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Category Archives: investment

What Can “Fix” Housing?

There are still a few politicians, and a lot of real estate professionals talking about the government “fixing” the real estate market.  But the question is…

Is there a way or a role for the government to fix the housing market?

We’ve seen a substantial tax credit for purchasing a home, both for first time buyers and for existing (hopefully) move-up buyers.  And we’ve seen calls for more of the same.  But at the same time, there are a lot of experts that don’t think that the tax credits created many sales that wouldn’t have happened without them.

Even $8000 isn’t that much of a motivating factor for someone to make a $150K+ purchase.  And most of the people that took advantage of the tax credit were only hastened by the tax credit, not created by it… in other words, they would have purchased the home anyway, only their time-table was altered… in many cases, only by a couple of months.  Looking at past sales, it is obvious when the credit expired.  Sales increased at a rapid pace, and then dropped precipitously as the credit expired.  Sales remained well under par for many months after the credit expired.  Some economists estimate that the $8000 tax credit had a cost of over $44,000 for each sale it “created”.

There are other ideas floating around on Capitol Hill about ways that the federal government can spur housing sales.  And there are a lot of folks… especially in the halls of the National Association of REALTORS® that feel that housing needs to come back in order for the economy to rebound.

I think they have it backwards.  In order for real estate to rebound, people have to feel secure with the job market.  How can someone be expected to make a 30 year plan (getting a mortgage, for example) when they are worried about their job in the next few months?  So, focusing on job creating, especially by smaller businesses, and removing impediments to starting or expanding small businesses would do wonders.  Instead of tax credits focused on housing, tax relief for people starting businesses would do more for the housing market.

What do you think?

Buford, GA, Market Report, September 2011

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Market stats for Buford, GA, September, 2011 indicate that there were 506 properties on the market. Overall, there was about an 6.6 month supply of properties (Absorption Rate or A/R).  There were 79 sales for August, up slightly from 75 last month and up significantly from 52 from last September (2010).

In the sub-$200k arena, there were 270 listings, with a 4.7 month supply.  This is the largest price segment in this market area, so strength here usually equals strength across the whole local market area.  Sales were down slightly from last month (55 v 56), but impressively strong compared to last year (33 sales in September, 2010).  Framed in the results for the whole market area, the segment is reasonably strong.  And the A/R is well under the 6 months that would be considered fairly balanced… pointing towards a seller’s market.

Between $200k and $400k, there were 175 listings for sale, and about  10.7 months of supply.  The 18 sales recorded were slightly above the 17 from last month and the 17 sales last year for September.  As strong as the Under $200k segment is, this one is MUCH weaker.  It is one of the weaker areas in the county for this price.  Of course, last September, the A/R was just over 17 months.

From $400k to $600k, there were 37 homes on the market. The absorption rate is 1.3 Months.  There has been 9 sales in the last 3 months (6 sales for September, 2 for August, 1 for July).  When the market is rolling, there should be 5-7 sales a month during this part of the year.  This is the first time in a while that we have been there.  This segment had been acting like a luxury segment with sporadic sales for the last few months.  I’d really like to see a follow-up with 4-5 sales for October.

In the $600k to $800k arena, there were 5 listings.  Absorption Rate is 15 months… but it jumps around a lot.  Sales in this range are pretty sporadic, but steady when looking at the long-term.  The drop in inventory over the last few months from 14 homes to 5 homes has made things look less slow… but there have been 5 sales in this segment in the last year… the last was two months ago.

The range from $800k to $1m, there were 11 homes listed. And with only 2 sales in the last year (December, 2010), obviously  trends are hardly definable.  Listings are up, but sales aren’t following, though.

Above $1m, there were 9 properties listed.  The last sale in the segment was in April… of 2009…and then there was May… and 2 sales in June.  FINALLY, new sales!  So, we have 13.5 months of inventory.  I hope, but am not expecting, sales to be more consistent.

Buford, GA is a suburb of Atlanta in Gwinnett and Hall Counties. The population is 2000 was 10,668, but that only included the area inside the city limits, and it had seen tremendous growth since that census.  Buford is home to Lake Lanier, one of Georgia’s premiere recreational areas, and Lake Lanier Islands.  Recently, the City of Buford has revamped their old town. It is also home to Buford (Buford City Schools aren’t a part of Gwinnett County Schools), Mill Creek, Mountain View and Lanier High School (Lanier will open for the 2010-11 school year).

