Maxsell Real Estate: 2008 Year in Review
Posted: December 31st, 2008
Category: Atlanta Real Estate, real estate news
Maxsell Grows Others Shrink
2008 was one of the worst real estate markets in the history of Metro Atlanta. The number of sales dropped, the value of real property dropped (although only slightly in Atlanta), and many builders, lenders, and realtors were forced to leave the business. However, the story was different for us at Maxsell Real Estate. As a small company, only 3 years old, many could have predicted a down year or possible failure. However our team of quality agents experienced solid growth across the board during one of the worst real estate markets ever.
Growth in a down year!
Maxsell Real Estate saw the following improvements for 2008 vs 2007:
184% increase in number of transactions
120% increase in volume of transactions
115% increase in gross commission income
138% increase in number of agents
These numbers would put us #8 in Cherokee County Market Share ahead of both Re/Max offices and Jenny Pruitt and within immediate striking range of being #6 on the list (Metro Brokers). A great job for a down market and we look forward to an even better 2009!
We did all of this while the average real estate brokerage lost 30% of their agents and a similar number in productivity. The Cherokee Association of Realtors is down from 1150 Realtors to approx. 815 (down 29%+/-).
How did we do it?
First of all, we are diversified by servicing residential, commercial and land transactions. But more importantly we only hire quality people to represent Maxsell Real Estate as agents for our clients. The public trusts our agents to be honest and tell them truth, not just what they want to hear or what it takes to get the listing. Our commitment to using the latest technologies also keeps us ahead of the competition. However, the number one reason Maxsell Real Estate experienced growth in 2008 is because of our clients. Thank you for trusting Maxsell Real Estate with your real estate goals!
Happy New Year and may 2009 be your best year ever!
- Brad Nix, Managing Broker
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Atlanta Real Estate Recovery
Posted: December 12th, 2008
Category: Atlanta Real Estate, Market Reports, real estate news
Post 3 of 3 in the Atlanta Real Estate Recovery series (energy, housing, credit).
Roger Tutterow Ph.D. and Dean of Economics at Mercer University gave his opinion to Sally’s Roundtable on the Recession of 08’ as it relates to Atlanta Real Estate.
Credit Markets
As far back as July 2007, Wall Street began to question the true value of Mortgage Backed Securities. Interesting how it really became a household word in recent months. Either way, banks are continuing to search for ways to loan money to the masses. The original bailout for Fannie Mae and Freddie Mac was probably the smartest move that Washington could have made. In essence, it allows lenders the ability to continue to bundle loans together and sell them to a company that is backed by the full faith and credit of the US government.
Banks, mortgage brokers, etc are in the business to originate loans. Most do not have a true mechanism to keep them in house and actually hold for 30 years. Therefore, without the ability to bundle and sell, loans would not be written.
Good News!
We are at or past the bottom of the Real Estate curve in GA. Home prices have stabilized and inventories are flattening. With the ability to actually borrow money at still all time low rates, the expectation is that the best deals will sell first which would include Pristine foreclosures, New deeply discounted homes from builders, and resales where the owner can take a loss to get a better deal on a more expensive home.
As an aside, I was working with a retired buyer couple from Florida and during the conversation we were comparing markets between Orlando and Woodstock. Since they are so similar (right!) they had the expectation that they would be able to move here, buy a home for about 60 cents on the dollar, and retire, again. The reality was that it was not going to happen unless they wanted a real fixer upper. In Woodstock, a $300,000 home is still affordable to many individuals and this price point recognizes the high end of activity in the area. In this case, I suggested we look at foreclosed builder homes or homes between $500k and $800k if they truly wanted to get a 30% discount. In the end, some people will let expectations driven by their local market or worse, driven by the national news, get in the way of truly a great buy. So what do we have to look forward to?
In 6 months or so, those with little to no equity will see a more stabilized and active market. Today, there is no place to go but up and do not let the Evening News Talking Heads tell you differently. Our problems are nothing like so many others. Real Estate is Local and it is not as bad as others would think.
Read Part 1:Energy and Part 2:Housing
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Atlanta Real Estate Recovery
Posted: December 10th, 2008
Category: Atlanta Real Estate, Foreclosures/Short Sales, Market Reports, real estate news
Post 2 of 3 in the Atlanta Real Estate Recovery series (energy, housing, credit).
