A couple of weeks ago I spent a week in Washington DC at the National Association of REALTORS® MidYear Legislative Meeting.   One of the key things I came away from this meeting is how terribly ignorant we really are when it comes to issues affecting us and the business being conducted by our elected officials.  I say this because there are critical matters being discussed but most people are woefully uninformed and remain frighteningly ignorant.  My fear is that if certain things come to pass without the outcry from the general public up front, afterwards, it might be too late.

What am I talking about?  Two things really and they both have handy-dandy ‘code words’ for them – further confusing people and making their eyes glaze over.

One is GSEs and the other is QRMs.

GSEs stand for Government Sponsored Enterprise. In other words – Fannie Mae and Freddie Mac and to an extent FHA. For those who don’t know what Fannie and Freddie are – they represent the primary entities in the secondary mortgage market. What’s that, you say?

Here’s a little abbreviated finance history that is necessary to understand what I am getting at…

Prior to the Great Depression, people buying homes generally took out what were called ‘straight loans’.  Straight loans were relatively short-term, interest only loans  and at the end of the term, the entire prinicpal balance was due to the lender.  During the Great Depression, many lost their homes.  Understanding that the way out of the economic rubble of the Great Depression lay partially in housing – the government created the FHA – Federal Housing Administration - and encouraged lenders to make consumer friendly loans including a long-term 30 year amortized loans.  Equal payments spread out over 30 years made monthly payments affordable.  Lenders were leary of making these loans but the FHA insured the lenders against loss in case of default.  So more lenders made these loans and this loan became wildly popular.

This created another problem – one of liquidity. A bank only has so much money.  If they made a bunch of 30 year mortgages, all their money was now tied up in these long term loans.  How can they remain liquid to keep to flow of money moving in and out of the economy?  The government then, created the Federal National Mortgage Association (FNMA or better known as Fannie Mae) and the secondary mortgage market.  The secondary mortgage market does not create loans, but rather buys loans from the primary mortgage market and then sells them to investors.  So Fannie Mae bought up loans from banks giving banks more money to lend.  Fannie in turn essentially sold them to investors. Traditionally speaking, mortgage loans were once considered relatively safe, long term investments.  I put it like this: If you purchased a company’s stock, do you know how much return you might make on your investment?  No. Stocks are a gamble.  It could go up, it could go down.  Mortgages had a set amount of return built in – known as the interest rate the borrower was paying.

Eventually, Fannie Mae was privatized into a for-profit, private corporation.  In response, Freddie Mac (Federal Home Loan Mortgage Corporation or FHLMC) was established to fill the gap and expand the secondary mortgage market. Eventually, it too became privatized.   Since Fannie and Freddie were purchasing loans from lenders, they established the guidelines for the type of loans they would purchase.  Lenders had to meet these criteria if they expected to sell them in the secondary market, hence the term ‘conforming loan’ which means the loan conforms to Fannie or Freddie’s guidelines.

Beginning in the Clinton Administration (no politics here… just sayin’ is all) the Feds began to put more and more pressure on Fannie and Freddie to loosen up a little – make things a little easier for people to qualify and buy homes.  Imagine the government whispering behind their ears saying, ‘Go on, loosen your guidelines – let everyone have a whack at home ownership!  It’s good for the economy and good for the public… and don’t worry, we’ve got your back!‘  Then it went too far.  Lenders were lending on criteria that if you could fog a mirror and had a decent credit score, you could get a mortgage.  Anything in extreme is a bad thing.

Then came the mortgage meltdown.  The way things were going was unsustainable.

So now – there is talk in Congress of eliminating GSEs altogether or reducing their role in the system ‘drastically’.  When asked how they mean to provide liquidity in the mortgage market, their answer is that the larger banks in the country will step up to the plate in the absence of the GSEs.  OK, now can you imagine Bank of America or Well Fargo stepping up to the plate to provide your HomeTown Community Bank liquidity?  Can you see such altruistic behavior from the likes of BOA and Wells Fargo? Do you believe a private mega bank will care whether or not a small regional bank survives?

This sort of talk should be freaking out all Americans but the crazy thing is that most Americans are woefully uninformed.  In fact, one congressman made a comment regarding support of this notion of eliminating GSEs from his constituents.  I believe his constituents have no earthly idea what critical roles the GSEs played historically in getting us out of our last great economic crisis – but also the role they’ve played since.  Most American’s have no idea what an FHA loan with a 3% down payment means.  Most have no idea the role of the secondary mortgage market or that it exists at all.  At best, they only know that Fannie and Freddie were part of the mortgage collapse and had to be ‘bailed out’ by the government.  ”Go on, get rid of them! Good riddance!”

