Archive for October, 2009
Where is the Real Estate market headed?
categories: Alpharetta Real Estate, Crabapple, First time home buyers, Foreclosures, Local Market Conditions, Metro Atlanta Statistics, Milton Real Estate
It’s hard for homeowners and buyers to know where the market is headed because there are so many conflicting reports out there about what is happening. Depending on where and from whom you get your information things can look like they are improving or getting far worse.
Nationally
The NAR reportsthat there is a big rebound in existing home sales nationally, with first-time homebuyers driving much of those numbers. Their report says: “Existing-home sales–including single-family, townhomes, condominiums and co-ops–jumped 9.4% to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.10 million in August, and are 9.2% higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in over two years, since it hit 5.73 million in July 2007.”
To be sure, first-time homebuyers have been on the hunt with the impending expiration of the first-time homebuyer tax credit. They have been driving sales numbers in the $250,000 and below price ranges. An extension and potential expansion of that tax credit would help broaden those numbers and that would be a good thing.
Metro Atlanta
However, Steve Palm from Smartnumbers says “Closings for all single family had a large 16.8% year-to-year decline for September”. He goes on to say that he doesn’t think it is an issue with the recent flooding or some lenders being taken over by the FED but it’s more of a liquidity issue-there are no loans available for some buyers.
The good news is that inventory levels are down quite far, with 47,000 single family homes available for all of metro Atlanta. This is on par with inventory level in January of 2006. Another good bit of news is that the percentage of sales that are foreclosures is dropping, as you can see in the following chart:
North Fulton Real Estate
So, what is the story for us here in North Fulton, specifically Alpharetta, Johns Creek, Milton and Roswell? Well, for the cities listed above, here are the units sold and average sales prices over the past 5 Septembers:
| Sep-05 | Sep-06 | Sep-07 | Sep-08 | Sep-09 | |
| # sold | 352 | 205 | 218 | 179 | 195 |
| avg. SP | $401,161 | $400,030 | $409,002 | $414,729 | $359,328 |
The average sales price for our area is only down around 12% - 13% over the past 5 years which is far less than the metro Atlanta average of 20%. I would describe our local market status as stabilized with signs of improvement. It’s kind of like a “statistical recovery”. The numbers are pointing in the right direction but nobody really feels like it’s improving yet.
Posted by Bob Strader | Currently No Comments »
An Un-Insurable Home?
categories: Alpharetta Real Estate, Milton Real Estate, Miscellaneous, Roswell Real Estate
Well…sort of.
I learned something new yesterday and I have to admit, I still can’t believe it’s true. We have a buyer under contract to close on a foreclosure by the end of the month. Of course, with foreclosures you have the ability to perform an inspection but typically they are purchased as-is. Banks usually won’t make repairs. Prior to the closing one of the last things on a buyers list that usually gets done is lining up their home-owners insurance. By the time buyers get around to contacting their insurer we are well past all the due-diligence and contingency periods.
Shocked!
So, we all were quite amazed when the buyers insurer told them that there was a previous claim on the property for a new roof, which was paid out to the previous owner. No proof of repair was ever provided to the insurance company so the claim was still “open”. Because of this, the buyers insurer said there was pre-existing damage that had been paid on and they would not insure this home. That’s right, they would not insure the home. After checking with other insurance providers we realized that this was the answer we were going to get everywhere.
The sort of part….
What they will do is provide insurance but the repairs must be completed within 60 days of closing. We’re in the process of negotiating with the bank to reduce the sales price of the home by the amount of a new roof and we feel pretty sure that we’ll get that amended. But I have to believe there are more than a few homeowners out there who took some insurance money without making repairs. In any case, this is something that will need to be clarified during negotiations moving forward and some well crafted stipulations will be added to our contracts.
This was news to us and I thought it might be news to you. Has anyone run into this before?
Posted by Bob Strader | Currently No Comments »
Increase The First-Time Home Buyer Tax Credit and Extend it to Everyone
categories: First time home buyers, Local Market Conditions, Stuff I like to talk about
I know, the title of this post sounds completely self-serving. You’re saying “Of course a Realtor wants the tax credit extended, oh, and even increased in size”. Here me out though.
Like it or not, both administrations passed stimulus bills to the combined tune of about 1 trillion dollars. There is no shortage of opinions on whether or not the bills were good ideas. My argument is if we are going to do something (and I think we should) then where should that money be spent. So far, according to ProPublica, a site that tracts stimulus spending, the government has spent about 19% of the most recent $792 billion dollar bill.
Economic Dollars Spent as of This Week:
- $111 billion spent
- $146 billion in process
- $324 billion left to spend
- $63 billion in tax cuts issued
- $150 billion in tax cuts remaining
Now, I’m not saying that because it’s there we should spend it all but I agree with many who are of the opinion that what has been spent so far isn’t delivering the intended effect. I think the question we should be asking is “what is the best use of those stimulus dollars?”
