chris oliver

Hello again Trendwatchers,

As the attached spreadsheets will show you it is proving to be a lackluster year for sales here on Oconee and Sinclair. This is certainly not news. While there is now some evidence of stabilization in the hardest hit markets and hints of a perceived bottom there, our area here is showing some signs of playing catch up. A wave of subprime has fairly well washed through the market but the current economic situation and the rising unemployment rate is continuing to fuel some foreclosures.There's more than there was a year ago. Despite this fact, we still have it better here than much of the rest of the state. Georgia's overall unemployment rate is now in the double digits at 10.1%. However, the Mid-Ga. region which includes Putnam co. is at 8.6% and the Northeast region which includes both Greene and Morgan county stands at 9.2%.

If you wonder why I frequently stress this market segment it is simply because it is the market segment that is most active for real estate sales and almost all sales are affected by it. The townhomes and condos that were built late in the building boom are seeing the most negative activity and virtually nothing there is selling for what would be considered fair market value. There are now more waterfront properties overall coming to market as well. The plus side is the fact that inventory has not increased much and those sellers who are comfortable are taking a pass on trying to list their properties in these harsh sales conditions. Many homeowners in the area were successful in refinancing and will now sit tight until things get better and the sooner the troubled properties wash through the system, the better it will be for everyone in the marketplace. It will be very interesting to see what the 3rd quarter of the year brings. If the foreclosure rate declines overall and the properties that were purchased by investors come back on the market at higher prices without the competition of distressed REO pricing then we could begin to see the revitalization of the real estate market.

Till the next time, Chris

I don't know of a single agent who would call you about one of your listings and ask "Who's your seller? Why is it then that so many agents feel perfectly comfortable calling an REO agent about a foreclosure asking "Who's your bank?"

It didn't used to be quite so prevalent but I think that there are a lot of hungry agents out there. I know several who are singing the blues here in the Lake Oconee area and suddenly this market segment is looking pretty good to them. Well, that's fine. Welcome aboard. But be prepared to do your homework and pay your dues. It takes hard work to crack the REO market and we cherish our personal contacts with banks and asset managers as if they were made of gold. Because they are. This is a pretty steady revenue stream for someone who plans to work hard. A lot of effort goes into being a sucessful REO agent and most of us who are doing well at it have been in this market for years. It's not blind luck, it's not a fluke and it's not any different from representing any ordinary fair market seller. Banks are entitled to every bit of confidentiality and ethical conduct we have to offer and our responsibilities to them are the same.

So, for future reference, when you call for information on one of my listings I will be happy to share any information with you that I ethically can. But don't bother with "How low will they go", "What are the other offers?", and especially my pet peeve "Who's your bank?"

Happy Closings ;)

Hi Trendwatchers,

Time for an update. As I'm sure you know, it continues to be a slow market here on Oconee and things have dropped on Sinclair as well. So far by the end of April, there were a total of 13 lake homes sold in the Oconee area mls compared to 31 by that time last year. Despite this fact, the number of active buyers looking is encouraging but they continue to make unreasonably low offers and more contracts have blown up than ever. Many of the contracts being written simply aren't worth the paper and ink it takes to print them and frequently buyers don't seem to understand the fact that a seller who is not a bank or corporate entity is not going to come to the closing table and bring thousands of dollars to in effect, pay someone to buy their home. The fact that these lowball offers are not accepted is actually a good thing for the area property values. Better no comps than ridiculously low comps and with most appraisals, fair market value can trump foreclosure properties provided it is not considered a distressed area and the percentage of REO remains low. Thankfully, this is still the case on Oconee.

The big news here is the fact that there is now some movement in the stagnant condo & townhome market. The bad news is the fact that the ones that have sold have gone to auction and foreclosure and the comps for this type of property will take a hit. One building of Condos in the Arbors area of Cuscowilla just sold for $250k per unit (3) which includes a 10% buyers premium. A building at Blue Heron Cove (7 units) sold for a total of $965k with a 10% buyers premium on top of that. Considering the fact that Arbors was initially listed at $599k and came out of foreclosure to list in the $380's and Blue Heron was listed at $585k, these are not just low, they are catastrophic prices. They may well end up being used as comps due to the lack of any activity in this market segment. At Blue Heron there is another building of units that has gone through foreclosure but has not been repriced or listed yet. The redeeming quality of these sales is the fact that it is an incomplete development and so was not worth the higher price without the additional infrastructure and completion but this is still a disturbing signal. Compounding the problems with this type of property are the increasingly tight lending standards for purchase. 20-25% down and with condos there is usually a minimum owner occupancy requirement. Cash buyers/investors are loving it.

Two other segments of our market are not too pretty either. There are currently 354 golf community lots (no private waterfront) listed for sale in the local mls. Thirteen have sold in the last year according to the same database. With new construction somewhere between slim and none, it's going to take a good long while to reduce this inventory. Commercial is also a segment that is lagging. Rentals are down and rents are being reduced to fill some properties. Others that have not reduced have too much empty space. Properties previously for sale are offered for rental and there are some real sweetheart deals out there. There are currently 141 commercial properties for sale in our mls (Oconee area only) and in the last year 13 have sold per the same database. Admittedly, both these types of properties may not be advertised and there may be quite a number of sales that were not recorded here but it is still an extremely poor ratio and is indicative of a stagnant market.