What happens when there is no more low down payment loans?  What happens when banks, unable to compete against the major mega banks, begin to collapse leaving only a few mega banks remaining and controlling the banking system of this country?  When there is no mortgage money for the American people.  What happens when the American dream is no longer possible?  The majority of the American public sadly will blithely let their elected representatives destroy homebuying in this country without even saying ‘boo’  out of pure ignorance – and only when they are face to face with the consequences will they realize what has happened.

On top of all this, there is also talk of QRMs – Qualified Residential Mortgages - which essentially will set up one cookie cutter loan for everyone.  This loan will require a minimum of 20% down in order to get a mortgage. Sounds good you say?  Well consider this,  the National Association of REALTORS® (NAR)research shows that the average American family will take 14 years to save up enough money to purchase the average American home.  While most agree a homebuyer should put downs some sort of financial stake in their home purchase… Think about it… even a $100,000 home will require a $20,000 down payment – not to mention the other costs of closing which could add up to $6000 more on top of that.  How many families do you know who has $26,000 lying around without tapping into their 401K?

It’s a slippery slope folks… and we’re heading down with no precautions and with little resistance!

And on a final note:  It occurred to me while in DC that while labor unions lobby on behalf their particular unions and their members… and while the auto industry lobbies on behalf of the auto industry. NAR – funded by it’s REALTOR members, lobby not for the best interest of it’s 1.0 million members, but rather on behalf of homeownership and property rights for everyone. We are paying for and lobbying for the American dream!

In fact, during this real estate downturn, many members have criticized NAR for not doing enough for the struggling members of our association – which is another conversation altogether.  But keep in mind that there is no other body fighting for the rights of homeownership out there… except NAR… and I think it’s sad that we have to go this alone and all property owners and potential property owners in this country along with all the other peripheral industries who work with and rely on real estate – all benefit from the efforts of a few.

I didn’t mean this to be some sort of commercial for NAR – in fact, I’m a little ticked with them right now and it has to do with that other conversation I mentioned above… but personal grudges aside, I do firmly believe in what I do and ultimately the efforts of NAR in fighting to maintain homeownership rights in this country and protecting the public’s best interest… even if they don’t know what that is…

As with all communities, businesses here are coming and going.  Here’s some of the latest things going on around St. Simons Island and Brunswick.

First of all, anyone coming on and off the Island recently knows that the barrier construction is fully underway.  For those of you unaware, they are building a barrier along the length of the Causeway.

Here's a shot from my car...

Personally, I think if a barrier had to be built for safety purposes, why not a grassy median with some trees or something nice.  Instead, it looks like they will be simply ugly concrete barriers like the ubiquitous ‘Jersey blocks’ running down the center of the Causeway.  My main problem with this is:   Accidents on heavily trafficked roadways are bound to happen.  I can’t tell you how many times I’ve driven down the Causeway, only to have to make a u-turn because there was an accident blocking all outbound lanes.  Without the barriers, all you had to do was simply make a u-turn and go back.  Now, when there is the inevitable accident or other traffic snafu, we will be stuck.  Sure there will be a few areas open for access to either lanes, but the ease with which we could turn around and get out of the soup will be gone.

Plus, they started construction just in time for our tourist season… good timing Glynn County!

Other things going on: St Simons Island…

There is going to be a new traffic light on St. Simons Island.  For most people, that’s not such a big piece of news. Around here, it IS a big deal.  St Simons Island has only about eight or so traffic lights.  Traffic circles have been installed in an effort to keep traffic lights to a minimum on the Island… and yet…

So now, there is going to be a light at the Harris Teeter entrance to the Shops at Sea Island, just yards away from the major light at the Frederica/Sea Island Rd. intersection.  This is to accommodate the new shopping center under construction on the north side of Sea Island Rd from Harris Teeter where a new CVS is being built as we speak.

It’s official.  The mid-island’s first fast food joint is coming. Another big deal? Yes, it is.  For years, the access path to Sea Island has been all pretty and nice… and now – a fast food joint right on the path to Sea Island nirvana?  Heaven forbid!  Well, sarcasm aside, all of our fast food places have stayed on the south end in the Demere Rd. area.

It too will be across the street from Harris Teeter in the opposite lot from the new CVS.  As of this week, construction on the foundation has begun!

