2nd Quarter 2010 Atlanta Green Home Sales Report

Welcome to the 2nd Quarter 2010 Atlanta Green Home Sales Report.

Carson Matthews, Buckhead Office, REALTOR®

In the 2nd Quarter I am happy to announce that certified green homes represented 12.3% of the total new construction market.  This is the highest percent of market share for green homes in Atlanta since I began reporting this in 2008.  Green homes sold for 97.1% of asking price in 99 days compared to 92% of asking price for conventional new construction in 110 days on the market.

Here is a link to the 2nd Quarter 2010 Atlanta Green Home Sales Report.

This study looks at detached single family homes that were built 2007 or later and sold as “new construction”.  The Green Home Sales Report looks at homes listed between $250,000 and $2,000,000 in Fulton, Dekalb, Cobb and Gwinnett Counties.  The green homes have all been certified by a third party Green Building Certification including EarthCraft House, LEED for Homes, NAHB Green Building Standard and Energy Star.

Please leave your comments if you have any thoughts or questions about green home sales in Atlanta.

For historical reports, visit Atlanta Green Home Sales Reports.

Existing home sales jump 7.6% (Natalie Ransom)

Taken from the Atlanta Business Chronicle

Natalie Ransom, Buckhead Office, REALTOR®

Sales of existing homes in April were up 7.6 percent in March, led not only by the homebuyer tax credit, but by improving consumer confidence and favorable affordability conditions, according to the National Association of Realtors.

Compared to a year ago, existing home sales were up 22.8 percent.

In the NAR’s South region, which includes Georgia, existing home sales increased 8.6 percent and were up 23 percent from a year earlier. The median price in the region was up 1.2 percent to $150,000.

“The upswing in April existing-home sales was expected because of the tax credit inducement, and no doubt there will be some temporary fallback in the months immediately after it expires, bit other factors are supporting the market, said NAR chief economist Lawrence Yun. “For people who were on the sidelines, there’s been a return of buyer confidence with stabilizing home prices, an improving economy and mortgage interest rates that remain historically low.”

While sales rose sharply nationally, the number of homes on the market also rose, with total housing inventory at the end of April up 11.5 percent.

The NAR also notes rising prices, saying median existing home prices were up 4 percent from April 2009. Foreclosures and other distressed sales accounted for 33 percent of sales in April.

The biggest jump in April prices was for condos and co-ops, up 9.1 percent from the previous month, according to the NAR.

The biggest month-over-month increase in sales regionally was in the Northeast, surging 21.1 percent.

Pending home sales jump 5.3 percent (Natalie Ransom)

Submitted by: Natalie Ransom, Buckhead Office, REALTOR®

Taken from The Atlanta Business Chronicle

Buyers racing to beat the home buyer tax credit deadline pushed pending sales of existing homes in March up 5.3 percent from the previous month, according to the National Association of Realtors.

Pending sales were up 21.1 percent from a year ago.

The Pending Sales Index does not break out specific metropolitan areas. But by region, pending sales in the South were up 28.3 percent from a year earlier.

The tax credit expired April 30, and lack of that incentive may slow sales in the next few months, the Realtor’s group said.

“In the months immediately following the expiration of the tax credit, we expect measurably lower sales,” said NAR chief economist Lawrence Yun. “Later in the second half of the year, and into 2011, home sales will likely become self-sustaining if the economy can add jobs at a respectable pace, and from a return of buyer demand as they see home values stabilizing.”

U.S. Economy: Exceeds Forecast! (George Heery)

 

George Heery, Buckhead Office, REALTOR®

Submitted by George Heery

Taken from: Bloomberg 

Sales of new homes surged 27 percent in March and orders for most durable goods climbed, indicating the U.S. economy sped up heading into the second quarter.
 
 The gain in new-home sales was the biggest in 47 years as buyers rushed to qualify for a government tax credit and the weather improved, a Commerce Department report showed. Bookings for goods meant to last at least three years, excluding cars and aircraft, climbed 2.8 percent.
 
 Stocks rose and Treasuries slid as the reports pointed to pickups in housing, business investment and exports that may benefit companies from builders such as Pulte Group Inc. to makers of capital goods including Eaton Corp. The outlook for the rest of the year hinges on job gains that will spur consumer spending, which makes up 70 percent of the economy.
 
