The Winds of Change

Finally, after so many years of stress and seemingly endless hand-wringing, it looks like the markets are changing.  Yes, we've begun to see a move away from the deluge of REO-bank owned real estate to a slow up-tick of families looking to either get into their first home or move up into something new and improved.  

No, it's not perfect yet but we're seeing those little green sprouts.  Mortgage rates have stayed relatively low - although that might be changing in the next few months - so people are taking advantage of this and the fact that we have a historically low inventory of houses on the market.  That means it's a sellers market.  Yes, it doesn't make it easy on buyers to "negotiate" but with prices still at the lowest prices in the last decade you can get more house today then ever! 

Ellen Shows Funny Real Estate Listings

Why should I use a real estate agent?  This is a question we hear regularly from people trying to sell their home.  Many try to sell on their own using a For Sale By Owner sign in front and a listing on Craigslist.  More often than not, they end up working with a listing agent because they realize they don't have the time to do two jobs.  Their normal 8 to 5 job AND playing real estate agent trying to accommodate buyers who want to see the home at all hours. 

They also realize that they just don't have the resources an agent has - especially an agent who's been in the market through thick and thin.  

Who knows how to navigate through mortgage qualifying, showing the house in its best light and schmoozing buyers and their agents.  Good agents make themselves available anytime a buyer needs to talk about the listing or see the house.

If you're thinking of selling your home, interview a few local agents.  You can ask friends and family who they might recommend and check on line sources like Zillow or Trulia to find recommended agents.  

For more information on the Atlanta market feel free to drop me a line.  Visit my personal page at http://johnbreaux.gmediaagent.com/  I'll be happy to answer any questions you might have. 

John Breaux, CIPS, CDPE

Investment Broker

Working on EasyStreet

EasyStreet Realty, that is.

    I made a move recently to a more traditional real estate firm.  EasyStreet is more retail oriented and not so much on the REO/bank owned property listings and sales.  That said, I'm still very active with my investor clients and look forward to continuing our work together.

   The market has definitely swung right into a retail setting.  That is, more and more buyers are locals looking to change their current housing situation and finding that now's probably the best time to do that.  Mortgage rates are still at all time lows but inventory is low too so sellers are pretty firm on their pricing.  In some pockets of the metro area, we're seeing a 15% year on year increase in pricing!  As a result, there's been yield compression on properties being bought for investment purposes and some investors are getting frustrated because of the move of large institutional investors like Blackstone into the market.

Since about mid summer 2012 we've seen the inventory level decrease month by month.  Most seems to be attributable to banks moving to allowing more short sales - letting owners work out the sale of their home for themselves - and also the "robo signing" fiasco we witnessed being resolved over the last 12-18 months.  Of course, with short sales the bank still has to approve the sale and it still seems to be taking an exorbitantly long time to get to that approval.  

So 2013 is starting off strong.  I've been very busy since right after Christmas.  How long will it last?  Who knows?  Investors are losing the yields they've been aiming for since entering the market 6, 12, 18 months ago.  Some are accepting it and are still active while others are sitting back and regrouping.  More traditional buyers are waking up after five years of forced sleep to start shopping around for a new home for their growing families.  They're moving from the burbs to city locations because they can now afford to live closer to work.  They can now afford an older home they can fix up.  They can now afford a larger home.

Welcome to 2013 and the "new world order" of residential real estate.  If you have any questions, please feel free to contact me.  I'm here to help.

John Breaux

+1 678-230-9613

jsbreaux@gmail.com

Information contained herein is the opinion of the author.  Any statistics relating to the Atlanta market or individual properties should be verified independently.  Please order an inspection whenever considering a property purchase.

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

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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.