Back down on the south end, next to St Simons Drugs located in what had been referred to as the ‘Piggly Wiggly’ Shopping Center , the local appliance/electronics store H&H Lifestyles is apparently moving in.  They are closing down their larger store in Brunswick to relocate here to the Island.

Out on the mainland…

Rumors of a Red Lobster opening and an Olive Garden opening are finally confirmed.  Apparently, it will be a combination of the two with the restaurants sharing the same kitchen.  This concept has been tried in Flagler County, as shown in this photo below – I think.  It seems to be working – a way to cost effectively bring the chain into a smaller market like ours.

It’s supposed to be in the empty space beside Starbucks… so we shall see!  So we have a Dunkin’ Donuts/Baskin Robbins combo… and now this.  But, alas, only Taco Bell and Pizza Hut combos have a song of their very own. Curious?  Take a listen/look! - it’s kind of funny.

Thanks Hank Paulson, Jr.  St Simons Island is lucky to have friends with deep pockets…

In the disintegration of the Sea Island empire… one of the victims was an untouched, beautiful 600 acre tract of land called Cannon’s Point on the north end of St. Simons Island.   Property owners across Jones Creek from Cannon’s Point had always rested easy knowing that if and when Sea Island Co. developed Cannon’s Point, they would, in all likelihood, develop something tasteful and non-offensive.  When Wells Fargo became the owners… that likelihood was no longer guaranteed.  Things could have gone very differently.

Well, according to Bloomberg.com:

The San-Francisco-based bank and the Bobolink Foundation, whose trustees include former Treasury Secretary Henry M. Paulson Jr. and his wife Wendy, said on Monday that the land, known as Cannon’s Point peninsula, will be set aside as a public preserve. A deal for conserving the undeveloped property was reached with the foundation, A.D. (Pete) Correll, the former CEO of Georgia Pacific, and the Saint Simons Land Trust, The Nature Conservancy, other community members and agencies.

Click here for the entire article…

As a little background – this isn’t Mr. Paulson’ first foray into St. Simons Island preservation.  According to the Atlanta Journal Constitution, Paulson and his wife owns three fourths of Little St. Simons Island – a small private island east of Cannon’s point and north of Sea Island once owned by the founder of the Eagle Pencil Co. and his descendants and home of the Lodge at Little St Simons – through a holding company, Whimbrel LLC. While different owners might have viewed the small island known as one of the best birding spots on the East Coast with an eye for further development, it has been said that the current owners want to keep the quiet, low-keyed, natural feel of the island as it is.

My in-laws have a view of Cannon’s Point from across the marsh and Jones Creek.  I’m sure they’re relieved to know that view will be protected for the foreseeable future.  I know I’m glad that I’ll be able to enjoy their view as well!

I know a lot of folks in real estate are happy to see 2010 behind us… but viewing 2011 with a rather skeptical eye.  Me, I’ve been surprised to find that somewhere along the way, I’ve become an optimist.

I’m looking at 2011 with the belief that it will be a better year than 2010 was, because as tough as 2010 was for the real estate market in our local community, statistically, it was still far better than 2009 when this market seemed to hit absolute rock bottom.  So to me, from an analytical point of view,  it can only get better.

A few weeks ago, I was installed as president of the Golden Isles Association of REALTORS® for 2011, so perhaps my optimism is tainted by the position where I feel I have to put a positive face forward… perhaps I am. In all honesty,  however, I think that’s what all of us in real estate should be doing.  We need to send out the unified message to the public that we still have faith in home ownership, that we still believe in the American dream despite the beating it’s taken over the last few years, that we are in this profession because we are dedicated to helping people and improving our communities.

There is nothing worse than hearing a REALTOR® rattle off their litany of woes in public.  People hear it.  People believe it. It perpetuates the fear and doubt in the public psyche.  It does no one any good.

Just like a smile, optimism breeds optimism.  You know what I mean… you see a stranger and you smile.  99.9% of the time, that stranger will smile back.  So try it with optimism and see what happens.

Happy Optimistic 2011 Everyone!!!

That's me getting installed as 2011 President by John A. Kaufmann, a member emeritus for our Association. Special thanks to Amy Mooney for this photo!

There have been rumors but now it appears to be true.  Apparently, Publix has an eye on St Simons Island for a new location. I’m told that years ago, they passed up the opportunity to be an anchor in the Shops at Sea Island because the space wouldn’t be large enough to fit their minimal footprint. That left the position open to Harris Teeter, whom, since the demise of the Pig – otherwise known as Piggly Wiggly – has been only one of two grocery stores on the Island – the other being Winn Dixie in the Retreat Plaza across the airport.  Now with  CVS’s upcoming move to the razed land across the street (see my previous post!), Harris Teeter is planning to expand once again to take up their space once it’s vacated.

