Atlanta Real Estate | Atlanta Housing News for Real Estate

Is any of this making sense?  Increasing days on market, no buyer traffic, high inventory levels, fierce competition to sell, low ball offers, over leveraged sellers wiht no equity, and no offers... are all indicative of a change in the market!  Ya think?  Since NAR quote the number of resale homes in free fall from over a high of 6.35 million units a year ago in October of 2006 to an adjusted annual rate of about 5 million units this November past. (NAR)  That is a 20% drop in units sold.  The other shoe that is dropping is foreclosures which are about to go through the roof.  The real numbers lie ahead, not behind us!  The most recent number of foreclosures are up in 2007 another 75%.  A total of 1.3 Million homes.  If we look at the last few years of NAR sales statistics one of the largest blocks of buyers were second homes sales which accounted for over 40% of all sales for the last few years.  Most of the money used to purchase these homes were pulled from the equity from their primary residence.  The only problem this year is that a lot of that money is no longer available with lagging sales, and declining prices.  So I have to sit back and acknowledge that the numbers are pretty bad no matter where you obtain them from.   The numbers are so high, you have to ask "Who's buying?"  It isn't media hype, it is far worse. It isn't pessimistic to look at the stories, it is factual and needed to plan out profit for my business.   I'm not a social worker or a home stager, I make a living selling homes to buyers and getting them sold for home sellers.  Perhaps you are starting to wonder where the buyers are..as I am!  You are not alone!

Most of the problems that we encountered last year were due to $50 billion in sub-prime mortgages resets.  This year the number is 10X worse.  There are over 500 billion in resets due in 2008 on sub-prime loans.  It will be great that some will be able to refinance their payments lower, but with the neighborhood price declines...  owners may still be in over their head, but just have a little breathing room with the monthly payments.  Some home buyers in a declining market may assume they have made a great purchase only to find that next year the prices have moved lower still from last years highs.  In some markets this will be more pronounced than others. 

Wall Streets rise in the maker and volatility for the last few months is almost a classic "Dead cat bounce!"  That means that if you threw a dead cat off a very high building chances are it would bounce when it hit the ground, but it does not mean that is coming back to life.  A dead cat bounce is also referred to as  a "Suckers Rally!"  Both of the terms are synonymous with trying to get uneducated investors into a market so they can sell their stock at higher prices, and get out with some money.  The last one holding when the music stops has lost all!

Look for some parallels with the stock market.  So in the current market what are the rallying stocks?  Financial, and builder stocks!  That is the last place I would be investing right now.  The broader stock markets have already started quietly retreating.  Stock buys are more cautious! That is an unsustainable rally.  So what about real estate?  Are we exempt?  It is another market, with similar issues.  There has to be buyers to keep the sales up!  Wall Street is not exempt from losses, whoy will we be?  When buyers disappear, prices soften and drop. 

4 Questions: 

1. What are your thoughts on the real estate numbers you read about?   
2. How do you interpret them?
3. Do they apply to your market?
4. How are you redirecting your business?

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I really love to hear all the news on mortgage fraud, bad loans, sub-prime, and the collapse of available equity.  The sub-prime loans that had no chance of ever being repaid may cause the collapse of the US housing market as we know it for a decade!  They knew this when the loans were issued!  To compound the fraud...these knowingly bad loads were packaged and sold around the globe.  If you haven't heard the banks overseas are tettering on the edge of slovency with loads of bad notes (from our sub-prime collateralized mortgage obligations CMO's!)  Yet for those that caused the problems are leaving their corporations with bonuses, and full retirement to the tune of millions as in Countrywide.  What is up wiht this?

They should be leaving the firms in handcuffs and shackles.  This government seems to always give a pass to the banks, they threw the book at Enron, Martha Stewart, and a few others...but no big players as of yet have been arrested for this major mortgage fraud.  When are we going tyo hear of some arrests, some indictments?  They will do a lot to restore calm in the markets.  Instead Walls Street climbs higher in a suckers rally acting as if it is just a pebble ont he road.  It isn't.  It is far deeper.  The Federal Reserve intervantion last week for .75 bp was only the 5th time the Federal Reserve has done this.  It was unprecidented, and was done for a greater reason than mortgages,  A bank(s) was introuble, and perhaps out of cash!

It really makes you think about the values that are running this country at every level.  It is all about the buck, elections, values, and payback!  This debacle could lead to a very deep recession, and those that perpetrated it are getting a pass!  Why was it easy to act like a bully and throw the book at Martha Stewart...when the resets a lone this wear from sub-prime will be over 500 billion dollars...that is 10 times higher than last year! 

So was it right to arrest and prosecute Martha and give the banks and lenders that could cause a global recession a pass?

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Atlanta Short Sales! Looking for great opportunities in buying a home at an unbeatable price? Have you considered buying a short sales in Atlanta?  Do you know what a short sale is? A short sale is when a person owes more on the home than they can repay, and the lender is willing to take a look at purchase offers and may accept less of a payment in return for a quick resolve to the potential foreclosure. Short sales are different. Think of a short sale as a "pre-foreclosure!" Here is some reasoning on the difference between foreclosures and short sales.

