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Category Archives: foreclosure

Lane’s Prognostications for 2011…

Saturday, 08 January 2011 08:24
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Real Estate = Big Money
Image by thinkpanama via Flickr

We’ll see how well I peg this.

Lane’s Predictions for 2011…

Looking back over the last year or two in real estate market reports, there are a few things that have been jumping out at me.

  • For over two years I have been hearing about the millions of homes in “Shadow Inventory”.  These are properties in the foreclosure process, or already foreclosed, that the banks are basically sitting on, waiting until “the market improves” before releasing them into the market.  I predict that next year there will STILL be people talking about the coming giant wave of Shadow Inventory. It isn’t that there isn’t a shadow inventory, but that we have dropped from over 10,000 homes on the market in Gwinnett County, GA to around 6,000.  Even for the overall Atlanta Metro area, we have gone from 120,000 homes to under 70,000.
  • The federal government has been borrowing unheard of amounts of money for the last few years.  Much of it has come from China and other foreign investors… but the deficit spending is not coming to an end, while the depth of the investment pool is…  Despite the best attempts of the Fed, Interest Rates ARE going to rise. Currently we are seeing rates under 5%.  I expect that we will be looking at closer to 7% by the end of the year.
  • Looking at the market reports, there are a few things that are VERY obvious.
    • Government Stimulus for the Housing Market only provides a temporary bump… and then it is worse than it was before, but there will be another wave of government intervention I hope I am wrong on this one).
    • The entry level market (under $200k) is well on the way to recovery… and that will continue. We won’t really know it until around September or October because it will be masked by the tax credits in 2010.
    • Meanwhile, it has been a rough ride for the luxury market.  And I don’t think we will see a meaningful recovery in prices for the Luxury Market (above $600k). There is a lot of downward pressure on this segment, and while there are some signs of strength, the best that segment can hope for is stagnation.
    • The “Near Luxury” segment (from $200k-$600k) will be mixed. It is also the market to watch for signs of permanent recovery.  I know that I will be watching the $200k-$400k and $400k-$600k segments to try to glean the health of the overall market.
  • I fully believe that unemployment (or rather employment) is at the center of the struggle in the Housing Market, and not the other way around.  Until the Unemployment rate drops, housing cannot really recover.  I don’t see Unemployment going under 9% during 2011. In fact, unless something changes radically, I don’t think it will even get that close (maybe 9.3%).

I’ll probably have a few more predictions before long…

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Wayback Wednesday… Fear/Greed and “the Deal”

Wednesday, 22 December 2010 08:44
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Figure 20 from Charles Darwin's The Expression...
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Two years ago, we were in the midst of the financial system meltdown.  real estate was looking bleak… and so was everything else.  Unemployment hadn’t really reared its ugly head.  It was swirling up, but still seemed manageable.

So, I thought that a blog about market psychology was in order…  And this isn’t just real estate.  The same holds true for any kind of market.

Fear and Greed

Those are the emotions that drive ALL markets.  Stop into the old post and take a look at the background.

In a nutshell, when fear overruns greed, markets expand.  When greed overtakes fear, markets contract.  Many are still fearing.  The market hasn’t recovered.  As the bubble was inflating, there was little fear… greed had full run of the emotional mind.

The markets will recover, barring some massive calamity like the currency market collapsing.  People just have to start being more greedy than fearful.

We need to keep a little of that fear in the back of our mind, too.  It will keep away the next bubble a little longer.

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Wayback Wednesday… Is NOW the Time to Buy?

Wednesday, 08 December 2010 08:57
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National Association of Realtors streetscape
Image by dannyfowler via Flickr

Listening to the NAR (National Association of Realtors®, it is ALWAYS the right time to buy.  If the market is going up, they pound the “buy the rising market” drum.  If the market is going down, they beat on the “buy into value” drum.  Frankly, I’m tired of it, and they have killed a massive amount of credibility by constantly trying to spin reality for “our” perceived benefit.

A couple of years ago this week, I was on Social Media Edge, on Blog Talk Radio, talking with Ken Cook about this very thing.  I’ve had my strong opinions about this for quite a while.  And, while for some folks, it is a GREAT time to buy, for others it isn’t.  I haven’t ever been shy about saying it, even when I have taken flak from my peers for not “cheerleading the market”.

On Social Media Edge, we talked for about 20 minutes about this.  Here is a link to the original post, and it has links to the Blog Talk Radio site, as well as a podcast of the broadcast.  Stop in, check it out.

If you are wondering if NOW is the time for you to buy, give Lane a call.  678-200-5895.

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Wayback Wednesday… Homes ARE Selling!

Wednesday, 01 December 2010 08:39
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This home is owned by a couple, who are writer...
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A couple of years ago I wrote about a deal on a property I ran across.  It was priced around $330,000.  At the time I said that it would have around $75,000 equity.  It sold for $300,000.  The most recent comps in the neighborhood have sold around $400,000 in the last couple of months.  Also of note, it was only on the market for about two weeks.

Since then, I have posted a couple of other times about properties that looked like good deals.  None of them were on the market for more than a couple of weeks… often less.

I have also been working recently with a buyer that made 7 offers before getting one through.  In 4 of those cases (at least) the properties were in multiple offer situations.  Our offers were close to (in one case… OVER) list price.  These were properties that were on the market LESS than a week. He wasn’t the only one… other buyers I have dealt with over the last year have been in the same boat… lots of offers and a lot of multiple offer situations.

Adam and Eve in the Garden of Eden
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So, in what is supposed to be THE worst housing market since Adam and Eve were foreclosed in the Garden of Eden, there are properties selling for OVER list price, within DAYS of coming on the market.  Of course, there are others that languish for months (or years) without so much as an offer… and barely a look.

If you are a seller, the secret is the price.  If you are giving it away, there WILL be a line.  A low price MAY actually start a bidding war… or it may not.  But price HAS to represent value to the buyer.

If you are a buyer, time may NOT be on your side.  Low prices and killer mortgage rates are pulling people in.  There is a good chance that the property YOU are attracted to, if priced right, will be attractive to someone else.  Make realistic offers (regardless of the list price).

Of course, a LOT more goes into it… if you need an agent that understands it, feel free to give me a shout.

Here is a link to the original post…

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Flashback Friday… Angry Yanks…

Friday, 19 November 2010 08:57
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Reo Speed-Wagon (the truck)
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Last year I was waist deep in dealing with buyers involved in REO properties (bank owned).  Oddly, I have been waist deep in the same process lately.

As mentioned in the older post, some buyers have to go through 6, 8 or 10 (or more) offers in order to land some of these properties.  And when the listing agent, or the seller, requires a pre-qualification from THEIR specific lender in order to offer on the property, that can add up to a lot of credit pulls for the potential buyer… possibly even enough to damage their credit.

The situation seems a little better… but only a little.  We are still running into a lot of bank owned properties that are requiring buyers submit to specific pre-quals from lenders that are either specified to by the seller, or friends/partners of the listing agent.

We have had a little better luck resisting this year, though.  Perhaps the banks are getting the message that this isn’t their best idea…

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