How does a Short Sale Effect Value
April 20, 2008 | Leave a Comment
One of the requirements of being a licensed agent is to successfully complete various continuing education classes during each year. Last fall I attended a class on “Understanding Appraisals”. The instructor for this class is an Atlanta Appraiser by the name of Scott Murphy. I found Scott to be extremely knowledgeable and he was more than helpful for the agents taking the class. Taking into account Scott’s experience and expertise, I requested his insight on the effects of a short sale on appraised values from an appraiser’s viewpoint. The following is Scott’s reply:
The effect on the market due to short sales is yet to be seen. Short sales are relatively new to the market. Many short sales will go to investors who know how to manage the complex and time consuming process. They will work the system to obtain the property significantly below market. They in turn will relist and sell the house at market value, much the same as the foreclosure process. These sales will hopefully self correct themselves. The sales that will be most damaging to the market are those which sell to owner occupants slightly below market value with full market exposure.
The true test to the validity of the sale and to determine if the sale is a true arms length sale would be its exposure to the market. Foreclosure sales are generally discarded because a lack of exposure to the market or they are significantly inferior in condition to other homes in the neighborhood. Short sales, on the other hand, are typically in similar condition to other homes in the neighborhood. If the home is multiple listed for a reasonable amount of time (IE: 30 days or more) it is then thought to have been adequately exposed to the market and may very well be an arm’s length sale. The effect these sales will have on the market will be determined by the exposure and the number of them in a given neighborhood. Most neighborhoods can support 1-2 short or distressed sales without altering values. When the number of short of distressed sales exceeds the number of arm’s length sales values will significantly decrease.
I want to thank Scott for taking the time to share his insight. His answer has brought up an even more thought provoking question, Are short sales in any way responsible for the declining markets as viewed by the various mortgage lenders? If so would they not be like a double edged sword, they cut the losses of the lender by foregoing a foreclosure but create a more difficult lending environment for purchasers because entire market areas are becoming classified as declining markets.
Hail Damage in Atlanta
March 17, 2008 | 9 Comments
Tornado Hits Atlanta
This past weekend was one of the most interesting weekends the Metro Atlanta area has ever experienced weather wise. Friday evening about 10:00 a tornado touched down in downtown Atlanta. Extensive damage was done to the Georgia Dome, the Georgia World Congress Center and various additional buildings throughout the area. Airborne debris and high winds broke windows and lifted the roofs off of several structures. The SEC Basketball Tournament was suspended Friday Night and then relocated to Alexander Memorial Coliseum on the Georgia Tech Campus when it resumed on Saturday.
Saturday Was Even Worse
While Friday evening was exciting, Saturday was even more eventful. Starting about noon storm after storm seemed to be like freight trains running through North Central Georgia. Even though it could have been much worse, there were two fatalities. My thoughts and prayers go out to the families effected
Have Your Roof Checked
The news broadcasts have shown much of the visible destruction. What cannot be seen is the damage that hail can cause to a roof. If your home was in one of the area that received hail, do yourself a favor and have a qualified roofer examine your roof for any hail damage. It is much better to catch it now before you have water damage to your roof and attic.
Atlanta Real Estate Conditions
February 27, 2008 | Leave a Comment
The Atlanta Real Estate Market has escaped from many of the problems that have affected other major markets. It has been pointed out that the resiliency of the Atlanta market is due to our sector being fueled by jobs and relocation rather than speculative buying as has happened in some of the condominium resort areas. Just how lucky are we? Below you can see one of the policies lenders have adopted that affect buyers in other areas of the county.
In certain areas of the country lenders have implemented what is called a “Declining Markets Policy”. In essence what this policy calls for is for buyers, purchasing property in what the lender has identified as a declining market, to increase their stake in the property. Most lenders are requiring the loan-to-value (LTV) ratio if one loan is being utilized or the combined-loan-to value (CLTV) ratio if multiple loans are being utilized to be reduced by five (5) percent. An example would be rather than being able to obtain 100% financing in a declining market, a buyer could only obtain 95% financing. The exception to this policy would apply for FHA and VA loans. For these government backed loans a second level underwriter review is called for, thus making qualifying more difficult.