Everyone knows about Atlanta foreclosures, and assume they are a great deal, but they aren't! A foreclosure is when a lender takes back a home that the buyer has not been able to repay the debt or mortgage. If all went well a foreclosure could be a great deal, but in the real world they aren't! The foreclosure process should be a very quick process in the state of Georgia because we are a non judicial foreclosure state, but there are impediments that stall the sale. Court filings, motions, appeals and bankruptcy filings slow the process to a crawl! During that stage the home falls into total disrepair! When a foreclosure finally comes on the market, it is usually neglected and in need of a lot of work! But what about short sales?

Since Georgia mortgage lending in the last few years had a very large percentage of 100% non money down borrowers that purchased homes with "teaser rate" mortgages! These mortgages re-set, and after an initial low monthly payment, re-adjust to a much higher monthly payment that is unaffordable to the home owner. Rising gas prices and energy cost may have pushed many homeowners over the edge and they are not able to repay the loan! So what do they do? Since there is no equity and sales prices are declining, the owners may owe more than they can sell the home for. So should they just walk away from the home? What if they petitioned the bank to help them out? Some banks may! This called a short sale process! It is not so much the sales price of the home that a bank considers, but rather the carrying costs, and legal fees of vacant properties, vandalism, maintenance and declining appeal! Banks an lenders may also include in making that opinion is the number of homes in total home inventory and rising foreclosure inventory!

For the consumer they represent a better purchase, a home in better shape, and a quicker close!  Short sales offer incredible great deals and opportunities for Atlanta home buyers!

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 I had a few people contact me this week about the latest issue  of the Georgia Realtor Magazine (January / February 2008) and about an article that was included in the issue (P. 15-16) about real estate Blogging as a tool for Success.  As I started reading it, I had the feeling of Deja Vu!  LOL!  It was way too familiar, and I actually had to go back to my articles that I write for http://www.realtytimes.com/ and look for something similar I wrote!  Low and behold it was my article they were running as one of the featured stories with permission from http://www.realtytimes.com/ . Maybe I am getting too old for this, but I forgot all about the article "Real Estate Blogging a Tool for Success."  When I looked at the end of the article there it was the full credits!  LOL!  But right next to the article was a promotion they had placed with the benefits of http://www.activerain.com/  I am a major proponent of the benefits of ActiveRain when I do my real estate seminars!  They are right!  There are benefits, and the Georgia Association of Realtors have formed a group on Active Rain called the Georgia Association of Realtors.

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Real estate mistakes.  Everyday in real estate there are errors. 

In real esate we handle loads of paperwork, and receive phone calls at the most inopportune times.  As we scramble to pull over to the side of the road to listen to a phone call, look for a pen or a pencil to write down the information, save the call info to cell, or replay a garbled message several times to hear the last bit of indistinguishable phone number...it is inevitable that we may overlook  or omit something from a deal we are working.  That's just another day in real estate.

I am sure there is a place in heaven with that last page of a missing fax with all the signatures that someone in your office just walked off with because they were in a rush!  That isn't a consolation.  It is just one more thorn in your side when you are trying to do your best for your client.  99.99% of the time every thing works out fine.  If something were to fly under the radar by error under these circumstances it would probably be covered by your Omissions and Error Insurance E&O.

Over the years, thee are other kinds of blunders that may not be so forgivable.  If you go into any real esate office you will hear about those deals!  People will shake their head when the topic comes up, and they will share those stories like those bad stories on a reality TV show on Court TV.  People will sit back and try to reconstruct the events that lead to an unbelievable outcome.  I call them "Real Estate War Stories!" 

Since I travel around the county, and get asked for my opinion pretty often I hear a lot of issues.  Most are routine, and have an easy fix, and others...well even an intervention cannot figure out a starting point.  Marketing and getting a contract on the wrong property could raise some eyebrows..and when the dust settles you could be left with a hefty legal bill.  Another one is the presenting an offer where the contract states you are in receipt of earnest money when you are not  can get sticky if things go crazy and the seller wants the deposit for liquidated damages.     The only problem is that your pastor did not give it to you, and refuses to do so.  Bogus checks, stolen checks and creative financing are warnings of another kind.Those are fraud!  People involved with fraud like to work with new agents with big egos!  Please keep in mind...E&O does not cover you if they view it as possible fraud! 

A lot of errors are not necessarily committed by new agents, they often happen to seasoned agent that are working in a different area of real estate to help a friend.  (Commercial, land sales, new homes sales etc..)  Be careful, this isn't a race to finish first!  Persons that rush you may not want you to review the deal too closely!

