Atlanta Housing Source

At the end of the month, there were 6,181 single family residences actively for sale on the FMLS.   In the prior 30 days 607 homes had sold for an average sales price of $189,863.  The average sales price represents selling at 94.34% of the average listing price.  The average days the homes were on the market before they sold were 80 days.

Brought to you by Mark Lackey, Assoc Broker, EcoBroker with Atlanta Housing Source at Solid Source Realty – 404.886.8789 – mark@AtlantaHousingSource.com

I have seen far more activity as the credit come to an end as I did when the last credit came to an end in November 2009.  At that point last November we had 5 pending closing and as of today we have 10 pending closings.

Has the credit made a difference?  Yes.  Would those individuals have purchased anyway, most likely.  What the credit has done was created a since of urgency and lowered the inventory levels quickly.

I have had a few buyers that have not gotten under contract to qualify for the credit and the clock is ticking.  Most of them early on made the choice to find a home that they love no matter how long it takes to find it rather than rush just to get the $8,000 credit.  These are the wise buyers.

The buyers trying to get under contract have been involved in multiple offer deals where there has been intense competition.  Banks and individuals have been holding firm on their offer price.  The ones that have won the bids have offered full list price or more.

Think about it, just months ago you could get a bank or individual to negotiate, and now they are holding strong.  I think this will continue until April 30, when demand will drop off.  At that point, then they will be more agreeable to negotiate.

Is the $8,000 credit held prices artificially high? I believe that sellers felt that could get $8,000 more for their home with the credit. Those who didn’t sell will see the reduced demand equate into price reductions.

I am glad that the credit was not considered for another extension so the market can get around to self correcting.  Selfishly I want a normal market, not artificially stimulated.   Myself and many of my colleagues agree that letting the free market find its balance will be the quickest way to get back to normal.

New buyers after April 30 will be in short supply, but we will be busy getting all the homes to closing by June 30.  During this time we will have to work hard since any issues found during inspections that could kill the deal may cost the buyer $8,000. Expect sellers to be tough about making repairs or concessions since they know every issue after April 30 is a $8,000 issue.

Keep focused on keeping the relationship of protecting your clients during the next two challenging months.  Remember, our partners are getting ready to get real busy. Our inspectors, lender, appraisers and closing attorneys all need our support and patience.

I stumbled upon an interesting news release by FICO – the company that establishes credit scores and evaluates risk for borrowers that they released in late February.

In short, they are finding that people who have high credit scores are still paying their credit card debt, but defaulting on their mortgages. Calling these defaults – Strategic Defaults, it is making the ability to establish risk more difficult in years past.

More interesting was the difference in default in the various regions of the country. Read the full article.

Atlanta is still growing, in spite of the lagging economy and rising unemployment figures throughout the country.  By 2020, Atlanta is expected to be the sixth-largest metro area in the country.

There are many opportunities for businesses and attractions throughout the Metro Atlanta Area.  Forbes magazine ranked Atlanta as top among the “Most Wired Cities,” and “Best Cities for Singles.”  Kiplinger magazine placed the city in the No. 1 spot for “Best Cities for Married with Kids.”

The cost of living in Atlanta continues to be a draw.  Lower costs for major expenses such as housing, food, clothing and gasoline help keep the region’s cost of living below the U.S. average.  Housing remains more affordable here than in other metro areas, and property tax rates range from 1 percent to 2 percent of home value.

High-tech employment in metro Atlanta is credited for 5.2 percent of total employment, which is more than 130,000 workers.  Top technology employers include heavies like IBM Corp., Cox Enterprises Inc., AT&T Inc., and General Electric Co.  There is also the Centers for Disease Control and Prevention that employs more than 6,500 scientists and staff.

A few years ago we bought a new home and every Saturday and Sunday when we wanted to sleep in we were awoken with the rhythmic music of the tapping of hammers. Well that music of tapping hammers died a couple of years ago, when new home construction came to a near halt.

Like the line in the Don McLean song American Pie “some thing touched me deep inside the day the music died”, we were all touched when the tapping of hammers almost came to a stop in the last few years. Well I’m here to tell you that the music has resumed as I witnessed it with my own ears this week.