Lenders are identifying the declining markets by both city and county in the various effected states. Several sources are being used to determine which areas are included. Standard and Poors Case-Schiller Home Price Indices, The Federal National Mortgage Association, The Federal Home Loan Mortgage Corporation, The Office of Federal Housing Enterprise Oversight Index along with statistics from The National Association of REALTORS are the most common sources used in identifying these areas.
Not only are there declining markets, but several of the lenders are also looking more closely at what have been identified as “Soft Markets”. While these areas are not as drastically affected, the lenders are requiring a second level underwriting review for soft market identified locations.
In the latest report I have been able to obtain, the Atlanta Market has not been identified as either a declining or soft market as defined by these lender guidelines. This doesn’t mean that the buyers market is gone. It just suggests that the Atlanta Market has not been as decimated as some of the other major metropolitan markets. Conditions remain favorable toward buyers with sellers making considerable concessions and interest rates remaining low. To find more information about Homes for Sale, just let me know what your requirements are. I am here to help.
Atlanta Real Estate Market Update
February 24, 2008 | 2 Comments
It’s A Buyers Market
If you didn’t know it before, you certainly will know it now by way of the most current stats for real estate in the Atlanta Market. Unfortunately for sellers 2008 has started much in the same fashion that 2007 ended, with a market that continues to decline. Inventory continues to increase and the average days on the market for single family homes is at it’s highest level in 10 years at over 101 days on the market.
Available Inventory Increasing
Here are some of the facts comparing months supply of available homes 1-2006 vs 1-2008:
New Single Family Homes up over 81%
Resale Single Family Homes up over 91%
New Condos and Townhomes up over 125%
Resale Condos and Townhomes up over 26%
Additional Good News for Buyers
The other factor that generally goes hand in hand with increasing days on the market and additional inventory is an overall average price decline of sold properties. The situation at this time confirms this factor. The average sale price for both single family residences and condo/townhomes declined in January.
Even More Good News
If you take the abundance of inventory to choose from and the lower average prices then add to it the notoriously low interest rates, you now have all the components of a full fledged buyers market in Atlanta. Sellers are saying bring all offers. Why don’t we get together and help them sell their home at a deep discount?
How to Avoid Foreclosure
February 6, 2008 | Leave a Comment
During the housing boom homeownership grew at record levels. Mortgage brokers were making loans utilizing all kinds of exotic loan programs. There were interest only adjustable rate loans, option loans were the purchaser would choose from one of 4 different payment options and 100% financing programs just to name a few. As long as home values continued to rise these types of programs may have made some sense. Unfortunately the housing market has gone through a "correction". What this means is that home values in many areas of the country have not continued with the appreciation that had been experienced in recent years. Not only had the values not appreciated but they depreciated by as much as 20% in some areas. From a purely economical perspective, the rate of appreciation could not be sustained.
Your Not Alone if You Are Having Trouble
For homeowners who utilized some of these more exotic loan programs to finance their homes the adjustable rates are increasing and making the mortgage unaffordable. Some homeowners who had less than perfect credit were able to purchase homes using sub-prime loans. Sub-prime loans generally have higher interest rates, costs and may have started with lower initial "teaser rates" which were followed by substantial increases that have now made them unaffordable. The Center for Responsible Lending estimates that there are approximately 2.2 million American households that have or will lose their homes as the monthly payments increase on these adjustable rate mortgages.
What Are The Alternatives
So what alternatives are available to homeowners faced with these escalating monthly mortgage payments. If you had not heard of it before, recently everyone has heard of foreclosure. Foreclosure is the method by which the lender takes back property that is not being paid for as agreed. A foreclosure is one of the permanent alternatives for loan relief. Some other permanent alternatives would be assumption, a short sale (short payoff) or a deed-in-lieu of foreclosure. Understand that these permanent alternatives result in the loss of your home.
There are also temporary alternatives which do not result in the loss of your home. These alternatives would include a forbearance agreement, a reinstatement, a repayment plan or possibly a loan modification.
Get Help From An Expert
Before getting to a situation where the lender has no alternative, do yourself a favor and get with a real estate expert who can help you understand your options. Remember you are not alone, but you have to take action. If you are currently behind on your mortgage or expect a problem with maintaining your mortgage Contact Mack for a free confidential consultation to discuss your exact situation and options. This service is free for any homeowner in the northeast Greater Atlanta area.
