Bo Knows The Economy!

An open letter to President Obama about the State of the Union Address

2012-01-24T11:23:00.000-05:00

Here is the text of an email I just sent to the White House (from www.whitehouse.gov).

"In anticipation of the State of The Union Address this evening I want to put forth the following-I know your focus will be on the Economy and Jobs. With that in mind, I want to share something that doesn't make sense to me. I drive over 60 miles a day to get to and from work; I frequently have to drive to appointments as well. I have heard several predictions that gasoline prices will rise to over $4.50 this summer and with the saber rattling over the Straits of Hormuz I am not surprised by this. Couple that with the fact that my 1999 SUV with 165K miles takes premium my payments will be much higher. So why did you stop the Keystone pipeline project? This is something that will help OUR country and provide immediate jobs (I believe you have used the term Shovel Ready for several other projects that haven't yet started). I try to conserve and recycle and yes, we DO need to come up with other energy sources. But TODAY we need oil and that won't change. We also need JOBS. Please reconsider for the good of our COUNTRY (not political factions). Thanks for you time, good luck tonight!"

So why did he block the Keystone Pipeline project? For Jobs? NOPE. For the Economy? NOPE. For the safety of our fine Union? NOPE. He did it to appease environmentalists. They believe this pipleline to be a horror show for our country. Yes, there are risks involved and they need oversight to ensure they 'get it right'. We DO need alternative energy sources; I wish I could afford a solar array on my roof so I could thumb my nose at the Energy companies during our hot summer but I can't. We don't have enough wind and the more or less 'clean' nuclear industry (yes, I know it's not perfect) is also blocked by environmentalists. SO what does that leave us? OIL. We need oil NOW and it's time to approve this (Especially before CHINA inks a deal with Canada).

So in the interests of our country, why not approve this? OR are you interested in Elections and Polls? We will soon see. I am not so sure...

Chapter 11?

2012-01-11T14:01:00.000-05:00

I just read an article about Hostess declaring bankruptcy. Why? To be able to truly bargain with their Unions and to ease some of their Pension pains. Look, I understand the problems of management versus workers but many of our unions have crippled their companies. It's pretty bad when such a well-known and well-loved company has to do something so draconian as to declare Bankruptcy in order to be able to negotiate! What's my thought on this? I am not a huge union fan obviously and I want to see more US companies be able to compete with foreign companies. Why did so many companies move offshore? Cheaper labor! I am sure the hourly wages are much different but if you add in all the governmental regulations PLUS the higher wages PLUS all the Union demands it makes for an easy business decision to relocate (not only that, compare rust belt Automakers vs. all the Southern US Plants--lower wages and benefits, yes, but people are WORKING). Look at all the new auto plants being built in the South--Kia, Hyundai, VW. Not only is it cheaper to produce here (due to exchange rates and shipping costs) we have a solid workforce. So I guess I'm just griping about unions today. Do I "applaud" Hostess' move? In some respects, I agree with it. However, no one wants to see someone 'fail' (at least that's how I see Bankruptcy). Will we see more of this? It all depends on the marketplace. In essence, both sides need to work together--pay a fair wage but work a fair amount. It's all in the balance! I wish Washington, DC worked like that... Cheers, Bo

The US Budget defined

2012-01-03T08:14:00.002-05:00

I got this from an email (so of course it's true :) SO even if the facts aren't fully correct, this is a pretty good depiction of why we're in such a mess. Have fun! (Sorry about the layout; don't know why Blogger won't let me format how I want it).Why the U.S. was downgraded:* U.S. Tax revenue: $2,170,000,000,000* Fed budget: $3,820,000,000,000* New debt: $ 1,650,000,000,000* National debt: $14,271,000,000,000* Recent budget cuts: $ 38,500,000,000Let's now remove 8 zeros and pretend it's a household budget:* Annual family income: $21,700* Money the family spent: $38,200* New debt on the credit card: $16,500* Outstanding balance on the credit card: $142,710* Total budget cuts: $385 Got It ?

Repeal Dodd-Frank NOW

2011-07-20T10:19:00.000-04:00

Read THIS ARTICLE. This is very well written, no matter what you think of Newt. I like Newt; perhaps not as my President, but as a solid commentator. I have long complained of the Dodd-Frank Act (and it's 'friend' HVCC) and its repeal would do wonders for our country! That important? YES!

A mixed bag: Unemployment "Down" in GA

2011-05-19T09:49:00.004-04:00

I suppose any drop is a good thing, but since we're still at 9.9% unemployment, it's tough to get super excited! March numbers reported 10% so a .1% drop is small, but I doubt the 30,100 people who found jobs would complain at all! Most of the jobs were added in hospitality, services, trade, educational and health services and (so it is reported) construction (construction? really?). It's also important to note that we were sitting at 10.1% unemployment a year ago (April) so again, this is a good thing, but the last time it was below 10 was in June of 2009 when unemployment was reportedly 9.8%--and all the while we've been running above the national average. BUT, it's the third consecutive month of gains to "Way to go, Georgia!"

Friday the 13--Feeling lucky today, punk?

2011-05-13T15:32:00.001-04:00

In case you've been under a rock today, it's Friday the 13th! And yes, that's a "Dirty Harry" reference (for those of you who are too young to know the movie, Google it and see what Clint Eastwood looked like as a "youngster"). Yes, some people will be extra nervous today, expecting something horrible to happen (or some horror movie reject jumping out of a dark corner with a chainsaw or an axe). Me? I'm more worried about the economy and business to fear Friday the 13th (actually, I have always liked the number 13). So what's going on? Lots!

Are you more upbeat today? According to a recent poll, 2 of 5 people believe the US economy will get better. No, that's not a ringing endorsement but it's still better than last month's poll (each randomly sampled over 1,000 people). Believe it or not, the death of Osama was one factor for the positive outlook but other news items are also helping to fuel the positives--job creation and sales data among them. Current pricing for commodities are dropping (silver, sugar, natural gas, and even OIL) and the dollar is strengthening (which allows the US to spend less to buy more!). This may be a temporary dip as it seems everything costs more (have you been grocery shopping lately???) and many of those increases have been due to higher fuel costs. Still, I am amazed that gas prices are over a dollar more expensive than last year. So much unrest in oil producing countries as well as supply demands, factored in with the switch to expensive 'summer blends' of gas have pushed up prices BUT expect prices to drop a bit as people changed their habits (drove less, traded gas guzzlers) and now supplies are up/consumption down so we're hoping to see $3.50/gallon again soon.

Despite gasoline cutting into our wallets, April retail sales were up-the 10th straight month of increases! Why? Earnings are growing (more jobs, higher wages, more hours worked), and people stepped back and paid down debt during the crisis (so now there is more disposable wealth on the sidelines). Sales are expected to keep rising in the months to come!

Recent employment reports are a mixed bag. Claims for unemployment fell last week by 44K, dropping to a seasonally adjusted 434,000 average. While any drop is great, it must be mentioned that 375,000 is the level generally accepted as being consistent with sustainable job growth so we're not there yet. Again, employers added more than 200,000 jobs in April for the third straight month. Various sectors were represented--retailers, factories, financial companies, education and health care-even construction! One source noted that Fed/state/local governments actually cut jobs (which may not be a bad thing for taxpayers as there tends to be overlap and waste in that area). So if gas prices are so bad, looks like employers are ignoring that and hiring more people!

The Fed is not ignoring the fact that despite commodities taking a breather of late, their last official statement noted "inflation has picked up in recent months." For now, they will hold the Federal Funds rate near zero, as has been the case for the last year or so. However, if inflation continues to take hold, they will have no choice but to raise rates (which would in turn raise other short-term rates like the Prime Rate, which will hurt many equity line holders as well as anyone carrying a credit card balance). If you further dissect their comments, in March they said labor markets "appear" to be improving; in April they noted they "are" improving gradually. What a difference a few words can make, eh? With that being noted, they talked about a few positive gains (household spending, business purchases) but they noted "the housing sector continues to be depressed." Gee, ya think? So what's going on with housing?

My view from the frontlines notes that yes, we're seeing more activity. However, we are still seeing a LOT of foreclosures, short-sales and investor purchases. As I've said before, if you have some cash, it's a buyer's market, baby! In late March, it was reported that new home sales were up (great!) but there is SO much inventory out there of existing homes, many of which are 'almost new' and all seem to be selling at deep discounts due to foreclosures and short sales (bad!). ATL home prices dropped below 2000 levels and hit a 3rd monthly low per S&P/Case-Shiller index. We're not alone--the U.S. as a whole is back to 2003 price levels. BUT, the Atlanta Board of Realtors reported sales were up 5% in February and median sales prices were up over 7% in March and foreclosures dropped a bit. So pricing remains a problem as well as credit--but again, who knew that rates would remain under 5% so long? That's great, but if you can't get a loan due to stupid laws and incredible restrictions on credit, what good is that? Likewise, these underwriting conditions are hurting entry-level buyers quite a bit and 'move-up' buyers are underwater or cannot hit the down-payment requirements for a new mortgage so looks like we're going to see a lot more renters for the short-term (Boo!). I hope that some common sense underwriting will return to our industry soon (repeal Frank-Dodd act?); it's still a great time to purchase a home--if you can. Good luck to all of you; thanks for reading and keep in touch! Remember--if you need a closing attorney, choose us! I'll be in touch again soon!

Rent vs. Buy: The New York Times perspective

2011-05-13T15:15:00.002-04:00

See this article from the New York Times to see what the fuss is all about. Also, read this from the Atlanta Business Chronicle for ATL specific info. Rates are great; go buy now : )

Interesting article on how to retire a Millionaire!

2011-04-22T13:24:00.003-04:00

This article from Clark Howard is a pretty clear example expressing the time value of money. Pretty sobering to know that $14K invested at an early age can = $1M over time and how long (and how much money!) you'd need to effectively "catch up" later in life. So get motivated and get those kids out there saving money! (Note-I am unsure how they take into account inflation, but it's still a great idea to start early and contribute often!) Cheers, Bo

Witness-only closings are a threat to you and your home...!

2011-04-12T15:09:00.002-04:00

I answer general questions from an attorney referral website from time to time. The scenario at the bottom (look for the link) REALLY struck a chord with me as this is a huge problem for citizens in Georgia. I must be honest that yes, my answers are self-serving as I would like only attorneys to close loans in Georgia. However, it's not just protecting myself and my business--it truly protects the consumer as well. These attorneys who show up at your house to be a witness for these out of state companies are not helping you out. Yes, it's convenient (and I do mobile closings from time to time--I happened to close a refi at a coffee shop with a good friend/loan officer this morning) but is it truly helping you? Let's look at the differences.

So we closed at a coffee shop. As a GA attorney, we ran title here in GA (using an attorney-certified title abstractor). We processed the file in our office; a licensed attorney (ME : ) with E&O coverage closed this file along with a witness (and I am a GA notary). I processed this file and we will fund it using a GA IOLTA account (Interest On Lawyers Trust Account--required by the State Bar, and it funds indigent defense among other things). I wrote title on a GA licensed Title Agency, which will in turn cut a check to the proper oversight agency here in GA. If the customer has an issue with their closing, who will they call? ME. Who will pick up their phone (or call back within 24 hours)? ME. Who is liable for any mistakes on that file? ME. Period.

Let's contrast that with a witness-only attorney who closed with their 'customer'-they received a file from an out of state company, showed up at the mutually agreed upon time and location and pulled out their notary stamp and pointed to where the customer needed to sign. When they were finished, they sealed up the FEDEX and sent it back to the out of state company/lender. NO taxes were collected in GA, no fees were generated in GA, no liability (so they think!) for the GA "attorney". So who does the customer call? GOOD LUCK PAL! And do you think that customer saved any money? From most HUD-1 Settlement Statements I have seen, the fees are more costly than a GA attorney's fees! Even if not, they are only slightly cheaper.

Is losing your house worth saving $50? Read this article and see if you think it is....

Georgia Economic 'Snapshots'

2011-02-16T15:55:00.002-05:00

When I first read the headline noting ATL is the #31 destination for movers according to U-Haul I was thinking 'cool, this is good for us!'. Unfortunately, when I read the article we were #1 in 2008 and #6 in 2009. People, Georgia is lagging! It's not just the data from 1.4M rentals by U-Haul--it's our water issues, our schools and our transportation problems. MARTA rail? Forget it... for a city our size we have the fewest miles of rail (compare us to Washington DC). We need to have a regional entity to make ATL competitive on that front. Many other topics but that's just one bugging me right now. The top 5 cities per U-Haul? 1-Houston (Houston?); 2-Orlando; 3-Vegas; 4-Chicago; 5-Portland. Oh what the heck-- 6-San Antonio; 7-Austin; 8-Brooklyn; 9-Sacramento and 10-Kansas City, MO (huh?).

We're also #8 for "financial distress". We scored 61.3 on CredAbility's Financial Distress Index--a score below 70 indicates a state of financial distress. A score of 60 or less is considered an emergency crisis. We are unfortunately in "good company". The top-10 in order are: Michigan, Mississippi, Nevada, Alabama, Florida, South Carolina, Indiana, Georgia, North Carolina and California. The 'punchline' in this story is that these 10 states produce over 33% of the country's GDP (no, it's not really a punchline, more like a punch in the gut). In essence, economic indicators are looking up; it's just that individual bottom lines have not fully recovered. Give it time; hang on fellow Georgians! Who knows--maybe we'll be able to vote on Sunday sales sometime soon; wouldn't that be a novel concept!

Losing to gain...?

2011-02-16T15:47:00.001-05:00

There was an interesting article in the AJC today talking about a couple that 'bit the bullet' and lost money on the sale of their townhome in order to purchase a new home for a pretty solid discount. That may well be our 'new normal' for quite some time with values continuing to drop (or remaining stagnant). This is a difficult mindset to overcome (to 'break even' or even lose money on a sale) and an even more difficult situation if a seller has to write a check to sell their home--how will they pay for their new home?
There are more positive signs that the economy as a whole is looking up. Unfortunately, one of the indicators is somewhat misleading for us in Georgia. While unemployment has dipped to 9% in the US, the unemployment rate actually rose to 10.2% in Georgia. What is happening? Unfortunately, many of our lost jobs were tied to construction, be it commercial or residential. As we all know, neither area has bounced back solidly. I read an article in the Atlanta Business Chronicle and I think it actually said that there are NO commercial projects over 20 stories being built at this time and we all see the vacant strip malls and empty 'big box' stores all over metro Atlanta.
So what's next for us? We still have several bright spots out there. The port in Savannah is growing like gangbusters (cross your fingers for money to deepen the harbor); the ATL airport is still the busiest in the world and Kia has expanded their plant already (and I believe they are expanding again!) down in West Point and there are other producers out there (though the new Volkswagen plant in Chattanooga didn't hire any Georgia workers--no wonder they chose 'the dark side' for their Super Bowl commercial). All in all, real estate is at or nearing the bottom. Prices are great; rates are great--no news there. The only change that needs to happen is to get people out there buying. Unfortunately, we need to get more people employed to make that happen. With that being said, consumers are out shopping again; my hope is that we'll see Home shoppers out there again soon!

