Using the results of this analysis, Goldberg and Goldfarb also calculated home builders’ and apartment REITs’ exposure to each market and were able to forecast which companies would be the best positioned for a housing rebound. Out of the nine public home builders in Goldberg’s coverage universe, The Ryland Group was the big winner. With the release of the report, Goldberg upgraded Ryland stocks to a buy status.
Ryland’s geographic diversification--it has no more than 10% of its business concentrated in any one geographic market--merchant builder model, and strong balance sheet puts it in a position to take advantage of a market return quickly.
Moreover, the company has a higher concentration in markets with more favorable outlooks and less of a presence in more troubled markets such as Las Vegas, Phoenix, and Tampa. In a related conference call, Goldberg pointed out that, based on community counts, Ryland has roughly 33% of its communities spread across top pick markets Atlanta, Dallas, and Houston versus an average of 24% for the group.
On the multifamily side, Essex Property Trust was Goldfarb’s buy-rated stock. He pointed to the company’s exposure in coastal California and Seattle--markets less affected by the housing downturn--as major pluses.
During the call, Goldfarb also pointed out that the market report was slightly more reflective of single-family building than multifamily activity. “A good apartment market is where single-family remains in check,” he explained. Thus, as the single-family market has struggled, the apartment industry has felt some fallout.
He also stressed this point in the report: “There has not been an influx of new renters as the housing market collapses--indeed we are seeing competition from rental homes in some markets.
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Alexandra Rodriguez RE/MAX Town & Country |
404-401-1731 - email
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| Categories: | GeorgiaRealEstate (17) | NewsontheAtlantaMarket (8) | Thu 30 Oct 2008 Feds cut overnight lending In another move to shore up the weak economy, the FED cut the overnight lending rates by .5%. This will reduce Prime by .5, which will result in equity lines going down for those that have lines. Tue 30 Sep 2008 Barry Habib's Take on Today's Turbulent Market‏ MSS' Barry Habib Responds to Government Rescue Plan Courtesy of Todd Colvin Hometown Mortgage Sun 07 Sep 2008 Atlanta, Great for Singles
Daily Real Estate News | September 5, 2008
Atlanta Named Best City for Singles
Forbes magazine has for the eighth year rated the nation’s largest urban areas in terms of how friendly they are to the country’s 74 million single adults. To determine which U.S. cities are most comfortable for soloists, the magazine ranked the 40 largest urbanized areas in seven different categories: number of singles, nightlife, culture, cost of living alone, job growth, online dating activity and coolness. Coolness was the most subjective factor. It was determined by a Harris poll, which asked singles to answer the question: “Which city do you think is the coolest?” This year’s top 10 cities for singles are:
Sources: Forbes, Elizabeth Eaves (09/04/2008 Ways for Sellers to Make Their home more Presentable If you have a seller who is not making sure their home is presentable to a potential buyer, remind them that, in a competitive market with more inventory than we've seen in some time, presentation is everything! By eliminating points the potential buyer may find fault with and bringing out the positive amenities, they are more likely to sell the home and get the price they are asking for. Here are just a few tips that will help them support your efforts as their representative in the transaction:
Bankruptcy, Foreclosure, and Short Sales I don't know about you, but every day these questions are asked of me by my referral partners and their borrowers who are quickly trying to respond to the financial chaos that continues to emerge from the mortgage crisis that has taken this nation by storm. Many individuals and many of your clients know, with certainty, they will have to leave their homes. Their biggest question now is how to most effectively do so without devastating their credit scores so they will someday be able to buy a home again.
As a Mortgage Professional, you are in the perfect position to answer the tough questions that need to be answered about serious mortgage and credit issues. I know that some of you may be thinking that there is no reason to spend time and money talking to individuals who are going into a short sale, or a foreclosure or even a bankruptcy, because they won't be able to purchase a home in the next 2-5 years, right? Well, if you can tell me that every one of these clients has no friends, family, co-workers, or contacts, then, I guess you are right, but I highly doubt it. Every client creates a potential for multiple loans through referrals, but first you have to win their loyalty as a client by being loyal to them when they are down. Even if your database is full of clients who are not being affected by the mortgage crisis, odds are, they know 5 people who are. Now is your chance to position yourself as the go-to person for this crucial information. I can help you do that in two ways:
Having The Answers To Those Tough Questions
When a homeowner finds themselves upside down in their mortgage payments, they have no idea of which direction to turn, and It seems that it is almost impossible to get straight answers to their questions about what options they have, and how each option will affect their credit. Following is information to help you answers those questions. Remember, there are NO quick fixes when it comes to credit, so it is imperative that you don't wait until the last minute to get this information out to your clients. and your prospects, clients and referral partners .
