The Tides of Change in Our Real Estate Market

By: jwest,
Posted: August 21st, 2007
Discussion: Comments



Many years ago an Irishman named Sean Lemass coined the phrase “a rising tide lifts all boats”. This phrase is often used to describe the effect on the economy when it is stimulated by using tax cuts, low interest rates, and by creating policies that generally spur the growth of that economy. There are many sectors that make up the overall economy in the and it is infrequent that all of them are rising or falling at the same time. These sectors are closely monitored by governmental agencies to maintain a certain level of stabilization and by independent companies and individuals to ascertain how to profit from the movement of these sectors.

If we accept that a rising tide lifts all boats, it is easily assumable that a falling tide would ground some boats. When a grounded boat is observed by onlookers, many individuals would say that boat should have never been moored there in the first place. Other individuals would look at a grounded boat and determine a way to profit from the situation. The current residential inventory in the Atlanta area has some grounded “boats”, meaning distressed properties in it and other properties that are quickly heading for a distressed status. The term distressed properties does not only apply to properties that are in a state of ill repair but also applies to properties where the owners have maintained the properties but currently find themselves in bad financial waters.

 There are more properties for sale in the Atlanta market now than there have been at previous points this year. Some sellers are trying to get out of houses that they can no longer comfortably afford, while others are trying to capture some profit from the growth in value of their property over the last several years.  There are also numerous residential builders in the Atlanta area that are carrying more inventory than they are comfortable with. They’re potential profits are decreasing daily because of the overall cost of maintaining the expenses related to their inventory and they are making deals today that they would not have considered earlier this year.  The market is becoming increasingly more fertile with deals for savvy investors in real estate.

 Investors of residential property have the ability to make higher profits on their capital in times when the inventory of properties is at a high level. They realize that some of the properties will be sold at distressed levels and sift through the inventory to find the deals with the best rate of return. Many of these investors turn to the local real estate professionals to help them gather a list of potential properties to look at and to help determine the value of an individual property based on today’s market. Many real estate professionals accumulate contacts with bankers, mortgage agents, and attorneys, and in doing so often obtain knowledge of distressed properties prior to the general public. When these contacts have a property that is distressed or is becoming distressed, they will reach out to the real estate professionals to determine if they know of an investor that is capable of quickly making a purchase on a distressed property. In many cases the agents have a limited amount of time to review the potential property and to determine if they have an investor who would be interested.

To obtain information on distressed properties in your area, contact a local full service real estate professional and provided them with a list of the prerequisite criteria that you require to invest in real estate. The agent will conduct research based on your criteria and will contact you with a list of potential properties.  This service is conducted without a fee attached so you have nothing to lose other than the chance of making a great investment.

 

 

 

 

 

 

 

Five Things I’ve Learned About Flipping Houses in Woodstock, GA

By: ycartledge,
Posted: August 21st, 2007
Discussion: Comments



1.  “It’s not as easy as it looks” – If it were as simple as those 30 minute make-over shows say it is, 10 out of 10 people would be doing it.

2.  “Don’t quit your day job” – After months of research, there isn’t a pool of no money down properties to be had as all the television infomercials lead you to believe. Unless you’re blessed with a trust fund, have a couple hundred thousand just lying around or just won the lottery you will have to borrow money.  You can’t borrow money if you don’t have a job.

3. “There’s no time like the present” - Turn around time means everything.  The faster the real estate sign goes up the faster you get your money back. 

4. “Take off the rose colored glasses” – Realize what you’re getting into.  We purchased a fixer-upper wanting to do the work ourselves along with the help of our teenage children as a fun filled family project.  Know your limitations and what you expect from others.

 

5. “Dreams do come true” – We were able to do all the construction ourselves.  We sold the house (actually made some money) and are now on the look out for a new project to purchase.

 

 

 

 

 

 

Hobgood Softball

By: maxsell,
Posted: August 21st, 2007
Discussion: Comments



As I was trying to think of a topic to write this blog about I turned to my 5-year-old son for help. During a very intense game of Nemo Memory (he was playing with my husband), I asked him what his favorite thing about going to Hobgood Park and watching my husband or father in law play softball was, he said “playing in the dirt and finding ants”. Aside from the finding ants I can remember being his age and going to the local ballpark and watching my Mom and Dad play softball. It always seemed like a contest between my brother and I as to who could get the dirtiest.  Now it’s my son’s turn to watch his Dad and Grandfather play ball and be so proud of the very few plays he sees between the playing in the dirt and finding ants. My husband plays on one league called “What” they play Friday nights at Kennworth Park and every now and then he’ll fill in on the “Grace ToThe Nations” team on Wednesdays, my father in law which we affectionately call Papa plays on a senior league for State Farm on Tuesday nights.

Mortgage shake-up tightens lending terms

By: Mike Pennington,
Posted: August 9th, 2007
Discussion: Comments



Based on the following article from the AJC, the lending terms that Realtors and Homebuyers have becomed accustomed to are vastly changing.  Now, more than ever, it is important for Realtors and homebuyers to work together in the process of pre-qualification, home selection, contracts, and the closing process.  As I look at the number of foreclosures on the market today and the growing number of homes on the market, I am beginning to wonder if all of the FSBO’s and other discount real estate transactions have had some input on the current situation.  In the end, are consumers getting what they pay for and are they really saving money in the long run? 