So you want to go to law school...

2011-01-26T12:16:00.001-05:00

This is an entertaining YouTube video : ) Have fun! Click HERE for the video

Good news/bad news

2010-11-12T16:23:00.002-05:00

So for the good news: mortgage rates are lower than they have EVER been in recorded history. Can you believe that? Rates are 'around' 4% and some say they may fall UNDER 4% if this QEII is successful. What's the bad news? Atlanta home prices (per the National Association of Realtors) have fallen 12.3% for the 3rd quarter, relative to prices a year ago. Not only that, the median sales price for ATL is $113,500 which is 34% lower than the peak prices of 2007. The odd thing about that is that I've heard so many say that ATL really didn't have much of a 'bubble' in real estate (truth be told, we had a bubble in real estate construction--which is why oversupply still exists)! Regardless of all that, keep positive and let's get people in houses! Time to move out of that basement and get into your new home! I hope sales remain strong for the next few months! Have a great weekend, Bo

Why HVCC killed the mortgage business

2010-10-19T11:13:00.001-04:00

As a closing attorney, I am on the 'front lines' as it relates to real estate. People ask me about the current trends or "what's really going on" as it relates to real estate. When I talk about our current conditions and why we remain 'stuck' in this real estate recession, my typical response has nothing to do with Wall Street or sub-prime loans--it's all about a little-known regulation called "HVCC" (I bet the mortgage people out there just had a collective shiver up their spine).

The concept behind HVCC (Home Valuation Code of Conduct) was noble enough--a loan officer should not be able to 'push' an appraiser into giving a higher value for a property. HVCC insulated the appraiser from loan officers entirely by using Appraisal Management Companies (AMC's) who now handle the entire appraisal process (LO's submit the property; the AMC will line up the appraisal and provide the finished product to the LO/Lender). Again, sounds reasonable, right? Well, the law of unintended consequences kicked in and the AMCs have either used low-cost providers that aren't very experienced or they've used appraisers that aren't up to speed on the area. Think of your own part of town--could you guess values on properties 20 miles away? I know appraisers aren't guessing (and this is not to throw rocks at qualified appraisers) but some of the people the AMCs use seem to be 'going through the motions' and (as they aren't getting paid market rates for their work) they aren't producing the best quality work. Low-cost providers aren't typically the best products (e.g. you get what you pay for).

My typical analogy for this is take someone who lives in the burbs and typically appraises mega-mansions worth $1M or more out in North Fulton--what happens when they have to do an in-town 'bungalow' that essentially would (should?) be valued at the same pricing? Typically, it doesn't compute and they have issues setting the true value for that in-town property. I hear that LOs can now 'appeal' values with the AMCs and changes are coming (perhaps the 'death' of HVCC?). Sure, HVCC isn't the only culprit, but it's one 'behind the scenes' issue that continues to haunt us. Likewise, there are even more dark clouds on the horizon as new legislation may create more levels of government interference in the industry, again with good intentions (such as lowering costs for borrowers).

Take FHA for an example. With FHA loans, there is an up-front mortgage insurance cost (that is rolled into the loan) and a monthly MI premium. So here's some info about the newly revised FHA program--the up-front MI is now lower (only 1% of the loan amount vs. prior amount of 2.25%). Great, it will cost your borrower less to get that loan, so hooray, right? Wrong! While the up-front charge is now lower, the monthly premium is now higher (from .55% to .90%)! I read an example in the AJC noting a $200K purchase price and a loan of $193K. Old monthly MI was reportedly $88 a month and the new MI will be $148/month! OUCH. The up-front MI is a one-time thing--but that extra $60 is due every month. So again, what sounds good ("lower costs") may not turn out to be a good deal for consumers!

The bottom line is this--many of the relaxed lending standards began years ago with the stated goal of getting more people in houses. Unfortunately, standards were 'too' loose and some people got in over their heads. We are now mopping up from that mess and now we face even more issues with tight credit, no credit and even the foreclosure moratorium is going to affect our industry. Regardless of all that, we shall persevere! Get out there and get some business! If you're over 5% and need to refi, get moving while rates are crazy low! Remember us when you need a closing attorney, no matter where you or your clients are located! Have a great week, Bo

Steroids for the Economy?

2010-10-11T14:42:00.003-04:00

This is great commentary--time to get off the drugs! The best comment is in the summary/end of the article: "Waiting for the recovery and removing the things that are holding it back (wasteful spending and regulation) is the healthiest way to create sustainable growth." AMEN While we're at it, what about all the foreclosures being "on hold"? That will only delay the inevitable (e.g. we need to work through the foreclosures that are out there so we can finally hit bottom with home prices). THEN we can see a true recovery. Whenever you tinker with market forces, 'bad things' can happen-in this case, it's just dragging out our issues. Final thought--we are 'on hold' until November. Win or lose, people are waiting to see how the chips fall. Once that happens, people will begin making their move (e.g. if Congress goes GOP, then businesses may see positive things on the horizon--if Democrats remain in power, they will either a) continue to sit on their hands or b) figure out a 'plan B'). Time will tell, eh?

In a word... Capitalism

2010-10-04T11:33:00.003-04:00

THIS ARTICLE is simply amazing! Typically, economic commentary isn't very political but this one is pretty direct in saying what they think.

Be honest-how can you disagree with this? If you work and earn, you get it. If you sit on your butt and wait for someone else to bail you out, you will disagree with this. Amazing article...

Why am I so 'amazed'? It's right off the pages of Atlas Shrugged (the novel by Ayn Rand from the late 1930's). What's next for us? Is that our future? God help us...

Tell us how you really feel, Bernie Marcus!

2010-09-20T17:44:00.003-04:00

The title of this interview says it all: Democrats are anti-business. Political pundit? Rant by some conservative talking head? Nope; Bernie Marcus! This article gave me a link to his interview--he doesn't hold back! Here's a link to the interview as well. It's a long one though... Cheers!

Newt Gingrich's message for Labor Day

2010-09-03T15:32:00.002-04:00

Read this article! There was not a lot of press about Congressman Boehner's call to fire President Obama's Economic team, but this article makes it clear that it's time for some real CHANGE in D.C.!

(Full text of Boehner's speech here)

Big Ben says "Loosen the Guidelines"--Hear hear!

2010-08-12T11:02:00.002-04:00

As an Atlanta closing attorney, we are on the front lines of the real estate and mortgage business and see 'what's really going on'. In lieu of continuing to generically (is that a word?) blame this all on "Wall Street" (which did contribute to this mess a few years back) let's take a look at one of the major reasons why we are STILL not seeing a solid real estate recovery--tight guidelines! (and appraisals--try googling HVCC if you want more info about well-intended legislation with unintended consequences) We see it all the time-people with good jobs, credit and income who cannot get a loan. With mortgage rates hitting an all-time low of 4.44% it's an awesome time to buy or refinance! Click on THIS LINK for a video from THINK BIG work small. Cheers, Bo

By the numbers: JOBS and Housing

2010-07-30T11:56:00.000-04:00

What's important for our nation's economic recovery? Two things dominate--unemployment and the housing market (yes, government spending is a huge issue but many expenditures relate heavily to the two issues above). The tax credit originally did its job as people rushed to purchase homes last fall. There was a pretty solid push this Spring (prior to the April 30 cut-off date) but it was not as 'robust' as the fall of 2009. In fact, new home sales in May 2010 dropped to the lowest pace in the 47 years records have been kept! Right now, housing starts are down but home completions are actually up as it appears builders are focused more on finishing homes already started versus breaking ground, which is in-line with the tax credit and the June 30 close date deadline (which has been extended to September). If housing starts remain this slow, new home inventories will continue to decline which will in turn help clear the way for more recovery.
As a side note, the NAHB (National Association of Home Builders) says each new home built in the US creates the equivalent of 3 new jobs for a year and generates around $90,000 in taxes paid (local and federal) and impacts many industries (such as raw materials, goods like appliances and faucets, etc.). When I say that the housing recovery is key to our nation's recovery, you can see what I mean now! In ATL, we were overbuilt prior to the crash; that's why we were really hurt by the downturn. Even now there are over 89K homes for sale in ATL, which is a 14 month supply. 150K vacant lots = enough to supply builders for the next 4 years per a report by Wells Fargo Securities. More foreclosures = even more inventory!
Bright notes? Our unemployment rate has declined 3 months in a row (still around 10%) and our fundamental growth models remain intact. Factor in all the Fortune 500 companies here, the world's busiest airport, and our strong ports in Savannah, we are still a very attractive area for job creation. With that being said, we may not be back to 'normal' for another few years. The Fed agrees; they noted that the recovery is weakening in many parts of the country.
Final thoughts? Stocks are up this week due to upbeat earnings reports from many different companies/industries and there was a small drop in unemployment claims last week. Likewise, uncertainty in Europe is calming due to bank ratings remaining acceptable across the board after regulators crunched numbers on 91 banks (only 7 failed their tests per an AP report) and determined that most would survive further economic slowdown. The Euro rose and most European markets rose slightly on these reports as well. See? It's not all bad! Keep plugging away, and have I mentioned that rates are at their lowest levels EVER? Buy or refi NOW ; )

While I'm at it...

2010-06-29T15:01:00.002-04:00

Metro ATL's unemployment rose to 9.9% in May (from 9.8%) per the GA Department of Labor. As for Georgia, the state's unemployment rate declined from 10.3% in April to 10.2% in May. For one final happy thought, May was the 32nd consecutive month GA exceeded the national unemployment rate (all per Atlanta Business Chronicle article 6/24/10).

When you're happy and you know it clap your hands....

(sound of crickets chirping)

Today's little ray of sunshine...

2010-06-29T14:22:00.003-04:00

Actually, this could be titled "The Economy turns to the darkside", or so it seems right now! Today's consumer confidence numbers dropped almost 10 points--the first drop since our last 10 point drop (February 2010-the index had risen monthly since that month's report). There are two components to the Consumer Confidence Index-one that measures how consumers feel about the economy (now) and the other assesses their outlook over the next six months. As noted previously, it's all about JOBS. Not the health care debate (debacle?). Stocks even dipped below 10,000 today (around 2pm the Dow is still around 9900 (will the Dow even close above that this week?). To put numbers into perspective, this index hit an all-time low of 25.3 in February 2009. Above 90 = solid economy, over 100 = strong growth. Todays' number? 52.9 (down from May's 62.7, with the expectation today's numbers would be 62.8).

What else is a mess? Housing. Sales of new homes fell 33% in May, to the lowest level ON RECORD after the government tax credits expired (and to be honest, April's closings/contracts were not as amazing as we had hoped). What other fun statistics do I have for you? Auto sales are expected to slow for June (have you seen more 0% finance deals advertised? Yep, I thought so too). Companies tracking auto sales expect a 9-12% drop for June sales, so you can expect to have more TV ads screaming at you between your reality programs (is there anything else on TV?). A quote from George Pipas (Ford's top sales analyst) notes that "The two big issues with consumers right now are employment growth and income growth, and they're not seeing much of either." Well stated...

So again, consumer confidence is in the toilet, sales of new and previously owned homes fell last month, auto sales are down, stocks are down (but hey, Bond sales are up!) and it is expected that the unemployment rate will creep up to 9.8% from 9.7% when numbers are reported this Friday. The only positive things to report relate to home prices rising in April (again, most likely due to the tax credit push) and consumer spending (remember, that's 70% of our Economy) rose 0.2% last month with personal income rising 0.4% (so more saving, less spending).

Finally--what other 'big picture' items could dump us into a DD? (no, not Pamela Anderson, that would be a "Double Dip" as in recession) Unfortunately, there are several disturbances in 'the Force' that are still unsettled. Globally, Asian markets fell after indexes related to China's economic activity fell and European indexes fell sharply after Greek workers walked off the job to protest budget cuts (how's that Socialist thing working out for you?). So roll that into our own government budget cuts, end of fiscal stimulus programs, problems in Europe and a slowdown in China--could that force a double dip recession? Time will tell. But for the United States, 2 comments attributed to a broker in NY (Doreen Mogavero) ring true: "People are starting to see that this recovery, as it is, is going to take considerably longer than anybody had anticipated." Relating to jobs and the job report, "That is the core of the recovery here. People have to feel they're going to work. If they don't they're not going to spend money." Again, well stated. So how confident are you? I'm not feeling it today... Ask me tomorrow or something...

Clark Howard says it's time to refinance!

2010-06-21T11:39:00.002-04:00

No surprise, as rates are so low! Contact me for any tips/ideas about lenders, etc. Read Clark Howard's article HERE!

Recovery?

2010-06-18T15:19:00.001-04:00

So where are we now? Yes, the tax credit has expired and we're close to the end of the original closing date of June 30, though there are rumblings that the 'close by' date may be extended into September. That can help the mortgage guys 'catch up' and get the loans closed, but it doesn't do much to really 'create' business. One reminder-if you have a qualified military client, the tax credit still applies (thru April 2011).

We still have a mixed bag as it relates to real estate. Georgia is number 6 in terms of homes having 'negative equity' (commonly called 'underwater', where the loans on the home are higher than the current value of the home). The US rate was reportedly 23.7% in May (11.3M out of 47.7M mortgages) vs. GA's 28.7% (457,652 of 1.6M). The top 5 states were Nevada, Arizona, Florida, Michigan and California. Similar numbers are reported for foreclosure listings in the 1st quarter with Florida and California making up 29% of that total. If you add the next 5 states (TX, GA, AZ, IL, MI) that total rises to 52% of all foreclosures reported! The worst may be over, but there are still high numbers being reported for homeowners being over 30 days late. Why is this trend so strong? Most foreclosures should currently (emphasis on should) be due to typical 'life events' versus people being stuck with bad loans. Unemployment is reason #1, along with other 'common' factors such as divorce, illness and a new trend of people 'walking away' from underwater mortgages. One soapbox issue is the fact that many mortgage companies will not talk to a homeowner UNLESS they are delinquent. Yes, if you are paying on time and you're underwater, I am hearing that the banks (esp. the monster-mega-banks) will not consider a modification of any sort until the borrower is at least 3 months behind. That is a sad commentary for people who are trying to do the right thing as well as keep their home! But I digress...

