Curbed.com’s regional real estate reporting is superb. Their site is interesting and they are really on point with the style of their site.

Recently, they reported on a grim forecast that surfaced for Atlanta’s metro economy, bringing up the bad and the ugly that “planners” statewide need to consider.

The article cites ““Atlanta’s persistent unemployment, traffic congestion, a 29% loss in average per-square-foot housing prices between 2000-2010, and the fact that the city is increasingly offering a lifestyle opposite of that desired by the most desirable workers and companies. The opportunities he sees are also legion, though, and many of them simply involve re-embracing our transit roots: i.e. investments in commuter rail, continuing to capitalize on the power of our airport, making The BeltLine everything it can be and getting T-SPLOST passed.”

The AJC reported on the same Brookings Institution report that brought up these findings, stating the following about some of the vibrancy in Intown Hot’lanta:

“ One piece of evidence of the pent-up demand for walkable urban space: The only ZIP codes to actually gain housing value in the past decade were Virginia-Highland, Grant Park and East Lake. All of these were considered slums 30 years ago. Today they are among the highest price per square foot for housing in the region.”

When I decided to move Intown in 1998, I never looked back – isn’t it great to hear those stats about VAHI, GP and East Lake???

The Mortgage Bankers Association (MBA) expects to see mortgage originations fall from an estimated $1.2 trillion in 2011 to $900 billion in 2012.

I went to google images to find something “rosy.” I found this  – a photo of a “Rosy lipped batfish.”

The Rosy lipped batfish is a rather apt spokesfish for this 2012 forecast…

Here are some choice excerpts from their always thorough review of the year ahead.

‘The drop will be driven by a significant decline in refinance originations, while purchase originations will increase only slightly. The economy will see another year of anemic growth in 2012, and then will grow somewhat faster in 2013. Refinance originations are expected to fall despite low mortgage rates as economic uncertainty lingers and fewer eligible borrowers remain”
“However, the uncertainty is not one-sided. We also see a path for the economy that could lead to above-trend growth in 2012. Housing inventory and shadow inventory is declining steadily. A more robust housing market recovery could spur faster overall growth. The odds of this scenario, however, are low and we think the most likely outcome is another year of frustratingly slow economic growth and stubbornly high unemployment.”

“We expect that mortgage rates are at or near their low points, but we have been wrong on this call before. Our rate forecast assumes that the Fed maintains short-term rates near zero for the next two years, and also assumes that mortgage-Treasury spreads remain wide, given the current supply and demand imbalance in the market. If the economy tips into recession, rates would stay lower for longer, but we do not anticipate they would drop significantly. If the economy recovers more quickly, even with the Fed’s Operation Twist, longer-term rates could rise faster.”

“A faster economic recovery led by the housing market would mean faster home price growth and more sales volume, increasing purchase originations somewhat, but would cut off refinance volume sooner than in our forecast.”

Here’s the forecast summary: 

• Slow, sloggy GDP growth

• The unemployment rate will increase slowly and will continue to slog for the next decade

• Fixed mortgage rates are expected to remain low by historical standards, finishing 2011 at around a 4.5 percent average for the year, falling slightly to 4.4 percent for 2012 and climbing back up to 4.9 by 2013.

• 2012 home sales will mirror the sales performance of 2011 nationwide, and new home sales will lead some growth in 2013

• Certain markets are showing year over year appreciation

• Purchase originations will likely decrease in 2011 from 2010, totaling $400 billion from an estimated $472 billion in 2010. Seeing as 2012 will likely be another year of slow economic growth, purchase originations will increase slightly to around $412 billion for the year. As the economy picks up a little more speed in 2013 and home sales and home prices also start to increase, purchase originations are expected to increase to $770 billion for the year.

• Despite lower mortgage rates people have “REFI” burnout and with rates at historic lows, many won’t return for “another” REFI – weak appraisals have hurt this phenomenon as well

Here’s some love for the MBA, who provided most of the content of this post…

The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA’s Web site: www.mortgagebankers.org.

Stay tuned to the Intown Insider for the Metropolitan Atlanta 2011 Q4 residential real estate statistics – coming in the next few days…you’ll find that we have a rosier 2012 outlook here in Atlanta, at certain price points and in certain neighborhoods.

The folks at Local Market Monitor, a Cary, N.C.-based real estate research firm, helped Forbes compile a list of the top ten markets poised for a rebound. “They sorted through a plethora of housing and economic data for the 100 most populous cities and their surrounding suburbs, defined as Metropolitan Statistical Areas (MSAs) and Metropolitan Divisions (MSADs) by the U.S. Office of Management and Budget. LMM assessed home prices over the past 12 months, unemployment rates, 12-month job growth projections, population increases from 2006 through 2009 (the most recent data available from the U.S.Census) and new-home construction rates for the third quarter of 2011 as compared to the same quarter in 2010. Home price changes over the past three years were also taken into account, as markets that lost less value in the downturn have the potential to recover and appreciate that much faster.”

