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        <title>Atlanta Real Estate Blog</title>
        <link>http://www.premieratlantarealestate.com/blog/opinion/</link>
        <description>Atlanta real estate blog. Consumer focused real estate information for Atlanta and information and insight into local and national topics. Areas of interest include; Buckhead, Sandy Springs, Roswell &amp; Alpharetta. North Metro Atlanta.</description>
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            <guid>http://www.premieratlantarealestate.com/blog/new-bottom-driven-down-by-condos-single-family-about-flat.html</guid>
            <link>http://www.premieratlantarealestate.com/blog/new-bottom-driven-down-by-condos-single-family-about-flat.html</link>
            <author>ryan@premieratlantarealestate.com (Ryan C Ward)</author>
            <title>New Bottom Driven Down By Condos, Single Family Prices About Flat</title>
            <description> <![CDATA[ 
January is the worst month for home prices in Atlanta and 2011 is no different - although not as bad as I thought. We now have all of the January data compiled and we do have a new bottom for home values in Metro Atlanta that takes us back to levels not seen since 1998.

But...

Closed sales were up and pending sales are up compared with 2010...

...and it's not as bad as it could be - or could have been for that matter especially with the weather we had early on in the month. Single family home (detached) prices are down 3.1% from 2010, but not lower than they were in January of 2009 and attached homes were down 18.4% from 2010. So I think it is more accurate to say that we have a mixed bottom. Technically, the new bottom of the market is January 2011, but I think that labeling the market as the worst it has been is only important for the doomsayers. Since the condo market is dragging us deeper in this hole while single family remains basically flat for 2 straight years (and now beginning a third year), I think it's important to make the distinction. The majority of sales (over 80%) are single family and that bottom was January of 2009. What we have is a technical new bottom and a bifurcation of the market trends as it relates to single family homes vs. condos.

The Hurdle is Financing (and therefore demand) and Foreclosures for Condos

Foreclosures played a large role in the decline in condo values as the median foreclosure price was $85,000. Until we shake out the remaining foreclosure numbers, we are going to have more trouble.&nbsp;

Financing for condos also complicate the problem. If you want to buy single family home it's not really a problem. 3.5% down and you are basically in. That's not the case with Condos where many buildings are not FHA approved making lending guidelines a bit more difficult. Where there is easier money, there are more sales. Since more sales by definition means higher demand, we see a relatively stable single family market and continued difficulty in the condo market. The good news for condo demand is that January numbers were up over 11% from January 2010.

There are great opportunities though for anyone willing to look. You can buy a 2 bedroom 2 bath condo on Piedmont park for under 230K. Try doing that 3 years ago. One bedrooms in Buckhead and Midtown for under $100,000 is not that hard to find either. For some buildings that are full in good locations with nice amenities, prices are pretty stable as well. It's just that trying to navigate through these waters without a very skilled agent who understands the market is pretty risky. That's not always the case, but working as a lone ranger right now is probably not a very good idea.

Where We Go From Here?

Sideways. For a while. That's for residential detached and down a little more for attached homes...

...and I for one am just fine with that. It's much better than it has been and should help bring confidence back to the market slowly. It's beginning to be a little more predictable too. The way it should be.

There just isn't anything to indicate a real upturn or downturn on the horizon. Anything can happen as we are seeing in the middle east right now with the effect on oil/gas prices, but without any real unforeseen changes, sideways should be the general trend for 2011.
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            <pubDate>Tue, 08 Mar 2011 09:41:32 -0500</pubDate>
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            <guid>http://www.premieratlantarealestate.com/blog/not-all-client-questions-are-easy-to-answer.html</guid>
            <link>http://www.premieratlantarealestate.com/blog/not-all-client-questions-are-easy-to-answer.html</link>
            <author>ryan@premieratlantarealestate.com (Ryan C Ward)</author>
            <title>Not all Client Questions are Easy to Answer</title>
            <description> <![CDATA[ 
Below&nbsp;is a question I received from a client I am working with so&nbsp;what I am writing&nbsp;is actually about answering the questions as best I can for my client, but it illustrates - at least to me - what one of the&nbsp;most significant&nbsp;differences is in today's market&nbsp;compared with the market of just a couple of years ago; regardless of price point, there is some reluctance to purchase now, whereas just a few years ago, there was almost a reluctance to wait for fear of losing the home to someone else who might also be interested in it. Here is the question from my client:

&quot;I need an understanding of what price points are are likely to appreciate the most over the next 20 years.&nbsp; Much of the appreciation before the crash was due to a declining interest rate environment which won't continue.&nbsp; I need to understand total cost of ownership after taking into consideration price, taxes, appreciation, finance charges, maintenance and difficulty of resale.&quot;

Well, I'm not sure why I am going to try to tackle this publicly, but, the need to blog is pulling me and I need to answer the questions as well so I'll try to kill two birds with one stone here. I'll address each segment separately:

What Price Points are Likely to appreciate the most over the next 20 years?