One of my neighbors just called me to say that the lady who runs the little garden center/farmer’s market next to Bennie’s Red Barn told him that they were being evicted to make way for a Publix.   Never realized there was that much room back there for a whole strip mall complete with a Publix as an anchor, but what you do know!  I’m a bit torn on this subject. On the one hand, I love Publix.  It was my preferred grocery store in Atlanta. On the other hand, this is just what the Island needs right now… more retail/commercial space. (I’m being heavily sarcastic here… considering we have commercial development all over the Island post-real-estate boom – such as the one across from the airport on Demere, the new office building sitting empty near the proposed Publix site, and of course, the giant, fancy, pretty one behind SunTrust on Sea Island Rd that no one even knows about – but trust me, it’s huge and very, very unoccupied. There are  also plenty of vacant spaces at the Proffesional Bldg on Demere next to the Shops at Demere as well as the new buildings adjacent to and next to the movie theater behind Harris Teeter… just to name a few more.)

Well, the Publix thing isn’t a done deal yet.  Apparently, they will be going up for a zoning request on the 21st.  So if anyone is interested in learning more, supporting or protesting this zoning change request – then, well… I suppose you should plan to attend.  So mark the calendar for Sept. 21 and stay tuned for more.  And all this begs the questions:  Does the Island really need another grocery store? I’m sure the folks at Harris Teeter don’t think so!

Yes, more trees have been knocked down on the Island.  Now, I’m no tree-hugger, but there’s something a bit naked now when I pull out of the Shops at Sea Island (a.k.a. the Harris Teeter parking lot) and see nothing but dirt and construction vehicles where once I saw nothing but trees.

I’m told it’s a shopping center and one of the major tenants will be CVS, who currently resides next to Harris Teeter, but needs more room to have the now ubiquitous drive-up window for their pharmacy and their current location doesn’t allow for it. The photo above was taken a few weeks ago when the construction began.  Below is a pic from a few days ago from the same vantage point, as I’m pulling out from Harris Teeter onto Sea Island Rd.

This construction runs all the way to the old stables, which is in the process of being purchased by the St Simons Land Trust and is visible from Frederica Rd.

As with any community, change is always in the air.   I’ve noticed changes occur most frequently in the restaurant business… so this post should bear no surprises when you see that it mostly has to do with places to eat…

Noticed the other day that the two empty store fronts next to Target was being combined into one space.  They had formerly been home to a mattress store and a discount shoe store.  I did a general Twitter call out to see if anyone knew what was going in and a friend said she thought it was a buffalo wing place.  Seems my friend might be right.    I just did a search of the Buffalo Wild Wings site and while Brunswick didn’t show up on their ‘Coming Soon’ section, I did find two job openings for a Buffalo Wild Wings ‘opening soon in Brunswick’ on Indeed.com, a job search site.  We’re always excited when there’s a new place to eat around here!

More on the food front, Pranzos has taken up the spot in the small retail center along Frederica by the Shops at Sea Island, behind Oglethorpe Bank at 44 Midway. It had been home to Frankie G’s, which started out with some promise for me but ended up being fairly inconsistent in their quality.  Some other restaurant went in and I can’t even recall the name – all I know is that it didn’t last very long.  So now, Pranzos has taken over that location.   I’m assuming they are expanding and haven’t closed their downtown Brunswick location which I really like.  But the one on the Island is much closer to home!

They’ve torn down the facade of the old Gisco Seafood building which was most recently the home of Southern Soul Barbecue which burned down at the end of March (See post).  Not sure what they’re doing with the place but I find it sad that the bit of character that old building brought to the ‘new’ traffic circle is gone.  I’m sure whatever the owners build on that spot will never have the campy charm that the old seafood shack turned into a bbq joint did.

Down in the Village, I’ve noticed the empty space where Subway used to be now has a sign saying that ‘John’s Pizza’ was coming.  Don’t know when… and don’t know who this John is.  Subway, by the way, moved into their new digs on Mallery sometime earlier this year or at the end of last year… under Rafter’s.  The space had been empty ever since.  I’m particularly intrigued as it’s in the building next to the one my office is in… so any decent lunch place in walking distance is always welcome!

So aside from my on-going gripes about the new entrance to the Island with the psuedo-traffic circle – which I’ve decided is more of a jug-handle turn (anyone from New Jersey out there?) than a circle… and the fact that no one seems to pay any attention to the yield sign as they merge from King’s Way… that’s all for now!

