Happy Hump Day!  I came across this recent article in the metro Atlanta paper….just another example of what we are seeing in our real estate comps here in the Atlanta area.

Metro Atlanta home prices fell sharply to a new low between August and September, moving against the national trend of a slight increase, according to the Standard & Poor’s Case-Shiller Home Price Indices.

Case-Shiller set a baseline home price index of 100 in 2000, so an increase to 125 would indicate a price increase of 25 percent.

Atlanta’s index fell to 95.99 for September, which means the average home sale price is 4 percent lower than it was in 2000. It was the largest decline for a major U.S. city and came at a time when the national index climbed 0.1 percent.

“I think what has happened is that we have a combination of the investors buying, coupled with short sales and foreclosures, coupled with a hugely disproportionate number of sales that are under $125,000,” said Daniel Forsman, the president and CEO of Prudential Georgia Realty.

Close to 30 percent of sales in metro Atlanta are foreclosures, Forsman said. Another significant share involves short sales, when a lender agrees to take less for a property than the value of its loan, and about 25 percent of sales are to investors, he said.

The short sales and foreclosures are putting downward pressure on the price of resales as well as new homes, said Brad Horner, the president of NRT Development Advisors in Atlanta, a residential brokerage company specializing in new homes sales.

The average sale price in 2010 was $188,524. So far in 2011, it has dropped to $156,922, his figures say.

If there is good news, it is that the number of homes sold are rising in the 56 counties of North Georgia, according to Horner’s numbers.

Through October 2010, 35,948 single-family homes sold. Through October of this year, 41,483 sold. Sales of condos, townhomes and other attached housing were also up from last year by nearly 1,000, with 7,400 sold. The creeping increase in sales is helping absorb the available inventory. At some point, demand will exceed inventory and prices will begin climbing again, Horner said.

The timing of that is something no one has been able to predict.

At its simplest, social media is a term that describes media that is shared by social interaction using the internet.  Think of it as a potentially profitable extension of  good real estate comps.   The creation and exchange of user-generated content; information and knowledge not just consumed by the users of the sites but also produced by the same.   

It is however through the hundreds of easily accessible social networking sites that the phenomenon of social media began its grip on the public imagination. Social networking, so beloved of the young, who are quite rightly the instigators of so many of the fads and fashions that later filter through to the masses, started as a means of sharing information about interests and of chatting with friends, but quickly became a byword for basic communication with choices now including “phone me, text me or Facebook me”.

No wonder then that the business community has picked up on the buzz and found increasingly more inventive ways to capitalize on the growth of this trend; with everything from social media marketing to viral marketing sweeping the net,  the possibilities for business growth are endless!

Happy Thanksgiving!

I love Thanksgiving for one simple reason, I get to make lots of people smile.  I love feeding my family and watching their faces when they see the spread at the table.  I always buy way too much food with the sole idea of getting my family to say “Wow!” and of course donating to the needy.

This got me thinking about Real Estate Investing and what 2012 might bring us.  Will 2012 be Thanksgiving for Investors?

As with most things in life, it will depend on your attitude and how you choose to tackle the opportunities/challenges that 2012 will offer.

In today’s post I have chosen the three most common topics discussed about Real Estate Investing.  We will discuss Price, Finance and Foreclosure.

Prices in 2012

The best news I can offer about 2012 is that I believe the foundation of real estate prices will become firmer.  Not rock solid, but they will certainly become firmer than the quicksand we are currently in. Specifically, prices in the lower tier and mid market will stabilize and stop the negative trend.  Unfortunately, the high-end and move up markets still have some significant pain to be felt throughout 2012.

If I am correct in my prediction it means that inventory at the lower end of the market will continue to become solid rental homes as cheap properties are turned into performing assets.    Stable prices and increasing transition volumes will drive 2012 to become the bottom of this real estate cycle.  We won’t be off to the races but we will have caused an inflection point and prices will slowly start to mend over time.

Lending in 2012

The good news is lending has to get easier next year, because it simply can’t get any harder (can it?). When lending loosens up more buyers will qualify to purchase real estate.  Increasing the number of closed transactions will mean prices will start to rise and the asset quality of banks will improve.  As the asset quality of banks starts to improve we will have officially turned the corner as banks will increase lending on real estate.  As this occurs we will witness the first of many positive feedback loops as good news causes more good news.

Foreclosures 2012

Lastly, I believe we will see the peak in foreclosures (Finally).  The backup caused by the robo-signing scandal has to break free soon.  When this does, we will see the spike in foreclosures and we can start the long road to recovery.

When foreclosures peak we will finally start to see some positive year-on-year metrics for sales, prices, and equity positions. When year-on-year metrics turn positive for real estate, attitudes will change.  Newspapers, Magazines and the talking-heads on TV will start discussing the positive trends in real estate and this will cause real estate values to rise.

When the press starts to push real estate it will be too late to jump into the market. In fact when magazines start printing headlines and providing cover stories about the new found wealth in real estate it might be time to sell.

So if you’re a strategic buyer in 2012, real estate investing should prove to be a time of “Thanksgiving”.  However, if you are a seller, I am afraid real estate will still be a source of sadness as 2012 will be a great buyers market.  Don’t give up hope sellers as 2013 could be your year ….

Happy Investing

Real Estate Comps prices in the U.S. are expected to fall a further 2.4 percent to close out 2011, compared to the first half of the year, as bank-owned properties drive down prices, unemployment remains high, and consumer confidence stays weak. Of 50 U.S. markets tracked by a national real estate market review company, only five metro areas are forecast to produce home-price gains by the of 2011: Washington, New York, Orlando, Dallas, and San Francisco.

U.S. home prices fell by 3.2 percent in the first six months of 2011 compared to the previous half, with median home prices dropping to $170,000. The peak of the market was in summer of 2006, at $240,000, indicating a median price decline of nearly 31 percent since then.

Before the housing collapse, the number of distressed sales historically made up a small percentage of the market. In the first half of 2011, however, bank-owned homes represented more than 30 percent of total sales, which is far above pre-2006 levels of less than 5 percent. In 2010 there were 1.7 million distressed sales, up from an average of 450,000 per year during the pre-collapse period from 2000 to 2005.

The rate of decline has tapered off in recent months, following a slow winter homebuying season and a double dip earlier this year. Prices are expected to be less volatile, though it is unlikely national home prices have reached a true and sustainable bottom.  National home prices will probably drift slightly downward until next year because of such factors as the financial crisis in Europe and discussions regarding the debt ceiling in Washington.

Under current conditions, and presuming continued job growth or should I say lack of growth, home prices may reach bottom in the first quarter of 2012. In its most recent economic projection, the Fed expects the jobless rate in 2012 to fall to between 7.8 percent and 8.2 percent, with gross domestic product growth anticipated at from 3.3 percent to 3.7 percent.