Atlanta is not one of those top ten markets. “Markets that will experience further price drops this year include Atlanta, Ga. (14.4% anticipated loss), Los Angeles, Calif. (10.3% anticipated loss), Seattle, Wash. (7.5% anticipated loss), Oxnard, Calif. (6.7% anticipated loss), and  foreclosure capital Las Vegas, Nev. (6.4% anticipated loss).”

Housingpredictor.com calls for a 6.7% drop in Atlanta – they’ve been about right for the 4 years that I’ve been reading their forecasts…

So, all real estate is local. Using the word “ATLANTA” does not accurately depict specific real estate submarkets. As an example, Decatur prices are up year over year and are trending upward. Inventory is down and a seller’s market exists in some cases. Some Buckhead neighborhoods are up and trending upward. Some Eastside neighborhoods are in flux and trending downward until the public schools get reoriented and reset for an honorable future.

So, stay tuned and know the facts and the data that drive your street’s value – your property’s value. The macroeconomists are not wrong about 2012 in “Atlanta,” so filter these forecasts with a hyperlocal lens, and please call me if I can help you with the valuation of a property, OK?

The Fairfield site is loaded with information – here’s the links page if you want to do some further reading.

First, the biggest news of the week – The Mortgage Insurance Tax Break is Gone.

On Dec 31st, Congress let 58 tax code benefits expire, including credits for home energy improvements, credits for builders of energy-efficient new houses, and home buyer tax deductions for mortgage insurance.  The mortgage insurance deduction has been a key mortgage financing benefit in place since 2007 which benefitted home buyers with income of $110k per year or less.  Combined with the new fees they are imposing on Conventional loans this Spring, Congress continues to increase the costs of homeownership rather than reduce them!  It should be noted that Congress still has the power to reauthorize all or some of the write-offs retroactively this year, but the current political atmosphere raises doubts about that happening.  Its time to let our elected representatives know how we feel!

FHA Extends Anti-Flipping Waiver Through End of 2012
To cut down on fraud, FHA has had an anti-flipping regulation in place for years preventing a seller from selling a home owned less than 90 days.  In an effort to accelerate the resale of foreclosed properties, FHA waived this rule in Feb of 2010 and then extended the waiver through the end of 2011.  FHA recently announced that they are extending the waiver through the end of 2012. This announcement has been well publicized but its important to understand that this is simply an extension of FHA’s policy for most of the last two years.  So, although this is good news, it is not necessarily new news.  It is also important to understand that most every FHA investor has "overlays" on top of the stated FHA guidelines that make the FHA guidelines more restrictive.  The most liberal overlays allow for the anti-flipping waiver BUT with the strict limitation that the resale price not be more than 20% greater than the acquisition price, even if there were renovations.  An exception would need to be granted for a resale value of more than 20%.  The bottom line is always be careful when your FHA buyers are buying homes that the seller has recently acquired.  Check to see when the seller acquired the property and make the Loan Officer aware of the acquisition date if it was within the last six months. 

What Every Lender Wants the Realtor to Know When Writing a Contract:
The “Financing Contingency Exhibit” is a wonderful addendum to the Purchase & Sale Agreement and something that the realtor should make a standard part of every financed transaction.  Here are a few tips when completing this form:

Always show the interest rate a good .25% to .5% more than the prevailing rate in case rates rise between the binding contract date and the rate lock-in date.

If you are not sure how much the buyer will put down, shoot high on the loan-to-value showing the highest % you anticipate the buyer will finance.

Selling Agents, always maximize the number of days that your buyer has to satisfy the Financing & Appraisal Contingencies.  Anything less than 20 days will not leave enough time for the lender to get the home appraised and the loan approved.  Be firm that at least 20 days are needed!

Listing Agents, always write the name of your most trusted Loan Officer in the space underneath Section 2.  What an opportunity to require the buyer making an offer on your listing to pre-qualify with your favorite Loan Officer. 

Rate Update

The news from Europe has been mostly negative over the last week.  Economic growth in Germany has been slower than expected.  Negotiations on restructuring Greek debt also have not progressed as planned.  S&P is downgrading the debt of several European countries, including France.  Lastly, the European Central Bank (ECB) has given no indication that it will provide relief to the troubled countries.  As a result of all of this turmoil, investors shifted funds to relatively safer investments, including US mortgage-backed securities (MBS), which has helped mortgage rates move lower. However, we already know that Congress is imposing new fees on Fannie Mae and Freddie Mac later this spring that are going to cause mortgage rates to bump up as much as .25% over the weeks ahead.  Anyone in the market to lock a mortgage rate should do it as soon as possible.

