Some Good News

Sales of existing homes posted an unexpected increase last month, closing out the worst year for the U.S. real estate market in more than a decade.The National Association of Realtors said Monday that sales of existing homes rose 6.5% to an annual rate of 4.74 million in December, from a downwardly revised pace of 4.45 million in November.

The results were better than expected. December's sales had been forecasted to fall to a pace of 4.4 million units, according to Thomson Reuters.Buyers were taking advantage of dramatically lower prices, especially in distressed markets like California, Florida and Nevada, where foreclosures have swamped the market.The nationwide median sales price plunged to $175,400, down 15.3%pe from $207,000 a year ago. That was the lowest price since May 2003 and the biggest year-over-year drop on records going back to 1968.

"The economy just simply cannot recover as long as home prices continue to decline," said Lawrence Yun, the trade group's chief economist, who called on lawmakers to include tax credits for home buyers in the economic recovery package being considered by Congress.For all of 2008, there were 4.9 million existing home sales, down more than 13% from a year earlier, and the lowest total since 1997.

And another encouraging sign -- the number of unsold homes on the market in last month fell nearly 12% to 3.7 million. At the current sales pace, it would take 9.3 months to sell all the properties, down from 11.2 months in November.

-Wall Street Journal

Become a Student of the Game - AND WIN!

Believe it or not, there ARE buyers out there, and we will end 2008 with a sales pace to match between the numbers represented in the years 2002 and 2003. This will be somewhere in the low-to-mid 50,000 as far as transactions.

If you do some simple math…that would just mean that there needs to be fewer agents than there are today, and we will all be making the numbers we were making at that time…right? Theoretically, maybe, but the reality is that a big divide will be initiated; and it is going to happen sooner, rather than later.

You need to study the trends, talk the trends, use the tools to find the trends, and understand more today, than we ever have had to.

This does not have to be considered a huge task…it is actually engaging and interesting!

This week, I am dissecting the North Atlanta Corridor, and seeing what are some of the recent trends going on between new homes, retail, and institutional homes.

The Time Period = Contracts written Since 10/01/08

Areas = North Fulton (area 13, 14, 121), Gwinnett, and Forsyth

This is a broad look. You can get a lot more specific if you wish.

New Homes = Homes that were built in 2006 or later.

Institutional Homes = Homes that are owned by an entity (Banks, Corporations, etc)

North Fulton (area 13,14,121)

Total Contracted = 375

New = 47 (this pertains to homes built 2006 or newer)

Institutional = 79 (This included 7 new homes)

Forsyth

Total Contracted = 341

New = 129

Institutional = 83 (this includes 24 new homes)

Gwinnett

Total Contracted = 1,246

New = 281

Institutional = 655 (this includes 97 new homes)

What does all this mean?

The good news is that the number of sales is not that far off from last year’s production.

Inventory levels are coming down in each of the areas. Some of this is due to builders not building, banks not lending, and people deciding that now is not the time to try.

It really does not matter why…the bottom line is that the sooner the levels reach low enough, it will turn to a sellers market eventually…we are moving in the right direction!

Gwinnett had a HUGE number of foreclosures, and institutional homes that sold…a little more than HALF!

Realtors really need to perfect their game twice as much as they are going to war with…here is your example:

· 33% of the buyers in Gwinnett decided to buy a RETAIL home (this is a typical seller that owns their personal home and is selling it)

· 67% bought New homes or Institutional in Gwinnett

It is TOUGH, and you better be very bright to do business in Gwinnett and sell to the 33% of buyers that are buying Retail homes, or specialize in one of the arenas that is pulling the most sales

· 55% of the homes sold in Forsyth were New Homes or Institutional

· 31% of the sales in North Fulton were to New Homes or Institutional

Gwinnett seems to be leading the way with Institutional homes. It is tough to see if this is going to be a trend for the other areas, or if it is only a condition in Gwinnett.

What is clear is that Institutional homes are going to be the competition for some time. These will be lower priced homes that the entity selling is going to look to price them competitively to sell, and you will have to communicate with your sellers the reality…YOU ARE IN COMPETITION WITH FORECLOSURES, BANK OWNED, and CORPORATE OWNED homes…deal with it, or don’t sell today!

I had the pleasure of sitting in a woman’s home that said “I am not going to compete with the foreclosures and giveaway-homes, my home is better!” Her home has been on the market for ONE YEAR! She does not want to drop the price of her home…that is a big part of the oversupply right now, is the people that are sitting and hoping vs dealing with reality…

You have to change your pattern prior to the sellers changing theirs! Study the trends, find the trends, be the expert, and lead the sellers wherever they need to go…even if it means taking it off the market!

Bloom Where You Are Planted

This is the statement I read: “Bloom where you are planted.”

There are many choices you get to make in life, and a whole lot more you don’t get to choose.

The plant in this picture did not get to choose where it was planted…but it sure made the best out of it, and is apparently THRIVING where nobody would have reasoned it could!

You are planted…you are in North Atlanta…you are in Real Estate…whether you like it or not, you are planted!

Now, what are you going to do about it?

Think about our smart, and tougher-than-nails plant.

Are you a Knower or a Learner? This is going to be the question that when answered will determine who will be blooming, and who will not stand a chance in 2009.

The Knower would assume that there is no logical way that a plant could exist in such a dry, sloped, rocky area…they would not adapt, and would fade away, never seeing a chance, so why try?

The Learner (our little plant friend) researched with passion, and found the one spot that could possibly work…they owned the area, and had determination to make it the absolute best they could…they paid no attention to the knower and the negative remarks…

Do you see any other plants standing tall around our friend?

You will not be able to get me down about the market conditions, and what the future may hold…I know a lot in the game of real estate, but I constantly seek ways to improve my game today and for the challenges that are ahead…I AM planted…I AM a leaner…I AM blooming…Right here in the Real Estate Arena of North Atlanta!