Atlanta Real Estate Blog - Jarvis

As the media clamour about our market falling, it's no wonder where they get their information.  I'm having a phenominal year, albeit it with fewer closings.  Many in my office are doing likewise.  One thing is for certain, there is a lot of new construction in the Atlanta Market and it's just sitting there.

Here's the article from the Wall Street Journal talking about how bad it is in some places.

With the housing market looking increasingly frail, home builders and real-estate agents are going to new extremes to attract buyers, dangling lavish incentives and slashing prices.

In Boca Raton, Fla., Gordon Homes is offering to pay two years of property taxes and insurance -- worth as much as $150,000 on houses priced as high as $2.5 million -- for buyers of completed homes at its upscale Azura development. In Richmond, Va., Orleans Homebuilders Inc. is offering "Sizzling Summer Sale Savings" that include as much as $100,000 off the cost of upgrades ranging from granite countertops to a conservatory. And in Medford, Ore., Diane Adams, a real-estate agent, is offering to pay four months of mortgage payments on the $975,000 house she and her home-builder husband constructed on 20 acres near Crater Lake.

"I'd also negotiate a lower price, too," says Ms. Adams, an agent with Re/Max International Inc. "I just want this house off our books."

Across the country, the theme is the same: Home builders and home sellers are juicing their efforts to unload single-family homes. Among other things, they are offering buyers cash discounts of as much as 20%, throwing in a pool and agreeing to finish basements, garages and other spaces at a cost of several thousand dollars -- incentives much richer than builders were offering as recently as six months ago, when the downturn didn't look as bleak.

Since then, home builders have been hit hard as rising mortgage delinquency rates have made lenders much more reluctant to issue new loans, causing home prices to fall and inventories of unsold homes to rise. In June, new-home sales had fallen more than 40% from their peak two years ago, and more than half a million new houses -- nearly eight months of supply -- sit in inventory, according to the most recent report from the National Association of Home Builders. Contract cancellations, meanwhile, have hit nearly 30% for some builders.

Things may not get better for a while. The National Association of Realtors said yesterday that new home sales this year were likely to fall 19% from last year, worse than its previous forecast of a 17.7% drop.

Many builders never expected the housing market to fall this far. Now they're struggling with empty land, too few buyers and an inventory of finished homes that have been sitting empty for months -- and some are growing desperate to free the cash locked up in their real estate by enticing the dwindling number of buyers. The latest survey taken by the National Association of Home Builders indicates that 56% of builders are now offering incentives, up from about 45% a year ago.

This four-bedroom, 2,079 square feet townhouse in Tallahassee, Fla., was originally listed at $320,000 in April 2006. It sold for $262,050 in July. The builder incentives and upgrades included a refrigerator, washer, dryer, in-wall speakers, and window treatments.

And those incentives are growing bigger. In California's San Diego County, Chris Heller, a real-estate agent with Keller Williams Realty, says that until about 18 months ago, builders had little reason to offer incentives. Today, he says, "buyers are asking for the moon, and they're often getting it."

Mr. Heller says that on houses in the $700,000 range, his clients are typically scoring multiple concessions totaling as much as $80,000. Generally, that includes a price reduction, an agreement to pay closing costs or upgraded flooring or appliances -- or a combination of all three.

Builders in the greater Dallas-Fort Worth area have also been struggling to move homes and are using incentives more freely. "They are giving stuff away here," says Kenneth Cox, a real-estate agent with DFW Urban Realty in Dallas.

In suburban Dallas, incentives on single-family homes abound, including price reductions of as much as 20% and free swimming pools. Steve Wall, president of builder Wall Homes Inc., says his company is knocking as much as 18% off the list price for inventory homes in the city's northeast suburbs. For other homes yet to be built, the builder is offering free blinds, a free covered patio and 50% off upgrades, up to $20,000. "It's more competitive than this time last year," Mr. Wall says.

This trend toward more-generous incentives is "likely to intensify," says Mark Zandi, chief economist at Moody's Economy.com, citing a growing inventory of new homes, an oversupply of pre-owned homes on the market and "a glut of homes that are a year or two old that investors bought as rental property that have never been lived in, and those investors are now trying to sell, too."

Incentives alone often aren't enough to close a sale, however. National builder KB Home says that in May, it was offering to pay $5,000 toward closing costs on already completed, or "inventory," homes, up from $1,000 about a year ago, "but we find that these kinds of incentives don't generally work that well," says a spokeswoman. Rowena Emmett, an independent Realtor in La Canada, Calif., says that during Southern California's last downturn, a client offered home buyers a new Porsche, "but that didn't work."

