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Tag Archives: business of real estate

Local? Hyper-Local? National? What IS the Market?

old photo of peachtree street, atlanta, GA

Image via Wikipedia

I love watching the news… but when they talk about the real estate market, I cringe.  I like to hear the national numbers, but I also know that they are just a framework for a smaller discussion.  Yep… a smaller discussion.

It matters what the overall market is doing, but it’s not nearly as important as what is happening in your neighborhood.  It matters what is happening in Georgia, and the Atlanta Metro market, but not nearly as much as what is happening in your specific city.  Real estate prices and demand react to specific local issues much more than to national trends.  In fact, the national trend is just a compilation of local and hyper-local trends.  What the national market does is create a headwind or a tailwind.  That’s about it.

Here locally, we look at things like…

  • changing employment statistics
  • companies relocating into or out of the area
  • school performance and trends
  • tax burdens
  • quality of local governmental services
  • proximity to recreation and entertainment
  • ease of movement (commuting, shopping, etc)

As we see these things change, we see the market move in one direction or another.  A prime example at the moment is the City of Atlanta schools issue.  It is possible that the Atlanta City Schools could lose their accreditation.  If that were to happen, it would drive down the price of most of the homes served by those schools.  The price would be driven down because there would be a lack of demand on the part of buyers, combined with an increase in supply as sellers seek to move to districts without the same problems.

Gwinnett County has one of the lowest unemployment rates in Georgia, below the national average.  But there is also a tremendous overhead of foreclosure action.  We also have one of the highest performance school systems in the region… and reasonably low tax rates.

The market in Miami or Las Vegas doesn’t have an effect on what is happening in Georiga, much less what is going on with real estate in Gwinnett County.

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Terra Sol by Pulte near Lilburn

Pulte Homes logo

Image via Wikipedia

A few years ago this property was started.  One home was built, along with the future clubhouse.  The tennis courts were installed and the swimming pool was roughed in.  Some of the streets had been laid, and many of the homesites had been prepped.

And that is how the property had sat for the last several years.  It just wasn’t worth building out during the worst of the real estate meltdown.

Apparently that has changed now…  Pulte has begun construction on the project again.  The actually tore down the house that had been built onsite, cleaned up the entrance and begun building in more infrastructure.

It’s really nice to see activity on this project again.

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Have You Seen the Commercial?

I’m sure you’ve seen it… the commercial with the mom that is trying to find the sport her son is good at…  She tries football then baseball.  She gets him out on the golf course.  She shoots tennis balls at him.  Finally, he is singing in the choir, he is good at it and he is happy.

I certainly can understand the sentiment.  As a parent, I want my children to ‘find their place’… see what they like and what they are good at… see them fulfill themselves.  To that end, I applaud this fictional mom.  She didn’t give up… and she appreciated her child for who he is.

But there is one thing that kind of bugs me… ok, two, but one we don’t really know.

The easy one would be figuring out what the kid wants… but we have to assume that mom and child talked about his interests…

The other one is a little trickier, and there is an application outside of parenting.  (remember, this is just a commercial… I’m reading some things into it)  Mom seems pretty comfortable on the tennis court and the golf course.  She has the gear for her son for baseball and football… and she seems reasonably comfortable in those situations, too.  But maybe what her son really needed was a real coach…

The thing that is different about the choir than all of the other sports she tried is that there is a teacher (coach).  There would be no reason to assume that she just chucked her kid up on stage without him going to choir practice and working with a professional.  What if there had been a coach helping him with some of the other sports?

I know… I’m reading a lot into a commercial… but, stick with me for a minute…

Let’s think about real estate for a minute…  If you really want to get your house sold, would you benefit from a coach? Would someone with emotional separation from the house be able to see it a little more clearly?  Would it be worth it to get someone with experience while you are trying to win this game?

Even the best players have coaches.

Wayback Wednesday… Can You Fix This?

Two years ago I wrote a post about fixing things for my son (now I have to fix things for two of them…).  Last week I had a closing that fit the post…

As a Dad, part of my job is fixing things.  As a Real Estate Agent, part of my job is fixing things.  Luckily I don’t have to glue/weld, nail or pop things back together in houses… although I have had to help a property or two pass an inspection, but that is another story.

An 1:8 four-wheel drive off-road racing buggy ...
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The closing last week was hard won for my client.  The buyer and seller had their work cut out for them in order to get to the closing table.  The issues weren’t anyone’s “fault”, they just ‘were’.  My “goto” Mortgage Dude, Ken Cook, the other agent and I all worked together to find solutions.  The buyer and seller were both flexible.

Even at the last minute when the HUD (closing settlement statement) came in, there were only about three lines that were right…  Of course, the HUD was supposed to be available 24 hours before closing… it was available 90 MINUTES before closing was scheduled.  As I was driving to the closing, I was on the phone with the other agent and the mortgage team, fixing it.

As the buyer was signing the loan docs, the other agent and I were in the hall, talking with a program administrator, closing coordinator and the mortgage team.  We had to tweak the contract to get it all to work… and everyone involved played a part.

And we closed it.

The seller was able to sell a property for which they no longer had need.  The buyer was able to buy a first home.  As we all filed out of the closing room, everyone was happy and thanking the others for their patience and perseverance.

We fixed it.

The WRONG Top ten List to be on…

FedEx A310 and A300 cargo aircraft fly daily f...
Image via Wikipedia

Yahoo News recently published an article titled “The Eight States Running Out of Homebuyers“.  (I know, I said 10… they say 8, but they mentioned that Colorado and South Carolina barely missed inclusion).

Georgia ranked #6…

I’ll cut to the chase and give you the list.  Check out the article for the details on each state…

  1. Michigan
  2. Nevada
  3. Arizona
  4. California
  5. Illinois
  6. Georgia
  7. Oregon
  8. Florida
KMMG plant and aerial view
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Georgia made it onto the list because of the following statistics…

  • 2010 Foreclosures: 3.25% (6th Worst)
  • Unemployment: 10% (9th Worst)
  • Decrease in Building Permits 2006-2010: -82.29% (2nd Worst)

Of course, I want to put my spin on these things…

There is no getting around the foreclosures.  As a real estate agent, I see loads of them listed in the local MLS (Multiple Listing Service), as well as properties that are foreclosed, but not yet listed.  I also see the properties that are on their way to foreclosure… short sales, neglected homes, etc.  They are seriously impacting home values across the state.

selfmade image of U.S. Unemployment rate from ...
Image via Wikipedia

Unemployment is the big one.  As employment increases, pressure on the housing market decreases.  Simply put, buyers are reluctant to buy when they aren’t feeling secure in their employment future.  There are some rumblings that could bring an improvement to the employment rate… FedEx is building a new Distribution Center in Norcross (Gwinnett County) that will be bringing a good number of jobs to the area over the next 18 months (it is scheduled to open in Sept. 2012).  While the 200 people that will work in the facility will be largely from other FedEx facilities, there will be jobs from the construction of the 215,000sf facility.  There may be future jobs added as well.  Kia Motors has a production facility in the state that is expanding.  There are other companies, large and small, that are opening or expanding operations in Georgia, as well.

The decrease in building permits is another matter entirely.  I see it as a backward looking indicator.  I also see a decrease in construction starts as positive news for inventory already on the market.  And in the last couple of years, we have seen the inventories decrease by half…  If there is already an over-supply, more building won’t help that.  And we have an oversupply.

The bottom line, for me, is that the article contains a mixed bag for Georgia.  There is NO question that the market here has been damaged, but at the same time, there may be rays of hope hiding in the tunnel.

The Eight States Running Out of Homebuyers

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