FORECLOSURE
Foreclosure is the legal process in which a bank or other secured creditor either sells or repossesses a parcel of real property, home or land, after the owner has failed to comply with the mortgage or deed of trust agreement with the lender. Most frequently, the violation of the mortgage agreement is the default of payment. The completion of the foreclosure process allows the lender to sell the property, and keep the proceeds to pay off the mortgage as well as any legal costs. The length of the foreclosure process varies from state to state.
If the foreclosed property is sold for less than the remaining primary mortgage balance, and there is no insurance to cover the loss, the court overseeing the foreclosure process may enter a deficiency judgment against the borrower. Deficiency judgments can be used to place a lien on the borrower's other personal property, obligating the borrower to repay the difference or suffer the loss of their property. It gives the lender a legal right to collect the remainder of debt out of borrower's other existing assets.
However, there are exceptions to this rule. If the mortgage is classified as "non-recourse debt," then the borrower has no personal liability in the event of foreclosure. This is often the case with residential mortgages. If so, the lender may not go after borrower's personal assets to recoup additional loss.
The lender's ability to pursue a deficiency judgment can be restricted by state laws. In California and some other states, original mortgages (the ones taken out at the time of purchase) are typically non-recourse loans, however, refinanced loans and home equity lines of credit aren't.
If the lender chooses not to pursue deficiency judgment-or can't because the mortgage is non-recourse-and writes off the loss, the borrower may have to pay income taxes on the un-repaid amount if it can be considered "forgiven debt."
Any other loans taken out against the property being foreclosed (second mortgages, HELOCs) are "wiped out" by foreclosure (in the sense that they are no longer attached to the property), but the borrower is still obligated to pay them off if they are not paid out of the foreclosure auction's proceeds.
How Does a Foreclosure Affect Credit?
A foreclosure can be reported as a Foreclosure or Repossession and carries a derogatory payment status of 8 or 9 (M1, R1 and I1 being the best and R9, I9, etc. being the most negative) which is just under a Public Record. There is a misconception that foreclosures are considered Public Records to the scoring system, however, they are not. Although there is a Public Notice Record on file once a foreclosure is filed, but this record is completely different than a credit report public record.
A Foreclosure will remain on a credit report for 7 years from completion date. And the score will drop from 50-250 points. The difference in point loss depends on how many points your client has to lose in the payment history factor of their credit. So if someone has a 750 credit score, and they opt to foreclose, their score could drop up to 250 points. However, if someone has a 500 credit score, they may lose 50 points for the same derogatory. If a Deficiency Judgment or Tax Lien is filed in connection with a Foreclosure, the credit score can drop an additional 100 points.
Fannie Mae Waiting Period
The current selling guideline from Fannie Mae has upped the previous 4 year period of how much time must elapse after a foreclosure to 5 years from the date the foreclosure proceeding is completed, not started.
The exception for extenuating circumstances has been increased from a 2 year to a 3 year waiting period. WORD OF CAUTION: If you have a borrower going through a foreclosure due to circumstances of losing a job, a medical crisis, sub-prime mortgage crisis fall-out, I suggest that you advise them to fully document their experience now. Not to wait until later, because the details and emotional energy of what they are going through will be more difficult to document and prove down the road if they decide to apply for a loan in 2 years based on an extenuating circumstance claim.
In General: When it comes to foreclosure and how it affects the ability to obtain credit in the future, there are multiple points of extremely negative impact. Deficiency judgments for the amount not collected by the lender in the foreclosure sale can end up on the borrower's credit report as a derogatory mark. Additionally, there is a high risk that the borrower will be hit with a substantial tax penalty which can result in a tax lien, which also appears on the credit report. As a general rule, other than a bankruptcy, foreclosure is the least desirable of all of the options available when a borrower is upside down in a home mortgage.
