Check out this article in Business Week on Sea Island and how it’s drowning in debt…

http://www.businessweek.com/magazine/content/10_02/b4162044100276.htm

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.

Looking back over 2009 so far, you can see some interesting trends in what is selling in the Golden Isles. I took a peek at mainland Brunswick and broke the sales figures down to seller controlled sales and other entity controlled sale (such as banks, asset management co, relocation) and the trend sort of tells a story…

Take a look at this graph:

Over this past year, the mainland areas of Glynn County has closed anywhere from 21 to 52 homes.  Yes, that’s way down from 2008, but such is the market.  Of those sales, as you can see, the year started almost neck in neck with regular (that is to say, Seller controlled) to Corporate controlled sales (meaning banks, relocation companies etc.).

You might notice, however, that as the year wore on, the number of corporate controlled sales dropped from running about 48% to levels more in the 30% range of overall sales.  What does this mean?  It probably means that the Federal First Time Homebuyer Tax Credit impacted general sales, improving regular seller controlled sales.   I also think that the drop in seller controlled sales in November so far may be indicative of the holiday season’s approach and the extension of the Tax Credit into next year. The pressure is off for now, leaving the bargain hunting investors to pick up the foreclosure deals where they can find them.

The other thing to note here is that there is a directly proportional relationship to price points.  All the national statistics have reported that re-sale home prices have gone up steadily over the last three quarters.  Well, this sort of goes hand in hand with my graph.  I noticed in my analysis of the Brunswick market that the lower the home price range I was looking in, the better the odds that they would be mostly foreclosures.  As I moved into homes in the $200+ range, foreclosure rates dropped and then $400+ were very rare (although there were some out there!).  So as first timers bought regular homes, they stayed in the higher ranges of home prices… if this is the case, this might explain increases elsewhere.

Based on that, I can see how the foreclosure sale dominated market would make it seem as if home prices in general are down – but what I noticed around here in the Golden Isles is that a good chunk of the homes under foreclosure and owned by the banks are already in a lower price range to begin with.  It’s not as if $250K homes are selling for $70K… it’s more like a proliferation of $90K homes selling for $70K bringing overall housing sales figures down.  There are just more of those foreclosures than there are of the $400K foreclosures, so the numbers will be skewed that way.  Get it?

It’s amazing what the numbers can tell you…  Stay tuned for more as I delve into the Island side of things!

]]> http://midishaw.com/sign-of-the-times/feed/ 0 http://midishaw.com/so-thats-how-it-works/ http://midishaw.com/so-thats-how-it-works/#comments Fri, 30 Oct 2009 13:37:15 +0000 Midi http://midishaw.com/?p=1133

Watching the Atlanta local news and there was a story that caught my attention. But before I get to that… a little background: Recently, an agent told me that a home her company manages for rental showed up on Craigslist for rent at a really low price.  Their own contract with the owner required them to ask  much higher.  She asked me if this could possibly be a scam.

This is a common scam on Craiglist and it is wide spread.  We assumed that it had to do with luring unsuspecting tenants into wanting to rent this home but in my mind, which works off the premise that things work on the whole in rational ways, the ideal of this scam working was just really bizarre.  I mean, who would hand over money for a rental home without seeing it? Apparently people do, otherwise this scam wouldn’t be out there…

Well, in Atlanta, they’ve just arrested a woman who had posted a home on Craigslist she didn’t own for rent and took deposits for this home from all the callers who were interested.  The tenants showed up at the house thinking they were going to move in and found instead a bunch of other ’suckers’ (for lack of a better word) standing around thinking they were moving in as well.  As you can imagine, mayhem ensued.

So this scam works on the gullibility of people, their willingness to rent a home they have not even seen, and equally, their willingness to hand over money for such a property to complete strangers.  I suppose it’s the ’steal of a deal’ concept the scammers rely on.  People respond to perceived ‘bargains’ in different ways.  Old adages and clichés exist for a reason…

1) Trust but verify
2) Caveat Emptor
3) If it sounds too good to be true, it probably is!

And of course, #4:  A fool and his money are soon parted

Craigslist has been under a lot of scrutiny lately regarding ‘other’ types of listings, but in their defense here for real estate, they actually do have a large link at the top of their Rental Page on ‘Avoiding Scams’ and it clearly tells you never to hand money over to someone you have not met, among other common sense things.

