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Tag Archives: real estate

Don’t Lose Your Shorts (Sale)…

Wednesday, 11 July 2012 08:00
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They are all of the rage.  Sellers don’t want to be forced to do them, and buyers are scared to death of having to deal with them.  At the same time, it is often the best option for a seller to avoid foreclosure and get back on the path to rebuilding their lives.  They can also be a great deal for buyers.

English: Buyers and sellers in the Plazuela de...

English: Buyers and sellers in the Plazuela de los Sapos, Puebla, Mexico (Photo credit: Wikipedia)

As a buyer, there are some big differences between buying foreclosures and buying short sales.  To begin with, often, short sales are still occupied.  I have been in a LOT of houses… foreclosures, vacant homes that weren’t foreclosed, abandoned homes and non-distressed tradition sales.  Homes without people in them tend to degrade.  Short sales tend to be in better condition and have fewer maintenance issues that need to be dealt with right away.

However, all is not wonderful in the world of Short Sale properties.  They have a huge problem.  Short sales are risky.  The risk is financial, but rather it is time.

  • The average Short Sale takes over 9 months to close after going under contract.
  • Only 25% of Short Sales actually make it from contract to closing.

So that means that a buyer could go through the better part of a year, only to have the sale fall through because of a lender-based wrinkle.  And when 3 out of 4 of them fall out in the process, it equals a MASSIVE waste of time.

The risk is the same for a seller.  Months and months of uncertainty followed by disappointment.  The desire to get on with financial life gets delayed.  It’s no wonder that so many sellers end up giving up and letting the house go to foreclosure.

But, there IS a way out…

Along with the brokerage change a few months ago, I also partnered up with a couple of other agents… one of which is a short sale specialist.  As part of the partnering, we have contracted a firm that handles Short Sale Process from contract to close.  The firm’s batting average is quite a bit better than the national averages…

  • Their average Short Sale takes less than 4 months from contract to close, with most happening anywhere from 2-5 months.
  • They are at 82% making it through the process to closing.

This is a huge reduction of risks for both the buyer and the seller… financial, time and emotional.  It still isn’t perfect, but 4 out of 5 beats the heck out of 1 in 4.  And getting the average time down by half is pretty big, too.  That gets Short Sale buyers out of the realm of almost exclusively investors and back into a range that is workable by people that plan to live in the house.  That opens up the market considerably.  And that means that more of the sales are likely to make it to close.

BTW, Sarah’s close rate is even higher than the 82%.

If you are wondering whether a Short Sale is appropriate for you, please feel free to give me a call, or send a text to my cell or email.

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How Does the Market Look?

Monday, 09 July 2012 08:00
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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…

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Duluth, GA, Market Report, May 2012

Monday, 02 July 2012 08:00
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Preliminary stats for Duluth, May, 2012 indicated that there were 426 properties on the market.  Overall, there is about an 5.3 month supply of properties.  Sales in May were 91, up from 71 a year earlier.  Sales were up compared to the prior month (77).  Duluth had been slightly leading Gwinnett County as a whole, but not so much over the last few months.

In the Under $200k arena, there were 151 listings in Duluth, GA, with about a 3.2 month supply.  The Absorption Rate for last May, was 7.05.  Sales in May were way up this year v last year (50 v 37), but only slightly up compared to last month (47).  The Absorption Rate (A/R) is better than most of the county…

Between $200k and $400k, there are 122 listings for sale, and about 6.7 months of supply. Absorption rates have similarly risen, dropped and then risen again, but they are moving the right way now. Sales were down compared to May, 2011 (20 v 18) and compared to last month (16). Duluth is a market that favors luxury, but this segment is not doing as well as I would have expected…

From $400k to $600k, there were 49 homes on the market.  The Absorption Rate was around 7.4 months.  May brought in 8 sales.  There were 10 last year and 6 last month.  As with much of the county, the recovery that seems to be solidifying at the lower end of the price strata is much weaker here.  Duluth is a luxury centric market, and it is doing better than the rest of Gwinnett County, GA, but the segment is still kind of weak, and it decelerated.

In the $600k to $800k arena, there were 41 listings, with about 12.3 months of supply.  Sales were 2 for May… 3 for last year.  And month to month sales were down (5 v 2).  Last month was ok, but I would like to see three consecutive months with strong sales, and haven’t seen that for a while.  Since Duluth does favor luxury sales, it looks better than the rest of the County at this price level.

In Duluth, GA, from $800k to $1m, there were 23 homes listed and approximately 7.7 months of inventory on the market.  The 6 sales recorded for May rocked last year’s 2 and from the 1 from last month.  Sales haven’t been moving much for the last couple of months, but 9 sales for the last 3 months bumped the same 3 months from last year (8 sales).  It isn’t as weak as that suggests… at least I hope it isn’t.  And five months ago the A/R was 69 months.