Deed in Lieu Of Foreclosure
An alternative to foreclosure is a "deed in lieu of foreclosure." In this scenario, the borrower turns the house over to the lender and walks away without owing anything. A deed in lieu of foreclosure offers several advantages to both the borrower and the lender. The main advantage to the borrower is that it immediately releases him or her from most or all of the personal debt associated with the defaulted loan. The borrower also avoids a foreclosure proceeding and may receive more generous terms than he or she would in a formal foreclosure. Advantages to a lender include a reduction in the time and cost of repossessing the property.
However, the lender usually will not proceed with a deed in lieu of foreclosure if the outstanding debt on the property exceeds the current fair market value of the property. So in this market, this option probably won't be available to most homeowners who are upside down.
How Does a Deed in Lieu Of Foreclosure Affect the Borrower's Credit?
Most lenders report a deed in lieu of foreclosure as a foreclosure, so the credit scores will carry the same serious affect as if it were an actual foreclosure. However, what most borrowers don't know is that they can negotiate with the lender to report it differently in return for turning over the deed and avoiding foreclosure costs.
Many lenders will say that they cannot change the reporting status, but they can. Here are their options in preferred order:
The item will remain on the credit report for 7 years from the completion date or the settlement date.
Fannie Mae Waiting Period
The selling guideline from Fannie Mae has not changed. It is a 4 year period of how much time must elapse after a deed in lieu of foreclosure proceeding is completed.
The exception for extenuating circumstances also remains the same at 2 years.
Short Sale (aka Pre-Foreclosure Sale)
In my opinion, the best option is a short sale, which occurs when a bank or mortgage lender agrees to discount a loan balance, due to an economic hardship on the part of the home owner. The home owner sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove a proposed sale.
A short sale is typically executed to prevent a home foreclosure. Lenders often choose to allow a short sale if they believe that it will result in a smaller financial loss than foreclosing. For the home owners, the advantages include avoidance of having foreclosures on their credit histories. Additionally, a short sale is typically faster and less expensive than a foreclosure.
Junior lien holders, such as holders of second mortgages, HELOC lenders, and homeowner associations (special assessment liens), may also need to approve the short sale. Frequent objectors to short sales include those who hold tax liens (income, estate or corporate franchise tax - as opposed to real property taxes, which have priority even unrecorded) and mechanic's lien holders. It is possible for junior lien holders to prevent the short sale.
While it is frequently common for a lender to forgive the balance of the loan in question, it is unlikely that a lien holder that is not a mortgagee will forgive any of their balance. Further, it is common for a lender to omit updating the zero balance and settlement option on the mortgagor's credit report, or even flat-out refuse to do so "due to their financial loss."
The Mortgage Forgiveness Debt Relief Act Of 2007
When the lender decides to forgive all or a portion of the debt and accept less, the forgiven amount is considered as income for the borrower, like with a foreclosure, leaving it open to be taxed. However, The Mortgage Forgiveness Debt Relief Act of 2007 contains amendments to remove such tax liability, allowing the borrower and lender to work together to find a solution beneficial to both parties.
How Does a Short Sale Affect the Borrower's Credit?
The few reported short sales that I have seen have appeared as "Paid Settlements" on a mortgage account. In the wake of the current mortgage crisis, short sales are becoming extremely common, but legislation has not caught up with the tidal wave and there is no law on the books relating to them to date. As a result, there is an opportunity for the borrower to negotiate credit reporting with the lender. I've seen several successful negotiations, so be sure to let your borrower know that it is possible.
My view - a short sale proves that the borrower is exhausting every effort to pay the loan. The borrower has willingly committed to taking on months of emotional and physical stress in a good-faith effort to sell the property to maintain a good relationship with that lender. Most likely, the reason they can't afford their current mortgage is because they were in an adjustable product and their mortgage payment has doubled. That doesn't mean that they can't afford a different loan program with a lower payment. Which leads me to wonder what the incentive is for lenders not to negotiate with the borrower on how the item is reported to the bureaus. All they would be doing is cutting off a pretty substantial future income stream if they put these types of borrowers out of the market for two years. In that light, negotiation for a non-report on short sales is well worth it.
Here are their options in preferred order:
If reported, the item will remain on the credit report for 7 years from the completion date or the settlement date.
Fannie Mae Waiting Period
A few weeks ago, Fannie Mae was going to consider a short sale the same as a foreclosure, however, the current selling guideline from Fannie Mae has reduced the amount of time that must elapse after a short sale to 2 years from the date the short sale is completed, not started.
There is no exception for extenuating circumstances.