The final issue that's dragging us down remains the job market. In May, employment increased. Good news? Not so much. Most of the improvement came from the government hiring 411,000 temporary census workers--the private sector only hired 41,000 for the month. Likewise, businesses are still relying on temp workers so there is still a good deal of uncertainty out there. One 'odd good sign is the amount of people quitting their jobs (told you it was odd!). The reasoning is this-if someone quits, they feel that they can find something better (i.e. they are not trapped in their current position b/c there is no alternative). SO you can make the argument that finally there are some 'greener pastures' for people to try.

I love listening to "Big Ben" (Fed Chief Ben Bernanke), especially when he's feeling positive about the economy as a whole. He noted that the European crisis will have only a "modest" impact on our recovery (don't we hope) and that we are "on track to continue to expand through this year and next." He did warn of a "slow reduction" in the unemployment figures and also seemed to hint that the Fed will not raise rates until next year. However, he warned about our record budget deficits, noting that if they are not reduced, it will hurt our economy in the long run, possibly leading to higher interest rates (homes, cars, etc.) and more expensive debt payments for Uncle Sam. His "happy" comment? At some point "things will come apart" if not. Oh goodie... SO, as we individually tighten our belts, our government has been warned to do the same--let's hope they listen! Cheers, Bo

Time for a Summer Vacation? Hope not...

2010-05-28T12:24:00.001-04:00

As noted in last month's email, the tax credit has expired and related closings have to take place by the end of June. What about July? Are we all just going to be sitting around with nothing to do? I for one (a) hope that's not true and (b) don't believe it to be true. Yes, there are many issues lingering (like dropping prices and an ever-rising tide of foreclosures) but more core items are coming together (like economic growth, increased employment and better rates). If we could just get some common sense underwriting as well as reasonable appraisals, I think we'd be in much better shape! By way of reference, for a great article on the current state of appraisals, click here (great work, Jim!).
Home prices are still dropping, thanks to foreclosures. That isn't a problem for buyers (except as noted in the article above) but it is an issue for sellers. Yes, you can swallow your pride and lose several thousand on a sale in order to save many more thousands on a subsequent purchase, but first you need to find a buyer. What if there is a foreclosure and/or a short-sale around the corner? Unless they are in a hurry to buy, those properties may be more attractive as they can be purchased for pennies on the dollar versus your need to at least pay off your mortgage--therein lies the problem! I have no solution to offer, but at least rates are still incredibly low--the average 30-year is reportedly 4.78%, which is the lowest of the year (compared to December 2009's record low of 4.71%) and more positive news is being reported, except for the BP oil fiasco and European money woes. However, we are benefiting from their problems as investors seek a safe haven in our bonds (which in turn helped our rates). As Europe 'heals' and our recovery continues, however, rates are likely to move higher as investors seek higher returns and focus on riskier investments than our bonds. So go for it now (like all the other consumers applying to refi--currently the highest level since October 2009, per the MBA) and lock in while you still can!
Have a great holiday weekend; THANK YOU to all who serve (or served) in our military! God Bless America!

A tale of two stories

2010-05-18T14:27:00.003-04:00

Read this article first; then read this article second. Same data, two different conclusions. On one hand you have Economists; you could say they are biased for the positive as they work for an investment company. As for the AP article, you could slam the author as being part of the evil 'mainstream media'. Who is right? We don't know yet. I for one like the Economists' prediction. Why? Well, other than self-serving cheerleading (e.g. real estate is our business) I do like to hear the positive spin, especially after so many negative news that has come down the pike. As for the AP? My guess is to sell newspapers, but I may be wrong. Who knows? As for noting that home sales will fall in the second half of the year... well, let's just say they are most likely not in our business. Yes, home sales will fall in the Fall of 2010. Why? Sales are typically slower in the Fall, but for the 2009 Tax Credit. So having sales drop in the Fall is not news to anyone in our industry--the Spring is 'where it's at' in terms of sales. Summer is somewhat busy but people are more focused on vacation and keeping the kids entertained. Likewise, most sales are finalized prior to the beginning of the school year so that the kids can be legally enrolled in the proper school. As for the Fall? It's just not that active, worse for the Winter. The bottom line is this--both could easily be right and/or wrong. As noted, I am hoping that the more rosy opinion is correct. Rates are still LOW and the inventory is still high so there are a lot of deals to find. If you want to buy a house, forget the tax credit for now; just ask for $8,000 (or more?) off the sales price! And sellers? Just remember you may lose money on the sale of your home, but think of the concessions you can ask for your replacement purchase? Ah, to be liquid... I'd love a mountain house and some rentals!!!

AJC Survey

2010-05-14T12:39:00.003-04:00

I had the opportunity to take a survey from our local paper, the AJC. One section asked to rank what I thought was the most important for the Atlanta Metro area. Using their topics, I ranked them as such: Transportation, Quality of Life, Economic Development, Regional Cooperation/Governance, Education and Health Care access and delivery. Why? As I drive up and down I-75 each day, our commute has gone from a 'typical' 45 minute drive to around an hour each evening. WHY? I have no clue. Driver's habits are one thing, volume is another and of course having trucks on the road are another issue (wouldn't that poorly planned 'northern arc' be great right now?). I got to give my 2 cents on education (I wish the teachers were allowed to TEACH), transportation (have GA take over MARTA and push it out to North Point Mall, Cumberland Galleria and the Mall of GA), the regional economy (again, fix transportation, and water woes--why do we allow so much lawn watering?), and quality of life (all of the above!). I gave a lot of thought to my answers; we'll see how they use the info!

Most/Least expensive vehicles to insure

2010-04-22T11:11:00.001-04:00

Interesting article on what vehicles to consider (or not) as it relates to cost to insure. To be honest, however, if I could actually afford a Porsche 911 Turbo, I would hope that I could afford the insurance on it... (well, until I got several speeding tickets!). Cheers, Bo

4 Days until March for Babies!

2010-04-20T12:39:00.001-04:00

Watch this : ) Click PLAY below! Thanks for your support!

Click here to help me reach my goal!">

"Southeast Economy Improved in March & April"

2010-04-16T12:00:00.002-04:00

So the Fed's "Beige Book" report noted that the Southeast's economy saw some improvement in March and April. Specifically, retailers saw higher sales, increased traffic and that's a big plus as we all know that retail sales contribute around 70% of our economy. Car sales even rose a bit, despite Toyota's recall woes (offset by a big sales push) and Chrysler's continued slump. Homebuilders should be a bit more positive as housing starts have increased over the first quarter (yes, there was a small dip in March, but that was due to a large upward revision for February). Existing home sales have picked up a bit, but mainly in the lower priced markets (sub-$300K) due to the 1st-time homebuyer credit. As noted several times in the past, the $6,500 credit was a non-event as a) people aren't truly aware of it and b) the 5-year residency provision was too restrictive. Prices are still a bit lower due to all the foreclosures out there (expect more in 2010 and 2011 as ARM's continue to re-set). While there are still hurdles to obtaining home financing (tight underwriting and low appraisals) I keep hearing that common sense MAY actually be returning and lenders are having less trouble making loans (I even heard that there is a local company actually doing SECOND mortgages again, the horror!). We'll see how that sorts out; hopefully interest in homes won't fall off a cliff after 4/30/10 when the tax credits expire (for good). Georgia reported higher unemployment (a record 10.6%) which has outpaced the National average for 30 months. Labor Secretary Michael Thurmond notes that there are signs of growth, however, and while we may lose additional jobs in the short-term, a recovery may finally gain traction in Georgia. Finally, the FDIC extended protection for large deposits (Transaction Account Guarantee (TAG) Program, which guarantees non-interest-bearing deposits greater than $250,000, not that it affects me individually!) which will help smaller banks keep high dollar deposits in-house. Hopefully we won't see any new bank closures, but don't bet on it... Have a great weekend! Bo

I told you so...

2010-04-12T09:35:00.002-04:00

Read this article to see what I'm talking about. Suffice it to say if you want to buy a house and/or refinance, make it happen SOON......!

More fun with Jobs and Rates (new and improved!)

2010-03-31T14:00:00.005-04:00

Well, it seems ADP is reporting employers cut 23,000 jobs in March, when Economists had expected a GAIN of 40,000. What gives? Wondering aloud (no one is listening) if that had anything to do with the weather but I doubt that seriously. Friday's actual employment report (from the Labor Department) may tell a slightly different story as the ADP tracks real jobs (translation: private sector) while the Labor Department's numbers include governmental jobs, such as all those 2010 Census hires. Either way, Economists expect the Labor report to show an added 190,000 jobs in March, which would be great (and only the 2nd monthly increase since the recession began back in late 2007). UCLA economists noted that they expect the economy to continue to grow despite our high unemployment figures. They even rule out a double-dip recession and I agree. I doubt we'll have a V-shaped recovery (i.e. a sharp rise to contrast our sharp drop in the past) but I am hoping that those who say 'hockey stick' are incorrect (translation, if you look at economic numbers on a table/graph, you would see a large drop (check!) and a loooonnnnnggggg slow recovery, hence the name hockey stick). Either way, the UCLA people expect unemployment to average around 9.7% this year and it won't drop below 9% until 2012.

To totally contradict today's posting (referencing Fannie and Freddie predictions) a March 15 forecast from MBA (Mortgage Bankers Association) said they expect rates to rise to 5.8% in the final quarter of the year and even hit 6.2% in 2011 and 6.4% in 2012. Yikes!

Time is up! (and time to move to ATL!)

2010-03-31T13:08:00.001-04:00

All too often you hear the phrase "For A Limited Time" tossed out in marketing. As noted in last month's email, time may be running out for these incredibly low rates due to TODAY's end of the Fed's $1.25T (yes, Trillion) program to purchase mortgage-backed securities (MBS). The program provided liquidity for Freddie and Fannie, keeping rates low and reducing financing costs. Low point? 4.71% for a 30-year fixed in December! But "what now" since the Fed is ending this program? I predicted a larger jump in rates but I have to retract based on what I've recently read (either way I hope rates remain low!). Estimates from Freddie/Fannie expect a rise of less than a quarter point in the next 3 months (a rise of about $30/month payment on a $250K loan). Why so 'low'? Right now the investment 'spread' for US Treasuries is low but higher for MBS so they are attractive to money managers, banks and pension funds (I also read that China is not buying as many Treasuries so be aware that the USA could face higher interest rates to finance our ever-increasing budget deficits, but I digress). In essence, the private industry players are stepping in to fill the void left by the Fed so rates should remain lower, though the (estimated) average will be just over 5% and under 5.25% (for reference, the average for the past decade was 6.2%). Note-the Fed is poised to 'jump back in the market' if there is a significant 'run-up' in rates.
So rates should be 'okay' but are we out of the woods yet? Well, we don't know what will happen after April 30th when the tax credits expire (actually, July 1 will be the true barometer as you MUST be under contract by 4/30 and you MUST close by 6/30 to get the final tax credit). Robert Shiller (of the S&P/Case-Shiller index) said "You don't make addicts go cold turkey. The credit interferes with the market in an arbitrary way, but ending it now would be psychologically powerful. People will be in a bad mood about buying a house." All I can say, try being a seller! Talk about a bad mood... or why not try to buy a short-sale? THAT'S truly 'bad mood' material!
Let's talk about ATL now. No less than the New York Times (albeit in blog form) noted "Don't count Atlanta out." Harvard Economics Professor Edward L. Glaeser notes that ATL has had its ups (#2 in population growth of 1.13M people from 2000-2008) and downs (annual building permits dropped like a rock from 2005-2009, highest of any other metropolitan area) but we have many things going for us. Click on the link to read the article but John Adams has a companion article that sums up his 3 maj or factors for our future success: ATL is dominant in the region, with no real rivals; we have a 'business-friendly' political environment; we have a highly skilled population (nearly 43% of adults have college degrees vs. 27% nationwide). Not only that, a recent KPMG study ranked ATL the second most cost-competitive 'large city'. They used a matrix of 26 cost components such as labor, taxes, real estate and utilities as it relates to 17 industries based on a 10-year time period. Tampa was #1, with a cost index of 96.0 (100.0 being the national baseline) and ATL was 96.3. Our ranking was based on our competitive business costs (office leasing, transportation, labor, employee benefits and corporate tax rate). Miami, Baltimore, and Dallas round out the top 5. LA, NYC and SF were the three most expensive.
SO tell your friends it's time to relocate to ATL! Buy now, save now, and pop some bubbly along the way!

Clark Howard on Health Care reform...

2010-03-29T12:12:00.002-04:00

I respect Clark Howard's opinion on several things and disagree on a few as well. In this article, he spells out some details of health-care reform. I see that the 'average taxpayer' will be hit with $450 in fees to cover this plan. I don't think that this figure covers all the costs, but so be it... I guess we'll see what happens down the road, eh? I for one am scared of any governmental control. I expect them to start dictating (rationing?) tests. Remember the mammogram issue last year? Just wait... that's the tip of the iceberg!

Rates at 7.5% by the end of 2010?

2010-03-08T10:17:00.002-05:00

Read this article to see what I'm referencing. Nothing new that I haven't said before but just further thoughts that you need to make that loan decision NOW before rates go up! I hope that I'm wrong, but it's highly possible that this will happen. Happy Monday, eh?

Headline today: Not much impact from repeat buyer credit"

2010-02-28T14:40:00.003-05:00

In a word-DUH! Check out this post on my other blog about this silly tax credit. What a waste of time...

Watch this demonstration of the rise in unemployment rates in the US!

2010-02-24T14:10:00.001-05:00

This presentation is scary! Looks like an outbreak of the plague... The question for Washington DC is "can it be stopped?"

Dear President Obama:

2010-02-23T17:17:00.002-05:00

This is what I emailed the President (on www.whitehouse.gov) today:

Mr. President, with all due respect I feel your focus on health care reform is not your top priority. Take a look at the consumer confidence numbers released today; your focus should be on the Economy (as it should have been all along). I am unsure where the 1.5-2MM jobs have been created, but we obviously need much more. Less governmental regulation would be helpful; either way the healthcare initiative (however important) can wait another day. Right now people need jobs first. As an aside, if more people had jobs, they could afford healthcare. Thanks for your time.

My 2 cents... Your thoughts?

How Interest Rates Move Video

2010-02-22T10:57:00.002-05:00

Watch this video to learn "How Interest Rates Move". It's 7 minutes long but it gives you a great understanding of how rates work AND notes why rates will be jumping up soon AND why you want to get into the refinance process NOW or you'll be sorry! Don't delay, watch this as soon as possible! Cheers, Bo

Uh-oh... The Economy stumbles a bit...