Admittedly, I have no crystal ball and so this is impossible to be certain of so&nbsp;a history of the last 100+ years in real estate appreciation will be helpful. This roller coaster ride plots the appreciation from 1890 to 2007:

#rollercoaster#

Here is a chart of you don't want to&nbsp;watch the&nbsp;long video. Click on the chart to see a full size. I borrowed it from the NY Times who borrowed it from &quot;Irrational Exuberance&quot; by Robert Schiller:



The point of the chart is to see that:

1.) Prices recently rose too much, too fast.

2.) Prices over time are likely to be higher rather than lower.

The question is what price points are most likely to increase the most over the next 20 years? First, I need to know if you the question refers to an increase in price as a percentage or as a gross dollar amount.

This is one of those questions that really requires more information to answer with precision, but generally, the more expensive the house is now, the more likely it is that it will be worth more money than a lower priced house. As an example, let's say that a $200,000 and a $2,000,000 each appreciate at 5%/year over the next 20 years.

This calculator will give us the future values:

The $200,000 will be worth &gt;$531,000 or, $331,000 more.

The $2,000,000 will be worth &gt;$5,300,000 or $3,300,000 more.

In fact the $2,000,000 would only need to appreciate about .8% in 20 years to increase in value the same dollar amount as the $200,000 house.

Given this, I think it's safe to say that when you leverage more money, you are more likely to have a higher yield. I hope that this makes sense.

I Need to Understand Total Cost of Ownership...

I need to understand total cost of ownership after taking into consideration price, taxes, appreciation, finance charges, maintenance and difficulty of resale.

Well, only a homeowner can ultimately answer this fully as one persons value on the actual living in the home may differ than another person. So from a dollars and cents perspective only we can make an attempt. Again, no crystal ball here...

Most of this, I suspect, will scale on a percentage basis so buying the right house will ultimately be the sum of what you can afford, what you want to buy, characteristics of the home, the location of the home, etc...Let's start with appreciation - the more expensive the house, the greater the dollar return. This should offset additional taxes on a more expensive home as you essentially pay taxes on a percentage of the home's value. Maintenance will be higher on a larger home - buy new and this will help to reduce those costs as well as monthly costs of ownership because newer homes tend to be more efficient.

Financing - this is tricky...let's say you pay cash for the house and it costs $2,000,000 and the home appreciates at 5%. We know that you will make &gt;$3,000,000. If you financed the house and invested most of that $2,000,000 for 20 years, could you make more than 5%? Sorry, I'm not going to answer that part. You'll need to get with your financial advisor :)

Now, let's talk resale with some statistics...

In the last&nbsp;7 months of 2009, 5,163 homes sold in Metro Atlanta between $200,000 and $300,000. That's 738 month. There are currently&nbsp;7,981 active listings at that price point. that's about 1.4 out of 10 that sell each month and about a 10.8 month supply of homes.&nbsp;The average days on market is 108.

During that same time, 277 homes sold between $1,000,000 and $2,000,000 with an average days on market of 149. There are currently 1,101 active listings at this price point. That's 39.6 sales per month and an absorption rate of 27.7 months. This is a price point that has seen large price declines over the last 18 months. About 1 in 30 of these sell each month.

During that same time, 25 homes sold between $2,000,000 and $3,000,000 with an average days on market of 117. There are currently&nbsp;246 active listings at this price point. That's 3.6 sales per month and an absorption rate of&nbsp;68.3 months. This is a much smaller price point. About 1 in&nbsp;75 of these sell each month and apparently it is only the very best ones. On a side note, these days on market statistics are not 100% accurate as many of these homes were previously listed and failed to sell. That time is not included in this statistic.

...frankly, the statistics don't mean that much by themselves and it is somewhat intuitive that more expensive homes are harder to sell.

However, if you weigh the greater difficulty in selling with the greater monetary gains realized, you may decide it is worth it. Of course, none of this can factor in what may happen next month, next year or a few years down the road when the market may stabilize or continue to fall. It is less likely that we will begin to see prices rise in the short term, but some think that most of the bleeding is over while others think there is more to come. At the higher price points, there is still an oversupply of homes, but, not many new homes are entering the market so 12-18 months from now appears to be a bottom. It's important to note that we have likely already passed the &quot;technical bottom&quot; of the overall real estate market in Metro Atlanta.

