Atlanta Real Estate | Atlanta Housing News for Real Estate

This was an interesting week in our Atlanta real estate market.  We had several Atlanta listings for sale for quite some time, they were priced right to begin with, staged and prepped for sale, but in this market they just sat on the market.  As they sat, other listings, and more foreclosures came on the market and made it even more difficult to sell.  But this week we've managed to get 3 of our Atlanta homes under contract, and the battle is not over yet until we can close them.  This is in stark contrast to the Atlanta real estate market that spoiled all of us just last year.  This year it's different, but homes are still selling. Homes have to show well, be priced to sell, have the new paint, carpets cleaned.  When an a offer comes in the sellers do not have many options...there is just too much competition to get cocky.  Selling a home in Atlanta these days means that the seller may have to contribute to the buyer's closing cost, provide a home warranty, and throw in a termite retreatment repair bond to sweeten the deal.  If it is a Nehemiah deal, the seller may also be asked to give the purchasers a 3% down payment to get the deal closed.  Some of these listings have been on the market with other agents for over a year before we took the listing.  Another listing was no the market with us over 11 months, but they are under contract...because the sellers we realistic and willing to listen to all our advice and strategies.  This is a difficult real estate market, but you cannot throw up your hands and surrender to it!  Homes do sell, if you have a strategy and the perserverance needed for to effect a sale.  All you need is a professional with experience to guide you.

We just hit another milestone for Atlanta real estate today, but it may not be one worth bragging about.  Atlanta real estate FMLS Active Listings Hit All Time High!  Our primary Atlanta MLS - FMLS posted Active - 89225 Properties for sale in Atlanta today as I write this blog.  This exceeds last summers peak in the high 88K's.  The reason that there are so many homes for sale in Atlanta is that financing is harder to come buy, there are loads of forclosures due to all the sub-prime no money down mortgages that were so popular here for the last few years.  The more homes that do not sell also means that Atlanta real estate properties for sale will continue to grow by reason of accumulation of unsold properties.

• Active - 89225 Properties Found
• Active - 58478 Properties Found Single Family Detached Homes
• Active - 11680 Properties Found Condos / Town Homes
• Active - 3405 Properties Found  Land/Farm
• Active - 8437 Properties Found Residential Lots
• Active - 864 Properties Found  Multi-Family Dwellings
• Active - 3988 Properties Found Rentals
• Active - 2380 Properties Found Commercial Properties

  ====================================================

April 2008 Sales

• Sold - 3,564 Single Family Detached Homes
• Sold - 561 Condos/Town Homes
• Sold - 18 Land/Farm
• Sold - 35 Residential Lots
• Sold - 26 Sold Multi Dwelling
• Sold - 12 Sold Commercial Properties.

First of all I would like to qualify myself and a statistic addict.  My success is based on knowing as much as possible in my marketplace.  It is marketing 101.  There are a lot of things in the world that can tell you where your business and sales are going and they are free.  Sometimes, agents and even brokers ask me where do I get my information from?  First of all it is all free, and usually right in front of your nose.  Knowledge makes the difference in whether I want to list a home, pricing it correctly, advising a buyer or a seller.  To me it makes the difference between success and failure.  Why guess about the market if your can just as easily pull up the numbers?  Can you answer the following questions?  Does it matter?

1. The number of agents in your board?
2. The number of sold homes last month?
3. What is the absorption rate?
4. How many homes expired?
5. What is selling?  Condos, town homes, lofts, or single family homes?
6. How many are withdrawn from the market?
7. What did they list for?
8. What did they sell for?
9. How long did it take to sell?
10. How does that compare to last year?
11. What is the trend?
12. What percentage of concessions did the seller make?
13. What price ranges are moving?
14. What prices ranges are sitting?
15. What are people looking for?
16. Are 3 bed room homes more desirable than 4+?
17. Are new homes selling more than re-sales?
18. Homes that are under contract what do they have in common?
19. How many foreclosures in your market place?

Some loan officers I know have given us the heads up that effective June 1 there are many changes coming in mortgages and needed down payments via Fannie Mae New National Down Payment and Loan Policy Guidelines.  The new guidelines as I understand it are meant to supersede earlier guidelines written in December 2007 that were not working out.  As a whole, real estate prices are declining, and buyers were unable and unwilling to put up more money to purchase homes in this current market.  The new changes are meant to get things moving.  What is not mentioned in the proposed changes...are the changes that will apply to condos.  I would love to hear input from other loan officers and mortgage folks about how this will apply to condo units and their financing as it relates to these changes.  There are several areas I would like to hear about:

• Loan limits
• The amount of down payment that will be needed to purchase. 
• The rates that will be charge for condos. 
• The availability of condo conversion units financing.
• Condo unit financing / complex vacancy rates / percentage of rented units.