Bankruptcy Mortgage Relief
Currently, bankruptcy offers very limited protection to a homeowner who is upside down with their payments. The borrower can file a Chapter 7 which, depending on the state bankruptcy law, will most likely require him or her to surrender the property to the bankruptcy court, or file a Chapter 13 debt repayment plan to spread out prior delinquent payments over a number of months or years in the future. However, no bankruptcy proceeding can modify the terms of an existing home loan on a principal residence. Legislation is being proposed to Congress that would allow bankruptcy judges to modify the terms of an existing mortgage loan. I would not hold my breath. It could take years to make further substantial changes to the bankruptcy laws.
How Does a Bankruptcy Affect the Borrower's Credit?
My advice on this is to avoid Bankruptcy at all costs unless, your borrower is upside down on everything. Not only have the new bankruptcy filing requirements become more difficult and more costly, a public record will wreak havoc on credit scores and could stop someone from being hired or renting a place to live.
A Chapter 7 Bankruptcy will remain on the report for 10 years, and a Chapter 13 will remain for 7. The point loss could be from 100-350 points, depending on how many points the borrower has to lose in this factor.
Fannie Mae Waiting Period
The selling guideline from Fannie Mae has not changed. It is a 4 year period of how much time must elapse after a Chapter 7 Bankruptcy. The 4 year period can start on either the discharge or dismissal date.
The exception for extenuating circumstances is 2 years.
Again, the selling guideline from Fannie Mae has not changed. It is a 2 year period of how much time must elapse after a Chapter 13 Bankruptcy. The 2 year period can start on either the discharge or dismissal date.
In the case of multiple bankruptcies, the current selling guidelines that have just been added require a 5 year waiting period from the most recent discharge or dismissal date.
The exception for extenuating circumstances in the case of multiple bankruptcies is a 3 year waiting period from the most recent discharge or dismissal date.
What's the Good News?
In Conclusion
As a CRC Referral Partner, the resources at your disposal will empower you to do great things for your clients and yourself - use those tools to your greatest advantage and view this change as the opportunity to rise to a higher professional level! When you guide your clients and prospects through their current challenges, they will remain grateful to you because you addressed the issue at a time when they really needed you. And you have Credit Resource Corp. to help you do just that. You are in a position of strength to help every one of your clients. And, it's imperative that you act now.
All the Best,
Linda Ferrari, President, Credit Resource Corp. Information from Todd Colvin, TD&W Mortgage Corp.
678-965-6626 Direct Wed 27 Aug 2008 Cherokee is Fastest Growing County...
Did you see in today’s paper that Cherokee is one of the top 15 fastest-growing counties in the NATION!!
Out of the top fifteen, Georgia actually had 6 counties including FORSYTH, PAULDING, HENRY, FANNIN and NEWTON.
Twenty three Georgia counties made the total list. Cherokee actually moved up 3 spots since last year, growing 44% over the last 7 years, with over 5% last year alone. Tue 12 Aug 2008 Interest Rates
By drobertson • Jun 27th, 2008 • Category: In The News SHARETHIS.addEntry({ title: "The Experts Agree— Now Is the Best Time to Buy U.S. Real Estate", url: "http://www.ideal-living.com/?p=108" });
Several months ago, financial guru Warren Buffet was asked how to determine when the real estate market hits bottom. He suggested looking back after a year has passed, and added that he was buying now.
In April 2008, American Express Publishing and the Harrison Group's Annual Survey of Affluence and Wealth in America revealed that 77% of the wealthiest people in the country believe real estate is a "real opportunity" now. Forty percent said they plan to buy this year.
In a May 6 online piece for the Wall Street Journal, Cyril Moulle-Berteaux, managing partner of NY hedge fund Traxis Partners LP, wrote, "Yes, the housing market is bottoming right now. The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market." He went on to state that, compared to other housing market slowdowns, interest rates are much lower and incomes have continued to rise.
Moulle-Berteaux conjectured that the supply of available home inventory should drop below five months in 2009; at that point, values will begin climbing. He concluded, "Housing led us into this credit crisis and this recession. It is likely to lead us out. And that process is underway, right now."
Is this why you should buy? NO! You should not necessarily be thinking about investment…but it may give you peace of mind. Think about accessing a lifestyle and amenities that will enrich your life, while you are young enough to enjoy them.