I have a page dedicated to Buford Market Data.

Atlanta Metro Zillow Home Value Index

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Sugar Hill, GA, Market Report, September 2011

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Image via Wikipedia

Market stats for Sugar Hill, GA , September, 2011 indicates that there are 199 homes on the market. Overall, there is about an 5.8 month supply. There were 27 sales, compared to 33 last month and 17 last September. The Absorption Rate (AR) dropped, but that is partly due to a declining listings.

For Sugar Hill homes priced under $200k, there are 145 listings, with about 4.7 months supply. There were 25 sales this September, 2½ times the number from last year for the same time (9). Last month there were 31 sales. Inventories have been fluid, rising and falling. Normally, this time of year we see inventories leveling out.

Sugar Hill Listings between $200k and $400k, there are 45 listings for sale, and about 11.3 months of supply. Last September there was an 11.5 month supply. Last September there were 7 sales, this year there were 2. Last month also had 2. This segment is acting opposite of the under $200k segment, as well as opposite of stronger areas like Suwanee ($200k-$400k).

For listings in the $400k to $600k range, there are 5 homes on the market. The absorption rate is around 15 months, but with 4 sales since last October, it is tough to calculate accurately. Obviously, a sale or two could make a BIG difference. There were only 3 sales in this segment last year. In 2009, there were almost twice as many sales in this price range. I still hope to see some consistent activity in this segment.

In the $600k to $800k, $800k to $1m and Above $1m (combined), the sales are too inconsistent to have a solid read on, but there are only 4 homes listed for sale in that price range. No sales have been recorded in the last 2+ years.

Sugar Hill, GA is a suburb of Atlanta in Gwinnett County. The population is 2000 was 11,399, but that only included the area inside the city limits. The name comes from a bag of Sugar that spilled on a hill while in transit between Cumming and the railroad in Buford. And while it is actually a big market, it is in the shadows of Lawrenceville, Duluth and Suwanee… which all are nearby. That also makes it a great location, as it is close to everything that Gwinnett County, GA has to offer.

I have a page dedicated to Sugar Hill Market Data.

Atlanta Metro Zillow Home Value Index

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Wayback Wednesday… Median Home Prices

Three years ago I wrote about a quiet little map that the NAR (National Association of REALTORSS®) had built (and they’re still populating with data) showing the median home prices of various metro areas around the country.  It is pretty interesting to see median prices around the country and compare them with the prices here (or where you live).


View Metropolitan Sales Areas Q1 2011 in a larger map

There is a dark side, though.  That would be looking at the numbers in historical perspective.  Here is a quote from 3 years ago:

For the 2nd Quarter, the Atlanta area was at $158,300, which was down 9.8% from the 1st Quarter.

Now, the Median Home Price here is a little more challenging.  For the 1st Quarter this year the Median Home Price was $99,800, and that was down 9.4% from a year ago.  More importantly, it is down about 37% from three years ago.  I don’t have a complete set of data, but I suspect that the median price has dropped around 50% in Metro Atlanta.

One important note here is that this does NOT mean that the value of any particular house has dropped 50%, or that the average value of homes have dropped 50%.  There is NO mistaking that home prices have crashed and burned… then crashed some more.  But there has also been a shift in the last couple of years towards less expensive homes.

Be sure to keep an eye my local market reports for more specific data about individual areas of Gwinnett County.

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Wayback Wednesday… Mortgage Thoughts from Ken

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One of my Mortgage Guys, Ken Cook (not the Weather man), write a LOT about mortgages and the best ways to get the best deal and best chances of closing your loan on time and without drama…  a LOT!  He knows his stuff.  And he has NEVER delayed a closing with me because of issues with an approval (ok, there was a time when we had to go get lunch and we closed it after lunch…)

A couple of years ago I grabbed a few quotes from Ken and linked them back to posts he had about those subjects.  Here is a link back to the original post

The subjects I included were…

  • Should you be “pre-approved”?
  • What do the different steps mean (pre-approved, conditional, cleared, etc.)?
  • How to make the whole process go smoother.

Ken knows his stuff.  I trust his opinion…

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