2010-02-18T12:56:00.004-05:00

Unemployment claims rose last week and inflation jumped more than forecast in January. Yes, there are still positive news items (manufacturing is up, cars are selling, new home permits up slightly and pricing stabilizing) but the core issue currently is the job situation (a reminder to those 'in charge'--it has ALWAYS been about jobs--NOT our health care). Why is this important? If inflation keeps rising, how does the Fed combat that? They raise interest rates! What will KILL home sales? Rising interest rates! (right Mr. Carter?) What else? Well, the Fed has been more or less buying loans (in simplistic terms). At the end of March, this will end, so we can see rates hike up based on the fact that it will be more difficult to obtain funds. This can also hurt home sales and refinances. I will expand on this soon, but suffice it to say that we are nearing a 'perfect storm' environment for home sales: the tax credit will expire soon (must be under contract by the end of March); the Fed will need to raise interest rates to combat inflation (prediction-by Summer); the Fed will stop shoring up the mortgage market at the end of March. bottom line-if you are on the fence, BUY OR REFI NOW!

As for health care, READ THIS from the AJC--I wish our politicians would....

What's really going on? Key word is 'underwater'.

2010-02-10T10:19:00.002-05:00

This article from USA Today is spot-on. People would love to 'move up' but they can't get out of their old home! My old house in Smyrna is still rented (thank goodness!) but it may be worth less than my mortgages so it will be difficult to sell. Our current home is definitely underwater as the mortgages are easily $20,000-50,000 higher than the value (not that we're trying to sell/move). This is one of the main stories that every American should understand--and I wish Congress could understand it as well and try to stop regulating with silly new programs (HVCC anyone?) that have unintended consequences. Instead of the waste of time, money and resources on the health care debate, the focus should be on 2 things: jobs and housing. If you get those 2 areas sorted out, EVERYTHING will come together. I do feel that healthcare (like anything government regulates) needs to be reviewed and 'tweaked'. I am NOT in favor of governmental control and we need to see how both sides (Dems/Reps) can figure this out together--AFTER they sort out the economy! My 2 cents...

ATL job losses

2010-02-02T16:32:00.003-05:00

Atlanta took a big hit with job losses, as did most large metropolitan areas. This press release from the US Bureau of Labor Statistics gives all the gory details. So out of the nation's 372 largest labor markets only ONE managed to squeak out a net increase in 2009--McAllen TX. ATL lost just over 105,000 jobs in 2009 and as you know our unemployment rate in Georgia is stagnant at just over 10%. Las Vegas lost over 7.4% of its workforce (they are "number 1" in the country, how proud they must feel) and we "only" lost 4.4%. However, if you look at year-end unemployment rates thirty-four of the top 100 markets ended 2009 with jobless rates of 10 percent or more (including ATL). Obviously, we have a long way to go and there may not be a 'silver bullet' for this problem. BUT there are additional signs that the economy is improving. Pending home sales are up, manufacturing activity is up and even car sales are up for many makers (GM, Ford and Nissan, for example, but not Chrysler, Honda or Toyota). Who knows, hoping that we start seeing some additional home sales soon (besides the people trying to get that last-minute tax credit). Keep praying for recovery! Take care, Bo

Headline of Disbelief

2010-01-28T16:17:00.003-05:00

A headline today: Ford earns $2.7B in 2009 (EARNS--read it again!) If you read additional details it appears that this may not be sustainable but when was the last time you read something positive about the auto industry? (unless it was related to Cash for clunkers or the recent purchase of Saab by Spyker). I was pleased to see that headline. They did not sell out to the Government and they've been producing some great cars of late (finally we get the European Focus!) including the 41 mpg hybrid Fusion (Car of the Year winner). What's next for Ford? Hopefully the union won't destroy the company (ditto for the underfunded pension plan) and the new models continue to sell well--though the Mustang is currently losing the sales 'race' with the new Camaro. Time will tell; guess we need to re-examine the old ad tagline "Have you driven a Ford, lately?"

The Panic of 2008 in a nutshell...

2010-01-26T09:48:00.002-05:00

I received the following link in an email newsletter. I am amazed at how clearly this shows 'what happened' over the past few years. I have to agree at their summation that it is truly the government that failed us. Are you surprised to read that? Both parties have failed us. Again the time is NOW to boot them all out. We are at a critical point in the history of our country. It's time to clean house and it's time to enact term limits to get rid of the 'us and them' mindset that so clearly has infected Washington (not that our own Georgia legislature has the guts to enact ethics laws and limitations on lobbyists either, but I digress). You truly want change? Let's get some new blood and new ideas in Washington. It's time for a voter revolution! God Bless America...!

What does the President Read?

2010-01-21T10:59:00.003-05:00

I received an email with a photo of PrezBO holding a book called "The Post-American World". The tone noted that it was written by a Muslim and was more or less anti-American (and you could allude to the fact that they were shaming Obama for reading it or it's proof of his Muslim and/or anti-American leanings). I clicked on the Snopes Link (and yes, I know that they have a liberal bias) but thought I would also go ahead and click to Amazon.com to read a review of the book.

I must say that based on the review (and the Q&A between the book author and fellow author Thomas Friedman) that I too would read this book! We need to be more competitive and I like Friedman's commentary that the USA needs to be on the cutting edge of energy technology (clean coal emissions, for example) so that we can sell that technology to rising nations like China. One 'takeaway' from that Q&A was a lightbulb comment--if we gave one standard 60 watt bulb to the next billion people that will be born we'd need 20 new 500 megawatt coal burning plants. WOW. SO, hopefully we have scientists and people much smarter than me working on clean technology solutions so we can continue compete on the global stage!

BoKnowsClosings...

2010-01-20T15:12:00.002-05:00

This is going here as well as on my other BoKnows blog... My 2 cents on closings today! Cheers, Bo

I talked a bit about the new Good Faith Estimate and HUD-1 Settlement Statement for residential closings in my last newsletter. Yes, it's official and any new loan 'started' in 2010 will have the new GFE and new HUD. Expect a lot of questions and confusion on this but as with anything new, 'this too shall pass'. What I want to talk about today is somewhat self-serving but very important for the future. Why is choosing an attorney important? For that matter, why is closing a loan with an attorney important? First off, it's not all about fees. Yes, I know how self-serving that statement is. When you look at a new GFE or HUD-1 you'll see all of our fees combined are almost $700 (without lender's title). I know one firm that will do all that for just shy of $300. They may be a great firm, but we never set out to build a high-volume closing firm. I've been there--the lobby full of people waiting to close, delays, tempers and it seems that customer service is tossed out the window. When we chose to open this firm in late 2008 we knew that's not what we wanted.
So our fees are about the same as most closing attorneys out there and we all have to quote the same title insurance rates as dictated by our title companies. If the playing field (e.g. 'fees') is level, more or less, why choose us? We are all veterans here. We can handle your first-time homebuyer's questions with ease (and patience!). We can handle "issues" at the closing table (we've all been there before) with tact and finesse (yes, even me!). For that matter, we don't let files 'lay around' until the day before closing so there really shouldn't be surprises on closing day. Come see us again and I know you'll be pleased. And remember not to think of us as 'just' an in-town firm--we can close all over metro ATL!
Final topic--why close with an attorney at all? This is less relevant for purchases but there are a lot of options out there for consumers. Many large national lenders use 'closing services' to close transactions and issue title insurance. Yes, I've closed loans in homes (even a Starbucks or two). However, there is a huge difference between us and these companies. We believe (as do most Georgia real estate attorneys) that a closing should be handled by the firm from start to finish. We run (and clean!) the title, close the loan, issue the title insurance and fund it through our IOLTA (trust account). This should be the bare minimum that a licensed Georgia attorney should do but some lenders insert themselves into the transaction. A witness-only attorney is just there to watch you sign documents--where are they when you have questions or issues after closing? An out of state 'title company' or 'escrow provider' won't help you clear up a messy title with open loan deeds--if you can even get someone on the phone or in the correct department! The bottom line? Even if you don't choose Harris Wagner Law Group, do yourself a favor and choose a licensed, LOCAL Georgia attorney to handle your transaction. You could even say the same thing about lenders and agents as well. Choose wisely as your home is the largest investment you own!

Quick take on the economy

2010-01-20T15:10:00.001-05:00

I have different items to work on today so here's my economics report for the current period: unemployment is still dragging down our country. In Georgia, it's really not going to be much better in 2010 as so many of our jobs were lost due to the housing implosion. SO housing is still going to drive this recovery--or not. If you have a mortgage in the mid-5's or 6% (or an adjustable that can 're-set' in the next year or so), you need to think about refinancing by Summer. Ditto for home purchases as there is not much time left on the homebuyer's tax credit. Housing starts are up in the South and competition for homes (new or 'used') will pick up again soon so act now before the crowds start bidding up prices. Act now before inflation kicks in and rates go back up (take a look at both the PPI and CPI if you need confirmation on that). Act now to get out from under the burden of rent!

That dreaded "I" word...

2009-12-15T12:08:00.003-05:00

Yes, INFLATION. Anyone alive in the Jimmy Carter era just visibly shuddered (I know I did)... What about inflation? Well, the Fed has kept rates incredibly (artificially?) low in order to spur on the "recovery" (again in quotes due to the low rate of job creation) and certain sectors have experienced rising costs. The Producer Price Index (PPI) is up, which would typically bring us a rate increase--ditto for consumer goods and energy pricing. SO if Inflation is coming (or is already here as some say) we would typically see the Fed raising rates after this week's meeting. What's that mean to you and me? Well, things seem to be improving relatively quickly, except for jobs, though there was a small drop in November's unemployment numbers. While energy prices are up the price of oil and gasoline has dropped recently. In essence there are a lot of positive things happening (even increased consumer spending was reported!) but there is still a 'wait and see' feel to our nation. I don't think anyone will feel comfortable while jobs are still getting slashed (which will continue into 2010 per many Economists) and until this health care fiasco is sorted out (put it this way--if you were a small business owner, would you be hiring right now with the uncertainty of being in business with the possible changes on the horizon?). Likewise, we have a long way to go despite all the 'dog and pony' shows going on about banks. There are few modifications taking place and the ones that are proceeding aren't helping to stop the flow of foreclosures. And to add to the misery, we STILL have at least a year of adjustable rate mortgages 're-setting' (possibly two) due to the large numbers of 5/1 ARM refinances that happened... well, just over 5 years ago. So what of inflation? If things keep improving and (as noted in several postings) if we continue 'printing money' the Fed will HAVE to raise rates. Will the struggling economy be able to take that shot? As always, time will tell :) Good luck, God Bless, Be safe... Bo

Why the IRS should go away!

2009-12-07T21:56:00.002-05:00

I have always noted that I am a fan of the "Fair Tax" as it levels the playing field for ALL Americans--Bill gates would pay the same tax rate on a Ferrari as I would pay for a gallon of milk, not to mention people who hide their income and don't pay their 'fair share' (to coin a Liberal catch-phrase). Spare me the details about the working poor being penalized as you probably haven't read the bill (someone correct me, was it HB 5 or 25 or something??) and don't understand the REBATE they would receive... But I digress. If you are a FAN of the IRS (or even if you aren't), please read this article of the IRS and how they managed to pour salt in the wounds (acid?) of a hard-working American. God Bless this family and I pray that their ordeal is over. Are YOU next?

Quote of the Week!

2009-11-23T10:28:00.004-05:00

While I am not fully 'educated' on whether or not I like or dislike Treasury Secretary Tim Geithner (I definitely hate the fact that big O couldn't find someone who didn't owe back taxes for the post, however) I must admit that I LOVED the following interchange reported by the Wall Street Journal last Friday (from the Joint Economic Committee):

REP. KEVIN BRADY (R-TX) "The public has lost all confidence in your ability to do the job."

TREAS. SEC. GEITHNER: "What I can't take responsibility is for the legacy of crises you've bequeathed this country."

BO WAGNER: "DUH!"

I concur Mr. Geithner, you hit the nail on the head (and nailed Mr. Brady in the process). I guess I'll go harsh this morning: I condemn Congress. I blame Congress. I am unhappy with Congress. For too long we have had these people running our country into the ground. BOTH parties. It's time for this mess to stop. It's time for TERM LIMITS. Elect representatives based on what messages they 'sell' us during elections (e.g. do we agree with their point of view? Then send them to DC for a short time to accomplish that goal and can them if they don't do what they promised). House of Representatives? 3 terms (that's six years). Senate? 2 terms (twelve years). I am unsure how I'd feel about a Representative 'graduating up' to the Senate (giving them a potential 18 year 'reign' on our nickel). I just can't see any other options to get these people to do what we want them to do--so that our "government of the people, by the people, for the people shall not perish from the earth."

We are at a true crossroads in our country. I have made my own choices in my life and I have benefited or been 'punished' for them. It is not the role of the government to step in and save me (or further punish me) for my choices. You cannot legislate change; there is no moral obligation (or requirement) for the government to take money from me and give it to someone else. I have my own issues and 'causes' to handle--it's not my job to be someone else's guardian--except for my wife, kids, dogs and family. My choices. Again, read John Galt's speech from Atlas Shrugged and you'll understand (for a highly condensed version, click here).

Lest you think I am a complete selfish monster, I do want to point out that I am a charitable person--however, I give to what I support-not what the government 'thinks' I should support. My 2 cents as always... Happy Monday, eh? : )

(For one important group I support, check out The Rotary Foundation and consider supporting them...)

Current Outlook

2009-11-19T16:19:00.003-05:00

The Recession Is Over!

Oh, really? Ask one of the thousands of unemployed people and I'd bet you'll hear a different answer. Yes, home sales (and prices) have risen a bit and yes, retail sales have risen a bit, BUT we need jobs. (I could digress about wasting time with health care reform vs. our real problems (It's the Economy, Stupid!) but this is not to be a politicized rant today).

This week's unemployment figures didn't truly rise (on a nationalized level, but in GA it actually went UP) but the numbers are higher than a level that indicates the economy is adding jobs. New unemployment claims have fallen around 22% since the Spring, but who is hiring? With people losing jobs and with those people not FINDING jobs, foreclosures could be the next flood to hit. We have been hit with all the adjustable-rate and/or subprime loan foreclosures in prior years but we are seeing many more fixed rate 'plain vanilla' loans going to the courthouse steps of late. To turn the tide, we need to see weekly claims to fall to higher than 400,000 for several weeks! Unemployment benefits were extended, but this lifeline will run out in January unless we see another extension from Congress. Some members of "The Fed" have noted that our recovery will resemble an "L" with a gradual upward tilt from the base (which is better than the L pointing down!). Small businesses typically contribute about a third of net job growth in the last 2 economic recoveries--not this time! Small businesses have accounted for about 45% of net job losses through the end of 2008, so it looks like we are in for a long fight...