So my shameless plug for the real estate industry is this:  Working through a real estate company gives you some protection.  A licensed real estate broker working as a property manager has a slew of laws and guidelines under which he must operate, the least being honesty, fairness and the above board handling of money.  They are also held to strict advertising guidelines.  Working with a property manager, there is a better sense that you are not just handing over money to some random stranger who happens to have a key to the house.  You know you are dealing with an agent of the owner and everything is on the ‘up and up.’

Of course, check out the Broker first and make sure he’s legit.  How?  Ask for his Brokerage ID and check it out at the Georgia Real Estate Commission’s site! Remember adage #1: Trust but Verify!

Just got an interesting email from Steve Nimmer, our local Coldwell Banker Mortgage Rep and in reviewing it, I really appreciated the breakdown and explanation of when these various reports came out and what they meant.  So, since Steve sent this to us to share with our clients – I thought share them with anyone who might find them interesting to help understand all the elements that go into helping us prognosticate on the economy and translate things back into how we think the real estate market might be afftected, afterall, it’s all inter-related….

According to Steve:

Tuesday

• The first report of the week is one of the more important ones. October’s Consumer Confidence Index (CCI) will be posted late Tuesday morning. This Conference Board index gives us a measurement of consumer willingness to spend. It is expected to show a small increase in confidence from last month’s 53.1 reading, indicating that consumers are a little more likely to make large purchases in the near future than last month

Wednesday

• Wednesday morning the Commerce Department will post Durable Goods Orders for September. This report gives us a measurement of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items
• Also Wednesday is the release of September’s New Home Sales. This data covers the remaining 15% of home sales that last week’s Existing Home Sales report tracked and is this week’s least important data

Thursday

• Reading of the 3rd Quarter Gross Domestic Product (GDP) early Thursday morning. The GDP is considered to be the benchmark measurement of economic growth because it is the sum of all goods and services produced in the U.S. and therefore is likely to have a major impact on the financial markets and mortgage pricing. There are three versions of this report, each a month apart. Thursday’s release is the first and usually has the biggest impact on the markets

Friday (3 reports)

• The first is the 3rd Quarter Employment Cost Index (ECI), which tracks employer costs for salaries and benefits
• September’s Personal Income and Outlays report will also be posted early Friday. This data gives us an indication of consumer ability to spend and current spending habits. It is important to the markets because consumer spending makes up two-thirds of the U.S. economy
• 10:00 AM ET, the University of Michigan updates their Index of Consumer Sentiment for this month. This index is moderately important because it helps us measure consumer confidence, which is believed to indicate consumers’ willingness to spend

Thanks to Steve Nimmer for this great breakdown of our economic indicators and what they all mean! Now we know!

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Short Sales. I think the name is what fascinates people. In a society based more and more on immediate gratification, the term ’short sale’ is completely deceiving.    I continually get folks asking about short sales as an option for them, people whose homes are not even on the market or in distress! So here are the very basics of Short Sales:

The term ’short’ replies to… well, look at it like this:   You and your buddy go out for a few drinks. The check arrives and you open your wallet.  Inside, what you thought was a $20 bill has somehow morphed into $12 and a few odd bits of change… and you suddenly remember that you had stopped by the Quikie Mart on the way to meet your friend and bought a couple of candy bars and some lottery tickets.  You say to your friend, “Dude, I’m a little short. Can you spot me a five?” Of course, the Code of the Drinking Buddy would prevail and he would spot you the cash.

Now…in a Short Sale, that’s what the ’short’ means. You’re ’short’ on what you owe. And this time, there is no buddy with you who will spot you the difference.  It has nothing to do with the length of the transaction and everything to do with offering to short the bank what you actually owe them.

So now, if you would like to do a short sale, you must talk to your lender.  But be warned… most lenders will not even talk to you about a short sale unless your account is in default.  This means that unless you have missed a payment or two and possibly a notice of foreclosure has been sent to you, no dice.  So if you are making your payments but needing to sell your home and know that the values have dropped… this is really not the answer for you.