Lori L. Beardslee
Branch Manager/Loan Officer Freedom Financial Mortgage 2230 Towne Lake Parkway Bldg. #600 Suite #120 Woodstock, GA 30189 (770) 517-7175 Direct Housing and Economic Recovery Act of 2008... Gotta love Uncle Sam. In an effort to kick-start the housing market, a key provision of the Housing and Economic Recory ACT of 2008 provides a TAX CREDIT to 1st time Home Buyers - Up to $7500!
For those of us who are income-tax code challenged (99.78% of the US population) - A tax credit is defined by our friends at Wiki as "recognition of partial payment already made towards taxes due". In other words, The government will allow 1st-time home buyers to keep up to $7500 of income tax they undoubtedly would have paid had they not purchased a home. WOW! That's $625/month, $144.23/week, or $20.60 per day. Ok - So where's the catch? The tax credit is also......refundable...but not in a good way. Uncle Sam wants his money back. The good news is that he'll kindly take repayment over a 15 year period and with a 0% interest rate. Assuming the full $7500 tax credit, that amounts to a repayment schedule of $500/year or $41.67/month. Not bad. If the house is sold prior to the 15 year period, the remaining balance must be paid on the subsequent tax bill for that calendar year. mortgageplanning.typepad.com
Sent out by Kelly Balzli with Vinings Mortgage Tue 05 Aug 2008 FHA Loan info Update Nehemiah and the Down Payment Assistance Programs with FHA loans Since the Senate and House passed the new Housing Bill HR 3221 Wednesday many of you have been calling me with questions. So I figure those of you who haven't asked are wondering the same thing:
If the new Housing Bill does away with seller-assisted down payment assistance, when does it go away?
So while we wait for Final Approval (could happen as soon as Saturday), let's ponder the implications so we can prepare ourselves and our clients.
According to the language in the bill's present form, the deadline is October 1st. Our read at the Genesis Foundation is that October 1st is the last day to have your contracts signed and "credit approved." The close date doesn't matter after that. So there you are. You have sixty days or so to Go Forth and bring them into the ark or they're going to have to save a little more than forty days and nights to close.
As for whether there's any chance DPA won't go away, there are several pro-DPA statements from various legislators. House Speaker Nancy Pelosi (the sponsor) says she's "disappointed" the mortgage bill's eliminating DPA and California Congresswoman Maxine Waters says she'll soon propose legislation to revive it. In fact, Barney Franks, Committee Chairman, says the October 1st deadline will actually give lawmakers time to work on DPA and risked-based pricing so that they "will not go out of existence". I'll be glad to update you as the situation changes.
I'll admit to being caught off-guard. I never believed HUD or Congress would do away with down payment assistance (DPA), especially in the present market. How do you recover when you've just stopped cold twenty-thousand homebuyers a month and triggered a 5-percent drop in home sales? I understand the concern over the uptick in defaults – but not weighed against the prospect of another massive downturn. But hey, those guys in Washington are a lot smarter than me!
For now, it's business as usual. We expect a huge onslaught of applications as lenders launch their own "Last Zero Down" promotions. One thing you can count on from me, though. Genesis Foundation won't be hiking our fee as others have done. Still $300 (or $200 for new construction). And we'll still fund your gifts in one hour, right up to the last possible moment should it come to that.
Know also that we are working very hard to keep this path open to homeownership, and we appreciate your kind words of support.
Lori L. Beardslee
Branch Manager/Loan Officer Freedom Financial Mortgage (770) 517-7175 Direct Fri 20 Jun 2008 The Booming Atlanta Market
The Great Booming U.S. Real Estate Market Ahead
Key Reasons for Optimism:
Now
Basically, we now have a bifurcated market. Think of it as two markets: A) the market we can describe as the traditional resale market; one comparable to the normal markets in 2000 and 2001 when a qualified buyer meant verifiable income and money to put down, and B) a new additional market – the distressed properties market including REO, foreclosed properties and short sales. To participate in the distressed properties market there are additional skills required and additional levels of admin (paperwork) is necessary, but for those who want to add transactions to their traditional resale market efforts or for those who want to specialize in this arena, it's an additional opportunity for more business over the next few years. This market is replete with transaction opportunities as there are many levels of support offered by the ECB, FED and Central Banks; programs geared at driving stabilization and increased home ownership opportunities.