 “The pieces are falling into place for a strong recovery,” said Gus Faucher, director of macroeconomics at Moody’s Economy.com in West Chester, Pennsylvania. “We’ve got strong business investment and we’re going to have some investment in residential” real estate.
 
 Stocks advanced, extending the Dow Jones Industrial Average’s longest weekly winning streak in six years. The Dow climbed 0.6 percent to 11,204.28 at the 4 p.m. close in New York, completing an eighth straight weekly gain. The 10-year Treasury note fell, pushing up the yield to 3.81 percent from 3.77 percent late yesterday.
 
 Sales of new houses increased to an annual pace of 411,000, exceeding the highest forecast of economists surveyed by Bloomberg News. Last month’s purchase rate was the highest since July and followed a record-low 324,000 in February that was higher than previously estimated.
 
 Exceeds Forecasts
 
 Economists forecast purchases would rise to a 325,000 annual rate in March, according to the median estimate of 77 economists surveyed. Projections ranged from 300,000 to 362,000.
 
 Demand may remain elevated through this month as Americans take advantage of a tax credit worth as much as $8,000 before it ends at the end of next week.
 
 “We’ll probably see another jump in April and then we’ll get some payback in May and June,” said Jim O’Sullivan, global chief economist at MF Global Ltd. in New York. “Through the volatility, the trend in home sales is probably more up than down.”
  
Broad-based Gain
 
 Sales increased in all four U.S. regions last month, led by a 44 percent jump in the South. The median price of a new home increased 4.3 percent in March from a year earlier to $214,000.
 
 The Obama administration extended an incentive for first- time homebuyers in November and expanded it to include some current owners. The deadline for signing contracts is the end of this month, and the transactions must be completed by June 30.
 
 Sales of previously owned homes, which account for about 90 percent of the housing market, are tabulated at contract closings, meaning demand may remain elevated through June. Purchases of new houses reflect contract signings, indicating the credit’s maximum influence on that market will be seen through April.
 
 A report yesterday from the National Association of Realtors showed sales of existing homes jumped to a 5.35 million rate in March, the first increase in four months. 
 

REALTOR® Nationwide Open House is April 10th and 11th

Join thousands of REALTORS® around the nation and hold an open house on the weekend of April 10 and 11, 2010! Our goal is to invite the public to come out and take a look at their local market. They will be assured that they can visit the open houses with no pressure to purchase, and that the REALTOR® on duty will be happy to answer their questions about the home buying and selling process.

Go to www.garealtor.com/openhouse  for more information.

4 Great Real Estate Deals That Won’t Last

Taken from Investopedia.com

Purchasing a home is one of the biggest decisions that a person makes. Because of the serious financial commitment involved, most buyers are interested in securing the best deal possible when purchasing a home. As the economy continues to wreak havoc on our jobs and plans for retirement, many people are wondering when will be the best time to purchase a house.

Much like timing a move in the stock market, potential home buyers are waiting for the time when they can maximize their investment. Lower home prices, low interest rates and federal subsidies have all led to better deals in real estate, but these perks may not last much longer.

Lower Home Prices

Since the real estate bubble burst, many real estate markets have seen a dramatic price drop in median home value. While this can be devastating to home sellers or home owners who are underwater with a mortgage that is worth more than their home, it can be a great opportunity for the home buyer.

More from Investopedia»  5 Simple Ways To Invest In Real Estate »  Financing For First-Time Homebuyers »  Choose Your Monthly Mortgage Payments

In many markets across the United States, it is truly a buyer’s market as prices continue to be well below levels from just several years ago. With many homes now going into foreclosure or short sales (where the lender agrees to sell the property at a moderate loss in order to avoid foreclosure), opportunities abound for the qualified buyer; that is, one who can still secure a loan.

While some experts believe that home prices should start to increase by summer, others think that it’s likely the prices will simply stabilize. Either way, for buyers this means it may be a good time to purchase a home. With the large number of homes currently on the market, there is a relative balance between supply and demand. As more people become willing to purchase homes, prices may reach a turning point.

Low Interest Rates

Over the past year, the Fed has been buying billions of dollars’ worth of mortgages every month, boosting the market. The mortgage-backed securities (MBS) market is similar to the stock market. When there is a high demand for a stock, the price rises; when there is a high demand for mortgage coupons, those prices rise.

