This is from the "But wait, there's more!" department. Yes, home sales are down and home prices are down. Again, I blame most of our current home sales crisis on the media--from back in the fall of 2006 with their doom and gloom of "Housing Bubble" ("The sky is falling, the sky is falling!") That caused a wholesale HALT of the real estate market. From there, yes, the sub-prime mess surfaced and now we're in the credit crunch period so all is truly a mess. BUT, sales prices aren't as bad as the media keeps screaming. Remember folks, just like "Location Location Location" all real estate is local... ATL market has only dropped 3.4% over the past year. Yes, nationwide the drop is higher (9.8% for the S&P/Case-Shiller composite based on their 10 large city metropolitan area, 9.1% for their 20 city composite). If you live in Miami, a 17.5% drop is horrific (unless you want to buy that million-dollar oceanfront condo for much less!) or better yet, Charlotte, NC with a 2.3% GAIN in sales prices! Way to go Charlotte! For all the cities, click HERE and look for the press release.
Look folks--rates are low, houses are priced to sell--before the Spring Fever hits ATL, get out there and BUY. If you wait, you WILL pay more... You heard it here first : ) Cheers, Bo
Tuesday, February 26, 2008
Economic Ramblings
Well, things are still not stellar. The economic stimulus package has passed, checks will be in the mail in May (sure!) Whatever are we to do until then? It seems that many people are predicting a continued slump in the first quarter-negative growth has even been mentioned. I am still cautiously optimistic about things picking up in the Spring. There are still a lot of "fence-sitters" out there, waiting for the "bottom". I chided a renter recently, telling her to buy buy buy! I was told 'Why should I try to catch falling knives?" She is convinced that prices will continue to drop. That may happen as there is still a decent amount of inventory out there and increased foreclosures mean even more homes on the market. However, I still feel that January was one of the best times to have purchased a home-rates were at incredible lows and prices were still very low. Rates have bumped up a bit, but we are still hovering around 40-year lows! Stockbrokers always say you can't predict (or time) the market-that's what buyers need to do now: BUY. A new issue? Banks are tightening credit. Nothing like an over-reaction to put the brakes on the economy! Yes, stupid loans were made. Yes, credit was extended to people who shouldn't have bought. But now, even people with good/average credit are being put through the wringer. It is taking longer to get people approved and to get them to the closing table. People are in trouble and "short sales" are all the rage. Time will tell. Hang in there...
Monday, February 11, 2008
A "WOW" email from a friend of mine!
This was sent to me by a friend. I am amazed at the simplicity of this explanation. Unreal to think this... Give it a read; see what YOU think!
There was a chemistry professor in a large college that had some exchange students in the class. One day while the class was in the lab, the Prof noticed one young man, an exchange student, who kept rubbing his back and stretching as if his back hurt. The professor asked the young man what was the matter. The student told him he had a bullet lodged in his back. He had been shot while fighting communists in his native country who were trying to overthrow his country's government and install a new communist regime. In the midst of his story, he looked at the professor and asked a strange question. He asked: 'Do you know how to catch wild pigs?' The professor thought it was a joke and asked for the punch line. The young man said that it was no joke.
'You catch wild pigs by finding a suitable place in the woods and putting corn on the ground. The pigs find it and begin to come everyday to eat the free corn. When they are used to coming every day, you put a fence down one side of the place where they are used to coming. When they get used to the fence, they begin to eat the corn again and you put up another side of the fence. They get used to that and start to eat again. You continue until you have all four sides of the fence up with a gate in the last side. The pigs, which are used to the free corn, start to come through the gate to eat that free corn again. You then slam the gate on them and catch the whole herd. Suddenly the wild pigs have lost their freedom. They run around and around inside the fence, but they are caught. Soon they go back to eating the free corn. They are so used to it that they have forgotten how to forage in the woods for themselves, so they accept their captivity.'
The young man then told the professor that is exactly what he sees happening in America. The government keeps pushing us toward Communism/Socialism and keeps spreading the free corn out in the form of programs such as supplemental income, tax credit for unearned income, tax cuts, tax exemptions, tobacco subsidies, dairy subsidies, payments not to plant crops (CRP), welfare, medicine, drugs, etc. while we continually lose our freedoms, just a little at a time.
One should always remember two truths: 1) There is no such thing as a free lunch. 2) You can never hire someone to provide a service for you
cheaper than you can do it yourself. If you see that all of this wonderful government 'help' is a problem confronting the future of democracy in America , you might send this on to your friends. If you think the free ride is essential to your way of life, then you will probably ignore this posting—But God help you when the gate slams shut!