Roger Tutterow Ph.D. and Dean of Economics at Mercer University gave his opinion to Sally’s Roundtable on the Recession of 08’ as it relates to Atlanta Real Estate.
Housing
In the metro Atlanta area, Existing home sales are down about 38% (units) and new sales are down 68%. In itself, these figures create an over inventory of homes which causes a longer time on market. However, this news is not all bad either.
If you are a watcher of the National Evening News, we have been told that housing prices have dropped at staggering numbers 20%, 30%, 32%. In metro Atlanta, those numbers simply AIN’T true. All Real Estate Markets are local! The city of Atlanta is very different from Marietta or Woodstock, GA and especially Coastal Florida, I-95 from Northern Virginia to Maine, and Napa, LA, and Vegas. The best estimate is that the average home price in Metro Atlanta has slipped about 6-8% in the last year which equals about two years of appreciation for the average homeowner.
Good News: Though it will take longer to sell your home, you should expect a selling price that can actually make a sale worthwhile.
What about foreclosures?
Many of us recognize that GA led the nation in foreclosures over the past year. There are a couple of reasons for that: Atlanta and the “burbs” has a lower average age for first time homebuyers than in comparison to most of the nation. So my opinion is that many of those college grads were some of the same one’s who had school loans, credit cards, new cars, and a huge appetite of I want it now.
I want it now truly became available to first time buyers by the creation of creative financing. Zero down payment, Discounted ARM’s, low credit score, and Excessive Seller contributions allowed a family with an income of less than $75,000 to buy a home at $350,000+. Those days are gone for now as borrowers are seeking FHA financing and Plain Vanilla 30 year fixed rate mortgages. Why? Those are the only kinds of loans available.
Secondly and more importantly, Georgia is a Non-Judicial Foreclosure State. In short, this means that the lender does not have to sue a delinquent borrower in court to get control of the home. In many states, like California, it can take 4-6 months for a lender to actually take a home back in foreclosure. In Georgia, you have 30 days and it will be sold on the courthouse steps to the highest bidder.
Most of the homes that builders have defaulted on have been taken back by the banks which present a real opportunity for those who can buy now. Most homes will be sold for much less than original price – builder profit. In addition, there is a great chance that the final price can include additional concessions from the local bank that now owns the property. (IE: a further reduction in price, a better loan, upgrades, etc.) Work with a Realtor who can think outside the box. When you are getting a deal, do not dwell on trying to beat the bank up. Search for opportunities to get things you want, albeit at a great price. Check out Atlanta Foreclosures to see some great houses that meet this requirement. Atlanta is still affordable!
The expectation is that homes that are occupied will see fewer and fewer foreclosures as time progresses. Interest rates are being manipulated by the Federal Reserve and the “Bailout” has been designed to allow homeowners an opportunity to refinance in order to avoid foreclosure. Just yesterday, a number of mortgage companies were offering rates in the high 4% and low 5% range, almost 1% point lower than earlier in the week. As a result, there should be no reason to expect a further increase in the number of monthly foreclosures.
What are your thoughts on foreclosure? Do you have a tale to tell? comment below
Read Part 1:Energy and Part 3:Credit
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Atlanta Real Estate Recovery
Posted: December 8th, 2008
Category: Atlanta Real Estate, Market Reports
Recession is Official: Let’s Chart the Recovery
Post 1 of 3 in the Atlanta Real Estate Recovery series (energy, housing, credit).
Yesterday, Roger Tutterow Ph.D. and Dean of Economics at Mercer University gave his opinion to Sally’s Roundtable on the Recession of 08’ as it relates to Atlanta Real Estate. It was great to hear that it seems we are now at or past the bottom of the curve and the expectation is that in late 2nd Qtr and Early 3rd Qtr 2009, we will see a noticeable improvement in some key statistics. As this information will address a number of issues, I will publish this as a series throughout the week. Be sure to check back often to read the next update on the Atlanta Real Estate Recovery. Forbes magazine also projects job growth for Atlanta as a catalyst for recovery.