On a positive note, the federal tax credit for 1st-time home buyers was extended and 'move up' buyers were given their own credit of $6,500 as well. HOWEVER, I am very disappointed in that credit as it is restricted to people who have lived in their home for 5 of the last 8 years. Let's cut to the chase-I am 44 and I am finally 'stable' (well, at least as it relates to moving!) and I don't plan to move any time soon. I have never lived in a home for over 5 years so if I was looking to move (I'm not) I couldn't get the tax credit. I think a more reasonable figure would have been a 3-year restriction but no one called for my opinion...

If we could loosen credit to credit-worthy borrowers AND get back to common sense underwriting we could get out of this mess faster. As I keep saying, this all started with Housing and Housing will get us out of this mess. We need to repeal the Home Valuation Code of Conduct as well so we can go back to using quality appraisals vs. whomever happens to be cheapest, but again, that's a topic for another day.

Finally, I read that Atlanta's housing inventory began to deplete in the 3rd quarter and housing starts actually ROSE. The quote (from Metrostudy) that really rang true for me was this: "We do not have an oversupply problem, we have a demand problem". This is what I am referencing above-if people could sell their homes they could move into a new home. It's like a 'reverse' domino effect-nothing is falling into place so that the next domino can fall. No credit = no home sale. No home sale = no seller becoming buyer. Hopefully we'll see some positive movement sooner rather than later!

Senator Byrd-time to go?

2009-11-18T10:45:00.004-05:00

This is a perfect case for Term Limits. While I respect the fact that Senator Byrd has set a record for his service I want to 'cut and paste' a few things from the AP article written by Laurie Kellerman.

*It was unclear whether Byrd would be able to attend Wednesday's session.

* He has cast more than 18,000 votes and, despite fragile health that has kept him from the Senate floor during much of this year, has a nearly 98 percent attendance record over the course of his career.

*Friday is his 92nd birthday.

Now I must admit that I have bias against him as he is known for his pork (another quote from Laurie's article: "He's a champion of "earmarks" - pet project spending that critics also call "pork." He's helped bring home to West Virginia $326 million for 2008 alone, according to Citizens Against Government Waste.") but truly I feel that ALL of our Senators and House members should have a much shorter shelf life. If he is not attending Congress, why is he there? And it's not blaming him for anything in particular, but I feel that many in Congress are too focused on special interest groups and companies and are biased against making tough decisions for our country versus voting using polls so that they can remain in Congress! As I type that comment, I must note that I think my Representative, Dr. Tom Price, has done great things and his voting has been in-line with many of my thoughts. So what to do? Guess it will be a 'toss the baby out with the bathwater' (e.g. getting rid of a 'good guy' along with some of the corrupted (yes, I said it) members).

Why are term limits so important to me? ALL of Congress have forgotten why they are in office: to serve US. Not special interests and not to vote laws that more or less purchase votes. As it relates to health care, why do they get a VIP health plan (at our expense)? Why can't they use the new health plan (in whatever form it passes)? As far as unemployment is concerned, wouldn't you like to vote on your own pay? Even as monster corporations get bashed by Congress, you don't see CEO's paying themselves MORE money when the company is losing money? I digress by complaining about Congress complaining about "corporate excess" by flying around in corporate jets--how does Madame Queen Pelosi get around? Do you think you'll ever sit next to her in Coach (heck, even on 1st class!) on Delta??? NOT!

Bottom line: Congress is broken. Let's end the fiefdoms of ALL of our "leaders" (lowercase and in quotes on purpose) and see how they fare in the real world like US. See how their tax and spend policies help them out (there are over 237 Congressional MILLIONAIRES currently serving us! Wonder how they'll like the tax code if they were private citizens again?) Let's work on getting Term Limits passed! My 2 cents and your rant for the day :)

Obama signs tax credit extension!

2009-11-06T15:10:00.002-05:00

In a rare bit of bi-partisanship, the house passed a bill extending jobless benefits AND the 1st-time homebuyer tax credit in a 403-12 vote (wonder who the 12 were??). The bill also expanded this tax credit, giving a $6,500.00 tax credit to 'move up' buyers. While this is great news, there is one "issue" (if you can call it that) about this new credit--you have to have lived in your principal residence for over 5 years. Using myself as an example, I have only been in my current home for 3 years. Prior to that, I lived in my old house for right at or just under 5 years, so that may have worked, but I was only in my first 2 homes for 2 years/4 years respectively. I would say that this is more or less common (to be so 'transient'). People like to move up; that's the goal! My current home is exactly what I need for now and I don't forsee moving in the near future. But if I wanted to move, this new law would not benefit me at all. I would think that this restriction is going to make this new tax credit pretty worthless. The intention was good, but the execution leaves a lot to be desired. But hey, I won't complain any longer as any help for the housing industry these days is a good thing (and the tax credit extension is a great thing too!).

One soapbox issue: based on how well the government has performed with the H1N1 vaccine, do you really want them handling our healthcare? While I'm at it, can you think of ANYTHING the government does efficiently? Just a thought...

What a difference a day makes

2009-10-28T10:21:00.004-04:00

Well, new home sales are down by 3.6% to a seasonally adjusted annual rate of 402,000 as reported by the Associated Press today. Why is that a bummer? Economists expected growth to the tune of 440,000. Whoops! Guess all is not well with our economy is it? Oh well, don't worry about that, let's focus all our efforts on healthcare while the country flounders. But hey, oil prices dropped because our economy sucks and due to a strengthening dollar (stong dollar usually equates to weaker oil prices as oil can be used as a hedge against a falling dollar). The world seems to see the global economy strengthening, I hope they are correct (and that sales rise in the last quarter of the year!). Fingers crossed!

Welcome back to 2003!

2009-10-27T16:13:00.002-04:00

Good news-home prices are up again per Case-Shiller index.

Bad news-home prices are still down relative to prior years.

What does "prior years" mean? Try the Fall of 2003! That is the rough equivalent of where we are today, 10/27/2009. Nice, huh? While you chew on that stat, metro ATL lost 27,800 construction jobs in September. What do you think will happen when the tax credit goes away in December? I read a quote from one economist that sales are predicted to drop 5% and eventually bottom out in 2010.

SO... do you have time to contact your leaders in Congress NOW?

Home-buyer Tax Credit

2009-10-23T16:39:00.002-04:00

Save the credit! Here is the text of an email newsletter from Senator Johnny Isakson. I agree with his efforts and I hope you contact YOUR representative to push this important legislation!

Text as received in his email:

"Dear Friends,

This week was another busy one in Washington as health care reform dominates the headlines and as momentum picked up on extending and expanding the first-time homebuyer tax credit, which is set to expire on November 30, 2009.

On Tuesday, I testified before the Senate Committee on Banking, Housing and Urban Affairs about the need to further restore the housing market and energize housing demand by expanding the first-time home buyer tax credit passed by Congress earlier this year.

I shared with the committee my personal experience as the President of a real estate company during the mid-1970s when Congress in 1975 passed a $2,000 home buyer tax credit. The credit drove buyers back to the market and ended the housing recession within a year.

During my 33-year career in real estate, I weathered four housing recessions and experienced many challenges and difficult markets, but never anything like the current housing market in America. America’s families have lost trillions of dollars in home equity as home values have fallen, and in some markets, continue to fall today. The current home buyer tax credit is set to expire on November 30, right as we are approaching the worst three months of the year for the housing market. It is imperative that we retain the momentum we have gained as a result of the current credit and go into the spring market with the increased consumer confidence necessary for establishing a viable market.

I believe the current first-time home buyer tax credit has made a difference. However, the real housing recession is not with first-time home buyers, but in the “trade-in” or “move-up” market in which Americans are putting off purchasing their next home.

I will offer an amendment to the legislation extending unemployment benefits that would extend and expand the current homebuyer tax credit. The amendment would keep the amount of the credit at $8,000, but would remove the first-time homebuyer requirement, extend the tax credit until June 30, 2010, and raise the income limits to $150,000 for an individual or $300,000 for a couple.

For purchases made in 2010, taxpayers would be able to claim the credit on their 2009 income tax return. Homebuyers would not have to repay the credit, provided the home remains their principal residence for 36 months after the purchase date. However, this 36 month recapture provision would not apply in the case of a member of the Armed Forces on active duty who moves pursuant to a military order and incident to a permanent change of station.

To view my testimony from Tuesday’s Senate Banking Committee hearing, click here. "

WAY TO GO JOHNNY!

Headlines to ponder...

2009-10-23T16:02:00.002-04:00

Take a glance at the headlines below. I have two questions for you: why has the $8,000 tax credit for 1st-time home buyers been extended? Why has it not been expanded to ALL buyers? Why are we wasting so much time on health insurance? I am outraged at the government losing sight of what is truly the most important thing in our country right now: THE ECONOMY! Read the headlines; do you agree with me?

FED SURVEY: HOUSING, MANUFACTURING DRIVE RECOVERY (10/21)

BERNANKE URGES CONGRESS TO ACT NOW ON OVERHAUL (10/23)

OBAMA TO REFOCUS BAILOUT ON SMALL BUSINESSES (10/21)

US HOME SALES RISE 9.4% IN SEPTEMBER (10/23) Sidenote-why? THE TAX CREDIT!

23 STATES REPORT HIGHER UNEMPLOYMENT IN SEPTEMBER (10/21) Yes, GA was one too!

HOUSING STARTS RISE IN SEPTEMBER; WHOLESALE PRICES DIP (10/23)

And now back to your regularly scheduled program already in progress: "How Congress will raise taxes on all Americans and effectively kill small businesses, while not fully accomplishing the stated goal of insurance for all (while bankrupting this once-proud Nation)".

Oh what the heck--one last thought: what got us in this mess? Housing. What will get us OUT of this mess? HOUSING, not insurance....

10,000

2009-10-14T14:46:00.003-04:00

Did you hear that cheer? I think I may have heard it all the way down here in Georgia--the Dow briefly went above 10,000 today, the first time in a year and up greatly since hitting a 12-month low of 6547.05 in March 9th. Will it close that high today? Who knows, but it's a huge psychological boost and futher proof that we are slowing coming out of this recession. HOWEVER, we still have the double bogey of unemployment and the potential for inflation.

Speaking of boosting the economy, take a second to contact your representatives in Congress to recommend that they extend the $8,000 tax credit for first-time homebuyers AND it would help if you pushed them to open that tax credit up for ALL homebuyers! That would truly boost the economy and remember that this mess started with housing and housing can bring us back!

Use this link to find your representative!

Re: Yesterday's Environmental post

2009-09-23T12:32:00.003-04:00

This article from Britain is pretty frank in its assessment of current US politics; much more so than my rambling posting yesterday. Pretty strong words for a country not used to 'leading the world', eh? I'm still a proud American, but we need to get back on track--and fast!

Death to the USA?

2009-09-22T10:57:00.003-04:00

It seems that the US is under attack on many fronts. One of which is from within, as we battle over (fill in the blank, or just say 'everything') in a highly partisan fashion, as if party 'loyalty' (read: special interest groups and lobbyists, or just say MONEY) is more important than our country. BOTH parties are guilty and I am ashamed at our government. PERIOD. It makes me want to go read Vince Flynn's Term Limits again! We are also under attack from terrorists here (arrests in NYC and Colorado?) and abroad. Regardless of that fact, and how G-20 wants to further emasculate our country, I hear today that the UN wants us to step it up re: climate change. Likewise, President Obama pledges that the US will do its part to reduce greenhouse gases and emissions. I actually agree with him in principle. While I do think Al Gore is an alarmist, self-serving person (with tainted 'facts' to support his beliefs), climate change is something for us to deal with. While I don't buy into all the arguments (and vehemently argue that 'cap and trade' is the worlds largest shell game) I feel that we CAN do so much more to work on reducing emissions.

Today's rant? The UN wants us to curb emissions--the main emissions are from our coal-fired plants. I know that most of our utilities are entrenched with this technology. Likewise, the coal 'scrubbers' to clean the emissions are incredibly expensive. Who pays for that? Not only do the utility companies, but WE pay for it as well. However, the utilities have to 'ask' to raise rates and the PSC won't always allow it, so the utilities continue to put off implementing scrubbers as long as possible; can't say I blame them!

What is the white horse for utilities? Windmills are cool (check out the photo from Maui, Hawaii) but not all areas are conducive to generating the power necessary to run our utilities; likewise, how do you get the power to the people (sorry, easiest phrase to use!). The best option may be nuclear power. Yep, I said the n-word (not THAT n-word, but it's almost as offensive to enviromentalists!). I acknowledge that the spent fuel is an issue, but nuclear is a great alternative; an alternative that finds great success throughout the world--in countries without as much regulation. If we can run a fleet of nuclear powered submarines, why can't we figure out how to build a 'standardized' nuclear power plant? Figure out an easily duplicated design and BUILD IT. Clean power; ask the French! 3 Mile Island was a mistake as was Chernobyl. We are one of the most high-tech countries in the world--surely we can build a new plant that is safe? Make that a priority, Mr. President; that will be a great legacy for the future of our country!

Mixed bag Monday

2009-09-21T11:13:00.002-04:00

Economic indicators missed their mark today by a tenth. Expectations for the index to rise .7 percent were off resulting in a smaller rise of .6%. While the markets are currently on 'sell' mode this morning since the numbers were off, I do think we need to focus on the fact that this is still a POSITIVE number, albeit off the pace expected. So we've had five months of rising indicators but unemployment still lingers. Yes, temp firms are seeing some increased business but not for temp to PERM jobs as of yet. Here in ATL, economists feel that job recovery is coming in 2010 but views differ on the amounts of job increases--but most feel that it may be later in 2010 than earlier so we're definitely not out of the woods yet.

What about real estate? Interest rates are still currently low, but the expiring $8000 tax credit could cause big problems AFTER November 30th as the tax credit incentive disappears. Senator Isaakson is fighting for an extension; hopefully he will be successful (insert rant about this credit being only for 1st-time buyers here).