Mortgage securities prices and interest rates are inversely correlated: as prices go up, mortgage rates fall; and when prices drop, mortgage rates increase. The Fed has purchased large quantities of mortgage-securities, keeping prices artificially high and mortgage rates low. Analysts believe that once the Fed ends its purchase program at the end of March, prices will fall, resulting in increased interest rates.

The Mortgage Bankers Association (MBA) expects the rate on a 30-year fixed rate mortgage to increase to 6.1% by the end of the year. This is up from an average of 4.91% for the week ending March 19, 2010.

To put this into perspective, a $180,000 30-year mortgage (excluding taxes and private mortgage insurance) at 6.1% will require a monthly payment of $1,091, with total interest paid equal to $212, 685. The same loan at a lower 4.91% rate will create a $956 monthly payment (saving $135 per month) with total interest equal to $164,305 (a substantial savings of $48,380 over the course of the loan). Rate changes as little as 0.5% can have a significant impact on the overall cost of a home.

Federal Tax Credits

The Federal home buyer tax credits will cease at the end of April. Created by The Worker, Homeownership and Business Assistance Act of 2009, these credits include the $8,000 first-time buyer credit and the $6,500 credit for current home-owners purchasing a new principal residence (repeat home buyers). The credits apply to sales occurring by April 30, 2010 – or June 30 if there is a binding sales contract in place by the April 30 deadline.

While the program has provided financial incentive and relief for many home buyers, there is no indication that it will be extended beyond April 30th. Buyers who want to take advantage of the credit will have to act quickly.

A Gamble

Timing a home purchase to get the best price at the best rate is a bit of a gamble. While many analysts believe that now is a sensible time to engage in a real estate purchase, six months from now might be a better time. It’s like trying to pick when the stock market will turn: you can only make a well-educated guess and hope that your research pays off. What we do know is that the Federal tax credits will soon end, interest rates will rise and home prices may begin to climb. Now just may be a good time to get into a new home.

Another Big Gain in Existing-Home Sales

Andrea Cueny, REALTOR

Submitted by Andrea Cueny, REALTOR

Existing-home sales rose again in November as first-time buyers rushed to close sales before the original Nov. 30 deadline for the recently extended and expanded tax credit, according to the NATIONAL ASSOCIATION OF REALTORS(r).

Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 7.4 percent to a seasonally adjusted annual rate of 6.54 million units in November from 6.09 million in October, and are 44.1 percent higher than the 4.54 million-unit pace in November 2008. Current sales remain at the highest level since February 2007 when they hit 6.55 million.

Lawrence Yun, NAR chief economist, said the rise was expected. “This clearly is a rush of first-time buyers not wanting to miss out on the tax credit, but there are many more potential buyers who can enter the market in the months ahead,” he said. “We expect a temporary sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010. In all, 4.4 million households are expected to claim the tax credit before it expires and balance should be restored to the housing sector with inventories continuing to decline.”

Inventories Fall
Total housing inventory at the end of November declined 1.3 percent to 3.52 million existing homes available for sale, which represents a 6.5-month supply at the current sales pace, down from an 7.0-month supply in October. Raw unsold inventory figures are 15.5 percent below a year ago. The last time there was a lower supply of homes on the market was April 2006, when it was at a 6.1-month supply.

“Nearly all markets experienced a solid sales gain from one year ago,” Yun said. “The only markets with measurably lower sales were in San Diego, Riverside, and Sacramento (Calif.), where inventory shortages for lower-priced homes are limiting sales.”

Sales Rise Across the Board
For the second month in a row, sales have risen in all price classes from a year earlier. Prior to October, the only consistent gains were in the lower price ranges. The national median existing-home price for all housing types was $172,600 in November, which is 4.3 percent below November 2008. Distressed properties, which accounted for 33 percent of sales in November, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.

Single-Family Homes
Single-family home sales jumped 8.5 percent to a seasonally adjusted annual rate of 5.77 million in November from a level of 5.32 million in October, and are 42.1 percent above the pace of 4.06 million in November 2008. The median existing single-family home price was $171,900 in November, down 4.4 percent from a year ago.

Condos
Existing condominium and co-op sales in November were unchanged from a seasonally adjusted annual rate of 770,000 in October, but are 60.1 percent above the 481,000-unit pace a year ago. The median existing condo price was $178,000 in November, which is 3.1 percent below November 2008.

