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Tag Archives: business of real estate

Wayback Wednesday… The More Things Change…

Wednesday, 13 October 2010 08:22
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Cook County Criminal Court House
Image by reallyboring via Flickr

the more they stay the same.

Two years ago this week I was writing about a Sheriff in Chicago (Cook County) that was refusing to do foreclosure evictions until the banks got their property information updated.  It seems that he was evicting some people that were tenants and COMPLETELY unaware of what was happening to the properties.  These folks had been making their rent payments as agreed with the landlords… and the landlords weren’t paying their mortgage, nor had they notified their renters that the property was going to be foreclosed by the banks.

Then, as now, I was not a fan of what the Sheriff was doing.  He was defying a Court Order to evict people from property that they no longer had a right to possess.  However, I also thought (and still do) that the landlords deserve jail time for defrauding their renters.

Now, we have banks committing fraud and illegally processing foreclosures.  In fact, several large processors have halted foreclosures nationwide, while others are halting them in multiple states.

But, regardless of which issue we are looking to confront, halting ALL foreclosures isn’t the right path.  Instead, the banks need to process them according to the law.  Don’t forget, that the bank employees that perjured themselves also need to be punished.  We also need to remember exactly WHO the victims are in this situation, and it isn’t the people that failed to pay their mortgage and are in the process of foreclosure.  Rather, it is the investors (not the banks, unless they own the note) that loaned for the purchase of the home.  The agreement was quite explicit… Pay the mortgage or LOSE THE HOUSE.

With the issue of the renters that were getting caught up in foreclosures in Chicago (and anywhere else), while current on their rent, they SHOULD have qualified as victims and not been forced out of the home for which they were paying.  And in that case, the landlords should have been prosecuted… and maybe sued.  Or both.

From the original post…

I may be an unsympathetic meanie… but I am also logical. First of all, I can see that in the case of renters that have been making their rental payments on time… those that the Sheriff of Cook County is trying to protect… they are the victims. They did what THEY were supposed to do. The owner didn’t do what THEY were supposed to do.

Link

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Gwinnett County, GA, Market Report, August 2010

Tuesday, 12 October 2010 08:30
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You might have noticed that these reports lag by a month to a month and a half.  The reason for the lag is that it takes until the end of the following month for the data to stabilize.  So, the data for August wasn’t very solid until the beginning of October.  I have tried to use preliminary data, but it always seemed to veer at the last minute…

So, let’s get to the numbers and try to get a handle on what they mean.

At the end of August, 2010, there were 6,473 homes on the market in Gwinnett County, GA.  As expected, there has been a general upward trend in the number of listings all year, but that is slowing… again, as expected.  While this is a lot of listings, it is low compared to the 10,000+ listings that were on the market a couple of years ago.  There were 617 sales in August.  This was down from 697 sales for August, 2009.  Averaging the result for the last three months yielded an Absorption Rate of 9.7 months of inventory.  Which shows an increase since June.  This has been pretty consistent across the board on price and location segments, although not exactly the same in all areas.

The Under $200,000 market segment was the meat in this sandwich.  For August, it represented 4,022 homes listed.  There were 436 sales during that period.  Averaging the last three month gave the segment an Absorption Rate of 8.8 months.  The rate has been rising since May (rather than the more normal June), having bottomed at just under 7.2 months of inventory.  Year over year sales for August were down from 487 in August, 2009.

In the $200,000 to $400,000 range, things are different.  There were 1,838 listings county-wide.  Oddly, the Absorption Rate, currently at about 11.1 months of inventory, has been dropping since March.  In most other segments it has been rising… getting worse.  And while sales are down, listings are down more, which is driving the absorption rate down.  Year over year sales were down significantly, 141 for 2010 v 172 for 2009.

Between $400,000 and $600,000, there are 354 listings in Gwinnett County and 25 sales for August, 2010.  Again, the Absorption Rate has been basically dropping since March, 2010.  Currently it indicates about 23 months of inventory.  This time it is a result of strong sales.  Inventories are down slightly, but sales are steady v last year.  For August, 2009, there were 27 sales.  While 23 months of inventory isn’t anything to bank on, at least it is dropping.