There was a chemistry professor in a large college that had some exchange students in the class. One day while the class was in the lab, the Prof noticed one young man, an exchange student, who kept rubbing his back and stretching as if his back hurt. The professor asked the young man what was the matter. The student told him he had a bullet lodged in his back. He had been shot while fighting communists in his native country who were trying to overthrow his country's government and install a new communist regime. In the midst of his story, he looked at the professor and asked a strange question. He asked: 'Do you know how to catch wild pigs?' The professor thought it was a joke and asked for the punch line. The young man said that it was no joke.
'You catch wild pigs by finding a suitable place in the woods and putting corn on the ground. The pigs find it and begin to come everyday to eat the free corn. When they are used to coming every day, you put a fence down one side of the place where they are used to coming. When they get used to the fence, they begin to eat the corn again and you put up another side of the fence. They get used to that and start to eat again. You continue until you have all four sides of the fence up with a gate in the last side. The pigs, which are used to the free corn, start to come through the gate to eat that free corn again. You then slam the gate on them and catch the whole herd. Suddenly the wild pigs have lost their freedom. They run around and around inside the fence, but they are caught. Soon they go back to eating the free corn. They are so used to it that they have forgotten how to forage in the woods for themselves, so they accept their captivity.'
The young man then told the professor that is exactly what he sees happening in America. The government keeps pushing us toward Communism/Socialism and keeps spreading the free corn out in the form of programs such as supplemental income, tax credit for unearned income, tax cuts, tax exemptions, tobacco subsidies, dairy subsidies, payments not to plant crops (CRP), welfare, medicine, drugs, etc. while we continually lose our freedoms, just a little at a time.
One should always remember two truths: 1) There is no such thing as a free lunch. 2) You can never hire someone to provide a service for you
cheaper than you can do it yourself. If you see that all of this wonderful government 'help' is a problem confronting the future of democracy in America , you might send this on to your friends. If you think the free ride is essential to your way of life, then you will probably ignore this posting—But God help you when the gate slams shut!
What's not to LOVE?
Okay, I guess you've grasped the Love theme, as we're nearing Valentine's Day, but what is there to love about our current economy? Well, if you make less than $75k(solo)/$150k (couple) looks like our 'guvment' is going to ship you $$$ later in the year. Great news eh? An election-year gift to you and yours courtesy of the top 5% who pay all the bills! (Sorry, guess I should have put "Soapbox alert" on that one!) One 'plus' embedded in that legislation will allow a hike in current conventional loan caps (over $417K is considered a jumbo and can cost over 1% higher than a conventional loan). That may help some high-dollar properties refinance. Rates are still great, by the way. What's going on this week? Well, home sales and home values continue to slide (and actually rates did a bit as well) compared to previous years, but again, we haven't been hit quite as badly as many areas of the country. One major issue for ATL is the amount of foreclosures we've seen! Add that to current housing inventories and it's a saturated market for sure! Other ATL worries? Delta/Northwest Airlines merger? Could be happening soon, but will we lose our largest employer to Minnesota? (brrr!) Delwest? Norta? Either way, it's unsettling for ATL. Coming to a ballroom near you: "Get rich quick in Real Estate!" (While you can and should be buying real estate if you're able, this link will remind you that nothing is free!) Note: short sales are actually becoming 'popular' these days; be careful when swimming in those waters, however...
Friday, February 1, 2008
Now what?
There's so much crazy stuff going on. In late January (and for the first time in history), the Fed dropped rates an unprecedented .75% in between meetings. While they have taken emergency action in the past, they've never cut rates so dramatically. Likewise, they also cut it .50% at their recent scheduled meeting. The Fed Funds rate is now as low as the Spring of 2005! What does all this mean? Besides my normal disclaimer that this will not lower long-term mortgage rates, it mainly shows us that we're not out of the woods yet! The Wealth Redistribution Act of 2008 (oh, I'm sorry, the "Economic Stimulus Package") is still up for grabs in the Senate, but suffice it to say something will be passed very soon. I saw an article about the wealthy spending less and how that is killing middle-class workers. That's Reaganomics in action-if the rich have money, they spend more/hire workers to keep up with demand. If they have no money to 'play' with, then they will not need goods/services, so the 'little people' are hurt. It's funny how that works out, huh? A tax cut (or FAIR TAX) would be nice! By the way, ATL home prices fell only 2% for the past year, but had risen 4.3% over 2002-2005. Meanwhile, the National average was down 7.7%/up 14.3% respectively. Here I go again: IT'S A GREAT TIME TO BUY! We are still #7 for foreclosures (1.57%), but we aren't in as bad of shape as other states (US avg. 1.03%). Bargains are out there, SHOP NOW! Click HERE for that article about the evil rich!
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