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Tag Archives: real estate

Lawrenceville, GA Market Report, February 2013

Friday, 05 April 2013 09:24
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This map shows the incorporated and unincorpor...

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Market stats for Lawrenceville, GA, February, 2013, indicate that there were 633 properties on the market, down 50 from last month. Overall, there was about a 3.5 month supply of properties. In 2012, sales for February were at 196, so 170 sales was a big decrease, year over year. Last month’s sales were at 166. Coupled with the decrease in inventory, things are still looking pretty good. Normally the market picks up from January-February through about June-August. This month we are OK, but some are arguing that constrained inventories are still holding back sales or we could be looking even better.  In almost every market I follow in Gwinnett, there was an increase in listings… except here.

For Lawrenceville, GA, Homes Under $200k, there are 497 listings, with about a 3.0 month supply of homes. Sales were down from February, 2012 (154 v 181), although sales may very well be off because of constrained inventories. Last year in this segment, there were almost 1000 listings v under 500 now. This segment is easily the lion’s share of sales for the area. With the 2.99 month A/R, it is solidly in Seller’s Market territory. The low Absorption Rate (AR) is due to very strong sales, coupled with dramatically lower listing inventories. Month over month sales were flat from 154 last month.  Again, there was a big drop in listed properties for this month.

Between $200k and $400k, there are 118 listings for sale, and about 7.4 months of supply. Oddly, this had one of the mid-pack segments in the county, now it’s on the weak side. The 16 sales for February, 2013 edged the 13 from last year, but killed the very weak 11 sales last month. But, we had been close but slipped back into Buyer’s Market territory here.

From $400k to $600k, there are 12 homes on the market. The absorption rate is around 12 months. However, with the level of sales in this segment, a couple of sales added or subtracted can have a HUGE impact. There was 1 sale for January but 0 sales for February, the Absorption Rate has dropped from 78 months June11, through good, but sporadic sales. This is acting like a luxury market and the A/R is jumping all over the place… with just a few sales (A/R was 34 10 months ago and 6.6 last month). While the long term trend was looking a little better, now it is still pretty choppy.

In the $600k to $800k arena, there are 4 listings, with about 12 months of supply. As with the next lower priced segment, a couple of sales makes a big difference and there were 0 sales in February. There were only 6 sales at this level in all of 2011. There was 4 sale in 2012.

Between $800k and $1M, and Above $1M there are 2 homes listed (combined) and not enough sales data to give an accurate absorption rate. Until this month, there had only been one sale in this range in the last 3 years (Aug, 2010), according to FMLS. But, there was 1 sale in July 12. It was over $1M, if that makes a difference…

Lawrenceville is in Gwinnett County, GA, just outside of Atlanta. As of the 2000 Census, there were 22,937 people in Lawrenceville, but that is only including people in the city limits, and there has been a lot of growth since 2000 in Gwinnett County (2008 estimates from the Census Bureau peg population around 29,000). It was incorporated in 1821. Lawrenceville is home to Central Gwinnett High School, and also has students that the Mountain View and Archer clusters. It is also home to Gwinnett Technical College and Georgia Gwinnett College. Another recent addition to Lawrenceville is that it is home to the Gwinnett Braves, playing at the Gwinnett Stadium on GA20 between I-85 and GA316. Possibly the most famous resident of Lawrenceville was Oliver Hardy. As a small boy he lived in Lawrenceville with his parents for a short time. Lawrenceville was also home to Junior Samples. Some of its other residents included Jeff Francouer, Brian McCann and Jennifer Ferrin.

Atlanta Metro Zillow Home Value Index
Atlanta Metro Zillow Home Value Index

I have a page dedicated to Lawrenceville Market Data.

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To Renovate or Not to Renovate?

Wednesday, 03 April 2013 10:25
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That is always a question…

And like most questions, there are two polar opposite answers that leave little room for anything but personal  interpretation.

Don’t Do It…

The White House renovation

The White House renovation (Photo credit: Wikipedia)

It is a pretty easy case to make.  The bottom line is that there are few, if any, renovations that you can do that will increase the value of your home.  About the best you can do is get back around 75-80% of the money spent on the renovations.  Of course, that is assuming that you are paying someone to do the job, not doing it yourself…

Looking at Remodeling Magazines annual statistics, there are a couple of standouts, but few things will get back that much of your money at sale time.  Link

So, renovating prior to selling your home prior to sale is really only a way to burn cash that you could plow into a new home…

Not So Fast…

There IS one thing about renovating that does make sense.  Competition.  Aside from needing to compete for buyers with the house up the street, you need to compete with new construction… now more than at any time over the last few years.  Here in the Atlanta suburbs, builders are going NUTS.  They are barely able to keep up with the demand, and standing inventory is hard to find.

