Tag Archives: business of real estate

Foreclosure Settlement Coming…

Thursday, 24 January 2013 12:00

Written by Lane Bailey

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Mortgage Loan Fraud Assessment based upon Suspicious Activity Report Analysis (Photo credit: Wikipedia)

It has been a long time in the making, and whether you agree with it or disagree, it has happened.

The 5 largest mortgage servicers, 49 states and the federal government have reached a $25B settlement in their lawsuit. Details aren’t very detailed… but:

$17B in loan mods and principle reduction for distressed borrowers
$3B for underwater homeowners that are still current on their mortgages
$1.5B for borrowers that lost homes to foreclosure between 1/1/08 and 12/31/11… there is an assumption that those foreclosures contained some impropriety
$the other $3.5B isn’t specified, but I would guess that the states are getting that money for “consumer protection” and “Foreclosure prevention” programs

In the case of foreclosed borrowers, checks are supposed to be coming out at the end of the 1st quarter or beginning of the 2nd quarter this year…

Tweaking Time…

Monday, 14 January 2013 08:00

Written by Lane Bailey

0 Comments

Reports (Photo credit: Wikipedia)

You may have noticed that the order for the Market Reports has changed. We will also be rolling out a monthly newsletter in the next few weeks. One of the newsletter features will be faster access tot he Market Reports. We will try to drop in a few other cool features, too.

Later in the year we will be rolling out a few subdivision specific reports, as well as some profiles. There will also be some specific property profiles of homes an the market.

There might be some more video, too.

There are some other changes in the works as well… stay tuned.

As always, there will be some real estate opinion and comment on current topics.

London remembers ‘spectacular’ 2012 (standard.co.uk)

Buford, GA, Market Report, July 2012

Monday, 07 January 2013 08:00

Written by Lane Bailey

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This map shows the incorporated and unincorpor...

Image via Wikipedia

Market stats for Buford, GA, July, 2012 indicate that there were 373 properties on the market. Overall, there was about an 4.1 month supply of properties (Absorption Rate or A/R). There were 84 sales for July, down from 102 last month but up from the 77 sales last July (2011). It isn’t the strongest market in Gwinnett, but the A/R is nothing to sneeze at. It is solidly in Seller’s Market territory.

In the sub-$200k arena, there were 196 listings, with a 3.4 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 from last month 53 (v 68 last month), and down compared to last year (61 sales in July, 2011). But, the A/R is WAY under the 6 months that would be considered fairly balanced… pointing towards a solid seller’s market.

Between $200k and $400k, there were 139 listings for sale, and about 5.2 months of supply. The 26 sales recorded were down from the 29 from last month but way up from the 14 sales last year for July. This had been one of the weaker segments in the county, but has improved dramatically and at current A/Rs, it is one of the stronger $200k-$400k segments in the county.

From $400k to $600k, there were 17 homes on the market. The absorption rate is 3.9 Months. There have been 13 sales in the last 3 months (7 for May, 2 for June and 4 for July). When the market is rolling, there should be 6-8 sales a month during this part of the year. Just for comparison, there were 6 sales in the May-Jul period in 2011. This segment has been bouncing all over the place… but it is VERY strong right now.

In the $600k to $800k arena, there were 8 listings. Absorption Rate is 24 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 8 has made things look less slow… but there were 4 sales in this segment last year… and 3 sales in March, 1 in June and 0 in July.

The range from $800k to $1m, there were 5 homes listed. Trends are hardly definable. Listings are down. June recorded the first sales since December, 2012. There were 0 sales in July. But it still has a 7.5 month Absorption Rate.

Above $1m, there were 8 properties listed. There was sale in the segment in April… of 2009…and then May, 2011… and 2 sales in June, 2011. But there was also 1 in July. So, we have 66 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.

Buford, GA, Market Report, April 2012(lanebailey.com)
Buford, GA, Market Report, May 2012(lanebailey.com)

Buford, GA, Market Report, March 2012 (lanebailey.com)
Buford, GA, Market Report, February 2012 (lanebailey.com)
Buford, GA, Market Report, December 2011 (lanebailey.com)
Buford, GA, Market Report, November 2011 (lanebailey.com)
Buford, GA, Market Report, October 2011 (lanebailey.com)
Buford, GA, Market Report, September 2011 (lanebailey.com)
Buford, GA, Market Report, August 2011 (lanebailey.com)
Buford, GA, Market Report, June 2011 (lanebailey.com)
Buford, GA, Market Report, May 2011 (lanebailey.com)
Buford, GA, Market Report, April 2011 (lanebailey.com)
Buford, GA, Market Report, March 2011 (lanebailey.com)

Atlanta Metro Zillow Home Value Index

Atlanta Metro Home Values – Interactive chart

How Does the Market Look?