While searching the MLS for a home for transferee I found those listings we use to find, ones without a picture and only a sketch or rendering of what the home would look like. Well, my buyer and I ventured to see the development where the four sketches were being built.

Like music to our ears we arrived in a beehive of activity and red mud. There was raw dirt just recently exposed for multiple basements and the heavy equipment was parked on an empty lot down the hill. Trucks full of concrete were there with their loads spinning, waiting to pour down the chute to the carefully prepared forms.

There were vans and trucks of all shapes and colors parked along one side of the road. Back when we moved into the new subdivision I remember the traffic jams all the construction vehicles would cause and remembered complaining when they parked on both sides of the road totally blocking access. Now instead of complaints of traffic jams we welcome the confusion and congestion because it represents recovery for us all.

I just stood back and took it all in. Twelve homes under construction in one subdivision and five in another. There must have been at least sixty construction workers of some sort there. Think of it, sixty jobs when we are a country starved for jobs. And think of the other jobs the construction was creating through the ripple down to suppliers and subsequent trades to be on site during the building process.

Here was a ‘manned’ sales office with an agent on duty. When was the last time you heard that one. The builder was in his office, managing schedules of labor and materials. Everyone had mud on their shoes. It was great!

How sweet the memories that this experience conjured up, with the smell of freshly turned dirt, sawdust and diesel, Memories from years ago during the housing boom. It is amazing what once was an inconvenience is now music to my ears.

Folks, the music has resumed! The music of the engine that turns our world, housing and the jobs it creates. So listen in the distance for that heavy equipment moving dirt, the sound of trucks loaded with construction supplies rumbling down our road, the buzz of saws and that rhythmic tapping out of the hammers. The music is not dead, and it is touching each and every one of you.

In Gwinnett county and others around the metro Atlanta area, most of us have suffered a loss in home value from the real estate peak in 2005 & 2006. So we were not surprised to find out the White House has been effected too.   You will be surprised to read just how much Zillow valued the White House. Seems like no one is immune!

Read the full article: 

                                               CNBC Article - Value of White House Drops by More Than $15 Million 

FHA has announced sweeping changes that range from increased down payment requirement from 3.5% to 10% in certain cases, increased Mortgage Insurance Premiums (MIP) by half a percent and cutting allowed sellers contributions by half.

Read More:

                                          Washington Post Article

Peachtree Forest subdivision, located in the Peachtree Corners area of  Norcross in Gwinnett county, Ga.

Peachtree Forest subdivision, Norcross, GA.  is conveniently located in Gwinnett County near Jaybird Alley and Spalding Road.  The neighborhood is only minutes away from fine shopping and dining at the Forum.

Peachtree Forest is very close to outstanding amenities like activity/soccer field, playgrounds, tennis courts, Peachtree World of Tennis, and one of the newest of Gwinnett County’s Water Recreational Park. Peachtree Forest is one of Norcross’ most established and desirable neighborhoods.

The outstanding local schools that serve Peachtree Forest are Peachtree Elementary, Pinckneyville Middle, and Norcross High.  The school buses make stops throughout the neighborhood.

Homes in Peachtree Forest are typically priced from the mid $200′s to $400′s, so there really are homes in a choice of price ranges for any Norcross or Gwinnett County home buyer.

SEE ALL PEACHTREE FOREST HOMES FOR SALE

 “We just won’t sell my home for that amount; it would be giving it away.”  

That is what the sellers says when the appraisal come in lower than the agreed upon contract selling price.  We have a willing buyer and willing seller but the appraiser holds down home values and won’t let the transaction go forward at the contract price.  How are we ever going to get out of this economic mess if this continues to occur?  How can home building start back with this narrow minded thinking? 

As an example, a half completed development was selling in the low $200s. The builder can’t pay his loan payment and looses all the remaining 12 homes to foreclosure.  The bank takes over and does a fire sale to dump them quickly.  The same home, same builder is selling 2 miles away in the $180s in the depressed market. 