Jerusha Jaitapker

A brand-new five-bedroom, two and a half bath single-family home in Fort Worth, Texas. This builder knocked off $50,000 off the listing price and is now on sale for $319,874.

Builders generally try to avoid outright price markdowns, in part because it angers prior home buyers who don't want prices in their subdivisions forced down. These days, though, builders increasingly resort to price cuts "because it's all about avoiding bankruptcy for some," says Gene Rivers, a Keller Williams agent in Tallahassee, Fla., where builders are offering incentives and price markdowns of as much as 15% of the purchase price on $300,000 and $400,000 houses, double the level of a year ago.

Certainly, not every market is struggling. Dianna Kokoszka, a vice president at Austin, Texas-based Keller Williams Realty, says homes in hot markets such as Austin still receive multiple offers, making incentives unnecessary. In other markets, pockets of strength may still exist, particularly in popular neighborhoods. Jim Napier, president of Napier Realtors ERA, in Richmond, Va., says an agent last week listed a house for $600,000 in a desirable subdivision, "and it sold in two days at the list price, all cash."

Lummie Jones, a vice president at Napier Realtors, says the best deals go to those who buy inventory homes, can close within 30 days and who have no contingencies in their contracts, such as the need to sell another house or find financing. Those buyers, Ms. Jones says, "are getting concessions of between 5% and 10%" of the house price.

(Article Shortened)

Source: Wall Street Journal JEFF D. OPDYKE

Tell me I'm not the only one who gets these calls.  It seems to happen at least once a week.  It's a bit funny and actually pretty sad.  In some case, it's no big deal but it really sheds some light on my conversion rate which is a very serious thing.

Here's what happens.

*Ring, Ring!*

ME:  Hi, this is Joshua
THEM: Yeah, I was calling about your listing in Snellville.  Is it still available?
ME:  OK, what listing are we talking about
THEM:  The MSL (yes, they say that alot actually) number is ....
ME: Oh, I'm not in front of a computer, do you know the address
THEM: Yeah, its ....
ME: Um, that is not my listing.  I actually don't have any listings in Snellville
THEM: Well, its got your name on it
ME: Are you sure?
THEM: Yeah, I'm standing in front of the home right now and we have the flier with your photo and everything.
ME: Are you sure, are you physically in front of the home?
THEM: Yes.
ME: (At this point, I realize I am talking to an AGENT!) If you are REALLY at the home, please walk to the Real Estate Sign and tell me whose name is on it.
THEM: Long Pause  .... but your name is on the flier.
ME: Are their fliers there?  What you have is probably a printout from my website.
THEM: (Uncomfortableness on the phone) - Oh, OK, well let me ask you about another listing I have of yours .....
ME: ... (after another minute of explanation) please look at the bottom of the fliers, it should say, listing information courtesy of: the broker......

And so my day goes.  Out of 3 to 5 calls a day, I'll get one bonafide prospect, a prospect that has a lazy agent and a lazy agent who has no idea that personal webpages display information.  I literally got called yesterday by a client asking if I received the offer on "my" listing in Snellville where I have no listings.  She was worried her agent didn't submit it.   She was actually ready to have me submit it, however, after several attempts to figure out what was going on, I discovered that she signed paperwork already.

Does this happen to you?  How do YOU convert the internet leads you get?

As I am getting into the swing of things today, I noticed something a bit odd.  No Homebanc personel in the office.  I get a call from a mortgage friend that says, Homebanc has stopped doing loans! Hogwash, I say. 

A quick search reveals this to be true: Excerpt from Bloomberg:

"Aug. 7 (Bloomberg) -- Countrywide Financial Corp. and CIT Group Inc. said they'll be able to ride out the mortgage industry's credit crunch as two more rivals, HomeBanc Corp. and Impac Mortgage Holdings Inc., curtailed new loans.

HomeBanc said it's selling assets to Countrywide after bankers cut off credit and left the Atlanta-based company unable to fund loans. Impac, based in Irvine, California, halted ``Alt- A'' loans and fired some of its staff. CIT, which disclosed plans last month to leave the mortgage business, said it has access to a cash cushion of almost $15 billion.

Bankers have cut off credit to home lenders as overdue payments rose to the highest level since 2002, according to the Mortgage Bankers Association. Markets where mortgages are bought and sold have almost shut down, leaving lenders short on cash. At least 70 have closed operations or sought buyers since the start of 2006, and now rivals are moving in to pick up the pieces.

``There's a huge amount of consolidation going on,'' said David Lykken, president of Austin, Texas-based mortgage consulting firm MBSD LLC. ``In markets like this, people look for conviction, and Countrywide is going to do well.''

