Club Chaos Agents - All Things Hollish, Wacked, and Jacked

Is was an unusually busy weekend with quite a bit of activity. As a result, my Monday is fully scheduled out with housekeeping tasks that need to be completed today.

I often wonder what causes the “switch” in business to be thrown from “off” to “on.”

If I had to guess, I would say that there are three significant factors that contributed to the current floury of consumer interest:

1) Amazingly low interest rates. Rates are so low now, they are barely significant. In many cases, there is not enough mortgage interest being paid to even consider itemizing deductions on an income tax return. And since mortgages are long term notes, a buyer can fix mortgage expenses for years to come.

2)Decreasing inventory. InCowetaCountyGeorgia, we are at about one third of the number of listings compared with the peak months of available inventory. Less houses for sale equals more activity per listing. We are now down to a four month supply of homes.

3) More seller flexibility. After years of adapting to the buyer’s markets, sellers are now entrenched in the mindset of doing whatever it takes to get the house sold. Sellers that negotiate with an open mind and a realistic attitude towards buyer concessions are getting the deal done!

We still have a long way to go, but at least now there is some light at the end of the tunnel.

And we are ready to roll up our sleeves and get to work. Bring it on!

In Coweta County Georgia, we are starting to see some houses listed as short sales and REO and HUD sales for the SECOND time in the last few years.

How did this happen? Did we learn nothing from the past? Have year after year of buyer incentives and continued low down payments completely eroded the fundamental concept of ownership?

True ownership involves skin in the game. It is too easy to just walk away and there are fewer and fewer consequences with each passing month. And yet the clamoring continues for easing mortgage qualification requirements.

Leverage has toppled the market. The notion of only losing OPM has created economic chaos.

Call me simple-minded, but I will always feel that people will act more responsible when THEIR money is at risk.

The madness will not end until attitudes do as well.

The current real estate market has caused a paradigm shift in the way buyers think about real estate.

The old notion that “more is better” has given way to “less is best.” Buyers simply do not want to put a lot of money into a house during a declining market.

Builders in Coweta County Georgia has responded to consumers by purchasing  existing lots at fire sale prices, and by downgrading the product finishing to make the price as attractive as possible.

What was once a stone or tile shower is now a one piece fiberglass unit. Where there was once crown molding, now there is none. Carpet has crept over most of the space that at one tome would have been a hardwood floor.

It makes you wonder if perhaps we had come to the point where we expected too much in the first place.

Perhaps simpler is better. At least it is more affordable, that’s for sure!

All of the experts seem to agree that the “shadow inventory” is out there.  Houses that have gone through the foreclosure process but for whatever reason are being maintained in inventory but have not been placed on the market for resale.

The motivation behind the phenomenon has been described as being anything from sinister to shrewd. Are these institutional sellers simply buried under piles of paperwork, stymied by litigation, or simply trying to stabilize the market in an effort to reap top dollar for their properties?

Whatever the reasons, in Coweta County Georgia there is a significant difference between the number of monthly foreclosures and REO and HUD homes showing up in the marketplace.

I get calls all of the time about houses that have been sitting empty for long periods of time while would-be buyers await the opportunity to make an offer.

The shadow inventory is out there. And it can affect our market dramatically.

And until it is dealt with in a proactive way a lot of uncertainty will remain.

Come set your joy on golden fronds
That spice the meadow with saffron strains
‘Tis Spring that waxes, fresh verdure dawns
Awakes as Winter’s crescent wanes!
                    ( R Weisser 2012 )

Spring has come early to Newnan Georgia this year. The “jonquils” started blooming in January and the “redbuds” are resplendent in their awakening.

The trees are already budding out. And while I enjoy Spring as much as anyone, you have to wonder about the impact this unseasonably mild winter will have on agriculture.

The famous Georgia Peaches require a significant amount of hours below 45 degrees to properly set fruit. Not to mention the fact that if they bloom too early, a late frost or freeze can ruin a crop.

But like it or not, we have no control of the weather and must deal with it as it comes.

In the meantime, I’ll enjoy the flowers!