So, for the one person I actually wrote this for, I hope it helped. For anyone else, I would encourage any and all comments although the number of people likely to be interested in this is likely to be quite low!
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            <pubDate>Tue, 30 Mar 2010 23:49:36 -0400</pubDate>
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            <guid>http://www.premieratlantarealestate.com/blog/tax-assessment-reform-may-be-on-the-way.html</guid>
            <link>http://www.premieratlantarealestate.com/blog/tax-assessment-reform-may-be-on-the-way.html</link>
            <author>ryan@premieratlantarealestate.com (Ryan C Ward)</author>
            <title>Tax Assessment Reform May Be on the Way</title>
            <description> <![CDATA[ 
Partial Reprint from the Atlanta Business Chronicle. You can read the full article here:


&quot;The Georgia Senate Thursday unanimously passed legislation aimed at overhauling a property assessment system thrown into disarray by huge market-driven fluctuations in property values.The bill, which now goes to the House, would restore Georgia homeowners loss of confidence in the fairness of the property tax bills they receive from local governments each year, said Senate Majority Leader Chip Rogers, the measures chief sponsor.Homeowners across the state are complaining that theyre being taxed based on assessments that no longer accurately reflect the declining value of their properties, said Rogers, R-Woodstock.&ldquo;The assessments are not keeping pace with fair market value,&rdquo; he said. &ldquo;Property owners are paying (taxes) on value they dont own.&rdquo;In an effort to ensure greater accuracy, the bill would require local governments to send out assessment notices to property owners annually.Owners who disagree with their assessments would be given 45 days to appeal, up from the current 30 days.In setting property values, assessors would have to take into account the effects of foreclosures in the neighborhood.&quot;


I find this to be great news for homeowners across the state. I get emails from homeowners who find me online, past clients and friends asking how to go about the process of appealing their tax assessments. With the market in flux the way it is, we need a more responsive government.

This might be worth contacting your state representative...
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            <pubDate>Fri, 12 Mar 2010 19:43:21 -0500</pubDate>
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            <guid>http://www.premieratlantarealestate.com/blog/whio-pays-for-poorly-underwritten-loans.html</guid>
            <link>http://www.premieratlantarealestate.com/blog/whio-pays-for-poorly-underwritten-loans.html</link>
            <author>ryan@premieratlantarealestate.com (Ryan C Ward)</author>
            <title>Who Pays for Poorly Underwritten Loans?</title>
            <description> <![CDATA[ 
Bank of America has filed suit against MGIC, one of the nations largest mortgage insurance companies. MGIC has rescinded many of its obligations to pay saying that they aren't contractually obligated to pay for loans that weren't properly underwritten. According to a Bizjournal story, MGIC cut 1.2 billion dollars in payments and Bank of America has filed a lawsuit as well as discontinued using MGIC for its mortgage insurance. Bank of America has also discontinued using MGIC to insure loans.

If you have a loan with less than 20% down, you or your lender has paid for mortgage insurance on your loan. If the loan goes bad, the mortgage insurance company is supposed to pay up. However, with so many bad loans, mortgage insurers are pointing the finger back at the bank in many cases saying that the loans were not underwritten properly. In these cases, the insurance companies won't pay out and in my opinion, shouldn't.

What was missing during the housing boom was accountability. I don't see a problem making sure that the right entity pays for loans going bad unless its another taxpayer bailout.
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            <pubDate>Mon, 08 Feb 2010 06:53:51 -0500</pubDate>
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            <guid>http://www.premieratlantarealestate.com/blog/im-pretty-sure-this-is-how-appraisals-are-performed-now.html</guid>
            <link>http://www.premieratlantarealestate.com/blog/im-pretty-sure-this-is-how-appraisals-are-performed-now.html</link>
            <author>ryan@premieratlantarealestate.com (Ryan C Ward)</author>
            <title>I'm Pretty Sure This is how Appraisals are Performed Now</title>
            <description> <![CDATA[ 
If this isn't how they are done, it might be obtained by taking a sledgehammer and hitting one of those&nbsp;strongman devices&nbsp;you find at a carnival that has been altered to show prices.

I don't know that I blame appraisers. It's a difficult task when you are trying to appraise a property in an area that you are unfamiliar with. Because of HVCC, we find ourselves in a new era where appraisers are being asked to perform a job for less money than ever before and simultaneously perform fewer appraisals because of the reduction in sales volume. A good portion of the income that appraisers used to make is now taken by the Appraisal Management Companies. What this is really about is how the Federal Government has caused greater harm with it's solution than they ever anticipated. The unintended consequences of HVCC&nbsp;may actually be hurting the real estate market more than helping by further pressuring prices down.