During the 2005-2007 market correction:
- Median household income grew by 5%
- 4M jobs were created
- 2M Legal Immigrations (4M IRS I-10 status)
- U.S. Population grew by 5M people
- House prices fell, so affordability is up
- 3M Family formations
- Retiring boomers abated sales or purchases
Ahead
Why an up-turn in late 2008 and early 2009 is likely and by 2010 solid:
- The nation’s roster of mortgage brokers and inexperienced real estate agents will continue to thin which mean more business for experienced real estate agents.
- Pent up demand from the correction will work off the inventory
- Population growth by another 5M people to 308M by 2010 (U.S. population is projected to total 438M by 2050)
- 1M + Legal immigrants/year
- In general, 80M baby boomers have not saved enough for retirement betting that the value of their homes or their tech stocks would increase. Neither has happened so there will be an increase in primary property sales (to capture equity) and downsized destination property purchases, which equals 2 transactions.
- X Generation 30M
- Y Generation 70M
100M = Growing into home buying age; youngest 20+, oldest early 30's. It's estimated that only 5% own a home now.
By 2010, we will likely be in a balanced market. This is the sweet spot for top REALTORS. Enough inventory to meet demand; but not at the point where there are not enough listings. AND -- Builders will start to replenish new homes needed supplies as there will be a demand for 129M housing units vs. 127M now built.
Why is now a good time for buyers to buy? Here are some considerations:
- 30-year fixed-rate mortgages at 6% on average, they are down from 6.3% a year ago -- lower rates mean buyers can afford more
- As a forward-looking factor, mortgage interest rates continue to hover just above the 40-year lows -- there is mortgage money available at some of the lowest rates in history
- Excellent homes-for-sale selection, both new and resale
- Great value - homes priced to sell
- More affordable housing and lower monthly payments
- Owning a home offers good tax benefits
- Homes are still a great investment and are increasing in value in most markets
- Build incentives and promotions available Thu 19 Jun 2008 FHA New Guidelines FHA Announces Risk-Based Premiums 1. Borrowers with either no score or at least 500 may get an LTV >90%; see matrix below. Wed 18 Jun 2008 Atlanta Market Recovering UBS: Atlanta, Charlotte, and Texas Will Be First to Recoverby Sarah Yaussi It may be too soon to call a bottom in the housing market, but that’s not stopping UBS from pinpointing which geographical markets will be the first to rebound--and which single-family and multifamily builders will be most able to take advantage of the turnaround in those markets.
In a new Q-Series report released this morning, UBS analysts David Goldberg and Alexander Goldfarb selected Atlanta, Austin, Charlotte, Dallas/Ft. Worth, and Houston as their top picks for markets that will lead in a housing recovery. The outlook for those five markets was optimistic because they exhibited stronger positive trends in demographics, economic growth, affordability, and inventory than the other eight markets examined. Based on these same metrics, Orlando, Las Vegas, Phoenix, Riverside, and Tampa fared the worst. For-sale inventories and declining home sale prices have increased competition among single-family builders, a fact that also poses hurdles for apartment fundamentals. San Diego, Los Angeles/Orange County, and Washington, D.C., were identified as “coincident” markets, meaning they were somewhere in between market leaders and market laggards. Courtesy of Ryan Lane with REMN Mortgage Fri 06 Jun 2008 Positive factors about current market
Positive Factors that the Media Seems to Ignore
The Reasons for Optimism:
During the 2005-2007 correction:
AND -- Why an up-turn in late 2008 and early 2009 is likely and by 2010 solid:
100M = Growing into home buying age; youngest 20+, oldest early 30's. It's estimated that only 5% own a home now.
By 2010, we will likely be in a balanced market. This is the sweet spot for top REALTORS. Enough inventory to meet demand; but not at the point where there are not enough listings. AND -- Builders will start to replenish new homes needed supplies as there will be a demand for 129M housing units vs. 127M now built.
AND -- Why is now a good time for buyers to buy?