There are signs nationally that indicate we may be nearing a bottom for the housing market. It feels right to me too, at least as far as single family residential goes. A couple of things to remember; there hasn't been any real construction activity in close to two years and many of the small & medium builders who were active in 2006 will never come back after this downturn. A second relevant fact is that many reduced/distressed sales are going for lower than it would cost to build them. Lake Oconee's mls has shown about 1 billion in active listings since late 2007 & early 2008. There has been very little change since then. It is high for the area but it is not going up dramatically. Rather than the old real estate adage of location, location, location, we should be thinking inventory, inventory, inventory. When this inventory starts to drop we will be well on our way to market recovery.

Best regards until next time, Chris

If you would like to be removed from this e-mail or if you know someone who would like to be added, just send me a note chriso@plantationcable.net

Chris Oliver

Lake Country Investment Team

"Bringing the Best Home to You"

Century21/Minchey Properties, Inc.

994 Lake Oconee Parkway

Eatonton, Ga. 31024

706-485-1056 Office

404-731-7025 Cell

706-485-1057 Fax

e-mail: chriso@lakeoconeehomes.org

Hi Trendwatchers,

You haven't heard from me for a bit because there really hasn't been much to say. Inventory has stayed high, prices have dropped and the mortgage market has been a mess. As anyone who has read a paper, the internet or turned on the evening news knows, this hasn't been a period that has treated Real Estate kindly.

With that being said, here's some good news. The Oconee and Sinclair areas have still not been nearly as badly hit as the metro and outlying areas of Atlanta. Condos still continue to be a problem and they account for the bulk of foreclosure properties in the area. First time properties account for another big chunk and were the leading edge for subprime defaults. The bad combination of unsophisticated buyers with dicey credit and adjustable rates that weren't sustainable brought many older fixer-upper homes and manufactured housing to the courthouse steps and they are now being sold for far less than their original loan amounts. Fortunately, quite a few investors are seeing this as a buying opportunity and when the price drops to their target, they are snapping them up and doing some rehab and then relisting or putting them in rental. The rental market has picked up substantially with demand for affordable housing staying with or outpacing supply.

Like the less fortunate areas of the country though, we have seen a drop in prices here. Lake homes are selling but if a seller isn't motivated they are best off just taking a rest for now. Buyers are not coming in with an offer that is 10% off list they are offering 25-35% off list. The homes that are moving are currently being negotiated downward to about a 10% discount and buyers and sellers are walking away from deals that can't be reconciled. Savvy sellers are making concessions for things like boats and furniture to move lake homes and this is helping them keep a buyer.

As the trends show, in December the inventory fell below 1 billion on Oconee for the first time since February 2008. Partially this is sales but some of it is property that was just taken off the market due to failure to sell. One thing that is very noticeable to me is the fact that many homes are now selling for less than it would cost to build them. Another important piece of the puzzle is the fact that many of the smaller builders have not been able to hold out. This tells me that when we do see a turn around the resale inventory will move fairly quickly and there won't be much replacement inventory around. This should drive the prices back to a competitive price point and level the playing field for buyers and sellers.

I am really looking forward to this coming spring to see what new programs, tax credits or whatever we end up with come in to play on the housing market. One thing is certain, something must be done to establish a bottom before the current pent up demand will be unleashed.

Wishing you all the best in 2009. Till the next time

Chris

I know I am a very lucky agent. I actually have good clients and good leads. It may be a poor market - I believe the technical term is 'stinky' - but I work hard to get and keep my people on the buyers' side. I also work hard to find them what they want, not what I think they should have.

One client I have is a young couple who are first time buyers. They are excellent clients. Pre-qualified and with some money to put down. Now, if we can just find them what they want. What is it?? Well, that's the $64k question. Not having done this before, they have a wish list that is unrealistic for the price range we are trolling in. Time after time, we have found something they like in the mls, I go over the particulars with them and explain exactly what type of property it is, then we go take a look-see and they don't like it because of something they already knew. They also can't seem to get on the same page. I call and verify listing appointments and then the husband backs out at the last minute.

You may be asking why I don't have better control over my clients and believe me, I've asked myself the very same question. Then the light bulb came on over my head and I figured it out. They have a bad case of first home jitters and it's my job to reassure them that everything will be alright. We all know how bad the headlines of foreclosures and equity loss have been for the past year. Imagine how absolutely terrifying it must be for someone taking their first plunge into the deep end of the pool.

I've made it a point now, to spend more time explaining finance to these folks and especially the difference between a good solid fixed loan with a down payment and a funny money, hundred percent, arm plus that can take you down faster than a sumo wrestler. I've also spent more time demanding that they pick out the items they absolutely must have and separating those from the things they would like to have if possible. Demanding nicely, but demanding anyway. It's the only way to see the forest through the trees.

This has been the breakthrough we needed. Commute was a big issue for them. We live on Lake Oconee - a Christmas tree lake and needless to say, I was keeping OPEC happy driving around simply to be told that it was farther than they had thought. Now, when we find something they like on the web, they clock it themselves before we ever set up that showing appointment. Sometimes they don't even drive all the way there if it gets to be too far. They've finally figured out that acreage is something that costs money. Smaller yard = more house, and we still look for the most room we can find. Things are easier and I now feel certain that we'll be able to get them into that first home in a couple of months.

So if you have any first time buyer's out there with the first home jitters, hold their hands, reassure them that they are making the right decision, protect them from what is to them the unknown, and when all is said and done, enjoy a lifetime referral.