Don't forget that we still have a lot of unsold inventory, including a lot of partially-built subdivisions. Factor in all the foreclosures in the market and there are still inventory concerns. If you wanted to buy, you have a golden opportunity. If you STILL rent you are an idiot (unless you have a really good reason to have temporary housing--if not, as you throw away your rent each month, remember that you're an idiot :) Keep the faith; like our rain, this can't last forever! Happy Monday! Bo

Latest newsletter: "Everything's Coming Up Roses"

2009-08-26T16:54:00.000-04:00

Suddenly everyone is an optimist! Don't get me wrong, I am truly hopeful that our economy is out of the dumps. As you already know from my emails and blogs, I have always been a huge cheerleader for our economy. We have seen so many reports that match Ben Bernanke's earlier predictions for a 3rd or 4th quarter recovery. On Tuesday we heard that metro ATL home prices increased in June, gaining ground for the 1st time in 25 months! The downside is that prices are still down 14% from 2008 and over 20% from the peak in 2007. The National Association of Realtors paints a rosy picture as well showing July sales rising 7.2%, beating estimates. Likewise new home sales were up 9.6%. So the monster that caused this recession (housing!) may be growing weak.
So why am I nervous? Well, those first-time buyer credits expire in December. Realistically (with all the issues related to getting credit approved and appraised values) you need to be under contract in early October to close by the end of November. What will happen when those credit expire? Likewise, unemployment may top 11% in Georgia per local reports--figures show unemployment rose in 26 states and fell in 17. Finally, what if the government stops spending (or if investors stop buying our bonds)? One word: Inflation. We are definitely in a better position right now, but we're not out of the woods yet. Drive past local strip malls and you'll see a lot of "For Lease" signs. While single-family housing is picking up, commercial properties (and their loans) may be the next problem facing our economy. I may not have b een excited about economics while sitting in my college classes, but I can certainly now say that economics are no longer boring!

My dinner with Ben

2009-08-26T14:18:00.004-04:00

"So a few weeks ago I had dinner with Ben Bernanke..."

Let that sink in for a moment... Damn, doesn't that sound cool? You'd think I was really tuned in to our # 1 economist and one of the top 5 most powerful men in our National Government. Well, it sounds cool AND it actually is true, but it's not as it sounds. The key is exploring the "with" in my first statement!

I recently took Susie to Puerto Rico for her birthday (a flight/hotel deal online was too good to pass up!) and chose a nice restaurant to celebrate on a Sunday night. We were told that we could not have reservations until well after 8pm, so we chose to pack up and go for the old-timer's early bird special (translation--we took a 6:30pm reservation). We were perplexed to find that the restaurant was virtually empty (I think there were 1 or 2 couples there). They had 2 large tables set up for what turned out to be a wedding party, but there were a ton of servers so they seemed to have coverage for the party AND the rest of the restaurant (remember, I used to work at Houston's and we were definitely a busy restaurant!). In any event we were enjoying our appetizers when the wedding party arrived, all aglow and happy and everyone took their places and the servers took orders, etc. As I was facing them, I couldn't help but glance over there from time to time, despite how fabulous Susie looked (see?). I finally noticed that one person in particular looked familiar. I told Susie that I thought it was Ben Bernanke. She couldn't really turn around as they would notice (you can see the table over her shoulder) but I was really convinced it was him! (as a sidebar, this tells you what a geek I am, as some famous football/baseball/basketball, etc. player could have been sitting right next to me and I wouldn't have known, but Big Ben is on my radar!). I asked our server; he said he didn't know but there were "men in the bar" with him, so then we knew! (He later confirmed that it was him). We later figured out that the restaurant was probably told not to allow anyone else to be seated around the time their dinner party arrived, because they all came in around the time that we wanted reservations. When we left, we saw that there were several casually dressed Secret Service (our guess) agents in the bar--imagine how many were around that we didn't see? I will say that is something our government DOES do well; kudos to the big guys with their radio earpieces!

I risked my life to bring you this (horrid) cell phone photo (good luck making him out as the light was poor!). In all honesty I really wanted to say hi, get an autograph, etc. but I couldn't bring myself to do it (irrespective of the armed men in the bar) as it was someones wedding party and it was "their" night--not my time to interrupt the festivities to shake Big Ben's hand... Maybe I'll get a chance someday!

2 Headlines to chew on

2009-08-20T16:21:00.002-04:00

"Peach State great for retirees" and "Match.com: Atlanta among least expensive cities for a date". As for the retirees, evidently we have a lot of good tax breaks for Seniors and no inheritance tax. As for the dating set, while ATL is #11 out of 25 surveyed, our 'real level' should be higher as the top city was Pittsburgh, followed by Detroit. Indianapolis and St. Louis were also ranked higher than ATL. Then again, you'd have to move there, so balance the equities on that one... This was based on the price of a 'casual dinner' and two movie tickets. So get out there and see a movie tonight :) Cheers, Bo

Did you miss the bus?

2009-07-17T16:12:00.001-04:00

It's time. We're hearing a lot more news about the economy improving, but we're also seeing rates rise. Unfortunately, it seems like inflation will rear its ugly head soon. People, rates are still LOW at 5.5% but they will be going up soon. How high? Who knows! Let's put rates into perspective--over 9 years ago (5/25/00 to be exact) I bought my Smyrna house (it's on the market again, by the way!). With 20% down and a 777 credit score, would you care to guess what the current rates were? My 30-year fixed rate "plain vanilla' mortgage was at 8.25%!!! That was the best out there at the time! I refinanced to 6.5% that October (and much lower than that later on), but I just want to point out that rates are constantly changing.
What about today and what's the 'bus' comment about? You know all the people waiting for the "perfect" time to buy? Well, they missed it. In all honesty, I'd say LAST MONTH was the perfect time to buy. Why? Rates were at their lowest, the media was still reporting 'gloom and doom' and inventories were still high. Now? Gee, you might actually hear some POSITIVE news on the economy out there! Let's review--unemployment claims were lower than last month (albeit still much higher than in 2008) and temporary staffing companies are doing brisk business; retail sales rose (May figures were the largest increase in 4 months); auto sales rose last month (thanks to incentives) and manufacturers are seeing some improvement as well. As far as real estate is concerned, new home (and resale) inventories are dropping and prices are slightly up, but again we have a lot of ground to regain after 2007/2008.
What are the negatives? Summer gas prices are up (and oil is back over $70 a barrel); Georgia is still # 7 in the nation for foreclosures and many state and local government agencies face staffing cutbacks and tax revenue shortfalls. I know that MY home's price dropped in value over the past year so I appealed the county's recent valuation--you may want to do the same. I know that will hurt my county, but I am hopeful that they can make some 'strategic' cuts that will save our tax dollars (I wish the US government would do the same). Finally, the credit clampdown may stall our recovery--rates are climbing and businesses are still having trouble financing inventory. If rates continue to go up, we'll have a 'whole new ball game'. Let's hope that doesn't happen. Me? I'm focusing on the good news and hoping for the best--you (and your clients) should too (and it's STILL a great time to buy!).

Today's News A Mixed Bag O' Nuts

2009-06-24T16:36:00.002-04:00

Free for all today; pick one and run with it!

May new home sales dropped .6 percent (sales prices up from April though)
Durable Goods orders rise 1.8% in May (vs. expected decline of .6%)
Mortgage Applications RISE 6.6% for the week ending 6/19/9
(My fave:) Fed mulls tweaks to economic revival programs
Energy prices drop as gasoline supplies surge

Here's the deal--we are seeing a lot of positive things out there. Yes, rates are up a bit and inflation is still a threat. The Fed has to walk a razor's edge in terms of encouraging our economy but not ignoring the fact that inflation could absolutely kill our recovery. The Fed continues to auction bonds and there is a fear that demand may fall due to lower yields. If you raise yields, you will more or less raise long-term financing rates as the two are closely tied. So again, I push you to purchase or refi NOW and don't be greedy about that extra .25 point as you may face something much worse in the near future.

With that being said, the economy should begin to emerge out of our recession in the Fall, but (this is a big but) unemployment will continue to climb well into 2010. Economist Lynn Reaser (VP of National Association for Business Economics) was quoted saying "The Fed is sending the message that the economy is making progress toward a path of recovery, that the credit markets appear to be healing and inflation is not going to be a problem." I hope she's right (and other economists' prediction that we could see improvement in the July-Sept quarter). Hang in there!

Random thought on Buying a Car

2009-05-27T16:31:00.003-04:00

My Dad decided he was going to buy a Volkswagen Van last week. Turns out he called a dealer in a nearby town and some fool tried to get him to 'come in and talk' before giving him a price. My dad is not online and doesn't have the patience (or skills) for internet research. He's not afraid of calling around to get a price, however, and I'm amazed that this guy pulled the old 'let me ask my finance manager' routine.

He ended up calling another dealer in a bigger city and they simply gave him a price. After calling Costco to find out if they had a better deal, he tried one more dealer (as dealer #2 didn't have an option/color combo he wanted). After all was said and done, he got the deal he wanted on the car he wanted and idiot #1 in Evansville Indiana will NOT be getting his business! I wish I was so 'flush' that I could turn away customers!

Are you (or your staff) turning away sales? I'm sure not! While we're a small firm, it makes me wonder how larger organizations are faring--are they unwittingly turning away business due to outdated practices/poorly trained staffers? I hope so as our customers get to see the value of our SERVICE! Thanks for your support!

Headlines of the day tell an interesting story

2009-05-27T16:20:00.003-04:00

I really don't need to do more than quote the headlines to give you an idea of what is going on. From the Atlanta Business Chronicle's email update: "EXISTING HOME SALES RISE" AND "REPORT: HOUSING PRICE DECLINES SLOW" Both good news, right? Absolutely! But remember this one as well: "MORTGAGE APPLICATIONS FALL, RATES RISE". Here's the takeaway from all this--the more 'cheerful' news about the economy will (hopefully!) get people off the fence. However, what really needs to happen is to get these people hopping NOW as rates will continue to go up as the markets improve. It's a fact-rates tend to go down when 'bad things' happen so take advantage of what's left of the economic malaise affecting our country. Don't wait for North Korea to rattle their sabres and spook the market-it's time to act now (and my usual caveat applies-rates may go up/down/remain the same, but will your LENDER or program be there when you decide to get a loan? I sure hope so!)

Cheers! Bo

Read this headline: "Mortgage rates rise as outlook improves"

2009-05-07T16:06:00.001-04:00

What does that mean? It means GET OUT THERE AND LOCK NOW and/or BUY NOW! For the article, go to the Atlanta Business Chronicle's site or click here. Good luck! Time is of the essence!

Uh Oh...

2009-04-23T10:46:00.002-04:00

Well darn. Bad news/Good news: The NAR (National Association of Realtors, a big cheerleader for our industry) says that "used" home sales fell 3% from February to March. Looks like we're not out of the woods yet (not that we expected that 'poof' the real estate market was going to just go gangbusters this Spring). On the good news part of this posting, sales prices were up a bit from February, though still DOWN. (2008 sales prices were $200K, in February 2009 they were $168K, in March $175K). SO, hopefully April showers will bring May BUYERS! Hang in there...

Go buy THIS house!

Of God, BMW Safety, German Engineering and "Buy American"

2009-04-21T10:46:00.005-04:00

It's interesting to read about the failings of the US auto industry. Of late we (the US Government, a/k/a the taxpayers) have pumped money into the major US companies only to hear that GM may still be forced into bankruptcy and Chrysler's possible Fiat merger may be off. Common thread? Unions... If wage concessions don't happen (and fast) bankruptcy will loom large for GM and Chrysler runs the risk of being split up and sold in pieces. I have owned a few Chrysler products and enjoyed them and I actually have a lot of respect for US auto makers right now. My son and I visited the NY Auto Show preview on our recent Spring Break trip and found several hot looking models (and I actually mean the cars!). Cadillac had a cool CTS wagon that caught our eyes and the Pontiac G8 is a hot rod. The upcoming Ford Fusion Hybrid gets an astonishing 40 MPG I've heard and the new Focus will finally be a decent looking European model. What does all this mean? IF the industry survives the economic downturn, there are many great vehicles to consider. Prices are low, dealer price concessions are high and again, quality is up. After you buy your home (or refi your mortgage) go buy a car!

Our 'fleet' of autos contains nothing newer than a 2000 model year and all have mileage over 100,000 miles. They are also all older German luxury cars and we do pay a premium for parts and service. You know what? If I could, I'd replace them with an expensive German car all over again. Why? In a word-SAFETY. On her way to work last Monday, my wife was in an offset head-on collision (she's safe, by the way, just banged up and sore) in our 2000 BMW Z 3. The car was a total loss, but it did exactly what it was designed to do and that was protect Susie at all costs. Thanks to divine intervention and great safety features she was safe. The car, well, not so much. See for yourself; both airbags blew and the seat-belt tensioners did their trick and the engine dropped down so that it did not intrude into the passenger compartment (the driver's door opened and closed fine even after the wreck!). I have personal knowledge of 3 horrific BMW wrecks and each time the driver walked away safely, my wife included (well, if we can get her neck/chest/ankle to not be so sore). If you have the wherewithal to purchase a German car I'd say go for it. Our cars are all used and were bought from family members so we got good deals. If you seek safety (AND sporty/luxury) don't just look to Swedish imports; try the Germans... My 2 cents.

Either way--go buy stuff; the economy needs you!

Newsletter Comments from 3/31: Thoughts on the Economy

2009-04-15T10:51:00.001-04:00

Rates are low, purchases are up, sales prices are creeping up--does this mean we're out of the woods? NO. Today's news notes that January 2009 sales prices were actually at a record low (per Case-Schiller index) and it's true that many foreclosures are still 'waiting in the wings' to further lower prices. If you are a buyer, you're in great shape. If you're a seller, it can be tough to stomach! The National Association of Realtors (yes, that's real-TOR, not real-A-tor!) predicts median prices to fall almost 5% this year, with a gain of almost 4% in 2010. Yes, they are ordinarily 'optimistic' but it seems plausible now that we've seen some slight rise in pricing in February. One month does not a trend make, however!
What can really kick-start our economy? First-time homebuyers--Yes, I know that this is contrary to my last rant-I have since learned that 40% of homes sold in 2008 went to 1st-timers. If they realize that they can 'pocket' an $8,000 Federal tax credit (versus last year's $7,500 "loan") if they buy this year AND if Gov. Perdue signs HB 261 (giving ANY home purchaser a $3,600 GA tax credit for 2009) we should see a lot more activity. If ANY of this is news to you, let me know and I will fill you in. Please pass this info along to ANYONE considering a home purchase-it may be just enough to have them overcome a) fear of falling values and b) greed (yes, greed). It's human nature to fear that you didn't get as good a deal as someone else, right? Yes, someone may get a lower price for a new home than you, but does the house suit YOUR needs TODAY? Isn't that enough to keep you from paying your landlord's mortgage?? Same scenario with rates-you MAY save a few dollars by waiting, but you may lose your chance at a low rate completely!
I get the awesome opportunity to hand someone the keys to their new house. I have been hugged, have seen tears of joy and even endured some piercing screams. It's why I've always said I practice happy law rather than focusing on negatives in life. I hope you can come see us soon and witness the spectacle!

"Big Ben" speaks!!!