By Region
Sales in the Northeast rose 6.6 percent to an annual level of 1.13 million in November, and are 52.7 percent higher than November 2008. The median price in the Northeast was $223,400, down 13.1 percent from a year ago.
Existing-home sales in the Midwest increased 8.4 percent in November to a pace of 1.55 million and are 53.5 percent above a year ago. The median price in the Midwest was $140,800, a decline of 0.4 percent from November 2008.
In the South, existing-home sales rose 4.8 percent to an annual level of 2.39 million in November and are 44.8 percent higher than a year ago. The median price in the South was $151,400, down 1.4 percent from November 2008.

Existing-home sales in the West increased 10.6 percent to an annual rate of 1.46 million in November and are 28.1 percent above November 2008. The median price in the West was $231,100, which is 4.1 percent below a year ago.

Please click here for the entire story from realtor.com on the gains in existing home sales.

You need a real estate agent to help with your move from Kansas City to Katmandu?

Heery Brothers, Founding Partners

 

Do you call Relo, yellow pages, http://www.best realtorintown.com, the person with the most signs? How do you select the right agent for the job? Call the people that you know.

Few people like to choose their advisors by opening the phone book; rather most folks prefer to work with someone who has been referred to them by a trusted source. Heery Brothers can help anyone moving to virtually any city in the United States and in180 international markets.

Sotheby’s International Realty participates in the top relocation networks, we can put you in touch with a qualified real estate specialist who has a proven track record of performance in your areas of interest. This specialist will have the knowledge and understanding you are looking for in your new home search or the sale of your current residence.

Sometimes we may know the agent or their broker. We work hard to kindle these relationships not only through the firm but with top producers in other firms and markets using the same type of networking used to develop clients here in Atlanta. We attend national conventions for Sotheby’s International REALTORS® and the National Association of REALTORS® not only seeking to learn about upcoming trends in marketing, but also to work on contacts in other locations. Much to our wives’ annoyance on vacation we stop in and meet other local REALTORS® and try to develop an understanding of their market and level of competence.

Just a few of the extended services a referred relocation agent can assist you with are: area tours, school orientations, special needs providers, settling-in-services, cost of living comparisons, medical services, and much more. Meet with a REALTOR® even if you are still considering a move. Let them present their local market to you in its best light. The information they provide could be helpful to you in negotiating a new job. Any firm your company uses is normally happy to work with this relocation network.

Throughout the process, your real estate specialist will touch base with periodically to keep us up to date as to how your move is going. We question them to try to insure that they are providing the best service possible. We check in with you to insure that you are happy. This monitor s your satisfaction with the process and to helps to resolve any issues, should they arise.

So if you need to sell or buy real estate anywhere in the world contact the agents you know first. Please call the Heery Brothers with Atlanta Fine Homes Sotheby’s International Realty for all of you real estate needs at 404.974.4319 or 404.836.9600.

Big Rebound in Existing-Home Sales

Joe Sheahan, REALTOR

Submitted by Joe Sheahan, REALTOR®, Atlanta Fine Homes Sotheby’s International Realty. Article taken from 

Realtor.com

Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to the National Association of REALTORS®.

Existing-home sales—including single-family, townhomes, condominiums, and co-ops—jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.10 million in August, and are 9.2 percent higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in more than two years, since it hit 5.73 million in July 2007.

Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.”

Even with the improvement, Yun said the market is underperforming. “Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home-owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet,” he said.

Conditions for First-Time Buyers
Early information from a large annual consumer study to be released on Nov. 13, the 2009 National Association of REALTORS® Profile of Home Buyers and Sellers,shows that first-time home buyers accounted for more than 45 percent of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29 percent of transactions in September.

NAR President Charles McMillan said affordability conditions remain historically high. “Potential first-time buyers can take heart in that affordability conditions this year are the highest on record dating back to 1970, but with the first-time buyer tax credit scheduled to expire at the end of next month, people could hold back from entering the market,” he said. “Our read is that housing overshot on the downside because homes are selling for less than replacement construction costs in much of the country, and the home price-to-income ratio has fallen below the historical average.”

Inventory Falls
Total housing inventory at the end of September fell 7.5 percent to 3.63 million existing homes available for sale, which represents an 7.8-month supply at the current sales pace, down from an 9.3-month supply in August. Unsold inventory totals are 15.0 percent below a year ago.

“The current housing supply is the lowest we’ve seen in two and a half years,” Yun said. “If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.06 percent in September from 5.19 percent in August; the rate was 6.04 percent in September 2008.

