Archive for the 'Foreclosures' Category
Luxury Home Builders and Home Buyers in Alpharetta and Milton - The Chicken or the Egg?
categories: Alpharetta Real Estate, Foreclosures, Milton Real Estate, New Construction
I’ve written several posts in the past about builders who are buying up developed lots in Alpharetta, Milton and Cumming out of foreclosure and building homes in the lower price ranges. It makes perfect sense, with the tax credits and persistent demand for new construction among buyers. Home buyers almost always gravitate towards new construction, given the chance. In communities where homes may have sold in the mid $300’s in the past are selling in the $190’s - $210’s and comparable homes can be built in those price ranges because the builder has a lower cost of entry into the community and materials are cheaper now as well.
But what about those communities where homes were originally selling in the $800’s to well over $1 million? Construction stopped a long time ago, lots are in foreclosure, there may be an inventory of homes (that have been standing for quite a while); and home owners who may have purchased earlier on are way upside down. The list is long, but a few are The Manor Golf and Country Club , Valmont , Echelon , The Oaks at Crabapple , King Estates Manor , Blue Valley , and Kingsley Estates .
20 Months of Inventory
There are 195 homes on the market in all of North Fulton, listed from $800,000 to $1.5M, 119 in that price range sold last year. The demand for luxury homes has waned a bit, but not vanished. Credit is tighter and qualifying for a home in that price range is significantly more challenging but not impossible. The rub is when a home buyer looks at a community that has been frozen in time and asked, "is it safe for me to buy a home here? What will they be building down the road, and when?". Which brings me back to the main question posed in the title of this post, who will come back first, the Luxury Home Builder or Home Buyer?
What if a Builder started building homes in one of those stalled communities? Would you as a buyer feel comfortable purchasing one of those homes or are you going to look for something a little older but in an established community? For me, it would depend on a few factors. First and foremost, who is the builder? What price range are they building in now, compared to the existing inventory. And what is the product they are building? Are there covenants in place that will dictate size, exterior materials, etc.? What is the vision for the community and is that vision different than what was started? If it is, that’s not necessarily bad, but it should be considered.
As more builders buy foreclosed lots or decided to start selling homes on the lots they currently own (at lower price points) these questions will come up from buyers. It’s not a situation buyers need to stay away from necessarily, just proceed carefully and with good advice from a local advocate. Tell me what you think, I want to know.
Posted by Bob Strader | Currently No Comments »
Alpharetta Real Estate for 2010: What will the future hold?
categories: Alpharetta Real Estate, Crabapple, Foreclosures, Local Market Conditions, Metro Atlanta Statistics, Milton Real Estate, New Construction
It’s a question buyers and sellers ask almost every day, especially in a market like this, but at the end of the year people look forward to that new beginning. For a brief period of time it’s like the slate gets wiped clean on January 1st. Anything is possible and we look for signs of what may come for Alpharetta real estate. I always say, in order to know where you’re going it helps to know where you’ve been. Looking back over 2009 might not be a pretty picture, depending on your perspective, but it’s telling.
Ouch : Sales declined through most of the year and Sellers really took it on the chin. And builders took it even harder. It’s tough to compete though when almost 40% of all homes being sold in the first 2 quarters were foreclosures or short sales. For those that could take less and get out, they didn’t like it but felt like they made it out. For others, they had to stay put or take a loss. Never before have I seen so many homes available to rent, which was a good alternative for many sellers out there that had to do something.
Cha-Ching : While Sellers were getting beat up, Buyers where cashing in. For those in a position to buy, the real estate deals were plenty and the banks had their shelves stocked with goods. First-time home buyers and renters were in the envious position of not needing to sell and having plenty to choose from. Still, competition was stiff for foreclosures. Banks started the year pricing at the old market value but later realized that aggressive list prices brought multiple offers fast and sales prices that were over list. They were still good deals but the time on market was reduced significantly. The tax credit did it’s job and continues to do so until it expires next year. Inventory levels were reduced quite a bit and now we are seeing an increase in homes sold year-over-year. Comparing November 2009 to November 2008, the number of homes sold in Metro Atlanta are up 52% and for North Fulton, they are up 82% .
Bye Bye: No, all the deals aren’t gone but they are slowly fading away. The expanded tax credit will continue to help but I’m seeing the mindset has changed with both buyers and sellers. At the beginning of the year Sellers were still amazed that a home reduced by $100K could still be on the market and Buyers were amazed it hadn’t been reduced more. Now sales prices have come down further, Sellers except much of the current pricing as market value and Buyers are not willing to spend months looking for that spectacular deal because they are slowly disappearing.
Looking Forward : We will see a higher than normal level of activity for the first 4 months while the tax credits are still in effect. This will help continue to reduce inventory levels and we will continue to see the number of home sold year-over-year go up. Sales prices will flatten out for most, and begin to increase in small pockets of demand and sought-after communities later in the year. The 400 corridor is well positioned with great schools and businesses that are still moving employees into the area.