A lot of Atlanta home sellers only sell a home every few years, and really do not understand all that is involved.  Ever see some real estate signs that say" I buy homes!" Or "If I Can't Sell Your Home, I'll Buy It?"  Rule #1 Beware - there is no easy and painless way to sell a home!   So deceptive marketing is  really an ethical issue.  A lot of listing agents want to gain your confidence quickly and easily and list your home with them without hassle!  They do not want you to interview other agents.  What is the easiest way to do this?  Guarantee the sale! Rule #2 If it sounds to good to be true, it's too good to be true! 

Yes homes can be purchased, but you have to ask at what price?  Is .70 cents on the dollar acceptable?  What about .60 cents on the dollar?  What if the promise to sell your home is based on performance?  Guaranteed I will sell your home in 90 days, or I will buy it from you!  "For good measure, if you are not completely satisfied, I will give you your money back!"  Rule #3 Get it in writing, and have your lawyer review the agreement before signing! 

Wait a minute!  What money back?  Oh, the $1500 marketing fee or the listing service fee of $2800.  The fee is paid on the front side.  The upfront fee that guarantees the agent that they are making money whether or not your home ever sells this decade.  Think of it this way, $2500 X 100 listings = $250,000

It is my understanding from many state real estate license boards - the most common complaint they receive from disgruntled home sellers is that have signed up for these "Guaranteed Home Buy Programs"  - that the listing agent never purchased their home!  Gee what a surprise!  The home seller has just realized a valuable lesson, there is no free lunch in life, nor is there a light at the end of the tunnel.  You may have been had!

A regular real estate agent that is experienced takes all the risk when they list your home.  If they do not sell it, their marketing money is lost.   However, reputable agents don't charge you for their marketing expenses.  Selling homes is a numbers game, but it has a reward for the listing agents when the deal is closed.  All it takes to sell a home is a realistic seller that is willing to listen to the advice of a very experienced agent, and be willing to work with them to accomplish the goal.

In the past several years in real estate every home seller basically got their price, no one lost, and everyone won.  Listing agents postured and thought they were God’s gift to sellers...they weren’t.  They were just order takers for a real estate fix that was driven by 100% credit.  No money, no down payment, no problem!  No questions asked!  The result?  The sold prices rose because the demand was so high; no one felt they were risking their own money.  They used other people’s money, the bank’s money!  The nation saw exorbitant rises in home appreciation, in fact last few years saw the most appreciation in property value than the previous few hundred years.  It was a real estate market driven by greed instead of need.  The ensuing run up in prices proved to be unsustainable, and so too will the contraction for the loss of that entire pool of buyers that will most likely never exist again. As a nation we are being weaned from an addiction of EZ  Credit.

So during this period of euphoric rise in our credit bubble no one really negotiated anything.  Why should they?  It wasn’t as if it was their money they were spending.  The buyers had not worked overtime for a few years just to save up the down payment.  If they had saved the down payment, they would have negotiated the price.  It is only natural.  A buyer with a down payment would try to get the best deal possible to end up with as much possible equity as possible. 

However since this was not the case… for several years, prices just kept rising.  The sellers got their asking price, perhaps there was a little concession on a seller’s contribution to ward the buyer’s closing cost, or maybe all parties just agreed to bump up the price to cover the extras!  Neighbor bragged to neighbor, and the neighborhood resale prices went even higher.  In new home construction the prices rose even more exponentially.  Why would a buyer look at a home without granite or stainless appliances?  The builders were unwilling to throw in all the extras for free unless they had a loser of a product so how did they get around it?  Roll in the extras into the loan.  Unlike years ago you had to front the money for the upgrades, but that did not apply in the last few years.  If we were amazed at how fast prices rose, we have to be OK with the return to reality.  Get used to the return to a normal real estate market where buyers will buy with more of their own money in the deal, and sellers that are realistic will still make a profit as long as they do not get greedy.

This is a real estate market that many Atlanta sellers often turn to their listing agents and ask for advice.  More often than not  these are sellers that aren't as motivated as others, and are in denial on price.  Their bet is that they did a half ass job o selling the home, did not want to make any of the improvements the listing agents suggested, and have come up with a novel way to avoid the pain of making a real decision.  These are sellers that have an aversion for pain and risk.  There solution?  "What if we rented the home until the market comes back?"  My answer would be..."that depends!"  "depends on what?" the seller will ask.  My answer, "If you are a gambler or not!" 

The gamble in this real estate market will home and real estate prices hold or continue a gradual slide?  No one really has an answer, but one thing for sure if you have your money in hand, you are ahead of the game.  If you rent the property and rent it for more than two years and it was your primary residence you may lose your homestead exemption, US Tax exemption, and more.  Also in many states like Georgia if you move out of state and rent your property for more than 2 years you are now subject to A non residency tax.  The state will withhold 3% addition proceeds at closing for taxes. (Check with your tax advisor!)

The last portion of this is value.  Suppose it takes you several months to find a tenent, and then finally secure a lease of up to two years...what happens to your investment if real estate values continue to fall?  In the last few months of Atlanta real estate statistics home prices are now starting to fall.