Wed 07 May 2008 Cherokee Market Published: 05/01/2008
By Ashley Fuller Cherokee Tribune Staff Writer
An attractive quality of life is pulling metro area residents to Cherokee County at a high rate, according to a new report.Cherokee ranked second in an Atlanta Regional Commission study of relocation patterns in the 20-county metro area for net residents moving in from other metro counties.The report used data from the Internal Revenue Service from 2000 to 2005, the most recent period for which data is available.According to the report, Cherokee saw 56,178 people move in to the county from other metro counties during that period and 32,378 people move out to other counties, a net of 23,800. Only Henry County saw a bigger net with about 30,000. Finishing behind Cherokee was Forsyth (23,785) and Paulding (20,564) counties.DeKalb County lost the most population to other counties during the period. DeKalb saw a net loss of 80,558 people. Other counties that shed a large amount of residents during the period are Fulton (66,204), Cobb (38,991) and Clayton (10,047). Cherokee's new residents mainly hailed from Cobb County. More than 27,000 people moved slightly north from Cobb to Cherokee during the period. Fulton County lost 13,257 people to Cherokee. In comparison, 14,115 people moved from Cherokee to Cobb and 5,092 people moved from Cherokee to Fulton. Local leaders said the lifestyle available in Cherokee is what is drawing people into the county. Wanda Roach of Canton, a Realtor with Century 21 Max Stancil Realty in Woodstock, said Cherokee has a list of positives going for it. "Cherokee is a very attractive place to live. We have the mountains, a major lake and good recreation. The schools are great, and the taxes are still good," she said. She said Cherokee also offers more room to people who are living in heavily populated areas. "People want more property. They are tired of the congestion," she said, specifically mentioning the Yellow Creek community in northwest Cherokee as an area now popular among newcomers. "They like the rural atmosphere." County Commissioner Harry Johnston of Canton said while quality of life is a big draw, the county also is attractive because of the availability of housing. "I think it's because we have an abundant supply of homes available at competitive prices, compared with other metro Atlanta counties," he said. "We have consistently had a very aggressive development program in Cherokee and a great many speculative subdivisions." Dennis Burnette of Canton, who serves as the county's citizen representative on the ARC board, said people naturally come to adjoining counties when congestion increases. "Atlanta is growing fast and we are getting the benefit of the overflow from Fulton and Cobb," said Burnette, president and CEO of Cherokee Bank. He said Cherokee also appeals to people looking for a second home. "If people are looking to move up to a little bigger house, they can get more house for their money here than they can in Cobb," he said. Cherokee ranked eighth in the 20-county region in net migration from other states, with 9,677 people moving in from other states during the time period. The most new residents came from Florida, with 1,743 people moving north to Cherokee. The county came in fourth in the region for the adjusted gross income among people who did not move in 2005 at $69,100. Forsyth County was first at $89,800. Cherokee ranked third in the region for adjusted growth income among people moving in, with $54,700. Forsyth was first in that category as well at $82,800. The adjusted gross income for people moving out of the county was just more than $50,000 in Cherokee. Forsyth again was first at $74,400. Mon 21 Apr 2008 What does the Future Hold? 2007 was a historic year in the real estate and financial markets, thanks to the highly-publicized subprime collapse and subsequent credit crunch. As the end of the year approaches, we at YOU Magazine were wondering, what could possibly await us in 2008? With this in mind, we turned to mortgage industry icon Bill Dallas for insights into what we can expect next year and, more importantly, what buyers, sellers, and refinancers need to do now make the most of the opportunities in the real estate market.
Bill Dallas, Chairman of Dallas Capital, is an innovative thinker who's been a leader in the mortgage industry for over 25 years. Bill has a well-earned reputation for developing creative products to expand home ownership opportunities. More importantly, Bill's uncanny knack for foreseeing the future of the industry is astounding, and we are pleased to be able to share his amazing insights with you.