Looking Ahead
The most significant economic data due out this week are the monthly inflation reports.  The Producer Price Index (PPI) focuses on the increase in prices of "intermediate" goods used by companies to produce finished products and will come out on Wednesday.  The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Thursday.  CPI looks at the price change for those finished goods which are sold to consumers.  In addition, Industrial Production, an important indicator of economic growth, will come out on Wednesday.  Housing Starts will be released on Thursday, and Existing Home Sales will come out on Friday.  Philly Fed and Empire State round out a very busy week.

Please call me or call Jeff if we can answer any of your specific questions…

Why? Well, because most of these properties are not worth buying…

But, this one is…

for the right price.

This one belongs to one of my clients, who needs to short sell this house in Oakland City – I listed it for $9000 in September – it remains unsold.

We are relisting the property soon, and I am thinking that $4000 is the right price. His mortgage lender may differ with me, but I let them set the $9000 price back in September. No offers followed!

Some of you may be thinking – huh? what? Is he really talking about this like it matters? Well, my client matters – he needs this short sale!

So, check out these FMLS statistics – 8854 houses sold for under $50,000 in Georgia last year, 1422 in Atlanta, 147 in 30314, 265 in 30310, and 205 in 30315.

363 houses sold for under $10,000 in Georgia last year, 266 in Atlanta, 39 in 30314, 73 in 30310 and 47 in 30315.                   

Only 4 houses sold for under $10,000 in Decatur’s 30032 – the most downtrodden Decatur (unincorporated Dekalb) zip code. 285 houses sold for under $50,000 in that zip.

Now, looking back just one year, there were 6279 residential properties sold in 2010 in Georgia for less than $50,000. That means that there were 2575 more sales last year for under $50,000 than there were during the year before.

There is a seller’s market in this price range, for the most part, so why did the $9000 house not sell quickly?

Because it is overpriced by 50%. Because, for $9000, on the edge of Oakland Park, this house is overpriced. Simple, right?

To relate this phenomenon back to any other price segment of the market, I simply suggest that the street matters most, and that chasing the market is never good, especially when  about 7-8 other houses per month are selling in the same zip code in the same price range.

Check this out and see how well this carries. On any given listing at higher price points I can probably find the same basic statistic – 7 or 8 other houses will sell nearby that month, while the overpriced listing languishes.

This will be my last article about houses in this price range for a while, but I’ll continue to make these same points about value. Because, most real estate listings are still initially overpriced and either chasing the market, or failing to sell. Lets use the bottom of the bottom of the real estate market to remind us that pricing matters most!

We are already seeing that in places like Decatur, and other high performing real estate submarkets in Buckhead, and in some of the suburbs.

Anecdotal evidence shows me that activity in the lower price ranges, particularly under $100,000, is strengthening while activity in the higher priced submarkets continues to show signs of stability.

The recovery is underway but it will be some time before we see prices firming across all segments of metropolitan Atlanta.

We will continue to see depressions in places like Lakewood, Vine City and even in some of the Atlanta neighborhoods  that are going through school struggles.

Here’s my video with the claim – stay tuned in 2012!

And 2012 is going to bring a big surprise to some real estate players, but to real estate business folks like me, we won’t be surprised.

My company President, Mark Willis, claims that Keller Williams Realty is poised to be the #1 real estate company in the world next year.

On 12/31/2010, I did not even speculate that one of the world’s largest Re/max franchisees, Re/max Greater Atlanta, would evaporate and scatter its agents far and wide by Spring 2011. A sad, broken business model. Ran out of money.

I also did not consider that one of Atlanta’s most formidable boutique brokerages, Sanctuary, was struggling too.

I got my real estate salesperson’s license in Georgia in 1999.

Back in 1999, when I became a Charter member of Keller Williams Realty First Atlanta, I became a “blueprint buyer,” for Keller Williams Realty in Georgia. “Keller who?” was a constant  statement. We were unproven, yet quite bodacious with the red signage, the talent pool and the belief that we had a better model – a better model that focused on the agent, and not the brokerage, as the key driver to a team’s success.

Today, worldwide growth places Keller Williams Realty International on it’s way to being the #1 real estate brokerage in the world. We’ve been rising place by place in the top 5 for about 5 years in a row.

Locally, the net results of 2011 in the Atlanta real estate market have transformed lives, businesses, careers and mindsets.

For those of us who have been a part of Keller Williams Realty for a while, we just keep shifting, and growing.

And, when I say that A is for Atlanta, D is for Decatur, I am offering an Eastside shout out to one of KW’s newest agents, and certainly Atlanta’s best real estate blogger, Jon Effron.

He just wrote a swell article that shouts out my walkable hometown of Decatur as the best submarket in metro Atlanta…nice call.

Jon’s A is for Atlanta blog is entertaining, informative and loaded with value.

