Atlanta Real Estate | Atlanta Housing News for Real Estate

It is hard to believe that the Atlanta real estate inventory in could still be rising. It's sad, but it is true!  in our First Multiple Listing Service FMLS tonight, there were Active - 87921 Properties Found.  Since we utilize 2 Multiple listing Services in Atlanta, the Georgia Multiple Listing Service GAMLS is reporting 117287 Active listings.   In the latest month for statistics August 2007, there were 5,129 closings for Atlanta single family homes in August. A decline of 34.6% from the same month a year ago.  This should be the percentage decline on record (since 1996).  The single family homes close are comprised of Single family detached, and attached which are town homes, and condo class homes.  On the single family detached closed 4,343 units in August or a decline of 34.6% from the same year ago period August 2006  with 6,662 sales. Condos and Town-homes closed 785 units or a decline of 33.7% from August 2006.  There were also 7,181 expired listings in August. This was 19 more than Last December's all-time record and 2,100 more than August 2006.  The number of withdrawn listings are also rising to record levels. Single family detached and condos & town-homes broke the record in August for most withdrawn listings for a given period. Single family detached had 3,196 withdrawn listings in August and Condos and town-homes had 546 withdrawn listings in August.

The scenario is odd at this time of the year, because once school is in session in the Atlanta area, is that in a normal market the homes for sale in Atlanta will dwindle,  The lowest number of Atlanta homes for sale usually takes place in the winter months between Thanksgiving, and mid January are normally the lowest points of home inventory.  Last winter the homes for sale never really backed off their inventory levels.  They just kept rising, ans now it is compounded by the number of sales dropping.

This information was compiled from FMLS and GAMLS. Inforamtion is Deemed Accurate but not Warranted.

I think http://www.activerain.com/ has reached a milestone and no own is boasting about it!  For the last few days I noticed that we were approaching 50,000 in membership and we reached that milestone today without anyone noticing or writing about it that I could see!  ActiveRain is a great opportunity for learning and sahring ideas, experience, mentoring, networking, marketing and more!  It is impressive to see how much ActiveRain has grown and realize that it probably hasn't even reached any of it's potential just yet!  There are so many possibilities for ActiveRain and it's members!  I also would like to thank all ActiveRain members that I have met, and chatted wiht over the phone.  This has been an incredible experience! 

Congratulations!

I was searching for some Atlanta local news this evening and I came across something I wasn't looking for.  It seems that as of 3PM today the Federal Deposit Insurance Corporation FDIC and the Office of Thrift Supervision shut down a local bank which is Internet based and has no physical branches.  The name of the bank is Netbank based out of Alpharetta Georgia, and it has over 2.5 Billion in assets, and over 1200 employees.  It is the largest bank closure by the FDIC in 14 years.  The last closure of a major bank by the FDIC was in 2001.  The reason cited for tha banks closure was excessive levels of mortgage defaults.  Unlike some recent failures of mortgage companies, the one thing that is different here was this was a Federally insured Bank!  Under current FDIC guidelines, depositors with deposits under 100K will be protected.  Netbank has a total of 109 Million is deposit accounts that exceed the covered 100K limit.

When you really think about it the scenarios are much deeper than the news we read and hear each day.  Persons with savings and cash presumed there was safety in the safe haven of a Federally insured bank now find out their savings are not so safe.  These were probably not risk takers,  These persons were not flipping homes, or betting on real estate doubling in 2 or 3 years.  They assumed they were playing it safe!  Those that avoided risk in stock investments, and real estate thought their money was in the right place, a bank!  However, once they placed their personal savings and investments into the bank the bank then makes money on the spread by lending to others.  A spread is the difference between what in placed on savings, and the interest paid on what is loaned.  This works fine when everyone is playing by the rules.  The higher the presumed risk, the higher the rates charged to that client.  However there are real risks with the higher interests!  Sometimes, it may be wiser not to lend what cannot be repaid!

Risk occurs when the bank does not do their job correctly.  If the money is too loosely lent without supervision or sub prime risky borrowers without finding out how well are the borrowers are qualified?  The lender really needs to know if the borrower have the ability to repay what they borrowed.  If they do not...that is where the trouble begins!  This isn't too smart to lend money out that is all risk! This is especially true if it your money they are lending out!  That does not bode too well if the loans were made to a sub-prime borrowers when perhaps the lender of the loan was too lax with their lending standards or supervision with your money. When this happens everyone suffers, lenders, depositors, borrowers, home owners, local and national economy and taxpayers... who's government agencies have to come to the rescue. In 2003 100% of NetBank's assets were real estate.  That is out and out suicide!