In order to effectively compete, YOUR house needs to look its best.  Those renovation may just pay back in a quick sale.  And that might be worth a little lost money…

My Opinion?

Coraopolis Railroad Station

Coraopolis Railroad Station (Photo credit: Wikipedia)

Don’t go nuts…  Price fixes everything, and you may not have to take the same kind of hit on price as the renovation might take.  Doing a $100k major upscale kitchen remodel probably would be overkill.  Putting up a fresh coat of paint, however, DOES make a lot of sense.

Do NOT forget that your time IS valuable.  That is one issue that I often see.  People remember that the paint will cost $200, but forget that they are going to be spending 20 hours applying it.  If you are going to renovate, don’t discount the value of your time to $0.  Sure, you might not need to value your weekend labor at $100/hr, which some contractors WILL charge, but give it some value.  Weigh that into your decision.

Next week we’ll be looking at it from the buyer’s perspective…

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Buford, GA, Market Report, February 2013

Monday, 01 April 2013 11:17
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This map shows the incorporated and unincorpor...Market stats for Buford, GA, February, 2013 indicate that there were 307 properties on the market, an increase of 22 from last month. Overall, there was about an 4.9 month supply of properties (Absorption Rate or A/R). There were 63 sales for February, up from 58 last month but down from the 64 sales last Jan12. It isn’t the strongest market in Gwinnett, but the A/R is nothing to sneeze at. It is still in Seller’s Market territory.

In the sub-$200k arena, there were 140 listings, with a 3.9 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 up from last month 34 (v 32 last month), and well down compared to last year (40 sales in Jan12). But, the A/R is well under the 6 months that would be considered fairly balanced… pointing towards a solid seller’s market. This time of year we should start seeing an increase is sales… and listings.

Between $200k and $400k, there were 123 listings for sale, and about 5.1 months of supply. The 26 sales recorded were up from the 21 last month and from the 23 sales last year for February. This had been one of the weaker segments in the county, but had improved dramatically until last month it was fairly balanced, though tilted towards buyers… now it is slightly further into Seller’s Market territory.

From $400k to $600k, there were 32 homes on the market. The absorption rate is 12 Months. There have been 8 sales in the last 3 months (1 for December, 5 for January and 3 for February). When the market is rolling, there should be 4-7 sales a month during this part of the year. Just for comparison, there were 5 sales in the Dec-Feb period in 2011-12. This segment has been bouncing all over the place…

In the $600k to $800k arena, there were 4 listings. Absorption Rate is (again) 36+ 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 4 has made things look less slow… but there were 7 sales in this segment last year including 3 sales in March, 1 in June and 0 in February.

The range from $800k to $1m, there was 1 homes listed. Trends are hardly definable. Listings are down. June recorded the first sales since December, 2010. There was 1 sale in February. So it now has a 3.0 month Absorption Rate.

Above $1m, there were 7 properties listed. There was sale in the segment in April… of 2009…and then May, 2011… and 2 sales in June, 2011… also 1 in July and September. There was 1 sale in October, but 0 sales in February. So, we have 21 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.

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Sugar Hill, GA, Market Report, February 2013

Friday, 29 March 2013 10:28
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Market stats for Sugar Hill, GA , Febuary, 2013 indicates that there were 111 homes on the market. Flat from last month. Overall, there is about an 4.8 month supply (4.3 last month). There were 25 sales, compared to 16 last month and 19 last February. Of course, then there were 150 listings on the market.

For Sugar Hill homes priced under $200k, there were 69 listings, with about 4.4 months supply. There were 16 sales this February, a little below last year for the same time (18). There were 13 sales last month. Inventories have been fluid, rising and falling. This time of year we often see a slight decrease in listings… but we are already very low. In fact, sales may be stifled by lack of inventory. Christmas slowed things down, as usual, but it’s about time to pick up again.

Sugar Hill Listings between $200k and $400k, there are 37 listings for sale, and about 5.6 months of supply. Last February there was a 12.3 month supply. There was 1 sale then, this year there were also 8. Last month had 2 sales. That makes two of the last three months look pretty strong. We are in a slight Seller’s Market here again when the Holiday slowdown is over.

For listings in the $400k to $600k range, there were 5 homes on the market. The absorption rate was around 5.0 months, but with 1 sale this month, it is tough to calculate accurately. Obviously, a sale or two could make a BIG difference. I’ve finally started to see some consistency here. Hopefully we’ll have a little more action during the Spring selling season.

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 were 0 homes listed for sale in these price ranges. 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.

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The Appraisal Came Back Low… aaarrgghh!!!

Wednesday, 27 March 2013 15:48
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Commonly heard, especially from sellers right now…

Let’s get a couple of things out of the way.