2009-03-11T12:57:00.001-04:00

Fed Chair Bernanke's comments at the Council on Foreign Relations outlined potential new regulations for the financial markets which seemed to be confidence-inspiring. How is the US Fed Chief 'newsworthy' as it relates to foreign relations? Prior expansion in the US fed a desire for investments in our economy from overseas. Where financial crises in the 1990's (case in point-Japan) were largely regional, this current mess is global. So a lot of $$$ came to the US, and fueled a lot of risky investments. Well, we all see what happened. Big Ben (Bernanke) noted that we obviously have to have free-flowing credit and stability. He also outlined (in specifics!) what needs to happen. In a nutshell-oversight and regulation. He addressed several factors. "Too big to fail" is not a good thing. Large financial monsters grow so big that their tentacles reach into all aspects of our financial markets. Their success breeds additional risk-taking as they have the resources to 'roll the dice' that smaller concerns can't try. BB feels that risk-management practices must be implemented in large companies across all aspects of their inter-related businesses--even non-bank divisions. This authority needs to reach across the entire company-not limited to one division, for example. A second focus would be to strengthen the financial infrastructure (his analogy was to work on the "financial plumbing"). Specifically, the mechanisms that allow trades to occur need to be tightened. Temporary fixes in light of the Bear Sterns collapse and Lehman bankruptcy need to be clarified, expanded and made permanent. He suggests the Fed Reserve system may be the best resource to oversee payment and settlement systems. Next, the word of the day is "proclivity", which means a natural propensity or inclination or predisposition. In simple terms, banks have to keep a lot of reserves. When things are good, they lend a lot of money. When things are bad, they don't. SO, things are bad, which means... no credit. He recommended changing some accounting standards to allow banks to 'go out on a limb' and actually LOAN money without angering the Gods (the bank regulators). Another recommendation was to allow FDIC to build it's reserves over a longer period (from 5 years to 7 years). Finally, he notes that there needs to be a new Sheriff in town, in order to regulate and oversee the entire system in the US, which may take some tweaking of existing authority, as well as new legislative authority from Congress. It appears that he feels that regulatory authority in the US is currently too decentralized and it is time for someone to set the standard(s) and it appears that the Fed is the one to do it! Last shot-all of the above will help smooth the global impact of financial problems, but it cannot end domestic or global crises. It will (hopefully) serve to cut the current tidal wave of market ups and downs to smaller ripples on the world pond. Go Ben, go!

For the text of the entire speech, click this link.

Rate report/Sales idea!

2009-03-05T16:17:00.003-05:00

Freddie Mac's weekly report notes that 30-year mortgages bumped up a bit this week, from 5.07% to 5.15% this week. A negative? Not if you think about rates a year ago, when they were averaging 6.03%! So again, rates remain low so go buy today!

Another thought on the Stimulus plan (specifically my ranting about the $8000 tax credit for 1st time home buyers ONLY). I know it's not what we want, I know that it really isn't very helpful. HOWEVER, I have to think about all those young buyers out there. THAT is the big target-Gen X or Gen Y buyers that are renting. If you can find some of them, you can create some sales! Go hunting! Look in Starbucks or something :)

Last Newsletter info

2009-03-05T16:14:00.001-05:00

Are you stimulated?

Well, the government keeps throwing money at problems and nothing is working. When will this madness stop? What intrigues me is how we've lost focus. Let's go back in time--what is this mess all about? HOUSING. Yes, banking is a mess, AIG is "too big to fail" and unemployment is like a cancer on our country right now. With that being said, Housing was the problem that brought our economy to a screeching halt. Housing prices up, sales stopped. Loans a mess, banks fail (or need to be bailed out, while cutting the credit lifeline). AIG? Wouldn't you know that it sold insurance to banks for loan defaults (sort of). Well guess what? Those 'great bets' started losing and AIG lost a ton as well. But again, where did this start? Housing. Stimulus? I think not. The bill put forth an $8,000 tax credit for first time homebuyers--not enough. I've said all this, so let's move on. The 'latest and greatest' plan is the "Making Homes Affordable" program that was officially unveiled today. If you are a good boy or girl and have been paying your mortgage, you may be able to 'refinance' so that your payments are more affordable. There are many 'what-ifs' concerning this and I'm not sure how it will work out. For more information, check out www.financialstability.gov. I will dig into this further and talk about it on my Economics blog, at right. Bear with me as there is a lot of info to digest! What's next on the horizon? Potential "Cram down" legislation could be coming this week. For reference, a bankruptcy judge may 'cram down' new terms to a mortgage company if the legislation passes. For example, a judge may be able to change/lower payments, interest rates and even principal balances! Again, this one is not ready yet, so stay tuned! My only comment to all of this? I am worried that people are going to just say to heck with it and stop paying their mortgages--not because they can't pay, but because they WON'T pay. This article seems to think it's due to negative equity--What I fear is a paradigm shift of borrowers giving up and saying "Who cares". Not a pleasant thought!

By the numbers
Recovery in 2009? Think YES!

Again we hear doom and gloom daily. Every once and a while the media 'censors' allow something positive to escape and actually make it into print. At the same time, however, any good news is currently tempered by some bad news. The current Fed "Beige book" report noted that conditions worsened in January and February (did you hear the auto sales reports yesterday? bleah!) When can we expect improvement? Unfortunately it appears late 2009/early 2010. Housing is stable more or less and there are hopes that purchases will pick up this Spring as buyers (what does that word mean? I forgot) start looking for homes. Foreclosures are a wild card right now-we should have many unfavorable re-sets (ARM rate adjustments) THROUGH 2010 and beyond. Not only that, the new legislation may keep some people on the fence. Then again, now that it has been passed, perhaps people can get a better feel for the current climate and finally BUY. Another issue? Many economists note that unemployment will continue to rise in the months to come. Even an optimist like me has to take note of the fact that someone without a job cannot buy a home, no matter how cheap it is or how low the rates have dropped. Georgia State's economist thinks that losses will drop for the next two years and paints a pretty bleak picture. Well, for this NON-economist, I am betting he is wrong! I wish I had some extra cash (don't we all??). I would love to purchase some stocks (just ask the Prez!) or better yet-some REAL ESTATE! Go get 'em!

Oink Oink Oink! These little piggies LOVE earmarks!

2009-03-03T16:37:00.003-05:00

Congress should be ashamed--House, Senate; Republican, Democrat. All are to blame. My disgust can be summed up with one word: EARMARKS. What happened to President Obama's campaign promises? Looks like we're back to business as usual as evidenced by signing a bill laden with these earmarks (though I think his patience will drop and he will call the "leaders" (quotes and/or sarcasm fully intended) to the carpet). What of all this spending and earmarks? It's true that Republicans blew it by spending too much over the past 8 years. I heard something today about these earmarks--a 60-40 split based on party lines. While 60% of the earmarks were from Democrats, I was intrigued to find that of the top 10 pork spenders SIX are Republicans! Shame on ALL of you! If we truly need stimulus, this isn't the way to go. Change? I'm still waiting! Our economy needs jobs, not more government. What's the old joke about the scariest line in the world? "I'm from the Government, and I'm here to help." Ha.

Take this quiz!

2009-02-25T12:37:00.003-05:00

I was amazed to read that of 2500 Americans taking this quiz, the score was under 50%! I was proud to get 28/33 right for a score of 84.85%, though admittedly I guessed on a few! Take the quiz and see how YOU do!

Quick positive links...

2009-02-19T16:14:00.003-05:00

ATL Federal Reserve Bank Chair thinks things will improve by 2nd half of the year, per a speech today in Birmingham. As always, however things can always change. I still have my rose colored glasses on and view everything in a 'glass half full' point of view. We'll see! My hope? Improvement by SUMMER (prior to 2nd half of year). Bo vs. a Federal Reserve President... I'd like for me to be right not for bragging rights but for all our wallets! As I always say, time will tell!

Even Ex-Prez Carter sez it's not all that bad... In comparison of course! Of course, one of the worst economic downturns in my lifetime was during his Presidency... Interesting contrast!

Finally, interest rates at ALL TIME LOWS! (DUH--get out there and REFINANCE TODAY or BUY A HOME!)

Stimulus FAILURE and Al Qaeda on the move?

2009-02-16T11:54:00.003-05:00

I am only going to focus on one portion of the bloated mess that is our "Stimulous Bill": a 1st time homebuyer credit of $8,000.00. Let's see--what started this entire mess? REAL ESTATE. Not autos, not jobs, but HOUSING. So let's cut off our nose to spite our face and limit the thing that could finally light a fire on the many fence-sitters out there: a tax credit for ALL home purchasers! That's what the credit was intended to do, but that's not what we ended up with. Four letter word for all this? FAIL. My task for you: can anyone tell me who changed this tax break from ALL homebuyers to only 1st-timers? I really want to know so I can write them personally. Republican or Democrat, they are FOOLISH to limit this.

While I'm on a rant, why not scare the hell out of you too? Read this article and see what may be next for our weakened country.

Georgia Rates are going UP! LOCK & LOAD!

2009-02-10T15:46:00.002-05:00

According the Atlanta Business Chronicle, rates are going UP! We are already over 5.25%....!

On the fence? GET OFF NOW!

Good news... sorta...

2009-02-03T15:06:00.002-05:00

Well, home sales crept up a bit in December thanks to cheap prices and even cheaper money. Looks like the seasonally adjusted index of pending sales for "used" homes rose 6.3 percent in December from the month before. Yeah, I know that's a LOT of foreclosures being sold but at this point, any positive news is just that--positive! As far as home values, the US average dropped over 18% but the ATL market only dropped around 11%. Again, we didn't truly have that much of a bubble--what hurt ATL is the number of people in over their heads (which led to foreclosures).

For a 'lesson' on value, consider this: I happened to do a refinance in someone's home the other day. It was a beautiful home that turned out to have appraised for around $15,000 LESS than what they bought it for 2 or 3 years ago. One culprit may have been the For Sale sign across the street with "REO" in the title (REO = Bank Owned). They luckily had plenty of equity in their home so they could easily refinance, but it could have been a huge negative for them if they needed a higher loan amount. But that home across the street was just as pretty and could probably be 'stolen' from the seller. That will kill values for surrounding homes, but again, you are seeking a good deal to BUY so what are you waiting for???

Want some light reading?

2009-01-20T16:48:00.003-05:00

Here's the new Economic Stimulus bill! And with such a friendly title like the "American Recovery and Reinvestment Act of 2009", how can anything go wrong? Most likely something evil is buried in the 258 pages of the bill!!! Yikes! And you think you're afraid to read Atlas Shrugged? Reading all of this sounds horrid!

BTW-the Dow closed down 330 points today... No 'bump' from Obama I guess. Hopefully something positive will come out in the news and give Wall Street some 'comfort' or something...

Broken Record alert: more Atlas Shrugged 'stuff' (an important read!!!)

2009-01-12T14:53:00.003-05:00

I received the following story from the Wall Street Journal opinion page in my in-box today and was not surprised to see that it more or less echoed what I've been saying for months and months--we are entering a scary period in history where fiction is turning into fact! No, I am not bashing Obama at all because he's not in control... yet. I really hate the fact that our government is such a mess. Why can't we have term limits? (for fun, read Vince Flynn's first book of the same name) I really think people get elected and forget what they were doing to begin with. Would I get used to corporate jets and executive privilege? You betcha! Every single member of Congress needs to remember that they are accountable to us. But if we have to remain tied to 'entrenched' interests, we have an uphill battle. Do you think we could outspend someone who's been attached to a Senate "lifer" like Teddy Kennedy or Robert Byrd?

Okay, off on another tangent, sorry. Bottom line-what's the balance between greed and capitalism? Self-interest vs. 'the good of the country'? Is YOUR self-interest best for someone else? That's the key issue (and why I'd say I'm philosophically a Libertarian) and one that's not readily discussed when you're playing the OPM game (Other People's Money). Please: go buy Atlas Shrugged and READ IT. If you don't have the stomach for a 1000 page novel at least read this. I assure you that it's worth the read. No, it's not always a 'page turner' but it's important stuff--then and NOW

Of "sightings" and spending...

2009-01-06T15:43:00.002-05:00

It's odd, we are definitely in a recession and spending has dropped off considerably... wait a minute, is that true? Yes, I know statistics show that, but all I can say is that it's not what I SEE out there! We went to the Dawsonville outlets the weekend after Christmas (Brooks Brothers gift cards were PERFECT gifts for me this year : ) and the place was PACKED. We burned an Ann Taylor card for Susie at Lenox and the mall was very busy too. Likewise, we celebrated our 9-year old's birthday at "American Girl" at North Point Mall last weekend and THAT place was packed--and if you have daughters in that age group, you know how expensive those dolls are! Ditto for Costco and Sam's, where I've had to pick up supplies for the home or office; still busy. So people are spending, at least in ATL metro!

On top of that, living in Atlanta, we are somewhat jaded by monster homes and exotic cars. In the past few weeks, here's a small list of 'toys' I've seen around (DRIVEN, not garage queens): Rolls Royce Phantom ($325K+), Porsche 911 Turbo (S190K?), Bentley Flying Spur ($200+?), Bentley coupe (ditto), Ferrari F430 ($200+), Maybach 57S (if you have to ask ; ) Likewise, there are tons of other precious metals cruising around. While they may be mortgaged to the hilt, I still say BRAVO to them, as they have done SOMETHING to earn those toys. God Bless America, the land of the free, home of the brave and all that... I hope that we can hold on through Spring (hopefully the Feds' recently released minutes are correct that we will be out of the woods by that time). All I can say is if you have good credit and your home's value is still pretty good, REFI NOW as rates are UNDER 5% today! When you do refi, you know where to close it : )

Shhhh.... Good news!

2009-01-02T16:27:00.003-05:00

Don't tell the media, but there was a bit of good news today--the Dow closed over 9,000 for the 1st time in 2 months! Can you believe how low it's dropped over the last few years? But what about falling gas prices? Ditto! $4 no more and we're loving it. More bad news in the media today (manufacturing activity dropped quite a bit) and as always, home prices, well, how should I say this... they still SUCK. In any event, the "Metro Mike" billboards here in metro-ATL show a positive trend as well--remember when it rose to over 113,000 unsold homes? That's about when they STOPPED showing the actual number and put up pithy 'BUY NOW' messages. Well, it's now back down to the low 80's (look here; lower left of screen) and I see that as positive. Final shot--I just closed a new home purchase for a couple with a 1st mortgage of $417K (with a 2nd mortgage HELOC-remember those??). The interest rate was a mind-boggling 4.875%. WHAT ARE YOU WAITING FOR??? GO BUY NOW!