Above $1m, there were 40 properties listed.  The current absorption rate indicated about 15 months of inventory.  A couple of sales at this level could have a large impact on the Absorption Rates.  There were 8 sales in the Mar-May period this year, and 7 for the same time last year.  We should be posting four sales a month here regularly… and we hit that this month with 5 sales.

Duluth, GA is a suburb of Atlanta, in the heart of Gwinnett County. It actually straddles the county line and has unincorporated portions in South Forsyth County. The population of Duluth is estimated as about 26,000 people as of 2008, but this doesn’t include unincorporated areas outside the city limits, but with a Duluth mailing address. It is also home to Sugarloaf Country Club, a PGA stop until recently. Forbes Magazine rated Duluth 26th in their nationwide survey of the best places to move, and it is one of the wealthiest parts of Georgia. It is also home to the Arena at Gwinnett Center (Home of the ECHL Gwinnett Gladiators) and the former Atlanta Thrashers practice facility (the Duluth Ice Forum). There is a LONG list of celebrities and athletes that call Duluth home, largely because of the country clubs and proximity to Atlanta.

Atlanta Metro Zillow Home Value Index

I have a page dedicated to Duluth Market Information.

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Lawrenceville, GA Market Report, May 2012

Friday, 29 June 2012 08:00
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Market stats for Lawrenceville, GA, May, 2012, indicate that there were 1046 properties on the market.  Overall, there was about a 3.9 month supply of properties.  In 2011, sales for May were at 262, so 267 sales was a solid increase, year over year.  Last month’s sales were at 256.  Coupled with the decrease in inventory, things are looking pretty good.  Normally the market picks up from January through about June-August.  This month we are rocking, in fact, some are arguing that constrained inventories are holding back sales or we would be looking even better.

For Lawrenceville, GA, Homes Under $200k, there are 870 listings, with about a 3.6 month supply of homes.  Sales were well down from May, 2011 (235 v 246), although sales may very well be down because of constrained inventories.  Last year in this segment, there were 1340 listings v the 870 now.  This segment is easily the lion’s share of sales for the area.  With the 3.57 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 down, though, from 237 in April.

Between $200k and $400k, there are 148 listings for sale, and about 7.1 months of supply.  Oddly, this had one of the weaker segments in the county, now it’s mid-pack.  The 31 sales for May, 2012 were WAY up from the 16 from last year.  They were also well up from the 18 sales last month.  But, we are still slightly in Buyer’s Market territory here.

From $400k to $600k, there are 23 homes on the market (big jump from the 16 last month).  The absorption rate is around 34.5 months (also a big jump from the 12 last month).  However, with the level of sales in this segment, a couple of sales added or subtracted can have a HUGE impact.  There were 0 sales for May, the Absorption Rate has dropped from 78 months last June, through good, but sporadic sales.  There were 0 sales in May, 2011.  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 7.1 five months ago).  While the long term trend was looking a little better, now it is still pretty choppy.

In the $600k to $800k arena, there are 3 listings, with about 9.0 months of supply. As with the next lower priced segment, a couple of sales makes a big difference and there was 1 sale in May. There were only 6 sales at this level in all of 2011, 2 of them were last January. There was 1 sale in January 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. There has only been one sale in this range in the last 3 years (Aug, 2010), according to FMLS.

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

I have a page dedicated to Lawrenceville Market Data.

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Buford, GA, Market Report, May 2012

Monday, 25 June 2012 08:00
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Market stats for Buford, GA, May, 2012 indicate that there were 388 properties on the market.  Overall, there was about an 4.5 month supply of properties (Absorption Rate or A/R).  There were 86 sales for May, flat from 86 last month and up from the 75 sales last May (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 217 listings, with a 3.7 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 54 (v 61 last month), but flat compared to last year (54 sales in May, 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 130 listings for sale, and about 6.2 months of supply.  The 25 sales recorded were up from the 19 from last month and from the 17 sales last year for May.  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 (aside from Suwanee).

From $400k to $600k, there were 20 homes on the market.  The absorption rate is 3.8 Months.  There have been 16 sales in the last 3 months (3 for March, 6 for April and 7 for May).  When the market is rolling, there should be 6-8 sales a month during this part of the year.  Just for comparison, there were 2 sales in the Mar.-May 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 5 listings.  Absorption Rate is 5 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 6 has made things look less slow… but there were 4 sales in this segment last year… and 3 sales in March, but none since.  But the low inventory is what is driving the incredible A/R.

The range from $800k to $1m, there were 5 homes listed. But, with no sales this year or last year (2011), obviously trends are hardly definable. Listings are down, but sales aren’t following through.

Above $1m, there were 11 properties listed. The last sale in the segment was in April… of 2009…and then there was May, 2011… and 2 sales in June, 2011. 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.

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