Change Is In The Air

Well, I've been away for way too long.  I moved back to the US a year ago and got to work with a REO (bank foreclosure) specialist company.  That's helped me learn a lot about the business and how it has changed over the years.  It also helped me get re-acclimated to the city and its environs.  I bought my own place and two rental properties which are doing well (14% annual net returns ain't too bad).

But the feeling of change is hovering around us.  I've taken a few real estate education classes and the same message appears - that 2013 will be the year that will begin to bring us back to traditional real estate sales. 

REO WILL BE WITH US FOR A WHILE

Does that mean that the REO business has or will go away?  No way!  Those properties will be around for a while but pricing is on its way up.  We're seeing gradual price increases across the city brought about, in part, because of the supply and demand curve being out of whack.  Inventories are at an all time low while investors continue to pour into the city looking for steals and deals.  But instead of getting deals, those investors are doing their best to out bid one another.  Yield compression is being seen throughout the market and is now averaging 9% per year (net).   Still not so bad but not the 15% most investors were expecting.

The biggest change we're seeing is a shift away from bank foreclosures to short sales.  Short sales are sales implemented by the home owner which is meant to stave off a foreclosure.  Banks are having a tendency to go along with short sales because of the savings they realize.  The foreclosure and subsequent property preservation costs hurt their bottom line more than the write off sometimes.  Foreclosures won't go away altogether because sometimes the banks have no choice but to foreclose but we'll see more short sales this coming year.

If you're an investor, be prepared to wait too.  Short sales, though becoming more streamlined in their approval process, still take time to get approved.  It can be take a few months to get the final approval but it can be worth it in the long run.  More often than not, the owners are still in the house and they are, to some degree, still maintaining the house.  NOT ALWAYS but some people still take care of their homes; they're just in a bad place and need to get from under heavy debt. 

Investors are still looking at properties priced, on average, around $60,000.  The problem is that there are too many investors looking for too few properties at this price point.  Moving up the price point will get you the same yield (and maybe better tenants). 

For more information on buying or selling in Metro Atlanta, give me a call.  +1 678.230.9613 

or write at johnb@southernreo.com

Featured On House Hunters International 

Information regarding any real estate investment contained herein is for informational purposes only.  You should check with your tax and/or legal adviser before making any investment decision and always conduct proper due diligence prior to a purchase.

American Property, Not EU Property is Hot Now

People around the globe believe that the US housing market could offer better returns than the stock market. Respondents to the latest Bloomberg survey of investors, analysts and traders rate U.S. financial markets highly: 46 percent say they will be among the best performers over the next year, double the percentage that select China, in second place.  More investors expect oil prices to fall over the next six months than to rise, 35 percent to 31 percent, the first time that?s been the case since September. 

Respondents also are the most bullish on the U.S. Dollar since September.  Close to half of those surveyed say they are adding to their Dollar positions, while only about one in 10 are reducing them. Many investors agree the American property market is at a turning point after a 33% fall in prices since it peaked in April 2006, with one third of those contacted seeing house prices starting to rise over the next six months.

Take a look at the recovering markets around the US.  Atlanta, for example, one of the hardest hit property markets, is seeing a dynamic change.  Foreign investors are flocking to the city snapping up properties now priced at 30% to 50% of what they were just a few years ago.  The  rental market is also rated as one of the hottest in the US giving those investors 13 to 18% NET annual yields.  

Some facts about Atlanta:

Atlanta is one of the fastest growing, stable metropolitan centers in America.

• Forbes Magazine ranked Atlanta as the #1 rental market
• CNNMoney.com says Atlanta is the 4th best city in America to invest in
• Forbes Magazine ranks Atlanta as the 4th most affordable U.S. market

U.S. Economic Rankings

• 3rd in job growth
• 3rd for most Fortune500 companies' headquarters
• Home to the world's busiest airport: Jackson/Hartsfield International
• 2nd as America's best cities to relocate
• 1st in U.S. as least costly large city for business

If you're thinking of investing in the US, Atlanta is worth considering.  For more information, please call or write.  I will be happy to help you.

 John Breaux, CIPS, RSPS

+1 678 230 9613

johnb@southernreo.com

Information contained herein is for informational purposes only.  

Please speak with your legal and/or tax advisor before making any investment decision.

Planning To Invest This Year?

Here's a great way to start your search.  No, I won't point you to Google or some MLS server - although both offer great ways to explore your area of interest.  Many of my investors are looking at school districts first then houses.

A good place to start is: http://www.greatschools.org/georgia/atlanta/ Here you can look at the various highly-rated school districts and make decisions relative to how much house you can afford and what kind of rents you can expect.  The caveat: better school districts will typically have higher valued homes! Why? Because people WANT to live nearby.  Simple.

The next simple step is to look through a service like Listing Book.  It's a service connected to the local Realtor's MLS system.  If you're working with an agent, ask them if they are on Listing Book.  If they're not, either find another agent or ask them to register.  You have to have a registered agent on Listing Book to be able to use it yourself.  You're basically using his/her MLS system for your own customized search.

Armed with all this information, you can talk to your agent about seeing the properties, estimating repairs, making the offer and moving on to the closing.

Last but not least, please be prepared to provide your agent with documents showing you have the ability to purchase the property.  It could be something as simple as a copy of your bank statement, if you're buying with cash.  If you want to get a mortgage, speak with your banker about getting pre-qualified.  They will provide you with a pre-qualification letter that you give to the agent.  This letter will be included with your offer and actually helps when the seller has multiple offers on the table.  The stronger the buyer, the better the chances of getting the property.

If you have any questions about investing in Atlanta, please drop me a line. I'm available to assist you in any way.

Information contained herein is for informational purposes only.  

Please speak with your legal and/or tax advisor before making any investment decision.

Happy New Year! Welcome to 2012

It's the start of a new year and there are resolutions to make and try to adhere to and new goals to reach.  Personally, I'm quite happy with the way 2011 panned out.  Sure, there were economic hiccups felt around the world but here in the US, even with the bad news streaming through the media, real estate  continued to move - and it moved at every price point.  I suspect that even in 2012 we'll continue to experience bumps and dips and potholes along the way but I also feel that real estate will continue to be a favorite amongst investors - especially US residential real estate.  

Here in Atlanta the last quarter of the year, at least for me, was quite busy.  Lots of viewings, closings and all along the way the phones just kept ringing and email inquiries kept coming in.  I am hopeful and optimistic for 2012 regardless of what the naysayers proclaim.  I personally think we'll have an active, productive year and investors will continue to see very good returns on their investments

So if you've been sitting on the sidelines observing, take a look this year at Atlanta.  You might be surprised at what you find.  Call or write for more information.  I'll be happy to  answer any questions you  might have and even sign you up for a regular email update of new property listings throughout the area.  

Information contained herein is for informational purposes only.  Please consult your legal and/or tax adviser before making any investment decision.