Lykken predicted Countrywide may capture as much as 34 percent of the market as other lenders pull out.

Countrywide's stock rose $1.38, or 5.2 percent, to $28.13 and CIT fell for the 15th straight session, losing 43 cents or 1.3 percent to $33.95 in 12:47 p.m. New York Stock Exchange composite trading. Impac, which sold for $22 in June 2005, dropped 36 percent to $1.09 and HomeBanc shares, down 98 percent this year, traded at 10 cents each.

Halt at HomeBanc

HomeBanc couldn't borrow to finance mortgages as of Aug. 6 and doesn't expect to fund any pending or future loans, the company's statement said. It's selling assets from the retail mortgage unit including five branches to Countrywide, with a ``significant'' number of people keeping their jobs.

A day earlier, San Francisco-based Luminent Mortgage Capital Inc. said bankers were cutting back on credit and that markets where mortgages and related securities are sold to investors had ``seized up.'' Luminent suspended its dividend, canceled an earnings call and said it was searching for new sources of cash. The shares fell 81 percent to 85 cents today.

Impac said today it will suspend making Alt-A loans, an alternative for A-rated borrowers who fall just short of standards for regular prime mortgages. The company didn't say how many employees had lost their jobs. So far, Impac has met all margin calls and a sale of $1 billion of loans is scheduled to close in the next 30 days, said a company statement. "

• About a month ago I was going to write an article about Yahoo! Maps and how the site has quickly become the best place for agents to plot their course.  However, each of the dominant map pages have come out with.

Well Start with Mapquest.  Mapquest has been the dominant "name" leader for consumers much in the same way Realtor.com is.  The alternatives have always been somewhat easier to use but it's THE map solution and for the most part, when in doubt use mapquest.  A little over a year ago they had a "road trip" feature that was just outstanding, you could put in multiple addresses and it was perfect for showing a few to a lot of homes.  They pulled that feature after a few months and started what look like a preparation for pay for services.

After some months of competiton from Yahoo! a new map evolves. Enter Google Maps.  Google comes on the scene (after Yahoo!) with dragability, satellite imaging and one of the simplest interfaces for a map program ever.  Several months later Yahoo! Maps upgraded their site to include multiple stops in the interface as if everyone would use it for this and it has quickly become MY MAP page. 

Fast forward to today.  All three map sites have sattelitte, multiple stop functionality and are relatively easy to use.  This is all very recent.  We'll go over some key features of each and how it relates to viewing homes or setting up the best route to a certain place, in relation to clients.

On the landing page, Mapquest is the most unfriendly.  It wants two addresses and two only, it has a nice naming feature that's not terribly intuitive for first time users.  The naming feature can help though with multiple homes or in the case of creating a map for a client it can help them remember. Names like, "Work," "Cat House," "Pool Home," "YMCA," ... the list can go on and on.  This is strictly a direction site though.  So only put YMCA on there if it's stop.  For example, if your client is going from home to work to the YMCA, then this is great.  The naming functionality is more useful for Realtors in this regard as it will help differentiate the homes if trying to plot the most effecient course.

Highlights

• Naming "Nicknaming" Function - Helps organize in theory, in practice does almost nothing
• Clunky interface for entering in addresses
• Nice Maps and Directions - Largest Map of the bunch
• Lots of options for Avoiding Highways, Fastest Route, ect
• Options aren't executed as nicely as they should be
• Pages are covered with Ads that can interfere with speed and ease of use
• Limit to 10 locations
• No draggable locales, manually delete and re-enter for planning

Yahoo is immediately ready for multiple addresses and upon entry will let you drag them up or down to optimize the road trip.  As soon as you land on this page, it's map is ready and says, "if you used me before, I'll be focused on the general vacinity." This is an excellent tool for Realtors as it provides a great way to enter in the homes for the showing that day and then organize them in a way that is the most effecient. The page is also nicely laid out, the adds are designed in a way not to confuse you but to entice you to click.  On add is usually flash heavy and can timeout the page.  In addition, if you are an active person with several windows open and you are using many addresses (read over 10) then Yahoo! can sometimes give you incorrect information.  The only annoying thing it does, in an otherwise perfect map solution, is give you the center of a city when it can't find an address.  If you're not paying attention, you could easily end up going the wrong way. 

Highlights

• Multiple Locations right "out of the box"
• Draggable locales to increase effeciency
• No re-routing features to avoid highways
• Easy to use interface - can be broken by impatience though
• Map seems small for large trips. 
• Zoom functionality works, but never seems to be enough
• Elegant design
• Seemingly the most up to date maps

Google seems to thrive when others pull ahead and come out with something bigger and better.  Google maps was already the place that I would send all my clients to.  It's ease of use and simple ad free site make it the perfect location to find out the best route between two places.  Recently, they've added a feature to allow multiple locations and a brand new feature called my maps.