The woodpile and the furnace grate
Await the tardy guest waylaid.
Is Winter past or only late…
Asleep, to stir another day?
              (R Weisser 2012) 

It seems as if we haven’t has any Winter at all this year here in Newnan Georgia.

As a matter of fact, even though it’s still January, the yellow bells and jonquils are already blooming.

And although we enjoy a relatively mild climate here in the Southeast, we do occasionally get a real taste of Winter, as these photographs from previous years will attest!

Here's wishing you snow if you want it, and sunshine and warm breezes if you don't!

As a result of readily accessible information about property listings, many buyers like to search listings based on one criteria: PRICE

And we do have many value-priced properties for sale in Coweta County Georgia. And buyers want to see all of these properties in hopes of finding the “perfect” combination of price and livability.

The problem is that many, many buyers are looking for the same thing. And so the good properties sell very quickly. As a result the casual weekend property seeker is very unlikely to stumble upon the right house at the right price.

A good real estate agent can be an invaluable asset in overcoming this dilemma. We see new properties every day and can alert buyers when a “hot” one shows up on the market. It is no longer a matter of being in the “right place at the right time”

Finding the right house at the right price is not a lottery.

Rather it is a calculated strategy for getting an offer submitted on a great house before it is too late. 

So far this year, winter has not made much of an appearance. Although there was a freak early snowstorm in the Northeast here in Georgia Winter has not amounted to much more than a few frosty mornings.

Here is it, the second day of January, and I still have a few peppers than can be harvested from a still alive (although not exactly vigorous) pepper plant.

I guess from a purely economic perspective, a mild winter in a real boon as we save on heating fuel and the cost of snow removal.

But from an aesthetic point of view, it somehow does not feel “right.” It’s January and it’s supposed to be cold.

I’m certain that this is probably one of those cases of “be careful what you wish for,” as there is plenty of opportunity for some real winter weather in the upcoming months.

But for now, I’ll just take advantage of the nice weather and get some yard work done!”

The question I have been asked most often in the last few weeks is: What is the outlook for the real estate market in 2012?

It’s an interesting question, because there are many dynamic factors involved in the state of housing in North America.

First and foremost are the immutable laws of supply and demand. If there is more product than there are consumers, the market will continue to decline.

And while we can’t change the rules of the axiom, we can certainly control the variables. Either the supply of homes for sale has to be reduced or the number of buyers has to increase, a bit of both would be great.

The best way to increase demand is to make mortgages easier to obtain. We don’t want to return to the debacle of the early 2000’s but a little sanity in the underwriting process would help.

Many consumers with good credit scores want to buy houses but they can’t because of guidelines that have caused such trepidation regarding default that the money is kept safely tucked away and out of the hands of would-be buyers.

Alternatively, we need to figure out more ways to keep people in their houses that want to stay but have suffered a financial or personal setback. The flood of foreclosures continues, and many of the displaced homeowners that I have spoken indicated that they tried to work out an arrangement with their mortgage holders but were unsuccessful.

Unfortunately, nothing has been done to significantly affect real estate in the upcoming year. And so any real estate recovery is totally dependent on the economy as a whole. As the economy goes, and as jobs are created, so goes the real estate market.

And since 2012 is an Presidential election year, one should expect some temporary economic remedies being set into action to skew the numbers by November.

As a result, the real estate market should fare slightly better in the second and third quarters of 2012. The market will be far from robust, but it will be a bit stronger than 2011.

2012 offers some promise for better times ahead. However, just how much better it will be is still anybody’s guess.

The 2011 Newnan Candlelight Tour of Homes is scheduled for Friday December 2 from 4:00 until 9:00 P.M.

The annual event is staged by the Piedmont Newnan Hospital Auxiliary and this year will feature five homes in the Cole Town Historic District.

The tour homes this year will include Victorian, Craftsman, and Cottage styles and were all constructed in the late 19^th and early 20^th Centuries.

Tickets are $12 in advance or $15 on the day of the tour. Advance tickets may be purchased at Scott’s Bookstore on the square, the Coweta County Convention and Visitor’s Bureau in the old courthouse, Morgan’s Jewelers in Ashley Park or the Newnan Piedmont Hospital Gift shop.

There is free parking at the Old Train Depot which will be open and offering light refreshments to tour visitors.