Lessons from Detroit

2008-12-12T17:55:00.003-05:00

As Southerners, we often have a lot of pride about the South. In the case AGAINST a bailout of the Big 3 automakers it's difficult to have much sympathy. How many NEW plants have been built in the backyard of the UAW up North? While you're working on that answer, let's talk about Toyota in Georgetown, KY, BMW in Spartanburg, SC (both have been expanded numerous times), Mercedes and Honda in Alabama (coming soon-KIA) and several others built throughout the South. What's the big deal? Well, in the rust belt, average hourly wages run around $74 per hour. In the South, they run under $50. Why did the bailout fail? The UAW would not think of taking wage concessions under the bailout plan! Sure, I know that the fat cats at the top (who can afford to take cuts) have lived high on the hog long enough--and will continue to do so. They are certainly not without fault. However, I find it tough to sympathize with unions. There, I said it. My Libertarian thoughts come out at last! Every time the UAW stared down the Big 3, management eventually blinked. Wonder what would be going on now if the B3 had pulled a Caterpillar on them (look it up-management did not capitulate to the unions and the company is stronger than ever). I also think back to the end of Eastern Airlines. They went on strike, the company failed (I wonder how Delta and Northwest will fare if they keep playing that game by the way?). In any event, the bailout failed and even though it will be bad for the USA in the short-term, I think that it will be better for the industry as a whole.

While I'm on my automotive soapbox, I have seen hot European models for years--no, not Heidi Klum, autos that are built/sold only in Europe. Ford's European Focus is hot, the US version is not. Saturn's homerun Aura is based on a euro-platform. The Big 3 are getting the idea to a degree but where are the diesels? Why can't a Ford pickup have dual-element turn signals (translation: brake light/tail light and turn signal are all in the same bulb-if you have hazards on, brakes 'cancel' the flashing, etc)? No, we don't want "A" cars (those tiny city cars like the Smart Cars) but there are hot cars that we should have here. But no, we keep getting bloated SUV's (mainly b/c we keep buying them). What do I lust for? Yes, an Aston Martin would be nice, but I'd REALLY like a Mercedes ML or GL 320 Diesel (24.5 MPG) for Christmas (with a new lawfirm, not a chance this year : )

Political Rant

2008-11-01T11:42:00.002-04:00

This is an excellent article about our next President. On one hand, the Republicans had full control and BLEW IT but on the other, when the Democrats take over the Oval Office as well as the full Congress, God help our country. Work for a living? You will have to pay for someone who is not. Why is this on my Economy blog? Because the policies that will be implemented in January 2009 will more or less put a halt to any growth that this country will expect to see for the next few years. Again, I am NOT a fan of what the Republicans did. Shame on them for the largess, shame on them for the out of control spending. Iraq or not, they wasted more of our money than any other administration... ever! I continue to be impressed with Obama's oratory; despite the double talk, his talking points are actually seem believable. However, no amount of spin will take away the fact that he will put his hands into my pockets and give money to someone else. No, I don't make $250,000 a year (and having McCain won't guarantee that either) but take note of the fact that the $250K figure keeps dropping. What is your definition of rich? For many people, it's someone who makes more than they do. Not me; we live in America, the once-greatest country in the world. We read stories all the time about someone coming up with a great idea...and getting paid for it! That is so incredible and when I hear a 'rags to riches' story I smile to myself and mutter "God Bless America". Well, continue to add layers of regulation and restrictions, don't expect anything great out of America any time soon. Libertarians sometimes have the best ideas (keep your government out of my life, etc.) but they are too 'on the fringe' for my tastes (and for many other Americans). You may be surprised; take this quiz to see if you're truly left/right/center.

Again, I am no fan of what the "Republicans" (emphasis added, as they no longer represent true Republican ideology) did to our country. Likewise, the continued political partisanship bantering around sickens me. Actually, what have the Democrats done since taking over? No, I don't know either... I fear what will happen over the next four years--We'll plot that course this Tuesday I guess. Future generations will judge our actions: CHOOSE WISELY.

Economy a Mixed bag...

2008-10-29T09:04:00.002-04:00

This article from the Wall Street Journal notes that home inventories are shrinking across the country (even though Atlanta still has a bit over a year's worth of inventory, where 'normal' rates should be in the 6-7 month range). Yes, we've had some price increases of late and some decent sales but we're still not out of the woods yet. I know that unemployment is up across the US and in Georgia and that does not bode well for housing. Unlike the go-go subprime times of late you now actually have to have a JOB as well as INCOME to support a home purchase/loan. Most loan programs require you to have some downpayment as well so it's rough out there for the average buyer. I can also wonder aloud about people who were planning to sell some stocks to come up with their down payment but the answer lies in the continued roller coaster that won't stop until the election at the earliest. It's not all doom and gloom (and I still bet that the media will say "hey, it's not all that bad" on November 5th, regardless of the winner!) and our country (State? City?) has persevered before. I can likewise opine that our current generation(s) will not be as likely to "step up" as strongly as "The Greatest Generation" did during WWII (not that we have that type of threat today, thank God). And one other ramble-FDR's New Deal (and all the public works projects) did not get us out of the Great Depression--WWII did. I can only hope that we don't have to have something that horrible occur to jump start our country!

Like Lipstick on a Pig!

2008-10-24T08:56:00.002-04:00

Yes I know that politicians have hijacked that phrase but it's relevant to this posting, I swear! Looks like August's home price declines slowed slightly! Yes, they still fell, but LESS than in prior months! Okay, okay, so a .02% improvement is not that great but I'm just looking for any positives here! And for all you info geeks, we are right around the same price level as in Sept. 2005. So all you 'bubble' fans can see that we did have some major appreciation; likewise we have had some declines. At the end of the day, we still have oversupply, especially with foreclosures, but the major source of that oversupply (new homes) will continue to fall as unfortunately we have lost a lot of builders (or they stopped building spec homes).

Full disclosure--the same article I read noted that prices may still fall an overall 10% additionally (over the next 18 months) from the peak of 2006 so we're still in for a ride; hoping for a slow ride down a hill versus a jump off a cliff! Data is listed here if you're curious.

Economic Ramblings for the day

2008-10-22T17:55:00.001-04:00

"How's your tummy?" could be a nice subtitle as we've really had a rollercoaster ride in the past month or so! I saw a headline this morning that oil has dropped under $70. It seems actually crazy to see gasoline under $3 after paying almost $5 after Hurricane Ike! I wonder how people are doing out there-did 'habits' really change over the past month? People parked or sold their SUV's and trucks and bought fuel-efficient vehicles. Will there now be a mad rush at the Hummer dealership again? What about actual driving habits? People took mass transit, cancelled optional trips, didn't go to the mall, etc. What's happening now? I'd be interested to see current trends!

One comment on the election-I truly feel that regardless of the winner next month, we will all be surprised at the media reports on November 5th that "Hey, it's not that bad out there". Regardless of your candidate, they NEED bad news right now. For example, Obama can blame Bush/McCain for the current economy. McCain can say that Obama's taxes will kill the economy. Barr? Well, he can just bug both candidates as an 'outsider'. Mark my words-the economy will miraculously 'get better' after the election. Oh, by the way, yes, I AM a cynic!

What's next for the Fed? Wow, seems like they want another round of economic stimulus checks. I would love to have some extra spending money for Christmas shopping, but I don't think that a) that is the answer and b) that I'll see a penny! How about you? Uncle Sam says SPEND!

A Visual Representation of the McCain/Obama Tax Cuts

2008-10-22T08:14:00.003-04:00

The proposed tax cuts are interesting to say the least. Looks like everyone gets a cut under McCain, but Obama's are higher for people who earn less and he NAILS people who make a lot of money. Takes me back to my heavy metal rock-n-roll days of a band called Krokus. Their 'hit song'? "Eat the Rich"

The most entertaining? NEITHER one truly talks about how they'd pay for these cuts (well, big O pays for many of his cuts by socking it to those evil rich people). I really suggest you get out there and buy ATLAS SHRUGGED by Ayn Rand. Written in 1957; coming to the United States in 2008???

The hits keep coming! Now we're Socialists???

2008-10-01T16:42:00.003-04:00

I was amazed to read this article. A TOTALLY different perspective than I had contemplated. Likewise, this one takes the Libertarian point of view of "Hands Off" and more or less says "too bad", thinking that Bankruptcy may be the best (inevitable?) course of action. And in a more partisan-ish (my word) article this one pretty much refutes Madame Pelosi's "Democrats are not to blame" concept. What do you think? I'm at a loss actually. First we drop over 700 points; then we rise almost 500. Even though today's loss on the Dow was a mere 19 points, I almost feel that the markets are saying "so what" to these proposals. It's a "Boy who cried wolf" situation in some respects, but at the end of the day, credit is still quite TIGHT. What would you do?

Younger Generation to the rescue?

2008-09-30T07:52:00.002-04:00

I thought that this article made so much sense! I sometimes look at 'kids' (I can say that at 42, even if I act like a 12 year old!) and worry about our future... Well, here's a kid with (hopefully) a bright future! It really makes you think, eh? Take a look for yourself...

What REALLY caused this mess?

2008-09-29T09:41:00.003-04:00

This is an interesting video which gives a pretty convincing argument, albeit a highly biased one. Take a look HERE and see what you think about what caused this current mortgage crisis. I must note that the 2nd half is more or less politically motivated and is obviously a McCain fluff piece. However, the base message to be taken away is a common theme of mine--unintended consequences of legislation. A great concept (getting people into houses) morphed into something that no one could have forseen. I am not a fan of this highly partisan mess we call Congress. For that matter, I wish our "leaders" (a very loose term!) would read the book "Term Limits" by Vince Flynn. No, I don't recommend such a radical course of action, but I sure wish our "officials" in DC would remember that they are elected to serve our country--not to pad their pockets or focus solely on re-election.

Wow, this really turned into a political rant! That was not my intention but when you see the mess that we're in today, it burns me up and blame is shared across the board-from DC to NY to unscrupulous lenders, etc. It's a mess, but hopefully this bailout bill will manage to somehow put us back on solid financial footing. We'll see; not so confident that it will be the 'magic bullet' needed but as the talking heads are repeating "Something needs to be done". Something, indeed....

What's next?

2008-09-23T11:28:00.000-04:00

"What's next" could reference any number of ominous issues out there--Hurricanes, news reports, home sales reports, etc... I have been a relentless "cheerleader" of sorts for our industry and I have to admit that I am discouraged to know that I have no clue where we're going. While I still know that it's an amazing time to buy (rates are SO low-so are prices!) it's becoming so tough to get a loan. First-time homebuyers will lose the ability to obtain down-payment assistance on October 1st and other new loan requirements kicked in with the passing of the much-heralded Housing Bill. The takeover of Fannie and Freddie by the Feds has stabilized credit & rates dropped considerably, but we're in further uncharted waters with a proposed new bailout of the entire financial landscape. Mr. Obvious states "If financial conditions fail to improve for a protracted period, the implications for the broader economy could be quite adverse." My response to Bernanke is DUH! Long and short we have events that have not been seen since the Great Depression. This plan will enable the government to buy bad mortgages and other troubled assets held by banks & other financial institutions. The theory? If they get rid of the debts it will make them more stable so they will be more inclined to lend, which is the main issue at this point. The problem? I expect our "Do Nothing" Congress to add 'garbage' to the bill at the further expense of "We the people". They've done so much to ease gas prices, right?

Guess who caused this financial mess?

2008-09-23T11:19:00.001-04:00

You need to read THIS ARTICLE to see the answer. You may be surprised; I sure was!

Ahoy there!

2008-09-19T13:27:00.002-04:00

Okay, so the Economy is quite the story this week. But fear not, I have just the thing to take your mind off the rise and fall of the market--it's "Talk Like A Pirate" day yet again! Have fun and Hoist your Pirate flag and join in a collective ARRRRRRRR!!!

Downpayment Assistance (DPA) Eliminated. Now what?

2008-08-25T11:57:00.002-04:00

October 1st may mean nothing to you, but to mortgage professionals/realtors, etc. it marks the end of Downpayment Assistance (or DPA). The new Federal Housing Bill ended this program. DPA allowed the Seller to bump their sales price anywhere from 3-6% to enable the buyer to receive 3% downpayment as required by FHA and up to 3% in closing costs. Nothing wrong with that scenario; someone wants to sell their home and someone wants to buy it (but they may not have enough money saved for a downpayment). As long as 1) the buyer can afford this home and 2) the property will appraise for the added value then the transaction makes sense. What is the problem? Well, I have heard that 1 in 3 homes using DPA were among the thousands that were foreclosed of late. With that info, I can understand the desire to delete this program so that banks lose LESS money! How can we fix this system? This video explains a bit, but again, how do you account for the huge numbers of losses as it relates to DPA? Perhaps you could base DPA amounts on credit scores/risk but other than that, what can you do? Anyone have any ideas?

Short & Sweet...

2008-07-03T11:37:00.000-04:00

I guess my main economics news is that we really need to get those buyers off the fence-rates will most likely continue to go up over the course of the Summer; I expect we'll see 7% for the 30-year by Fall. Lenders still have tight standards for loans; the main 'traffic' I am hearing about relate to short-sales or foreclosures. I guess those monster law firms are rolling in clover since they have a lock on the foreclosure business. Other than that, we're here and ready to handle your closing business, be it residential (purchase OR refinance) and/or commercial. Why us? Excellent service, prompt return calls/emails and honest answers. How can I help YOU?

Another thought on oil prices-if the dollar had remained strong in relation to other currencies, a barrel of oil would only be around $70-80. Rate cuts helped our economy, but hurt the dollar. Expect rising rates!

Spending and small towns

2008-06-06T16:02:00.000-04:00

I find it interesting to read articles about the "Economic Stimulus Checks" that have been paid to-date. As you remember, this wealth redistribution program was supposed to push people to spend money to boost our economy. Well, just like ethanol, it has resulted in some unintended consequences again! Not that this is a bad thing, but it's not what the politicos really wanted--People have increased costs; most are using it as a cost of living boost. Sure, some people finally got that 32" Flatscreen, but most are simply filling their tanks or their grocery buggies. Speaking of economic stimulus, we really didn't find much at the outlets over the holiday weekend, though Joey found 2 pairs of Nike shoes for only $30 each and my daughter bought yet another Webkin (parents in the know understand... probably one of the best marketing coups I have ever seen! Makes 'beany babies' pale in comparison). I do have to praise small towns though-we stayed at our friends' place near Ellijay, but also went up to Blue Ridge. It turned out that they had an arts & crafts festival so we got to wander around and see some neat stuff. We also had the BEST Kettle Corn I have ever had in my life! Perfect balance of sweet/salt-I still keep thinking about it : ) Another anachronism? We saw the new Indiana Jones movie at the Swan Drive-in (one of FOUR still open in GA). Great time, the grounds were packed in! Sounds like Indy will rake in the highest $$ for the Summer. So see, SOMEONE is having success!