Here are some notes and facts as presented by Tutterow, along with my personal commentary:
Experts Announced: US Economy is in Recession
Not that we all would not believe it! Our friends on the news like to say a recession is when there are two consecutive quarter’s of negative growth. That is incorrect. A recession involves looking at the following sectors and establishing negative trends in all of them: Manufacturing and Trade Sales, Personal Income Levels, Non-Farm Payrolls, and Industrial Output. So while we know that a recession is upon us, it is usually months after the fact that the data will prove it.
What we do know is that this is not going to be as bad as the Great Depression but will resemble the deep recessions of the 80’s.
3 Contributing Factors of the Current Economy
1) Energy Costs
Since the Worldwide recession of 2001-2002, all international economies were growing at a staggering rate. The BRIC nations of Brazil, Russia, India, and China held some of the leading growth rates and thus created a higher demand for all commodities: Oil, Metals, etc. So as oil prices grew at staggering rates, speculation began to take place in the form of long positions on oil futures that pushed the price of oil from $100 to up to $150/barrel.
Now that the world is in yet another recession, oil prices have dropped to $45/barrel in a short period of time as demand has decreased and speculators eliminate long futures. The target price for oil may be $65/barrel.
This affects the economy in two ways: Driving costs and Manufacturing costs. It is estimated that $4.00/gallon gas in Georgia costs the average driver about $2,000.00 additional per year. If you have two wage earners in the family, this could easily double. So to break it down to real impact, out of each paycheck, the average employee will spend an additional $75 out of pocket per paycheck. This money was no longer spent on clothing, movies, eating out, etc. This had a tremendous effect on the state of the economy.
More importantly are the costs that we as consumers do not recognize. Second to labor costs, energy costs are extremely expensive in manufacturing. Converting raw materials and delivering goods has squeezed the bottom lines of most companies and could have resulted in higher prices paid at the register, had the price of energy remained at all time highs.
In the end, the single largest positive news is that we are looking better than worse. Oil and other commodity prices have dropped with the strengthening of the US Dollar and the lack of demand on the worldwide stage. This will make large differences in manufacturing costs, disposable income, and Industrial Output. In addition, the Consumer Confidence level will rise as predictability becomes more evident. Quite simply, who would by a home when the price of gasoline is $4.00/gallon and rising? Not many, I am sure as evidenced by recent sales data. Now that we are seeing $1.60/gallon is it reasonable to assume that some of the uncertainty is going away?
Read Part 2:Housing and Part 3:Credit
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Atlanta Real Estate & Business Attorney Advice
Posted: December 7th, 2008
Category: Atlanta Real Estate
In the coming months, you may find your customers are having grave financial difficulty and may file for bankruptcy protection. It may shock you when you receive a letter from the bankruptcy court trustee demanding return of payments your customer had made to you within 90 days of their filing for bankruptcy.
WHAT IS A PREFERENCE
When you receive the demand for repayment you are the recipient of a preference action. The bankruptcy trustee has authority under the law to recover certain payments made to creditors within 90 days of the filing for bankruptcy provided the payment meets certain criteria. In essence, a bankruptcy trustee can sue your company to recover payments made by the bankrupt customer in the 90 period prior to the filing of the bankruptcy petition.
WHAT CAN YOU DO TO DEFEND AGAINST A PREFERENCE ACTION
The bankruptcy code provides defenses against a preference action. They include the following:
1) Contemporaneous Exchange for New Value: This means that if you hear a customer is having financial trouble you may require that they pay you at the time they purchase the goods or very shortly thereafter. If this is not practical, then understand you may run the risk of possibly having a trustee recover an eventual payment to you later.
2) Ordinary Course of Business: This defense is available if you can prove the credit transaction is recurring and is in the ordinary course of your business. You must bear in mind that a Bankruptcy Court’s analysis of what is ordinary course will vary from industry to industry.
3) New Value: This defense is available when you provide additional products and services as a direct result of receiving payment for prior products and services.
Your business attorney can provide tremendous value to your business by helping you arrange your credit practices with customers so that you have defenses when that preference letter comes in the mail. That preparedness is far preferable to having to give back the payment you received and ultimately ending up with pennies on the dollar.
For more information, contact Justin Daniels
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