First, I believe that reducing home inventories will help the housing market recover which is right up there with job creation in helping the economy recover. Secondly, I don’t believe in letting the markets do their thing, on their own, with the idea that how it all falls out will be better. That line of thinking is right up there with the people who don’t believe they should vaccinate their kids. If you’re sick, you go to the doctor. If you have the flu, take an antibiotic. We wouldn’t be good stewards of our economy if we didn’t try to lessen the impact or speed the recovery of the economic crisis.
Why do I think an expanded home buyer tax credit will have a more profound impact?
Let’s start with the current first time home buyer tax credit that is set to expire on December 1st. It’s had a firm impact and has worked in spurring home purchases, in the lower price ranges mostly. These buyers did not just suddenly become capable of purchasing a home. But why haven’t they taken advantage of deals that have been available over the past 12 months? There are many buyers in a position to buy but are concerned about where their market is heading. Or they have perceptions that they’re going to get an already aggressively priced foreclosure for another 50% off - they get mired in searching for an unrealistic “deal”. The tax credit incented them to move forward now.
Buyers in other price ranges will respond to that same incentive that first-time home buyers did. They’ll want to take advantage of a tax credit opportunity while it’s there. Those home purchases will allow sellers to move and buy. It will spur purchases of durable goods like refrigerators, washers, TV’s etc. The National Association of Home Builders estimates that extending the program would create more than 347,000 jobs, generate over $16 billion in wages and over $12 billion in business income.
It’s a topic that can initiate a lot of arguments but I’m curious to hear what you think.
Posted by Bob Strader | Currently 1 Comment »
“I’m looking for Foreclosures, I want a deal”
categories: Alpharetta Real Estate, Foreclosures, Milton Real Estate
Why can’t I find a $250,000 home for about $150,000?
I’ve had more than a few people ask me this question lately. There are still a lot of home buyers looking for great deals but they all seem surprised when they aren’t finding many foreclosures out there. Sure if you just search for any foreclosure in North Atlanta then a lot of homes will come up, but most people are looking for deals in specific communities or school districts and they are finding the choices somewhat limited.
Here’s an example looking at 5 large communities in North Fulton County:
| Community | Active Foreclosure Listings | Sold Foreclosure Listings YTD |
| White Columns | 0 | 4 |
| Crooked Creek | 0 | 1 |
| The Manor GCC | 3 | 6 |
| Fall of Autry Mill | 1 | 1 |
| Six Hills | 0 | 3 |
The chart above clearly indicates that foreclosure listings are moving fairly quickly. The banks aren’t having a hard time moving these properties. As of this post there are 57 active Foreclosure / Bank Owned properties listed in Alpharetta / Milton in North Fulton. There are 153 bank owned properties currently under contract or sold so far this year. That sounds like a 100 day supply of inventory.
How can this be?
I know, everyone keeps hearing on the news or reading that the foreclosure crisis is far from over. Here in Georgia we are a non-judicial foreclosure state which basically means the lender doesn’t have to sue you to take the home back. So, after being 90 days behind they can advertise your home in the paper for 4 weeks and then sell it on the courthouse steps. I’m hearing about people who are behind by 8 or 10 months, some even a year and the process hasn’t started. Before the crisis this was unheard of in Georgia.
Banks are too swamped with current inventories nationally and with people trying to get loan modifications. The foreclosures that do go on the market get priced very aggressively (generally) and often sell for over the asking price. The banks are dragging their feet on new foreclosures because having the owner in the home and taking care of it is better for them. If the bank eventually forecloses they may be able to sell it for more when the market improves.
Smart buyers make realistic decisions.
So, what does that mean for the buyer looking for a deal? It’s fine to look for a great deal but remember, you’re going to be living in the home too. Have your Realtor explain the market, this isn’t Detroit or Las Vegas. Don’t get distracted looking to pay $150,000 for a home worth $250,000 - you won’t find it. Instead, make sure your realtor looks at current comps and compares those to the market last year and gives you a realistic idea of where the market is heading now. If you can buy at 20% - 40% off recent market values you ARE getting a good deal.
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Crossroads at Crabapple Antique Fest Gets Bigger and Better
categories: Crabapple, Miscellaneous
This past Saturday was the Crossroads at Crabapple antique fest and what a perfect day it was. As I understand, it was started in 1969, but I have been coming for the past few years and it really has grown into a great event that the Crabapple community can be proud of.
Apparently there were over 50 juried artists and as many antique dealers with a wide display of furniture, art and collectibles. There were also great local artists playing bluegrass and country music. Local Boy Scout and Girl Scout troops were there selling food to raise money and the Olde Blind Dog Pub was selling their famous Irish Stew and Corned Beef as well!
Crabapple continues to create a great community atmosphere with unique and original shops and restaurants. It is no surprise that many people moving into area choose to live in and around Crabapple.
Posted by Bob Strader | Currently No Comments »