My Maps is a feature only previously available through a service called MapBuilder.net.   I won't go into that service now, but I will cover the basics of My Maps.  My Maps has quickly become my "WOW" factor for my relocating clients.  I can save a map with all the locations they could ever want and then send them a link.  I can even create custom maps for them and click it on or click it off. 

Some of the advanced features like icons can take some time to learn, but for the service oriented Realtor this is great.  The direction functionality is great too.  You enter two places, then can add additional stops.  What's great is that there is almost no time required for re-routing when you drag the stops around to create the best route. Also, one of the best features ever, is that you can now drag the route ON THE MAP, to include the back roads that we are going to use.  This feature will make you never want to leave the site.

The most disapointing thing about google maps is that it's the only one of the three that has terrible print functionality.  You can spend a few hours creating the perfect My Map for a client, but unless you do a screen capture, you aren't going to be able to print it out with the icons on board.

Highlights

• Ease of use
• No ad clutter
• Fastest interface
• My Maps! - Now you can add directions, but also point out what's near
• Awful Print Options
• Some Re-Routing Options (for traffic)

Conclusion

WINNER YAHOO! MAPS (by a hair)

All of the sites have something to offer and whichever map is the most up to date usually wins in my book.  With that said, Yahoo! Maps is the one I use when I have 5 or more location stops.  This includes the office and the trip back. Although Google Maps is technically "better"  I find entering in the multiple locations to be faster on Yahoo! as well as the maps being more up to date.  With newer homes this is great.

Google Maps is my next favorite and would win out over the others, but in the end, the maps are not up to date and the My Maps feature is all but unprintable.  This feature then is only useful for e-mail.  Google has the ultimate rerouting features but again, if it's not up to date, it's almost useless.

Mapquest is the real loser here.  Much like the analogy in the beginning to Realtor.com, Mapquest is probably the most widely use.  The internet is proving that is you are too popular for your own good and not will to adapt you'll be left behind.  Although, this is going on a rant, but I doubt Trulia and Zillow would be so popular if Realtor.com did a better job of presenting listing information in the manner these two sites do.

None of the three sites are perfect and I imagine by this time next month, I'll likely be using Google.  For now though, it's still too far behind on the maps in order for me to use it for anything but client e-mails.

Your leads belong to you. That's the bottom line.

So, effective Nov. 1 all leads generated from KW.com will be routed directly to you, as follows:

• For leads that come in via KW.com - visitors will be routed to the appropriate market center's Website to search for properties.
• Leads on Keller Williams listings generated from individual market center Websites will be routed to the Keller Williams listing agent. Individual market centers will determine their own method for routing inquiries on non Keller Williams listings.
• ALL visitor inquiries to agents' eAgentC Websites will be routed back to the agent.                          

I'm sure I'm not the only one that feel like KW is ahead of the competition but behind the curve.  It'll be interesting to see how this evolves.  KW has always been about teaching people how to fish and not handing the fish out.  Now that they are doing the fishing too, it'll be very interesting to see if they stay true to the culture model.    

I'm cleaning out my e-mail from over the weekend and I get this e-mail from National Realty News and the top headline is REAL ESTATE AGENT STABBED TO DEATH AT OPEN HOUSE.  Upon clicking on this link you get to read ... ONE YEAR LATER. 

First of all, let me just say, we need more exposure to this kind of thing.  Self defense should be a require course for agents.  Open Houses, New Construction and just plain ole' new clients can all turn us into victims.  Realtors are seen as people with money and nice things.  My Wife reminds me of this stereotype everyday.  We'll see another Realtor and out comes a snide comment about how that person is rude (because they are on the phone and drive a Lexus?).  I always have to remind her that I drive a Lexus and am on the phone non-stop too! So maybe I'm to blame. lol.

Seriously, this article definitely brings up the point that we need to be especially careful.  What it does that is disturbing, is that in a round about way, drags this persons personal things to the light publicly.  The article, although well written could have been written in a completely different way.  Walker, the victim, was a victim of an online dating "stalker/killer," not of some vandal coming after Realtors in Open Houses. 

In the end the article reminds us of how open we are when we meet with clients, but also how dangerous the internet is.  I'm just a bit vexed by the misleading headline and skew of the article.

As I'm putting together numbers for my relaunch of my newsletter and market reports I became quickly aware of the upcoming trends. 