New construction starts, which showed up in the 4th quarter of 2009 will widen through 2010 due to an abundance of developed lots at bargain prices. Forsyth County will lead the pack here, mainly because builders will be able to buy lots and build in lower price ranges to a greater degree than in North Fulton, but we’ll see that in North Fulton as well. Knight Construction is selling out in the Cumming community of Union Station, which is no surprise as first-time buyers typically gravitate towards new construction when it’s available. I suspect new homes in Crabapple and Milton will have the most opportunities.
Foreclosures will be present for the next couple of years (no surprise) but banks will continue to roll them out slowly keeping competition for them fairly high. Also, thanks to the banks, Short Sales will remain an excruciatingly painful and slow process (thank you Bank of America). Interest rates are anybody’s guess but until unemployment comes down to a respectable 7 or 8% then they will have to remain reasonably low.
How do I know it will all turn out this way? I have inside information that "It is decidedly so".
Posted by Bob Strader | Currently No Comments »
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 »
“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.
Posted by Bob Strader | Currently No Comments »
Atlanta Real Estate Turns Up in July
categories: First time home buyers, Foreclosures, Metro Atlanta Statistics
All the lagging numbers aren’t in yet but for July 2008 there were 4451 single family homes sold in metro Atlanta. Right now, for July 2009 there have been 3738 homes sold with an additional 1444 homes in pending status which were scheduled to close in July - bringing the total closings to potentially 5182. If all of those pending transactions actually closed in July then that would represent a 16% increase over the previous year.
Now, some of those certainly got shifted to August closings so the actual number will come in lower than 16% but July has shown us the first year-over-year increase in the number of sales in over 3 years.
A majority of those transactions can be attributed to a combination of first-time home buyers and foreclosure sales. In fact, foreclosures and short sales made up 31.8% of all metro Atlanta homes sold for the 2nd Qtr. of 2009. While this isn’t a surprise, what might surprise you is that percentage of foreclosure sales is lower than 1st Qtr. 2009 which was almost 37%.
This can partially be attributed to demand but also, many banks have been slowing the foreclosure process to determine what changes may take place with loan modification rules. So, the 64-million dollar question is, “how many more foreclosures will hit the market and when?”. There certainly is an appetite for distressed properties but with currently inventory levels going down, an onslaught of new foreclosures could slow us up again. Inventory levels for single family homes haven’t been this low since the end of 2006.
There is hope that the first-time home buyer tax credit will be extended beyond the December 1st deadline but as of right now that is still the deadline. The bottom line is that while deals continue to present themselves, we’ve definitley bottomed and have started what I think will be a slow but steady recovery for the local real estate market. Tell me what you think…
Posted by Bob Strader | Currently 1 Comment »
North Fulton Buyers Running Out Of Homes?
categories: Alpharetta Real Estate, Foreclosures, Milton Real Estate, Roswell Real Estate
OK, we’re not exactly running out of homes. I did want to get your attention though because the inventory of single-family resales are the lowest they have been in more than 2 years. And, foreclosures seem to be selling like hotcakes in North Fulton. I pulled some quick numbers of inventory levels at the end of June for this year and the previous two years, take a look:
| June 2007 | June 2008 | June 2009 | |
| Active SF Resale Listings in North Fulton | 2024 | 2279 | 1970 |
While nearly 2 thousand homes sounds like a lot, keep in mind that the area I looked at is all of North Fulton both west and east of Hwy 400. This area includes Roswell, Milton, Alpharetta and Johns Creek. Another interesting note is how low the percentage of resale listings are foreclosures in North Fulton. Take a look below:
| Total | No. of REO | % REO | |
| Active Listings in Metro Atlanta | 43412 | 4442 | 10.2% |
| Active SF Resale Listings in North Fulton | 1970 | 63 | 3.2% |
Compared to all of Metro Atlanta, North Fulton has a pretty low percentage of bank owned properties. The reason for that could be the fact that North Fulton Schools remain in high demand. Most buyers out there are looking for deals so the foreclosures get snapped up more quickly. So, if you are looking for a foreclosure in this area, don’t waste too much time thinking about it.
But on the flip-side, if you want a well maintained, move in ready resale and you are looking in a very specific area or school district - there may not be as many out there as you think. Sellers offering more for less (a home in perfect condition and priced well) should be able to move their property in a reasonable amount of time.
Case in point: I listed a home in the Highlands at Park Bridge community on June 12th (about 3 weeks ago) and put it under contract on July 3rd. They had the home in perfect condition and the sales price was exactly where I thought it would end up - so there were no surprises for anyone.
Posted by Bob Strader | Currently No Comments »
Bank Foreclosure Gets It Right
categories: Buyers, Foreclosures
Or maybe the title of this post should be “Creating demand in a tough market”.
I have an investor client that has been looking at everything that hits the market in his price range, waiting for that great deal, like almost every other buyer seems to be. Occasionally a listing will hit the market at a great price and this one did. A nearly new foreclosure home in Canton that was priced at 88k, 12k below the most recent sale.