Jon is also one of the best real estate agents in Intown Atlanta, and at the end of 2011, he and some of his fellow Sanctuary agents joined Keller Williams Realty’s Heart of Atlanta group.

We are glad to have them, and I am glad to know that I can use their cute little office space in Inman Park when I need it…

I believe that 2012 will bring some counterbalance to the past 5 years of real estate market upheaval. Intown, we have seen far less distress than the suburbs, and as an Intown specialist, I am very encouraged by the outlook for 2012.

Some of the most talented agents in metro Atlanta have joined me at Keller Williams Realty over the past 12 years. Many are hustling everyday and they are building careers worth having, businesses worth owning, and lives worth living.

As Zig Ziglar says, see you at the top!

In the past two posts, I wrote about distressed properties. Today, I am writing about two of the best performing neighborhoods of Intown Atlanta and Decatur.

Last night, my daughter was the best performer in Kirkwood.

So, when thinking about real estate values, one of the safer notions to consider about today’s real estate market is that even the best performing neighborhoods of Atlanta are “down about 10% or so…”

I looked up 2 neighborhoods that offer tremendous value, two neighborhoods that have pretty consistent demand, just to see if my notion is valid.

1. Morningside  – there were 209 sales in 2007, at an average sold price of $578,072, and the number of days on market average was 74 … there have been 143 sales so far in 2011, at an average sold price of $524,815, and the number of days on market average was 81

2. City of Decatur – there were 273 sales in 2007, at an average sold price of $391,342, and the number of days on market average was 64 … there have been 179 sales so far in 2011, at an average sold price of $362,660, and the number of days on market average was 68

So, the notion is correct in both of these high quality, wonderful neighborhoods, right?

The best performers are always upbeat, lively and from time to time, they show off. Keep on truckin’ , Morningside and Decatur!

It’s open for showings.

It’s pretty big.

It backs up to the city of Atlanta’s “Oakland City Park.”

I get inquiries from around the world about it – it has been on the market for over a month, yet no one seems to want to buy it.

Oakland City is in one of the most distressed zip codes in the country, 30310.

Regardless, in my opinion, 30310 has a great twenty to thirty year outlook – it’s the zip that I will buy in when I start landlording new properties again.

Here’s some advice I’ve offered recently to a potential investor – a guy from Australia:

I  told him – check out these links that detail current trends in and around 30310:

1.  Fort McPherson redevelopment

2. Lakewood Fairgrounds redevelopment

3. Ford assembly plant redevelopment and the recent commitment by Porsche North America

The way that I see it, the long term plans for some of the most distressed parts of Atlanta are quite good – areas like the southwest side, plus cities like East Point, Hapeville and College Park.

However, these all have a lot of immediate need for school advancement, policing, infrastructure and retail and lifestyle amenities.

When I buy there, I do not expect the properties to increase in value for at least twenty years. Really…

I asked this gentleman from Australia who inquired about the property: “are you thinking that long term?”

I suggested: “if you want turn key, move in ready houses – houses with the potential for positive cash flow – then choose the best school districts, and plan to pay a lot more for the long term ROI goal. I suggest that you look in the $65-80,000 price range, and that you seek close in, urban Atlanta properties.”

I am a big believer in the strength of Atlanta’s urban core versus many of the weakening suburbs, however if you think that “in general” US real estate is really a great “investment,” then think again. I suggest that a buyer get very clear on what they seek from their real estate – I suggest the value of usefulness first, then investment performance.

When it comes to buying a $9000.00 house in 30310, the real estate investment will only be as good as the investor who is on task. An investor who is hands on, on site as frequently as is needed, and in the face of the tenants…

I like the Intown Atlanta neighborhoods and the best Intown Atlanta and Decatur school districts, long term. Recently, we’ve seen decent price stability in these submarkets. Some streets are thriving!

But nationally, we will continue to see price drops over the next 3-7 years. One of the links above calls for another 40% decrease in values over the coming years, and how cash will remain king.

I believe that’s true.

As the population of the US re-migrates, reorganizes and resets itself for the future, what are your thoughts?

My thoughts are that a $9000.00 house in 30310 is a buy, as long as you know what you are doing with it!

For the past few months, Atlanta property, dollar for dollar, is better to buy than to rent – on average – across many counties.

The BUY NOW versus RENT NOW numbers get even more dramatic for buying now when certain submarkets are studied. Here’s two examples:

1. just about any close in condominium, loft or townhome

2. just about any house in a great Intown school district

My friend Scott Mauldin sent me a 16 page document yesterday entitled “Housing: A Time To Buy” written by some of his folks at JP Morgan Asset Management – the overwhelming evidence supports buying in the best Intown Atlanta submarkets – is it time for you to make the move up?

You can find the article within two clicks, here.