In an updated note because this is a breaking news story the FDIC made some futher announcements.

I was going through the Atlanta MLS tonight I had some thoughts,  There are a lot of great buyer incentives for Atlanta home buyers.  Some Atlanta homes for sale will have just been reduced 50,000 dollars, and the Atlanta home builder or seller is offering to pay closing costs for the buyers, an increased commission for the buyers agent, and will throw in extras for the buyer.  Let's think about this for a minute... a $499,990 home that is reduced to $449,900 the builder will pay your closing costs up to $6000 dollars, there is another 10K on the table for buyer extras or upgrades and, there is an increased commission for the buyers agent of 5%.  In my books the net sales price of the home is in the $420K range.  It sounds like a great price, and too good a bargain to pass up!  Doesn't it?  On first glance it is, but on second thought it is way over priced to have that much padding and movement in price.  The appraisal is already set because you are going to use the builders lender and financing...and it is new construction. It is going to appraise!

So do you tell you buyer to take it or write a lower offer?  Do you have the stomach to negotiate lower?  How much lower?  Upon further examinaion the last few sales that sold in the subdivision were in the $379K's!  Are you comfortable with this?  Instead of price do you try to negotiate the builder finishing he basment or making some custom changes?  How good a negotiatar are you?  Or sell your buyer that it is a hot deal?  Since there are a lot of gimmicks for sales, it is easy to pump the price up then lower it dramatically.  It does not mean it is worth either price since the home has been sitting for months...and already has every know extra to man other than hot and cold running servants!  So who will determine your sales price the seller or the buyer?

If you are thinking of buying a foreclosure home in Atlanta, don't do it without an Atlanta Buyer's Agent!  There was a news story the other day in the Atlanta area where loads of buyers that went directly to a builder to save the other side of the commission, and waived the right to have a buyers agent are in deep trouble. It seems as if they bought investment properties from troubled Atlanta builders while dealing only with the builders representative.  The builder representative by Georgia law does not represent the buyer!  They only represent the builder.  First of all the buyers made several mistakes, waiving the right to inspect on a new home is not smart.  In fact it is the single most important time to find building mistakes.  It is rather important when you consider a lot of these builders distressed properties are being sold as is without disclosure!  The other mistake the buyers made is that they waived the right to buy title insurance!  They did not buy buyer's title insurance!  A really stupid mistake!  Because when the builders were going under, they neglected to pay a lot of their sub contractors!  So what is showing up now?  Liens, big mechanic liens!  In fact most of the homes are loaded with major liens and it is my understanding some are over 50 and 60K!  The problem is that the leins flow with the land, and now the responsibility of the new owner.

The biggest mistake a buyer can make is assume that they are saving the commission of the buyers agent by not having representation,  they are not.  They are losing the right to have representation, negotiate, and protect their own interest.

In real estate there is always tremendous resistance to change, yet change is inevitable as the changing tides. Some will survive,and some will not. Charles Darwin is pretty much accepted today for his theories on the subject of survival of a species.  So how will we adapt to change personally?  Change occurs every day, and moves us away from a comfort zone into an uncharted territory.  It is perplexing to find that what we employed so successfully yesterday, is not yielding any results today. The newness of our surroundings makes it difficult to come up with new ideas and try different things.  The landscape has changed, and the new surroundings do not bring us any peace of mind. We are more set in our ways than we know, and the thought of confronting hurts us!  We make new resolutions to get up earlier, go to the office more often, we realize that networking may not change your current streams of income...if you and your associates are unable to to adapt to the new market.  New ideas and a fresh approach is needed.  It takes more the discussing the book "Who Moved My Cheese" because it has already moved, and the answer lies in what have you implemented since you've read the book last!  Has it yielded any results, if not, what is your next strategy?  Do you have one?

Stock markets and industry bobble heads will be coming out saying things are not that bad, because that is their job, but your income tells a different story.  Paying your own bills, and preserving your own home are more important than the trends taking place in real estate.  We must begin wiht a total review of persona finances and budgets.  To survive softer times, a new focus for our livelihood has to be made.  A new beginning has to be broached! Choices may have to be made, but only when all the information is at hand.  Think about it as an assessment.