Monday, 09 July 2012 08:00

Written by Lane Bailey

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The regular market reports will resume on Friday, but for today I just wanted to expound on the general market a little.

Things have really changed in the last few months. Just 4 or 5 months ago, I was constantly looking for “follow through” on strong numbers for almost every market segment. There would be a good month or two, but then there would be a lousy one to cast doubt into the recovery process.

There were programs designed to “bring back the housing segment”, and while some of them did manage to move the market for a short time, for the most part, they only seemed to steal from future sales. Sales that would have happened regardless were moved up in order to qualify for government subsidies or more favorable tax treatment. But over the long run, they didn’t create many sales that wouldn’t have happened over the follow couple of months.

After all of that worked through the system, and consumers were more certain that there wouldn’t be future inducements, sales started picking up again… but the real boost to the sales numbers has been inventory reductions. And while there are still rumors of a “tidal wave of foreclosed properties”, those same rumors have been around for 3+ years, always with the tidal wave 4-6 months away. There could indeed be a wave of foreclosed properties poised to hit the market, I wouldn’t bank on it. And the market does seem ready to absorb some more inventory, especially on the entry level end of the spectrum.

The bottom line is that the real estate market is getting back to normal. In fact, under $200k in most of Gwinnett, it is well into Seller’s Market territory. From $200k-$400k, it is mixed. Above that, it is still pretty much a Buyer’s Market, but not to the extent it has been for the last few years.

It will be interesting to see what happens with the market when the general economic recovery starts in earnest. I am still of the opinion that the best stimulus for the housing market is a recovery in the jobs market. While the unemployment rate has gotten better, the labor force participation percentage rate hasn’t budged much. The unemployment rate discounts workers that give up or time out on unemployment, while the labor force participation rate includes everyone that could be in the labor force.

I’m firmly of the belief that many buyers are reluctant to make a 30 year plan (buy a house and get a mortgage) when they are worried about the security of their job over the next year.

Stay tuned to see how it all shakes out…

Brace Yourself, Real Estate Prices Are Going Back Up – Bloomberg(bloomberg.com)
Why anti-foreclosure laws are ruining the U.S. recovery(business.financialpost.com)

How to Get THE Best Deal…

Monday, 11 June 2012 08:00

Written by Lane Bailey

0 Comments

Every buyer in the market has one goal in mind… get the best deal possible on the exact house that they want. Of course, there are a few problems… but like most problems, there ARE solutions.

exterior (Photo credit: lane.bailey)

The first problem is understanding value… To begin with, the quality of the deal is NOT measured by sale price v listing price. The list price and the value are NOT directly related. You might actually have a better deal in your hand at full price… or even above… with one property, while another might be over-priced at half of the list price. Compare the price you are getting to the value of the comps. Don’t forget to subtract (or add) for needed improvements, updates and other differences. That is what real estate agents do when they create a Comparative Market Analysis.

The second problem is being realistic… Sure, there is a chance that you might be able to get a property that has a realistic worth of twice what you will pay for it, but don’t expect it. Especially if you are looking for a property YOU are going to live in. If you are looking for a rental/investment property, then you don’t need to worry as much about the particulars of living in the property… only how it will work financially.

Third, learn the real market… You need to have a heart to heart with your real estate agent. You need to talk openly about the area values and trends. Not the national values and trends, not the state… not even the city or ZIP code, but the area… subdivision or neighborhood, as well as the price range. In the market areas I monitor, I see instances where the direction of the market in one price range is opposite that of the adjacent price range. The same thing happens with locales.

English: To Let in Dover As the estate agent would say , 'A property with potential'. (Photo credit: Wikipedia)

The fourth problem is REAL big. Don’t “just toss something out there as a starting point”. This one is huge. I see it all of the time. Buyers toss out an incredibly low offer “to get the ball rolling”. BUT, when working with an actual human seller, it often only serves to anger them and get them to dig in their heels. When dealing with an institutional seller, it makes them think the buyer isn’t serious. In either case, what ends up happening is that the chance of a deal gets slimmer… and if there is a deal between the buyer and seller, it might end up not being as good of a deal as if the buyer had made a higher initial offer. (BTW Sellers… this one works both ways… pricing too high often leads to a lower selling price in the end).

Finally… Be READY to act when you find what you want. It isn’t a deal if you leave it laying on the side of the road.

If YOU are ready, give me a call. Lane 678-200-5895…