appeared in most local newspapers!  We believe it to be a significant honor.  We also believe it’s easier to provide “outstanding client satisfactions” with “Exclusive Buyer Representation” where market objectivity is absolute and conflicts of interest largely eliminated.  As some proof of that, two “Exclusive” agencies in St. Louis, with whom we work, garnered unusual numbers: Finding Homes for You had 2 out of 2 active agents, and William French Buyers Service had an astonishing 8 agents named.)

Three agents with Home Buyers Relocation Services have been named winners of “Best in Client Satisfaction” in 2007 by St. Louis Magazine, as announced in their April 2008 issue. They are Paul Ottwein, Nancy Jo Mitchell and Denise Carter in the picture.  Nancy Jo and Denise work from the firm’s O’Fallon office.  Paul is broker of the Edwardsville office.   

 The measures were: “knowledge of the market, representation of the clients’ interests and operating with an emphasis upon integrity and service.”  While most of the opinions came from actual relocating buyers, title companies also contributed.  The surveys are conducted by an independent research firm. Home Buyers Relocation Services is set apart as an “Exclusive Buyers Agency”.  The firm serves only the buyers side of the transaction and never sellers.  In its 17 years in business, it has served more than 2600 buyer families, but not a single seller.    The company also specializes in relocations, so has growing visibility within the

 (This section is intended for frequent updates in local housing statistics.) 

These are additional market stastistics you might find interesting:

·        We believe that the whole St. Louis area, probably the whole

  Source: Census Bureau (

 ·        Then, we believe that SW Illinois is faring even better than

Sales have been soft in SW Illinois…but not as “soft” as most of the nation, and even, not as “soft” as St. Louis west of the river, where 20% or more declines were shown: Single-home sales in Metro East last three years: 

There are then, these two important related issues:  ·        2007 prices were only slightly under 2006 prices on better selections.  This is a soft observation without statistical backup, but we believe we saw homes in disadvantaged locations and condition take a big hit in value, while better homes in better conditions had values about level.  Certainly there was no inflation, but sellers of good homes saw better values, and buyers of good homes had to pay competitive prices to get them.  Our philosophy here is to “stay the course” on buying only better homes, where resale potential is far better and values more sustainable.  (See essays in “Homework” and in the library.)    By the way, the public press likes to quote “average” values, as we’ve copied in a chart above…but we believe that data is not that meaningful.  The “average” includes those disadvantaged homes and reports a huge range, too broad to have averages mean a lot. ·        Inventories have been on the rise.   And this is important to buyers!  It simply means there’s more to choose from….and it holds values down as sellers compete with each other.  It also is a skewed observation though, as the better located and conditioned homes are turning over faster; the disadvantaged homes staying on the market longer, or enduring discounts to get them moved.  Here again…an important point of buying philosophy; discounts should still not be a prime buying goal…that will misdirect buyers to this pool of harder-to-sell homes which usually means harder-to-resell.  We’re not saying we won’t try when we can (to get discounts), and that value isn’t important, for we still will try to get the best values possible for you.  Again, see “Homework” for detailed philosophy.  All that said, more inventory is good for our buyers.  

As an example, here are “springtime” O’Fallon listings (totals)

(*)  This is not a fair comparison, as this is still “winter”, and usually, listings go up greatly in the springtime.   This still (or therefore) is still a high number.

 Summary of Market Opinions…

• Prices, on both new and pre-owned homes in these two years were about level.
• There was zero inflation for the 1^st time in years…but no deflation in good homes.
• There were a few bargains in new-builds as inventory was worked off, the only real bargains we’ve seen…a process certainly winding down here in 2008.
• It still is a “buyers market”, and we believe we’re close to, or at the “bottom”.
• Interest rates are still incredibly low.

It’s all in all, it’s still a great time to buy a home….and buyers are already “out”.  

We hope to see you soon in support of your “wiser-homebuying” quest!!          

Merrill