Interest Rates As you can see, interest rates aren't much different now than they were in January of this year. The average mortgage rates in this chart remain generally unchanged. According to Bill Dallas, mortgage interest rates in 2008 will likely remain unchanged as well – or even drop a bit lower. Adjustable Rate Mortgages (ARMs) may see a little more volatility and could potentially be pushed down if the Fed is forced to lower short-term rates again in an effort to stimulate economic growth. One thing to remember, however, is that Fed rate changes do not necessarily equate to fixed-rate changes. This means that, even if the Federal Reserve does lower its interest rates in 2008 (as Dallas suggests in his video), don't expect fixed-rate mortgages to fall as well. In fact, depending on the degree to which the Fed may be forced to act in 2008, current fixed-rates may be the lowest we'll see for some time – especially after 30-year fixed rates dropped to a 2-year low in late November. Home sales, of course, have been declining. However, there is some good news about the national economy that frequently translates into good news in the real estate market. For instance, 5.4 million jobs have been added nationally since home sales peaked in August 2005, despite the nearly 200 financial institutions that went out of business or laid off employees this year. True, the dollar has suffered a major decline in 2007, but the typical effects of a weak dollar (e.g. higher inflation and higher interest rates) have yet to appear in the national economy. In fact, some analysts say this "weakness" of the dollar in 2007 has actually made American products more competitive in the global markets. With nearly 4% growth in the nation's gross domestic product (GDP) in the last two quarters, this seems quite accurate – but for how long? Interestingly, the weak dollar is also proving to be quite attractive to foreign investors seeking American real estate. According to a survey from the National Association of REALTORS® (NAR), while many Americans are waiting on the sidelines for the market to bottom out, foreign buyers (especially from Mexico, Britain, and Canada) have taken action, buying second homes in the U.S. at a major discount. Real Estate Prices Just imagine if you had purchased stock in Google™ in March 2006, when prices pulled back from a January high of $471.27 to a bottom price of just $340.93 per share, a significant discount in just three months. Twenty months later, however, that same stock has now fully recovered, reaching a new high of $741.79 in November 2007. With returns like this, would it have made much of a difference if investors had waited for the absolute bottom? Bill Dallas isn't the only one predicting that real estate prices are nearing the bottom. According to the National Association of REALTORS® (NAR), by the first quarter of 2008, price declines will be "minimal as current widely available mortgage products filter through the system." In 2008, NAR further predicts that "many markets in the middle part of America" could even see some decent price gains. The increase may be nominal, but if you plan to hold on to a home for a few years, why wait, especially when interest rates are near historic lows? Whether this is the exact bottom or not, you could still see appreciable gains several years from now, while those who sat on the sidelines will be scrambling just to get in the game.
By taking action now, you can benefit from the many opportunities available to purchase homes at a discount in those areas with high inventory levels. Remember, the larger the inventory, the more flexible some sellers will have to be if they want to compete. Instead of trying to time the exact "bottom" of the market, concentrate on getting the most house you can get at a discount while rates are still low. Do your homework. Team up with an experienced real estate agent and find those neighborhoods that fit NAR's timeline of recovery, or what Bill Dallas refers to in the video as a "U-shaped" increase. Combined with low interest rates, entire neighborhoods you couldn't quite afford to live in during 2005 could now be well within your reach in 2008.
For the best deals, however, look beyond simply lower prices. Look for short sales, bank repossessions, and homes where the seller needs to move now due to personal or family issues. Other areas that may present buying opportunities are the areas that have and will and continue to experience employment issues. Look for areas with the strongest gains to suffer the greatest losses: the coastal states, Nevada, and Arizona. Areas with the greatest condo growth, like Miami, can also offer great buying opportunities, thanks to flippers who took on way more than they could handle.
Get Loan Ready in 2008
This means that now is the time to look closely at your credit score. If you're trying to time your long-term entry (2 years or more) into the real estate market, the last thing you need is to find out you have credit issues that could seriously delay your plans. Contact your mortgage professional right away and make yourself as "loan ready" as possible (see November's Mortgage article). It's important to note that credit remediation services, while extremely valuable, can take anywhere from three months to a year or more to provide the kind of results you might need in order to benefit in today's tighter credit market.
Getting credit won't be as easy as it was in 2005, that's for sure. But there is still plenty of mortgage money out there if you can put together a solid credit profile with the proper documentation. (Be prepared to provide much more documentation than you have in the past.) Don't let wild stories from the media keep you sidelined when you need to be in the game. Get yourself pre-approved (not pre-qualified) by an experienced mortgage professional and be ready to move when the time is right for you. Finally, for homeowners looking to refinance, start looking into options in the next 30 days. If the credit crunch does continue and more mortgage companies are forced to deal with increasing defaults and rising foreclosures, lending standards could tighten even further. Last month, we told you about Loan-Level Price Adjustments (LLPA) coming in March. For mortgage consumers with credit scores below 680, this means much steeper rates automatically will apply to your mortgage. Bottom line: 2008 will offer low interest rates, plenty of inventory at a discount, tighter credit standards, and (while lower at first) more stabilized home prices. Buyers: this is an awesome market for long-term investments. Sellers: be realistic about prices and creative about marketing. Refinancers: find out where you stand in the next 30 days. Courtesy of Todd Colvin Embed this feed with: SpringWidgets |
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