The average price of Atlanta homes are dropping with the average price of condos & town homes in April '08 down 7.8% from April 2007's $ 8.2% for year-to-date, January-April 08. The average price drop in price for Atlanta single family detached homes are down 9.0% from April 2007 and 10.1% for year-to-date.*

Most new agents in the Atlanta area cannot bring themselves to be the bearers of bad news, but that is their job.  In some areas the numbers are not bad at all, but there are plenty of statistics to back up the data.  Sellers need to be realistic, and look only at most recent data from the last three months.

*Source FMLS statistics 4/2008

We receive a lot of calls from persons that want us to show our own listings but claim they have an agent that "Is sick...unavailable...busy...at a wedding...working etc!"  We do not have a problem with that.  "Just have your agent call us to make arrangements, and we will be more than happy to accommodate you."  There is only one problem with this...there is no other agent.  The buyer made that statement to totally disarm you the listing agent from asking them real questions.  They just want you to open the door for them.  They knew if they said they have an agent you would not ask:

 Do you have a house to sell before you can buy?

• Is your home currently on the market?  If so, with whom? 
• How long has it been on the market?
• Are you in a lease?  When does it expire?
• Are you approved for a mortgage?  By whom?  May I have their phone number?
• When were you qualified?  What amount were you approved for?

These questions are not intrusive or overbearing - these are the mark of a real estate professional that takes their career seriously.  New agents that are not comfortable with asking questions will think they can soft sell the caller and win them over.  They cannot!  It is a game where the caller already planned to perpetrate a lie, and for what purpose?

1. Are they casing the home to rob it later?
2. Are they planning to rob you or rape you?
3. Are they really just nosey neighbors?
4. Are they bored and curious and have nothing better to do today?

We have an obligation as real estate professionals for only show qualified buyers homes.  We do not know wo they are, nor do we know what their real motives are.  Not everyone needs to be allowed in someone elese home, especially when they have no right to do so, or have lied to you initially!

Every day in the news there is something said about the health of the economy.  There are loads of pieces to the puzzle, and everyone is trying to pitch their spin on the events.  There are so many facets to the economy...real estate, stocks, bonds, housing, oil, gold, international markets, manufacturing, transportation, factory orders, trade, commodities, financials, consumer confidence, and so much more.  The problem is that there is never anyone that has the vision to look at the big picture and call the shots.  However, this  week Warren Buffet who is a multi-billionaire and has his hand in just about everything made a statement that for the most part went unnoticed.  When interviewed by Der Spiegel Warren Buffet shared his views is the US is already in recession, and unlike others he feels this is going to be a long deep recession.  However he also mentioned that he was still investing, and still buying!  To me that makes sense.  There are more millionaires made in a declining market than those that have lost their status.  Baron Phillipe Rothschild once was quoted when he urged others to buy was "when there is blood in the streets."  Sometimes...when we are at a time when there are no other buyers going in, it makes sense to do so.  One should sell when the market is at its peak of euphoria and buy again at the lowest ebb of pessimism.  What are your thoughts?

I is amazing what you read in an MLS entry, and sometimes it is a wonder that anyone would come to see the home.  The listing agent places in items like "EZ-Sale...Easy Terms...Lease Purchase Available...Please Note Commission,  and  last but not least...To show is to sell!"  Too bad the homes have been on the market for almost 2 years!  You wonder if the seller even read the MLS printout.  Many of hte entries are ambiguios at best.  One I read this evening mentions "Pictures do not do the home justice!"  And guess what?  No pictures!  I thought I would post a few comments for you to read.  I had to change them, but left their intent in tact so you'd get the jest.  You really have to wonder if some comments do more harm than good!   

1. 1 % SELLING BROKER BONUS WITH ACCEPTABLE OFFER OR CLOSING ON OR BEFORE 3/31/08.
2. Subject to 3rd part approval.As Is. Seller have RE active license.
3. Bring all offers, owner is builder and must reduce inventory.
4. GOLDEN RETRIEVER WILL BARK IN WELCOME & BEGIN WAGGING TAIL-DOG BISCUITS AVAILABLE FOR BRIBERY-2 HOURS NOTICE WILL ASSIST IN REMOVAL OF DOG
5. Owner wife speaks little English, be patient
6. PRICED TO SELL BY RELOCATED OWNER/AGENT
7. Owner agent. Courtesy call agent, VACANT 
8. DOGS WILL BARK - CALL AGENT IF CONCERNED.
9. IF WE CAN GET IT UNDER CONTRACT BY 5/31/08. PROPERTY MUST CLOSE IN ORDER IN ORDER TO RECEIVE BONUS.
10. OWNER WORKS FROM HOME, LARGE DOG AT HOME
11. POTENTIAL SHORT SALE
12. PRICE REFLECTS SELLER'S EAGERNESS TO MOVE AND NOT AN INDICATION OF QUALITY OF HOME OR DIRE SITUATION.
13. commission subject to banks approval
14. ABOVE GROUND POOL CAN BE REMOVED.