Atlanta Real Estate Advocate
January 13, 2008 | Leave a Comment
When thinking of the term advocate and applying it to the real estate market you would think that it would probably have something to do with being a consumer advocate. I would tend to think so also. There can be two different types of real estate advocates. There would be the buyer’s advocate whose sole intent is to protect the buyer’s interest and a seller’s advocate whose purpose would be to protect the seller. Let’s examine each type.
Purchasing a home is typically the most expensive purchase any of us will ever make. Not only should a buyer enlist the services of a qualified Atlanta Buyer’s Agent but also an individual that would be considered an Atlanta Real Estate Advocate. To be a good buyer’s advocate an agent should have a complete understanding of not only the legal requirements in representing a buyer as called for by Georgia law but also have a good working knowledge of construction techniques, current mortgage information, school information (both public and private) and most of all put the buyer’s interest above all others. For Atlanta First Time Buyers make certain that you get a complete understanding of the process of buying a home. Attending a buyer seminar or workshop is an excellent way to increase you knowledge and after all, knowledge is power especially in a real estate transaction.
Selling a home is also an enormous financial transaction. Rarely would any of us be involved in transactions for hundreds of thousands of dollars except with our homes. Doesn’t it make sense to put your trust someone who understands what is required in Selling a Home in Atlanta. The days of just putting a sign in the yard and answering the calls are gone. Having a solid marketing plan detailing the steps to be taken to properly market a home is the foundation for a successful transaction. To get a home sold in today’s market it is of utmost importance to have the home on multiple websites in order to obtain maximum exposure. One way to accomplish this is through an Internet Data Exchange (IDX) that makes your home available on every agent and broker website in the entire Atlanta Market and really helps when a buyer is searching for Atlanta Homes for Sale.
Having experience in assisting both buyers and sellers has helped me be able to understand the needs and wants of both buyers and sellers. Understanding what each wants pays off when a contract is being negotiated.
The nice part of all of this is that working with a real estate expert in Atlanta who will protect your interest doesn’t cost any more than working with a less experienced agent who may not be as qualified. It is impossible for one agent to be able to cover the entire Greater Atlanta Market effectively. Feel free to contact me for assistance with finding qualified REALTORS throughout Metro Atlanta to help with your real estate needs.
Bank of America Buying Countrywide
January 11, 2008 | Leave a Comment
It has been rumored for some time, however yesterday it seemed to gather increased reporting by some of the financial publications. Both Bloomberg and Reuters had extensive articles about Bank of America puchasing Countrywide.
As I was doing some research for this article I received an email from a Countrywide Loan Officer whom I have known for several years. The email was forwarded and the original is from Angelo Mozilo, Chairman and CEO of Countrywide to all Countywide employees so I would say that this pretty much takes this purchase out of the rumor category. Here is an exerp from the email:
"The highlights are the Bank of America has agreed to buy Countrywide but are going to run Countrywide under the Countrywide brand. This is what many of us wanted to happen – although many of our competitors did not want this to happen. This makes us by far the biggest mortgage company in the country!"
Last August when local lender Homebanc went out of business Countrywide took over their loan origination. Now with Bank of America buying Countrywide the largest mortgage company in the country has been created.
Last fall Bank of America elected to shut down their mortgage wholesale division and originate all loans in house. Now with this aquisition, perhaps the question that should be asked is does this in any way resemble a monopoly? You would have to guess that the Security and Exchange Commission will address this possible issue.
Here is the primary question that I have about this purchase and Bank of America becoming so large in the mortgage business, If the mortgage business in this country is in such bad shape why would Bank of America elect to buy Countrywide and increase their exposure? Sure they are getting Countrywide at a reduced price as Countrywide stock has tanked recently but what about loans that default in the future? Some of the articles that I read indicated that there is a chance that Countrywide was going to be filing for bankruptcy protection. Bank of America could have possibly bought Countrywide for less then.
We will all have to wait and see what the future holds with this purchase. My recommendation to anyone who is refinancing or purchasing a home would be to shop around for the best terms and conditions for your mortgage. Make sure to get a "Good Faith Estimate" and compare the costs from each of the lenders you have selected.