The market in Atlanta has always been a buyer's market, it's just more of one now than before (in the past 10 years).  This is inclusive to all metro Atlanta counties, such as Gwinnett, Cobb, Fulton, Dekalb, Clayton, Henry and more.  However, as the economy swings back around for the better so will home sales.  I've noticed an increased rush late this summer as have many other agents.

With the average Atlantan moving every 2 to 3 years, this is PRIME buying time.  If you're thinking of buying, now is the time.  Prices will not go much lower if any and the next few years will see small increases.  By year 3 (following the average) you'll be coming out on an up market with hopefully more mortgage options than before.

With Fall and Winter around the corner, now is the time to act as many sellers will be packing it up to wait till Spring and a deal can be had.

Right now the Jarvis Team is GUARANTEEING a 3% saving on your purchase or we pay the difference! In this market, we've never had to pay the difference, in fact, this year, we're well over the 3% per home discount!

If you're on the fence about buying and can purchase, ACT NOW! If you're working on getting in position to buy, continue your pace for another year, as this time next year, prices will be up but we'll be heading into the winter again.

Dave Ramsey, AM Financial and Real Estate Guru, was on the other day talking about the Real Estate Market.  As a consumer advocate Dave walks people through trying to live debt free.  For those who don't know, he comes from a Real Estate background as an investor and now spends his time trying to teach people to make good decisions with their money.

One caller had called and asked why his home hasn't sold.  Dave was pretty clear.  He said, "There's 2 reasons homes don't sell, Price & Condition."  He quickly asked about the conidtion and told the caller to FIX IT, PAINT IT and/or stage it.  Lastly he said, "AFTER you're sure it's in great condition, cut the price another $5,000."

Real Estate Truths are timeless in any market.  If you listing is sitting there, then it's price or condition. Take it one step further, if it's condition, then it's price again.  In regard to condition, Dave has the following things to say about selling your home (Found here):

4 Easy Tips to Sell Your Home

It's spring, the busiest time of year when it comes to buying and selling real estate. If you want to sell your home, make sure your house looks its best during these next few months. Since I have a background in real estate, I thought I would share some important tips that are easy to carry out but are often overlooked. Here are 4 tips to help your home sell:

1. Fix your front yard.
   Are the bushes out front bigger than your house? If so, they definitely need a trim or need to be removed all together. No one wants to buy your house if they can't see it. Landscaping can be the most important detail to sell your home. Why? Your front yard is the first impression of your home. Make it a good first impression. That means you should mow your lawn, paint your front door, and clean up any dirty spots. Once the cleanup is done, ask yourself: "If I didn't live here, would I want to go knock on the front door?"
   
   
2. Clean up pet smells.
   No one wants to buy a house that smells like a cat or any other animal. If you own a pet - a dog, cat, or house pig (yes, some people have pigs as pets) - be sure to really clean your house. Get rid of any hair and smells that your beloved pet leaves behind. Be sure to give old carpet a good cleaning since it can trap in bad smells.
   
   
3. Clear out the clutter.
   Be sure to pick up personal items and your kid's toys. Having stuff lying around your house distracts buyers and makes your house look messy. Put your stuff in plastic bins and store them in your garage or shed. You want to keep your closets clean. Buyers love lots of storage space so your closets can be a big selling point.
   
   
4. Get a great real estate agent.
   This is the best advice I can give to sellers. A great agent will give you even more tips that can sell your house faster.

If you follow these 4 tips, you can bet an offer on you home won't be far behind!

There is a petition going around in the City of Dacula, GA that is trying to permit a liquor store. Here's the actual post on a forum from the Mayor of Dacula:

"You may be aware that there is a private initiative to bring liquor stores to Dacula by way of forcing the City Council to call a referendum for such purposes, and you may have seen an informational piece posted near your mail box about this. This is not an initiative of the Mayor and City Council.

If a verified 35% of the registered voters in Dacula sign the petition, the City Council is required, under state law, to call a referendum concerning package sales of distilled spirits. If a majority of voters in the referendum approve, the City Council will have to amend our alcohol ordinance to allow package sales in the City."

What's interesting is that the online voting is about 50/50 but the people posting on the forum have really failed to articulate why they oppose a liquor store.  All of the political and news regurtitation aside, I have my reasons for opposing one, and that has to do with property values.  Then again, some of the nicest areas in Georgia have liquor stores.

The pros are much easier to express in terms of free enterprise and capital raised, but what about the negatives.  I think there are some strong negatives, and I think they are more subtle than anyone realizes.

Am I off-base?

Do you think the presence of a liquor store affects your opinion of a community?  Would its presence affect your decision to purchase or not to purchase in a given area?