  • Back during the “boom”, it was almost unheard of for an appraisal to come back too low.  The banks wanted them high, and the appraisers were getting paid by the banks.  The thought was “real estate will always go up, so if the value is a little out of line, it’s OK”.
  • Around 2007/2008, that stopped.  There were a lot of big changes in the appraisal world…
  • Appraisers NOW are all but forced to be VERY conservative.
  • Appraisals are based on “comps” sold within the last 6 months… sometimes 12 months.

 

1939 United States Appraisers Stores Building,...

1939 United States Appraisers Stores Building, 7300 Wingate, Houston, Texas 1205201547BW (Photo credit: Patrick Feller)

So, where we find ourselves in the current real estate climate is with price appreciation happening, most noticeably at the entry level end of the market.  Homes are OFTEN drawing multiple offers and selling over listing price.

 

As a byproduct, values are outstripping appraisals.  It isn’t always that the prices are out of line with other homes in the neighborhood… it is often because the appraisal process almost demands that appraisers work with information that is out of date.

On average, after a buyer and seller agree on a price, it may take from 30-60 days for the sale to close.  After that, it may take another 30-60 days for the sale to be recorded with the county.  The local MLSs are a bit faster, generally having the sale information within a week or so of closing.

So, the Appraiser is working with sale prices that reflect where the market was anywhere from 1½ to 4 months ago… at best.  And in the market we are in, there has been about a 10% increase in pricing, dependent on location, price segment, etc.  But much, if not most of that appreciate has been more recent than the 6 months an Appraiser is looking at.

The next issue that we run into relates to condition.  Many of the properties that sold last year, or the year before that were in pretty rough shape.  Much of the foreclosure and short sale inventory has been worked through, but a year, and even 6 months ago, it accounted for a large chunk of the sales.  Now, with constrained inventories, that isn’t the case.

 

Housing

Housing (Photo credit: james.thompson)

Appraisers DO adjust values based on condition… but the problem is that often the adjustments are based on a limited amount of information available in an MLS listing for a bank-owned property.  Sorry, but many of the “REO Agents” left minimal information for the appraiser to work from.  It wasn’t uncommon to see a bank-owned listing with 4 pictures, and NO details about condition of the property.

 

Subsequently, the Appraiser might not know that the house that sold a year ago in the subdivision for $75,000 less than the house you are dealing with also happened to need $50,000 in work to bring it up to where it is now.  And his adjustment for that house might have only been $10,000…

The result is that we see neighborhoods with homes that sold for $100,000 last year, with homes that could (and do) sell for $175,000 this year.  Seems like a HUGE increase in value, but the reality is that the $100,000 house needed a tremendous amount of work to get it up to where the current houses are.  Coupled with the reduced inventory and increasing prices… the current price is NOT out of line with reality.

But then…

The appraisal hit.  And it hits HARD.

The buyer either freaks out and thinks that he wants a MASSIVE price cut because of the low appraisal, or starts freaking out that there is no way they can buy the house.

The seller either freaks out because he has to take that much more of a loss, or becomes despondent because he doesn’t think he’ll ever be able to sell his house.

Nobody wants to return anybody’s call…

Solutions…

AP of Large Residence under construction for u...

AP of Large Residence under construction for use in an appraisal article (Photo credit: Wikipedia)

Actually, there are some things that can be done…

  • Buyers – You have to realize that the appraisal is an opinion of value, often based on out of date information.  It is NOT the Appraiser’s fault that it is low… the Appraiser HAS to work within very specific guidelines.
  • Sellers – Same thing.
  • Both – Don’t yell at your agent.  We aren’t picking the appraisers.  Neither is your Mortgage person.  But, we WILL try to help.
  • Sellers – One of the best ways to start is to buy (yes, spending money) an appraisal PRIOR to listing your home for sale.  Forewarned is forearmed.  It is better to know well in advance that there could be a problem than to get slapped by a shocker appraisal just when you think you are on Easy St.
  • Agents – Do your homework.  Is the CMA for the Seller (or the Buyer) “real” or is it manufactured just to tell them what they wanted to hear?  If it is based in reality, give the Appraiser the comps you used.  You can NOT tell them what to value the house at, but you can help them get to where you are.
  • Sellers & Seller’s Agent – If you get a pre-listing appraisal, talk with the Appraiser about helping to fight the low one.  They speak the same language and might have an easier time working everything out.

There is one other tidbit.  If the appraisal is done for an FHA loan, it sticks with the house for 90 days… that mean ANY subsequent FHA loan from another buyer for the next 3 months will use the same appraisal.  And if you think it is out of whack now, think how out of whack it will be in 3 months…

 

The bottom line is…

Don’t freak out.  Work with the professionals that you hired and see if they can get everything worked out.

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