As a Realtor, I do take my responsibilities very seriously and I can say that I would loose sleep selling a home that was overpriced for the market.  Even worse would be the feeling that I would have knowing that a client of mine got into a mortgage situation with a teaser rate or reverse-amortization.  Just my thoughts…..feel free to comment.

Here is the article:

Dream of owning a home wakes up to reality
Mortgage shake-up tightens lending terms

By BILL TORPY
Published on: 08/09/07

Not long ago, financially strapped consumers with low credit scores — of, say, 600 — could obtain mortgages and call themselves "home owners."

But with the industry in turmoil, particularly for credit-troubled borrowers, local mortgage broker Brooks Campbell now has another name for them: "I think we’ll be calling them ‘renters.’ "

• Asian home-buyers shore up Atlanta market.
• 2007 HOME SALES REPORT

Subprime mortgages to risky borrowers, 100 percent financing and interest-only loans have gotten a slew of consumers and lenders in trouble. And with funds drying up, Campbell, a senior vice president of Vanguard Mortgage Corp. in Atlanta, said conditions are returning to fixed-rate mortgages and down payments.

"It’s going back to where it used to be," Campbell said. "It won’t have a big effect on the average, normal, first-time buyer, as long as you have decent credit — 680 and above (680 is an average credit score and 850 is the highest). But the customer with credit issues, and who can’t verify income, will have an issue."

Such customers may not get a loan at all.

The turmoil in the industry hit home Tuesday when Atlanta-based HomeBanc Corp. announced it was closing its mortgage loan business and selling some assets. That came on the heels of a Monday announcement that American Home Mortgage Investment Corp. of Melville, N.Y., the nation’s 10th-largest mortgage lender, filed for bankruptcy protection.

Signs of the spreading trouble in the industry are evident in various ways.

Graveyard humor in the industry is rampant as brokers each day click onto mortgageimplode.com, a Web site that now lists 114 "imploded" lenders (HomeBanc was 112).

The implosion is seen on the borrowing side, too. Suzanne Boas, president of Consumer Credit Counseling Service of Atlanta, said that in 2005 her organization had four counselors dedicated to foreclosure prevention. Today it has 36.

"And it’s not enough," she said.

Borrowers have been wowed by loans that allowed them to pay interest only or not all of the interest, and by adjustable-rate products that ballooned to market rates after two years. That strategy may have worked for borrowers when home prices were appreciating strongly a few years ago. Just about anyone could get into the game — and did.

"If you had a 580 credit score and a pulse, you could get financing," said Steve Smith, a broker for Wisdom Financial in Oak Lawn, Ill. He said some lenders got themselves into trouble with "stated income" programs that allowed borrowers access to money without showing a W-2 form.

But flat or falling home prices and adjustable mortgages that reset to higher rates over time have caused foreclosures to soar.

The epidemic has caused many investors in mortgages, as well as the lenders they fund, to re-evaluate their actions. Said Smith, "It’s going to come back to reality."

Consumer advocate and radio host Clark Howard agreed, saying the mortgage business is getting more rational.

"The tremendous competition for the borrower is gone," he said. "For a while, we had the best circumstances we ever had. Ever. … But a lot of people got into homes they shouldn’t have. No one did them a favor, putting them into homes they couldn’t afford. We don’t have an automatic right to the American Dream. You earn the American Dream.

"Back to the basics is what works. If you can qualify with a traditional 30-year loan, you can afford the home."

Boas from Consumer Credit Counseling said there is a silver lining: The market has more homes at affordable prices for those looking to buy a first home.

That glimmer, however, has been largely blocked out by the grim news. Last January, her office launched a foreclosure hotline (888-995-HOPE) and expected to get 5,000 calls from Georgia and conduct 2,000 counseling sessions in the first year. They got 8,200 calls and conducted 2,200 counseling sessions in the first six months.

Nationally, 13.77 percent of the nation’s subprime mortgages were past due in the first quarter, according to the Mortgage Bankers Association. Georgia posted a delinquency rate of 15.14 percent — eighth in the nation.

Mary Moore of the Center for Responsible Lending in Durham, N.C., said the turmoil should serve as a "wake-up call" for both lenders and borrowers.

"Beware of a lender that says credit doesn’t matter," Moore said. "You’re credit does matter."

She said 100 percent financing loans can be disastrous in a period of flat or decreasing home prices.

"You can be upside-down in your loan real quick."

Canton Marketplace - Canton, GA

By: Brad Nix, Managing Broker
Posted: August 8th, 2007
Discussion: Comments



It appears that Sembler is targeting a Fall 2008 opening of it’s retail district in Canton called Canton Marketplace.  Here is what Sembler says about the project:

"This fast growing Atlanta suburb has experienced a 64% increase in population (since the 2000 census) within a 5-mile radius of the Sembler site. In order to accommodate the demands of this growing market, Sembler is developing a 800,000 plus square foot shopping center in the heart of a major development that will include a regional hospital, office and residential.Located at I-575 and Highway 20, this center will include discount department stores, big box retailers, shop space and outparcels with great access to the highway and nearby office and residential areas.DOT is making a full diamond interchange at I-575 and Highway 20. The project will include a new parkway east of I-575 that will connect Hwy 20 to Hwy 140 south of the project, and Hwy 5 North of the project; which will enhance the local access to the site. Opening: Fall 2008"

Sembler has a site plan with the names of major retailers and restaurants posted on their website, including:
Lowe’s
Super Target
Kohl’s
OfficeMax
PetsMart
Best Buy
Dick’s Sporting Goods
Taco Mac
Steak ‘N Shake

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