The assessment may be based on trends in our own market place, our personal experience, our own sales history, and local sales increases, units sold, and prices ranges that are moving need to be examined.  We must be able to answer the question, "What is selling and why?"   Are sales hot in single family homes?  Where do more sales occur in your market?  What price ranges?  Is the number of bedrooms a factor?  Why are some units selling when others do not?  What is driving the sales in those areas?  Is it a school district. access to public transportation, price?  Do not be blinded by the national news and headlines.  Things may be better or worse.  Every market is different, but you must know your market!  Be proactive looking for hot spots that are bucking the trend,   Knowledge is always the key to survival.  When you obtain enough information, you are able to move beyond the diagnosis stage and make a prognosis,  Where will you be when this all straightens out, and how well off will you be?  Then you will be able to see where you fit into the scheme of things and develop a new plan to adapt and succeed in the next phase of the market.

Taking more listings, waiting for the phone to ring, desk duty, holding open houses may have been productive in the past, but are not really a plan.  Watching your budget, making modifications of spending, turning away bad business may be a very smart idea.  We have enough on our plates without adding to the stress.  So a signed buyers agency with a pre-approved buyer is a must.  Working with motivated sellers is critical!  What changes are you making in your business?  Here are a few of my own:

Budget and Expenses:

1. Not renewing unproductive marketing tools
2. Cancelling unneeded domain names
3. Cutting Expenses
4. Cutting Marketing Expenses
5. No new expenditures or systems
6. Pre-determined targeted marketing
7. Using a more gas efficient car for daily runs and errands.

For Sellers:

• No listing agreements less than 6 months
• No open homes (glutted market)
• No overpriced listings - list prices must be within last 4 months comps or less
• No Discounts (more effort, more time, increase marketing expenses, more stress to sell)
• No overpriced listings
• All listings must be clean, immaculate and without odors
• Neutral decor, turn key condition
• No Appointment only listings
• No homes on the market until they are show ready!

For Buyers:

• Signed buyers agency agreement
• Working with Pre-Approved Buyers Only
• Not working any Contingent upon Sales Buyers (too many buyers cannot sell homes!)
• Not showing any buyers just thinking of moving to area.
• Buyers need to have a job.
• Not opening doors for non-clients (will show single home with signed buyer agency only)
• Meet buyers only at office.
• No addresses, or detailed free information on websites.
• No free information over the phone for non clients.
• Buyers must ride in my car when showing homes!

Copyright September 25 2007 Jim Crawford All Rights Reserved

The title above is not so far fetched these days.  A lot of homeowners are really up against different types of pressure and they need real help yesterday!  Home sellers may have different needs, but they share one thing in common, they must get results!  The needs of one seller to another may vary from job loss, terminal illness, death of a spouse, financial setbacks, divorce, relocation away from the area, an impending adjustment on a mortgage that the seller can no longer afford to pay, or just some other dire need.  What the seller is requesting is a tall order.  Their lives depend if you can sell the home or not!   Marriages and families are in the balance.  Can you really help them?  Or is it just your ego want another sign in the ground?  So if you received a call from a desperate seller that had to sell their home or else would you take the job? What would you tell them?  Would you make a promise that you could really help them?  What skills to you bring to the table that other agents do not?  Have you ever sold anything before?  If not…. is this really the time for on the job training?  Would it be better to refer it out to another agent that could better assist them?
 
Sometimes we have been called to assist those in pending foreclosure or bankruptcy.  The window of opportunity may be non existent or have already closed.  If so, we pass it on.  The sellers need as many facts as possible.  Sharing the truth never hurt anyone, but promising hope and not being able to deliver could be devastating.  A lot of life is not about a sale, it is about ability, and acknowledging our limitations.  What type of agent are you?  Could you help?  Would you list a seller knowing how dire the situation is?  Do you qualify?
 

I just finished reading several well written real estate articles that explored a reality check for home sellers.  It was quite informative, and compared other periods of peaks in the real estate market in the late 1980's and draws some comparisons to our current situations.  It seems as though a mathematician could easily dispense solutions for homeowners.  The problem is the reluctance of the homeowner to embrace the economist approach.  We also were talking to some friends and relatives that live in several markets across the USA...unbeknownst to us, they have had homes and real estate properties on the market for sometime without showings or offers.  After several steep price reductions there is still no traffic or offers.  When questioned why they did not cut the price further (even though they had purchased the properties at the right price and they would still make a profit)...they refused.  It seems as though they had some invisible line in the sand drawn that they would not pass.  So let's discuss some of the issues that comprise  A Reality Check for Seller's

Over the years we've seen many clients tell us they have their limits in pricing also. If an offer came in below that price, they would refuse it.  They share they would rather keep the home, rent it, or burn it than give it away!  Those are strong words and sentiments for sure.  I think for many veterans in real estate that a sale is more objective than subjective.  For myself it is more like making a decision to get from A to B!  Once the decision is made, then a plan has to be formed to figure out the best plan to get there.  I look at minimizing a loss, and making it up on the other end.  How can I make up the loss?