Home Sales Breakdown
The national median existing-home price for all housing types was $174,900 in September, which is 8.5 percent lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.

Single-family home sales rose 9.4 percent to a seasonally adjusted annual rate of 4.89 million in September from a pace of 4.47 million in August, and are 7.7 percent above the 4.54 million-unit level in September 2008. The median existing single-family home price was $174,900 in September, which is 8.1 percent below a year ago.

Existing condominium and co-op sales jumped 9.7 percent to a seasonally adjusted annual rate of 680,000 units in September from 620,000 in August, and are 9.7 percent above the 561,000-unit pace a year ago. The median existing condo price was $175,100 in September, down 11.7 percent from September 2008.

Here’s the region-by-region picture:

• Northeast: Existing-home sales increased 4.4 percent to an annual level of 950,000 in September, and are 11.8 percent higher than September 2008. The median price was $234,700, down 7.0 percent from a year ago.
• Midwest: Existing-home sales jumped 9.6 percent in September to a pace of 1.25 million and are 7.8 percent above a year ago. The median price was $147,600, which is 1.0 percent below September 2008.
• South: Existing-home sales rose 9.0 percent to an annual level of 2.06 million in September and are 10.8 percent higher than September 2008. The median price was $153,500, down 7.6 percent from a year ago.
• West: Existing-home sales surged 13.0 percent to an annual rate of 1.30 million in September and are 5.7 percent above a year ago. The median price in the West was $219,000, which is 15.0 percent below September 2008.
  Source: NAR

Liquid Investors Should Increase Real Estate Allocation Now

George Heery Founding Partner

Submitted by George Heery, Founding Partner

Real Estate investors take a variety of risks and have a variety of advantages. The illiquidity risk associated with real estate and how leverage increases the volatility of this risk is keeping many otherwise liquid investors out of the market. Investors’ fears are rational and amplified by the current market conditions. A recent estimate by Deutsche Bank predicts that by the 1st Quarter of 2011, 48% of homeowner/mortgagors in the United States might be under water. With negative equity pervasive, it seems implausible the National Association of Realtors is right that prices will bottom out in early 2011. Heery Brothers will outline how asset allocation to cash, stocks and fixed income instruments can work in consort with prudent direct ownership of investment property. The net result can be less risk and less volatility with comparable or better returns. It is clear that pricing is favorable and an over correction is likely over the next 6 to 12 months. Don’t wait for this excellent blend of a low cost of capital and low prices to lose its elixir.

Let’s first look at a unique situation in public equity markets. We have significantly reconciled residential real estate values. Legitimate fears that commercial real estate values have not made their full adjustment persist. Wall Street seems to have put on the back burner their marked-to-market tantrum over commercial real estate. Concerns over commercial real estate performance and other factors may reveal the current rally in equity markets as a bear market rally. Many market makers assert equity markets are over-bought and adjustment to prices could be at hand this fall. It sounds vaguely familiar that real estate finance and macroeconomic concerns can do a real number on the market indices when earnings do not support prices.

So, is real estate going to become a favored asset class? Well maybe not favored, but a good allocation for a liquid and balanced portfolio. If bond yields don’t appeal, stock prices fall and cash yields are lousy, why not put everything you got into real estate? Wrong, but increased allocations to real estate while maintaining a balanced investment portfolio including cash is now prudent. In other words, we think now there is going to be a good alignment of interests to maximize investor returns through real estate investment. Modern portfolio theory takes the returns, volatilities, and correlations of an assortment of assets and mixes them in systematic proportions to produce a portfolio that, in theory, provides the optimum return per unit of risk or volatility. So while maintaining cash, fixed income instruments and stocks, buy real estate. The deductibility of interest, the deductibility of loan points and the effect of cost recovery (aka depreciation) are major reasons to own real estate.

Never use this model to get addicted to cheap money and interest rate deductibility. A moderate amount of leverage can still have advantages whilst mitigating volatility and illiquidity risk. In fact, do not buy investment real estate if you have serious concerns about personal liquidity. The below table compares a portfolio without real estate to a portfolio with real estate. Which would you prefer? We would be delighted to discuss with listing and buying opportunities. Please contact Heery Brothers at 404 974 4378.

Summary Table of Portfolio for a 40 Year Old with $5 to $10 Million in 36% Tax Bracket click here.