Last week I posted an infographic from Active Rain saying that Real Estate is Back… Here is another one from 29doors that makes it look like in Georgia, it isn’t so much. But, looking at the market reports for Gwinnett, as well as Case-Schiller numbers for the Atlanta statistical area, prices look to be up year over year by more than 9%. That tells me that there are some places in Georgia that are still pretty slammed. What do you think?
I have been saying it for a few months now… and it has been pretty apparent in the Gwinnett County area. Real Estate is back. This nifty infographic from Active Rain, where I am an Ambassador (I help other agents more effectively blog and such…) shows that agents across the country are really starting to feel confident that real estate is again strong.
As mentioned here during the depths of the down-turn, we wouldn’t really know that the market had turned until it was done. And just because I, and a few thousand of my real estate peers feel like real estate has returned to normal doesn’t mean that it can’t be derailed. But, for now…
Data provided by ActiveRain, the #1 social community for real estate professionals.
On June 3rd, 2013, there will be a HUGE change to FHA loans. The Mortgage Insurance Premium (MIP) will become permanent for those that put less than 10% down. This will cost borrowers tens of thousands of dollars over the life of the loan.
Let’s say that you buy a home valued at $225,000. If you put 5% down, that would be $11,250. In addition to that, you’d pay an upfront fee of about 1.75% of the loan amount. The monthly MIP would be around $200/mo. Traditionally, as the loan balanced passed below 78% of the purchase price, the MIP would be removed from the loan payment. Depending on the down payment, this would happen around 5-10 years into the 30 year loan. By the time it’s all said and done, you might spend an extra $50,000 or more on MIP with the change. ($50k is based on 20 years at $200/mo.)
For files open PRIOR to June 3rd, they should be eligible for MIP expiration. If you are looking at a house, and about ready to pull the trigger, delaying could cost you upwards of $50k…
Supply and Demand (Photo credit: ATENCION:)
Normally, a Seller’s Market means that conditions are generally better for sellers than for buyers. There is, in effect, more demand than there is supply. And, usually, that means that sellers are more in control of pricing and terms for their homes. Prices generally rise and there are fewer demands made upon sellers in regards to inspections, and other concessions.
But things aren’t always “normal”. Now is a great example of that.
Right now, the majority of Gwinnett is solidly in Seller’s Market territory. Below about half a million dollars, Absorption Rates remain under the magical 6 months… in some cases, even below 3 months. Above half a million, things aren’t quite as rosy, but they are WAY stronger than they have been for years.
But all is not beer and pizza in Seller Land. In fact, it may be FAR from fun to be a seller in today’s market, no matter what the numbers look like. The reality is that bank-owned properties are skewing the numbers… or skewering, depending on how you want to look at it. What has happened is that bank-owned inventory has come to dominate the market. It may or may not be the majority, but there is enough of a presence that it pushes the pricing down for all of the homes that are actually selling.
Whether this is a good thing or a bad thing depends on whether you are a buyer or a seller. As a buyer, it means that the homes you look are are either priced quite competitively (and don’t stay on the market very long) or they aren’t… and they stay on the market forever.
One of the ways that I can see this is by looking at the “Days on Market” (DoM) stats while preparing Market Reports. They are jumping ALL over the place. This isn’t a direct sign, but rather one that is more deduction. In some segments I am seeing DoMs bounce from over 100 days to under 50 days and back over 100 in back to back to back months. This means that homes that every once in a while a home that sells has been on the market a VERY long time… pushing up the average, then there are none of those “old-timers” the next month… then another one pops through.
Simply… as a buyer, if you see a home you like, and it is priced well, there will likely be competition for it. Don’t expect that you can toss a low offer across the table and get a reply. In fact, I have seen a LOT of multiple offer situations on well-priced properties. As a seller, don’t expect that you can price your home at the level you thought it was worth a few years ago. You are competing with bank-owned properties and their primary motivation is to not own the property any longer than they need to in order to almost break even… and their definition of break even may include insurance payments and government inducements to hurry up and sell it.
One may say that the worst aspects of both a seller’s market and a buyer’s market are present right now… fierce competition (for buyers) for the “right” properties and weak pricing for sellers).
If you really want to sell your property, let’s talk…
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:
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…