The biggest mistake most home sellers will make is to believe they can save more money by selling it themselves as a sale by owner, or getting an agent to list the home for a greatly reduced commission.  What they just did was make a fatal mistake.  They just placed their listing in the hands of someone that will do nothing to sell their home.  A real estate kiss of death! A sale is not made by placing a home as an MLS listing..that is passive and not proactive.  A sale begins with hiring someone that has the ability and experience to guide them through the sale of their home, and accomplish the task!  It is not about listing, it is about selling!  Otherwise they will sit on the market forever without selling.  And sit, and sit some more.  That is what happens when markets change.  In the late 1980's in Boston prices rose quickly and fell.  From 1989 to 1992 prices in Boston condos fell over 40 %...  yet some homes sold!  Why?  Could it be that some home-sellers faced the reality while others just denied it?  Those that bit the bullet of reality sold, while those in denial watched as their home prices kept falling over time.  When we read statistics from some markets they will report that sales from last month were only off 2%, but in the bigger picture is how much are sales units off from the same time period a few years before.  If we compare peaks of markets and units sold what we may find is that from June of 2004 to June of 2007 units sold may have dropped by almost 50%.  Some agents make the fatal mistake of looking at the rising medium price as opposed to units sold.  In one market where I am licensed, a comparison of markets shows an erosion from 2000 units a month sold in June of 04' to about 1000 units a month sold in  June of 07'.  If we are agents of the buyers and sellers we have to be giving our clients the right information.  Telling the truth is never easy, but you will make more sales if your sellers are able to embrace the same vision you are sharing!  The phrase "Are you seeing what I'm seeing?" has to be a fluid dialogue that you are having with your seller clients.  If not, you are just wasting their time, or they are wasting yours!  They have an option to sell now if they want, or no regrets later.

Within the last few days there was an announcement on the newswires that was pre-empted by the Federal Reserve lowering some bench mark interest rates.  The story that got lost in the shuffle was that IBM decided to offer some great new office software totally FREE!  It was designed to put a chink into their mian competitor Microsoft.  The new productivity suite is called "Lotus Sumphony!"  It is created in an ODF Open Document Format which mean that it's more of an open platfore non proprietary format.  Since most of my friends in real estate like stuff that is free, and works well, I thought it was something that I would toss out to all!  Since I used to use a lot of the Lotus Products years ago in the old Lotus Suite, Lotus Approach and Organizer...many of which I still use today...I have no problem sharing this.  To check out the new features and possibel downloads for your own use click here:  "Lotus Sumphony!"  By the way, if you own Microsoft Office 2003 it can also share files,

I guess everyone is breathing a sigh of relief with the Federal Reserve cutting the rates 1/2% today.  Not only did the Fed cut the rate, they exceeded the anticipated cut of 1/4%.  So what will that mean to us that work real estate?  Will it have an immediate impact on our sales?  Or was the rate cut meant more for  those caught up in the refinance credit squeeze, and now allow many of them the opportunity to reaffirm their debt at a slightly lower rate?  If so, will most of the sub-prime borrowers just be locked into properties without equity?  It is interesting to think of the alternative scenarios.  The biggest fear was that many of the 100% borrowers would just walk away and let the properties fall into foreclosure.  They had nothing to lose at all!  So if the property owners by their refinance just lock the owners into properties that really are inflated above market values?  For the financial institutions that approached the brink of the abyss, and now can step back an perhaps get a second chance..will this just prolong the inevitable?  After all, they purposely made loans to those that could not afford to repay, or refinance!  Since they created a lot of the mess we are now in in real estate...would it be better for all had the Fed not dropped the rates?

The phones have not started ringing off the hook with the much anticipated rate drop, so unlike past drops, there was not a pent up demand waiting on the sidelines to pounce on great opportunities that are now reasonably priced and affordable.  This was what happened each time int he past when mortgage interest rates descended a little at a time from highs of 18% to 12% and less.  At each drop, the phones started ringing and sales would take off in spurts.  There are a lot of questions that will be answered by the marketplace in the next few months.  I guess we'll just have to wait and see.  There was however one major difference between 1988 and the current market that is disturbing.  The slowdown in 1988 was interest rate driven as opposed to a price driven retreat that slowed the markets this time.  High mortgage rates dominated the 1980's but in the last decade interest rates have been at 40 year lows for quite a while.  It was the price of real estate that took financing to the edge of the abyss.

updated 9.24.2007