Now, $12,000 doesn’t sound like much but in that price range it is significant. Within hours multiple offers were submitted and that bank asked for “highest and best” from everyone. We raised our already-over-the-asking-price offer even higher. While I don’t yet know what the final accepted price was, we do know it was far in excess of the lowest comparable in the community.
So, what is the take-away here? Well first off, if you are a buyer looking for a deal and didn’t realize this already - EVERYONE is looking for the same deal you are. So be ready for it when it shows up, and when it does-move on it.
But the other take-away is that there are buyers out there and they will move when motivated. For sellers, it’s all about price and condition. It’s not always true to say “if I price it that low then the offers will come in even lower”. They may come in lower but if you are priced attractively against your competition, there will be demand and there will be offers. I would rather say no to 4 low offers than get no offers, what about you? What you have to ask yourself as a seller is “Can I sell at an attractive price?”.
Posted by Bob Strader | Currently 1 Comment »
The Foreclosure That Is and Wasn’t and The Foreclosure That Wasn’t and Is
categories: Alpharetta Real Estate, Foreclosures, Luxury Homes, Milton Real Estate
MILTON - There is a house in Highland Manor pictured on the left; you may have seen it. It’s the first house on the right as you pull in.
It has been on and off the market for the last two years. It was the last lot sold in the neighborhood a number of years after all the other lots were built. A builder who builds over in The Manor bought it and built a spec home which he wasn’t able to sell. That was a couple of years ago. The house was listed then at $820,000.
It is a great house as far as houses go. The builder does a very nice job: huge kitchen and keeping room, top of the line cabinets, amazing ceilings, spiral entrance stair case, beautiful floors and trim, four-sides brick and stone, cedar accents, large unfinished terrace level basement with lots of windows.
The problem has always been that it suffers from FHOTR syndrome. That is, First House On The Right, which means that the side yard abuts to Birmingham Road. While the location of the house in terms of the traffic is not ideal, the lot is level, which can’t be said for many lots in Highland Manor and there is a row of Leland cypress planted along the road to provide privacy. When inside the home, you don’t hear any street noise at all.
This house is listed in the MLS as a foreclosure. The thing is: It isn’t.
Yes, the builder, who has been living in the house himself to cut expenses, is very motivated to sell. The price has been reduced to $599,000 and I dare you to find as nice of a house for $600,000 within Milton. But it is NOT a foreclosure.
I asked the listing agent why it was listed as a foreclosure and he told me to "try to generate some interest for the seller." No doubt it is working because every buyer seems interested in foreclosure properties. But is this fair play. I joked with some fellow realtors a few months ago that we all ought to list our properties are foreclosures even though they weren’t … this guy has actually done it.
Regardless of the ethics of this marketing maneuver, never fear. The house will be a foreclosure in short order no doubt. Why would someone who is interested in buying the house deal now? The distress has been advertised. Why not wait until it actually forecloses and then try to get an even better deal?
Do you think this marketing technique is cleaver or is bound to be counter productive? If you like the house, though, and you can deal with the lot, we should take a look because someone is going to get a steal of a deal eventually.
The House that Wasn’t Listed as a Foreclosure But Is
Then there is the case of the actual foreclosure that wasn’t properly marketed in my opinion.
The picture on the left is not the house, but the barn. This is a 5-acre horse farm / french country estate for LESS THAN A MILLION DOLLARS ($949,000 actually) on Wood Road.
Wood Road is a dirt road running between Freemanville Road and Birmingham Highway. There are numerous family horse farms dotting the country side along Wood Road and a community of its own.
If I could chose any place to live in Milton, it would be either Wood Road or North Valley. I don’t even own horses and I love Wood Road and often cut through just so that I can enjoy the scenery.
So, I repeat, 5 acres, 6 bedrooms / 4 baths, French county estate, working horse farm, all-season riding ring. The barn is nicer than many houses. Check out the picture below to see how comfortable that horse looks.
This house was not marketed as a foreclosure in MLS. The only way I found it was accidentally in the tax records.
Now the listing agent had put some remarks in the comments section noting that it was a pre-foreclosure and to "bring all offers," but the buying public can’t search on that field and agents generally don’t know how to.
The best thing to do in a pre-foreclosure situation, and this is becoming common practice with agents, is to go ahead and list it as a foreclosure. The criteria for a pre-foreclosure would be that a short sale has been agreed to by the lender and/or the property has been advertised for foreclosure and a courthouse sale date set. This house met that criteria; the house in Highland Manor does not as far as I know…yet.
This horse estate where humans also get to live is not currently on the market now that it has foreclosed. I’m sure it is in the process of being relisted by the bank and will be coming back on the market shortly. For some horse-loving humans and human-loving horses, this is going to be a fantastic future home at a fraction of what you could buy this sort of property for two years ago.
I can hear a horse now living in some drafty barn prodding her owner to call me go take a look. Come on, your horse is worth it.
Posted by Kevin Warmath | Currently 2 Comments »