So what does the bank do, they unload them in the $140s to sell quickly, and quickly they sell-  all under contract in a matter of days.  It makes sense, a lot of supply lowers price.  Then comes my seller and he is the only one for sale in the same complex as the bank sales were in. 

Now the supply is down to one home and a buyer writes an offer in the $150s.  So what does the appraiser do, well he continues to hold down prices by appraising our listing at the average price of the fire sale that took place. He forgets the supply is now limited and demand is up. 

If it were cars in demand and short supply the dealer marks them up over the manufacturers recommended price.  Collectables go up in value when the supply is small and down when the supply is large.  It’s basic Economics 101. 

So we have a chance to start to have home values increase when the willing buyer and willing seller agreed on a price, but the appraiser holds values down.  If this trend continues we will never have a rising market and home values will never change unless someone wants another fire sale and they go down. 

How can we get the government to stop the regulation that is stifling the home market recovery?  Here is the coming dilemma we are going to have to deal with.  At some point there will be a shortage of homes for sale, in the next few years. 

When we suddenly find that we haven’t built enough homes to meet demand and a builder goes into that community to build new homes he will have second thoughts.  The cost to acquire the land and build the same home as there now is in the $180s to $190s, but an appraiser will tell him he can’t sell for more than the $140s.  Who will build with a planned $40,000 to $50,000 loss? 

The builder will just walk away and not build.  So then when demand is screaming for more homes inventory to buy, will the values go up to the $190s over night.

The future is very bright for Georgia after we get through the next couple of years. Read the ABC article and lets start planning for a great tomorrow.

GA to lag national recovery through 2011
Dec 1, 2009 – The Atlanta Business Chronicle

Georgia’s economic recovery will lag behind the rest of the nation in 2010-2011, but the slow start will give way to more robust growth that will outpace the nation in the years ahead, according to Albert Niemi, dean of the Cox School of Business at Southern Methodist University.

Niemi, speaking Tuesday at the 17th annual Bank of North Georgia Economic Forecast 2010 at the Cobb Energy & Performing Arts Centre, said unemployment will not peak nationwide until April 2010, when it will crest at 10.5 percent, and remain above 10 percent until late fourth quarter next year.

The United States’ economy will grow by only 2.5 percent to 2.7 percent in 2010, he said.

“It is a jobless recovery,” Niemi said in an interview following the presentation.

Unfortunately for Georgia, the state will lag behind the recovery experienced by the rest of the nation. Georgia will underperform in jobs and economic growth through 2011.

Niemi, 67, the former dean of the Terry College of Business at the University of Georgia, said it is unprecedented in his lifetime for the Peach State to fall behind the nation in terms of economic growth.

“This is foreign territory,” he said.

Georgia maintains the fundamentals necessary for job and population growth, including relatively low costs of labor and land, a high quality of life and a global transportation hub in Hartsfield-Jackson Atlanta International Airport.

But the state’s manufacturing base is tied to construction, and both housing and commercial real estate development have fallen off a cliff and the state is choked with a glut of supply.

Housing starts in metro Atlanta that once exceeded 110,000 per year at their peak, have been cut by 80 percent.

Oversupply of housing, retail space and commercial office space will continue to weigh on Georgia until the excess supply has been filled. Cheap real estate will eventually become a plus for the region in attracting investment, but in the short term, it will continue to dog the region.

Long-term, Niemi said Georgia will add 1 million people through 2015, and overtake Michigan as the nation’s eighth-most populous state.

Niemi forecasts strong growth after 2012, and Georgia will become on of the nation’s Top Five or Six states in terms of economic growth through 2030.

Georgia is also favorably positioned for a return of a manufacturing base; one that is more diverse, as shown by the opening of the Kia Motors plant in West Point and the position of a manufacturing plant by NCR Corp.

Atlanta and Dallas, Tex., will be among the nation’s rising stars for the next two decades. Georgia, North Carolina, Texas and Utah will be among the fastest-growing states post-recession and through 2030.

Niemi’s visit to Atlanta is part of a series of lectures, which will continue Dec. 2 at the Atlanta Athletic Club and Dec. 3 at Eagles Landing in Stockbridge.