Something as simple as a dry erase board can bode things are picking up… Like many offices, we have a dry erase board in our office upon which we note pending sales. A few weeks ago, there was one pending transaction on our meager little board.  Today, there are about seven or eight possibly more – with one them, I’m happy to say, being one of mine!

While seven or eight transactions may not seem like a lot, it’s a far cry from none or one!  When times are tough, we need to see the positive in even the most trivial of things… in both our business and our lives. Personally, my family has been dealing with a medical situation involving our mother and now it’s little signs of improvement she makes each day that gives us hope.

So I will take the small but growing number of sales on our dry erase in the same spirit understanding that even the little things count!

Do people even like receiving Christmas cards? At 44 cents a pop for a stamp, are they even worth sending in this digital age when I can wish one and all a Merry Christmas or a Happy Hannukah with one status update on Facebook?

Now, for business purposes, I send out one of those magnetic calendars  to the folks in my farming area, the ones whom I regularly send real estate updates throughout the year.  I considered passing on the calendars this year but I ran into several people who specifically asked me if they were going to get my calendars this year and how much they liked them.  How could I say no?

But in regards to the standard personal Christmas cards we send to friends and family: I have to ask myself how I feel about the Christmas cards I receive.  I mean, do we even like getting them? Each year,  we dutifully line our fireplace mantle and shelves with them… and every year, we collect them all and pitch them in the garbage once the holidays have passed.

Then, we started receiving the photo cards, you know the ones… line up the kiddies in matching sweaters and take a picture and send them to everyone you know. Now, I used to like these as they were the only time in the year I would see pictures of my friends’ progeny.  Once again, social media has made that obsolete.  I now routinely see pictures of my friend’s kids in real time.  No longer the kids lined up against a phoney baloney Olin Mills backdrop with a forced smile.  These photos on Facebook are varied and ‘real’ – like Camille at an annual corn maze/fall festival,  Alex playing Xbox in the basement, Grant as a triumphant blur on a soccer field, etc.

Yet, each year, after Christmas, Hubby and I ride up to Target and pick up wrapping paper, Christmas cards and other assorted holiday junk for next year at 50% off. Well, last year, I couldn’t find the cards I’d stashed away the year before… so we didn’t send any out.  Well, this year, we found them PLUS the ones we bought last year so I’m up to my eyeballs in two season’s worth of Christmas cards. Therefore, it seems only fitting I write some greeting inside, sign them, stamp them and send them out.

But it still begs the question: why?

• Facebook,  Twitter, LinkedIn: Free.
• US Postal Service: 44 cents a pop.
• Saving money to put towards a new pair of  boots: Priceless.

Perhaps the fiscal soundness of the digital thing will make the decision for me.

p.s. Since I began this post a few days ago, I’ve noticed something.  By this point in the season, I would normally have received a lot Christmas cards by now… to date, I’ve received 2.  So perhaps I am not alone in my contemplation of withholding business from the US Postal Service… and relying solely on social media to pass on my Christmas Greetings.

Just found out that the construction going on the wedge of land between Demere and Hamilton right near the on-going construction of the new ‘traffic circle’ at the entrance to the Island is going to be a gas station.

First of all, I put ‘traffic circle’ in quotes because it is using the term loosely to call that ridiculous piece of engineering a traffic circle.  Traffic circles are about the continuous flow of traffic and the elimination of traffic signals to artificially stop and start traffic movement.  This one still has a light… and don’t get me started on the problems with the design.

But back to this gas station.  What a nice way for visitors to this Island to be greeted.  Why, everyone knows the best face a resort community can put forward is by presenting their newly arrived guests with a gas station/convenience store.   They already put one that the entrance to the Causeway years ago… on the opposite side of the street from the Welcome Center, there sits a big El Cheapo gas station. (El Cheapo is the actual name – classy eh? – and not a commentary on them, by the way.)

Years ago, the local arts association told me they owned land inside that wedge and were planning to build a new facility there.  When I saw the construction under way, I thought their plans were finally moving forward.  Perhaps it’s not their land at all that I’m seeing.  I had heard something about Sea Island Co. unloading more land they owned around the Island due to their recent financial difficulties… wouldn’t put it past them to sell this piece off too.  Whatever the case may be… it’s just seems crazy to me to put in another gas station right at this particular spot.

Maybe now the kids from the private school across the street will have someplace where they can conveniently pick up their smokes on their way to class…