Here is a real anomaly.  In the $600,000 to $800,000 strata, the Absorption Rate indicates only 10 months of inventory.  That rate has been dropping since February.  In fact, in February there was a 38 month inventory of properties.  For August, there were 97 listings in this price range.  There were 7 sales… up from 6 in August, 2009.  Honestly, I was really surprised to see these numbers at this level…

As we move up to the $800,000 to $1,000,000 price level of Gwinnett County, GA, homes for sale, we see that there were 54 active listings and 3 sales for August, 2010.  This has an indicated Absorption Rate of 45 months of inventory.  Because the sales at this price level are less consistent than at lower levels, the rate bounces around a lot.  Sales may be rebounding here, though.

On the top level, Over $1,000,000, there were 108 listings and 5 sales for August, 2010.  Here we have seen the Absorption Rate on the increase, despite the inventory dropping.  For August there was about 25 months of inventory.  Sales are down significantly from last year.  Since this is a very wide range (prices from $1,000,000 to over $10,000,000), there are more listings and sales than the next level down.  Also, the homes are generally harder to compare because this realm is populated with custom homes and “one-offs”.

I’m looking forward to seeing the sales data for September soon.

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Flashback Friday… Bankrupt Subdivisions…

Friday, 03 September 2010 08:53
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The gone bankrupt and destroyed bakery
Image via Wikipedia

This would be one of the posts that almost got me on the news.  A local TV station was doing a story on this very thing, and I was out of town on vacation when they needed someone on camera.  I might not have been pretty enough away…  ;^ )

To the post…

While the pace has slowed, there are still homes available in subdivisions that the builder abandoned, surrendered to the bank or defaulted on.  These represent danger and opportunity.  They are definitely  an option for some buyers, but not all… and there is NO blanket statement as to whether they are good or bad.  In fact, the only blanket statement I can come up with is the pay attention and don’t underestimate the risks or overestimate the rewards.

Take a look at the original post.

I’d love to hear what you think about this…

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Wayback Wednesday… Recovery?

Wednesday, 01 September 2010 08:58
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Recovery Truck
Image by kenjonbro via Flickr

Recovery… In it or do we need to go to it?  That was my question two years ago this week… and it is STILL a valid question.  And two years ago, I don’t think there were many people (including me) that were expecting the housing slump to last this long.

But here we are, not knowing if a bottom to the market has been established or if there is more blood that needs to run in the streets.

At least now, more of us in the real estate community have figured out that stimulus and incentives aren’t the answer… JOBS are the answer.  There are too many potential buyers out there that are worried about the security of their jobs.  Demand can’t rise until buyers don’t feel threatened.

And that means that the Supply side of Supply/Demand will be out of whack… even thought the supplies have be mostly dropping for well over a year (compared to the previous year).  And even though supply has been coming down, there have been reports of a wave of foreclosures just out of sight over the horizon (those reports have been with us for well over a year, too).

On the flip side, there are some pretty good deals.  Mortgage rates are ROCKING… I heard a report today that rates hadn’t been this low in 60 years.  If you ARE in a position to buy, it might be the best time in a generation.  If not, I understand…

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Wayback Wednesday… Why the Hurry?

Wednesday, 25 August 2010 08:47
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Schematic representation of short selling in t...
Image via Wikipedia

This hasn’t changed… unless it has become MORE important.

Looking through listings is kind of like wading through a sea of REOs (bank owned properties) and short sales (properties on their way to becoming bank owned, barring a miracle).  And one thing uniting these listings is that they are generally marketed VERY weakly.  Scant pictures, minimal descriptions and even non-existent directions to the home.

So, when a property comes on the market that is well photographed, marketed and with a well written description, it stands out.

Two years ago I wrote about agents rushing to get listings onto the market… before things like photographs could even be sorted out.  Then and now, buyers reject properties without photos.  Seldom do they come back to see if the listing has photos updated on it… unless they have moved past everything else on the market.

Here is the original post…

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