Atlanta’s Golden Triangle
January 9, 2008 | Leave a Comment
Smart Numbers
When it comes time to talk about statistics in the Atlanta Real Estate market the person you talk to is Steve Palm of Smart Numbers. For years Mr. Palm has been providing builders, developers and even the listing services in the Metro Atlanta area with statistical data and accurate forecasts.
Atlanta Real Estate Sales Heading Up
I had the privilege of attending a meeting yesterday were Mr. Palm was the featured speaker. He pointed out some interesting statistics about the Atlanta market. For the entire Atlanta market the last 2 months have shown an upturn in residential sales. This upturn has been fueled primarily by the resale segment of the market. Mr. Palm anticipates a quicker recovery from the resale segment than from the new construction side of the market. He bases this forecast on the fact that there are approximately 14 months of inventory for new construction versus approximately 10 months of inventory in the resale segment. In addition to the inventory status, due primarily to land prices and building materials escalating, the pricing structure of new construction has far exceeded the price appreciation in the resale market.
Atlanta’s Golden Triangle
One area that was pointed out in his talk as being a prime real estate area in the Atlanta Market is the area he referred to as "The Golden Triangle". I really liked hearing this information as this is my primary service area. This area encompasses parts of Gwinnett County, Fulton County and Forsyth County. The primary reason this area is so highly thought of in Mr. Palm’s eyes is due to the transportation arteries. The Golden Triangle, as it is referred to, is outside of Interstate 285 and is between US Highway 78 and Ga. Highway 400. What separates this area from other segments, and makes it so special, are the 7 major arteries for the area; Highway 78, Ronald Regan Parkway, I-85, Highway 316, I-985, Peachtree Industrial Blvd. and Highway 400.
I have to say that I agree with Mr. Palm’s assessment of the area. For those of us that live in the area we can tell you that not only are we fortunate to have these transportation arteries, but we also have some of the best schools in the entire Greater Atlanta area.
Forecaster Got It Right
December 28, 2007 | Leave a Comment
Last night on the local evening news the weather forecast was for rain and thunderstorms in North Georgia today. Now I know that we have made fun of weather forecasters in the past but this is one time that everyone in Metro Atlanta should want this forecast to be correct. After all we have not had much rain in Atlanta since mid November when I asked for Spare Water.
It’s A Good Rain
Recently we have had small trace amounts of rain that really did not provide any measurable relief to the drought. They were helpful in replacing some ground water which will make today’s rain so much more beneficial. It is currently a very steady rain and according to the weather maps, much of it is falling over the Lake Lanier and Lake Allatoona basin’s. This will be extremely helpful in replenishing some of the water we so desperately need in these lakes.
Can They Be Partially Right
Part of the forecast for today is for thunderstorms. Even though we need the rain, getting it too quickly can be bad for erosion. So I hope the forecasters are correct in that we will get between 1 and 2 inches of rain today, just not all at one time in a violent thunderstorm.
Extended Forecast
Saturday should be clearing slightly and the rains return on Sunday. If the forecast is correct we should receive another 1 to 1-1/2 inches of rain Sunday. These two days of rain will definately help with the lake levels and may be just enough to prevent 2007 from being the driest year on record in Georgia.
Dominick’s Italian Restaurant in Lawrenceville
December 19, 2007 | Leave a Comment
As we were finishing the last of the Christmas shopping yesterday evening the conversation turned to dinner. We had been so busy that we totally forgot about eating. Millie remembered that one of our neighbors had told her about a new Italian restaurant in downtown Lawrenceville and we decided to give it a try. To say that we were very impressed would be an understatement. This was one of the best Italian meals we have ever eaten.
So our newly found favorite Italian restaurant in Lawrenceville is Dominick’s. The Lawrenceville location is the newest as they also have a location in Norcross. Their slogan “Little Italy, Lotta Food” is very fitting. Not only is the food fantastic, but the portions are family sized. Fortunately our waiter warned us about this. We each had half orders of our dinners and had to get to-go containers also. A full order will probably feed a family of four. From what we understand, you will be well advised to have a reservation if you plan on going to Dominick’s on a Thursday, Friday or Saturday evening. I hope you enjoy Dominick’s as much as we did.