1. When in doubt ask lots of questions!  Go to your broker, not another new agent in the office!
2. If your broker is never available, leave the office and go immediately to another office!!!
3. If you think something is possibly wrong...?  Listen to your instincts!  Stop!!! Do not proceed!
4. Run by issues that you do not understand with your real estate attorney!
5. Not sure of a finance question call the loan officer or originator!
6. Work with a mentor and have someone review the details of your first few listings, and contracts. 
7. When in doubt have your broker review your contracts!
8. Ask for copies of plats, surveys, and deeds.  Make photo copies for your files.
9. Research the property for debts and liens before listing.
10. If prices or facts are way out of line do not rule out Mortgage Fraud!
11. Original contracts for all involved - Everyone reads on the same page!
12. Make copious notes, and do not let any detail get away from your file!
13. If the other agent is unresponsive, have your broker contact their broker!
14. Never carry checks around - Follow brokers instructions!
15. Always follow your state's real estate license law!
16. No breaks for friends, they must follow the rules also!  If things go wrong, they will not come to your aid!
17. If you suspect fraud report your suspicions to your broker immediatley!
18. If you have concerns or unanswered questions do not proceed foreward in the deal...!

Atlanta real estate market report.  Atlanta homes sales and prices continue to decline.  This market report encompasses the entire FMLS market area and is not limited to just the city of Atlanta, but rather the entire metropolitan area.

On the Atlanta real estate market report just issued today by our First Multiple Listing Service, the number of single family homes sales declined in December to 3,178!  Compared to last December 2006 we had 1865 less sales, and sold only 3178 homes.  That is a drop of 37% AND FROM 2005  WHERE WE HAD 5,463 SALES - A DROP OF 42% in single family home sales.

In condos in the month of December we had a 39% Drop in Sales from December of 2006 compared to 2007. From December 2005  with 101 sales it was a drop in Atlanta condo units sold of 43%.

Median Price has dropped 3.5% from the previous year, and  from the original List Price ( Home priced at previously) which really is the real List Price / Sales Price Ratio is 87.3%

Atlanta Expired listings - Single family detached had 8,128 expired listings in December, a new monthly record and 2007 saw 76,140 expired listings 20,000 more than 2006.  2007 saw 57,218 single family home sales, down from  68,853 sales in 2006.  Withdrawn single family home listings for 207 was 29,186. Expired listings, and withdrawn listings are exceeding sales almost 2 to 1!

It has been on the news all day today, if you awoke this morning and follow business... stock markets around the world are in total turmoil.  The "R" word for recession is leading the stock parade much lower.  How do you feel it will impact real estate?  The stock market futures for tomorrow portend a much lower open.  For those that have not witnessed these stock plunges in the past...they do have an impact on real estate fairly quickly.  Such market corrections of stocks spill over into real estate because it is the disposable income that fuels upper end purchases, and consumer confidence tugs away at the bottom!  People become more dollar consious, and worry about their jobs. 

A bear market can be defined technically as a stock market that asa  whole trades an average of 20% lower than the peak in the market index.  In 2002 the stock market Dow Jones Industrial Index moved a full 27% off the peaks in price. Our current DJIA market hit a peak of 14,198.09 in October 2007 and is now 14% off that peak and trading in a range of 12,099.30 with Dow Jones Futures pointing to an open 4.5% lower which would take the market to +/- 11554.83.  That is below the range the DJIA has traded in the 12000 for almost 5 years.

Since the US is not on the gold standard, our worth is called "Fiat!"  The dollar is worth what you believe it is worth or is based on consumer sentiment.  If your saving portfolio dips substantially you are less likely to go out and make a big item purchase.  This will affect the upper end sales more than anything.  Yes interest rates and mortgage money may be very affordable in the coming months, but buyer apprehension may tighten sales further.  This happened in all of the last major moves if the stock markets.  In my own life the quickest comeback of the markets was in 2001 - 2002.  Our real estate business was impacted, but our business did very well.  There will be an impact on real estate in the coming months whether we like it or not, but I would love to  hear your comments and assessments.  Since real estate as a whole is already suffering the impact will be like waiting for the other shoe to drop.

Tomorrow should be an interesting day on Wall Street, but how will it affect us in Real Estate?  Who will it impact most?  Bulls are optimistic the market will rise, and Bears will bet a market will decline because it is overpriced.

Woodstock Real Estate Market Conditions in Cherokee County Georgia:  Woodstock Georgia homes.  Woodstock Georgia saw 83 homes sales in November 2007 as compared to November 2006 with 110 single family homes sold the year earlier. That is a drop in sales of 24.54% in sold homes, and a 3.9% sales price increase* for November 2007 compared to the same time period a year earlier. November was the last full month of real estate statistics for reported closed sales in First Multiple Listing Service FMLS.

As of today January 20, 2007 there are currently 902 homes for sale in Woodstock Georgia in Cherokee County.  The average list price of a home for sale in Woodstock is $319,643.   72 homes in Woodstock are currently pending sale with an average list price of $222,421 and an average market time of 75 days on market. 

***Months of inventory may be much larger than it appears because many new homes are not included in the MLS to avoid MLS fees.

• November 2006 saw 110 homes sold with an average sales price of $222,452 - 68 Days on Market.

• November 2007 saw 83 homes sold with an average sales price of $224,305 -   70 Days On Market.

That is a drop in sales for Woodstock homes of 24.54% in units sold single family homes, and a .82% increase in sales price*. 

*Seller's must also realize that in spite of the prices rising modestly…the seller’s contributions to closing costs will actually net them a lower sales price.