There is a Petition to Reverse HVCC

Take a minute, follow this link, watch the short video&nbsp;and maybe&nbsp;sign a petition to help permanently reverse HVCC.&nbsp; It's quite interesting.

The only entity who benefits from low appraisals are banks. Now, I want to be clear; I am not a bank-hater. There are plenty of people who think they deserve everything they get, but, I am not one of them. Banks are eating more bad loans from people who very well may have committed mortgage fraud with their &quot;stated&quot; income loans and the other things going on like short sales, etc...I appreciate lenders wanting safe loans, but, I think this may be unfairly padding extra equity that does not belong to them.

If I'm not mistaken, I believe that FHA loans will not permit money from an appraisal to be paid to an appraisal management company beginning January 1st and that is a step in the right direction. If an appraiser is only getting $125-$150 of a $450 appraisal and they are the one doing all the work, something is wrong. HVCC is an attempt to correct a part of the lending process that may have been corrupted sometimes by loan officers pushing appraisers to find a value in a home that didn't exist, but, this was an extreme solution. It would have been much better to require mortgage brokers and lenders to be state licensed the way we as real estate agents and brokers are licensed. This would be more effective than HVCC in correcting the original problem and would not have the negative impact on the housing market. For those naive enough to believe that there is no negative effect due to HVCC, licensing would still do a better job than HVCC could ever do. 
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            <pubDate>Tue, 17 Nov 2009 22:30:04 -0500</pubDate>
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            <guid>http://www.premieratlantarealestate.com/blog/i-am-very-proud-that-i-require-contact-information-to-view-properties-on-my-website.html</guid>
            <link>http://www.premieratlantarealestate.com/blog/i-am-very-proud-that-i-require-contact-information-to-view-properties-on-my-website.html</link>
            <author>ryan@premieratlantarealestate.com (Ryan C Ward)</author>
            <title>I am Very Proud that I Require Contact Information to View Properties on my Website</title>
            <description> <![CDATA[ 
A couple of years ago I decided to require contact information to view listing details on my website. When I made the decision, I knew that some people would leave or become frustrated at having to provide me contact information but more people would be fine with providing a way to be contacted. To make that decision for people and not ask for the information, in my opinion is not a good business decision, but people can disagree on this point. To call it against consumer interest, immoral or unethical&nbsp;is to not fully comprehend the consumer.&nbsp;Requiring registration also allows me (and now my team) to help consumers if they want it. That in turn&nbsp;is good for business and good for consumers. If they don't want to be contacted, they won't register. No harm, no foul. Those that don't want to be contacted are free to use another website.



I was skeptical at first because I wasn't sure it would be a good business decision. I had never done it so I just didn't know. I thought it would be possible that people would be frustrated and leave our website but that didn't happen. I am well aware that some people left and others provide bad contact information. Never did it occur to me that some would consider it an ethical decision or consider it akin to murder as some have done in this blog - read the comments&nbsp;- which I find absurd, but, I'll put this out there just to further the conversation.&nbsp;I'm also writing this because&nbsp;in defense of my position I said I would from within those comments :) .

Now, I have no problem at all registering to gain access to something I feel is of value to me. I don't proclaim to know exactly how everyone feels or what they think about being asked to register, but, I have more than anecdotal evidence that demonstrates beyond a shadow of doubt that less people are offended by it than those who are offended. Some people say that it doesn't &quot;feel&quot; right to ask for information and others say they don't need the additional business, but, to argue that it is against consumers best interests to ask for contact information is disingenuous if intentional or incorrect if unintentional.&nbsp;To say that this is against consumer interest is silly. This doesn't actually have anything to do with consumer interest. It's just an argument some like to make because of their personal feelings on the matter. Personal feelings that want all things to be &quot;free&quot; because information that isn't &quot;free&quot; now will be someday. Again, silly. And Wrong. Information that has value will never be &quot;free&quot;. Most who feel this way spend too much time in front of their computer, too little time in front of consumers, are still in college or younger and are yet unable to understand the value of information, or some other ideal that does not understand the value of an exchange. This is not forced. People are free to go somewhere else. You don't have a right to the information on my website. It's not yours. It is&nbsp;mine. I trained for it and paid for it. Can you get it elsewhere? Sure. Don't want me to call you? Go somewhere else and get the same information. Let me repeat - the same information. Maybe not displayed as well as it is on my site and maybe not as easy to find as it is on my site, but, you get what you pay for.
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            <pubDate>Thu, 27 Aug 2009 21:46:13 -0400</pubDate>
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