A year ago,  if a buyer asked me about five listings that had fallen out of the MLS, upon closer inspection, I would have found that those five listings had all expired or had been withdrawn by the owner.  The other day, however, I looked into five listings for one of my buyers and discovered that two had recently sold, two were under contract and only one had been withdrawn by the seller.

To top things off… of the other five properties I tried to show the same buyer, two of them were actually under contract when I called to set up appointments.  That hasn’t happened in a long while.

There had been a time during the ‘boom’ when every other property I called on to show would be under contract – many agents don’t bother to change the status of the listing and let them appear ‘active’ when in fact they are pending sales but that’s another story.  More recently, any active listings I’d call to show were pretty much all available and the agents sounded relieved someone wanted to show it at all.

I firmly believe it is an indication that the market is changing and activity is on the rise.  Just last week while sitting on the panel of the Glynn County Board of Equalization, one of the county appraisers, in defending the value of a property under appeal, cited several noteable land sales in the West Glynn area of the county where during the ‘boom’ growth had been rampant, but since the collapse, things had come to a halt.  Hearing about all the land sales out there and then encountering the increased activity here on the Island makes me feel that things are definitely shifting.

I’ll pull some numbers and perhaps make some sort of graph for a future post soon… stay tuned!

Spoke at the Kiwanis Club of Brunswick’s luncheon yesterday on behalf of the Golden Isles Association of REALTORS® and of course, the topic was real estate and what’s going on.  Thought I’d share the numbers here.

Essentially, I was looking more at activity versus prices – which I’ll get to later.  Here is a ten year activity trend and you can see for the Mainland where activity peaked and where we stand now.  It’s a bit tight but the main green line below tells the tale…

As you can see, activity peaked in 2006 then dropped drastically in 2008 / 2009 with the market’s near total collapse at the end of 2008 – can anyone say TARP?  Then, you can see the ups and downs more  normal for real estate though I bet you those ups and downs can be correlated with major economic news at the time.

Taking a look at St. Simons Island -

The constant ups and downs are common on the Island where sales trends follow a seasonal path.  1st and 4th Quarter then to be quiet while the heavier tourist months tend to show picked up activity.  This is common of the second home/resort market.  But notice when the low hit… the low REALLY hit.

But if this tells you anything – it’s that both paint a clear picture that the bottom was hit at the end of 2008 and beginning of 2009 and things, despite the ups and downs, are going back up.

So far in 2011:

• Single Family Sales  in Mainland Glynn is up 23.2%  with the average sale price down 16.8% to last year.
• Single Family Sales  on St. Simons Island is up 14.2% with the average sale price down 3.1% to last year.
• Condo sales on St. Simons Island is down 2.0% with the avergae sale price down 18.5% to last year.

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.

Looking back at the what’s sold in our market for the year so far and decided to investigate just what percentage of the properties being sold are bank-owned/foreclosures.  According to the Golden Isles Multiple Listing Service, 192 properties were sold in our market.  Of those 192, approximately 54% of them were bank owned properties.  37% were sold through ‘normal’ sellers and 9% were offered as a potential short sale (whether or not the short sale actually happened is not known).

Of the bank-owned properties, the average list price was about $220,526 and the average sale price was about $194,310 which is about 88.1% of asking price.  Regular sales ran about 90.4% of asking price while potential Short Sale properties ran closest to asking at 94.9% of list price. (See below)

Keep in mind that the average price of the bank owned properties is due to the fact that 40% of the bank owned properties were those  listed at or below $100,000 while only 18% of the regular transactions were on properties under $100,000.

Of the 192 transactions that closed since the new year, 130 of them were for properties on the mainland areas of Brunswick,Glynn,McIntosh,Camden and Brantley counties while St. Simons Island, Sea Island and Jekyll Island transactions represented only 32% of the real estate sold.

Stay tuned for more analysis as we near the end of the first quarter!

After last fall, I really told myself I would not hold another real estate prelicense course for a while.  I thought I’d take a break in 2011 to focus on other things.  But, when people start asking me when my next class is going to be… and folks are kind enough to let me use their conference room for free, thus eliminating the need to drive all the way out the Toyota dealership by I-95… it’s hard to say no.

So we’re about to start another class.  Still not the sixty plus people who would sign up for the class back during the real estate boom, but it’s a handful of what appears to be very professional and eager individuals.

Trying something new this term as well.  I created a website for my students where they can see the schedule, review the school policy, start a discussion, view their progress and most importantly, download and print all the supplemental material for the class.   I can’t tell you how many hours I would spend printing material for the class… and how expensive it got.  With student numbers down, there’s little money to be made in teaching this course so we have to get creative with ways to delivering the course material effectively.  I even found a cool ‘school’ theme template with WordPress!

So, class starts officially March 21 at 6pm.  Still not too late to get in on this class and start the process of getting into real estate.  I’ve said it before and I’ll say it again.  Real estate is not a get rich quick scheme.  It is a business – you’re own small business.  Starting while the market is down gives you time to get licensed and start your business off on the right foot, laying down the foundations for future success.

Usually by this time of the year,  our Prelicense course is about to begin.  This year, I had to delay things a bit, knowing the beginning of the year would be a bit busier than normal.  I was also waiting to find a new location to hold the prelicense course.  Given the smaller size of our classes, I have been forced to find ways to make this class profitable.  The costs and time involved in preparing for the class had to be re-considered.

Well, last week, I happened to mention my location issue to one of our local brokers and they kindly offered us use of their conference room on St. Simons Island.  I’ve checked it out and I think it will suit us perfectly!  So we are in the process of working out the kinks in our schedule, get some marketing in place and hopefully, I will have another prelicense class going beginning in Mid-March.

So if you know someone who needs or wants to take the real estate prelicense course, let me know!  Remember, this is the course required by the Georgia Real Estate Commission in order to sit for the state real estate exam.  It is a 75 hour course, meets two nights a week plus two full Saturdays and as of right now, looks like it will begin mid-March – and end in Mid-June.

Will post more when everything gets finalized!

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!

2010 is over and here are some market statistics to carry you into the new year!  As you can see below, the number of transactions for the most part are up but prices have dropped slightly.  I believe  much of this is due to the fact that many buyers are in a foreclosure frenzy – taking advantage of banks eager to let loose their inventory of foreclosed properties.

If you’re in the market to buy during this time, please do not forget that many properties for sale that are not offered by banks are very well priced and are worth consideration.  I say this because I have a listing where the seller is very attuned to the current market conditions and have priced their home very competitively.  Yet, I can’t tell you how many times someone has called and simply asked if this was a bank-owned property.  As soon as I answer no, they hang up.  They are under the misconception that the only bargains out there are foreclosures.  Not so!  And consider that when you buy a bank owned property, you are dealing with the bank as the seller.  This means they work on their own time tables and make you jump through lots of hoops.  You need a lot of patience and endurance to see these transactions to the end.

Now is a great time to buy if you are in the market for a great deal.  Just remember to work with a solid reputable mortgage lender – be aware of the time constraints involved in finalizing a loan.  Lenders are much more cautious these days and are requiring far more documentation and verifications!  I always recommend you work with a local lender who is involved in the real estate community in the area you are looking to buy.  They have more accountability to the community and can’t afford bad word of mouth if things go bad!  Far better than some faceless voice off an 800 number lender.

Talk to a REALTOR® who can give you the best advice on how to prepare for the buying process so you don’t waste any time!

As for 2011, we are all cautiously optimistic as we enter the new year.  The number of transactions prove that buyers are coming back into the market.  Don’t miss out!  Happy New Year everyone!