Let’s say you are in default.  You contact your lender and they agree to consider a short sale. This does not mean they are not going to proceed with the foreclosure. A short sale stops nothing.  It simply means that they will be hedging their bets.  You see, at this point, it sort of comes down to this:  If you owe $200K and all the homes in your area have been selling for $150… then the odds are, when the bank gets it from you in foreclosure and turns around to sell it themselves, they are looking at $150k as the potential re-coup on their loan to you.   If you can sell it ahead of the foreclosure, then it saves them the effort and expense of the foreclosure and taking possession and passing it onto their already overworked asset manager.

Keep in mind, however, if they say they will consider a short sale, it doesn’t mean they will do it. You don’t know until you get an offer… which means you have to market it like normal and hope you get an offer.  If you do get an offer, you must agree to the terms of that offer as usual and get it binding… and submit that contract to the bank for approval of the short sale.  They may or may not accept it.  It’s all up to them.  And remember, you are dealing with a bank, a bureaucratic entity with their own policies and procedures set up to benefit only the bank and their shareholders, if any.  You, as the defaulting borrower along with any time frames or obligations noted in any contract have very little, if any, power here.

They may receive your contract and review it and decide to accept it or reject it for any reason.  For them, it can be construed that it makes no difference whether they accept less now… or later after foreclosure. It probably depends on how much less they are to accept. If they feel this offer is good and probably more than what they could get if they tried to sell it on their own, they may accept. I should note here that the process involved here is where the term ’short’ sale becomes an absolute contradiction…  this process can take days… I’ve even heard weeks. They care nothing about the ‘time is of the essence’ clause in the contract.  Everything and everyone must abide by the bank’s time frames.

If they accept, you need to find out if they will forgive the balance of the loan. Some banks will, which will create a tax issue for you… if the bank forgives your debt of $25,000… the IRS may see that as earned income!  Some banks will not forgive the balance and will file a judgment against you.

So there’s a lot to consider. On the one hand, if you successfully short sale a property, it will impact your credit less and for a shorter length of time than in a traditional foreclosure. On the other hand, it forces you to jump through a lot of hoops to potentially get nothing.

If a short sale is something you are interested in, get sound advice. Talk to someone who is experienced, trained and able to work with you.  Speak with your accountant and perhaps consult an attorney familiar with short sales and real estate law.

Looking at some stats since we’re now officially into 4th Quarter of 2009.  Here’s a quick glance at the list price/actual sold trend for St Simons Island going back to the beginning of 2008.

Obviously, home prices are dropping but they seem to have leveled off to a certain extent, the largest drop being experienced between 2nd and 3rd quarter of 2008.  Keep in mind these are average figures combining both Single Family homes and Condominiums.

Some other stats include actual unit sales trends… which shows that 1stQ 2009 was our worst  performing period since 2008 and that activity has been picking up since then.

It will be interesting to see how 4th quarter wraps up this year. We have a  couple of things going on during 4th quarter, one being that 4th quarter tends to be slow due to the holidays.  This year, however, we have the Federal Tax Credit which currently applies to homes purchased before Dec. 1… statistics show that the tax credit is a factor in getting people off the fence. The National Association of REALTORS® has been lobbying for the extension of this tax credit into next year.  Not sure how many first-time homebuyers are actually buying on the Island… but there is increased activity with the growing number of foreclosures around the community.  Foreclosures… that’s a topic for another post altogether!

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…

Sounds odd, right? The Big TurnOff Event…  Well, the St. Simons Island Lighthouse is going to be turned-off (hence the name) on Sunday, Sept. 27th and apparently, it’s going to get a big send-off!

Why? Because our 150 year old lighthouse is undergoing renovations and this will be the first time since World War II that the light has been turned off!

The current lighthouse, built in 1872,  replaced an earlier one built at the beginning o f the 1800’s that was destroyed during the Civil War during an invasion of Federal Troops onto St. Simons Island.  Today, it is still a functioning lighthouse… but I suppose as of tomorrow, those big container ships full of cars coming into Colonel’s Island better be extra diligent coming into the Sound!

Hosted by the Coastal Georgia Historical Society, Sunday night’s event will be complete with entertainment and refreshments at the new Casino pool.  Should be fun.  I’m planning to be there!

Welcome to my latest version of MidiShaw.com.  I took my old FrontPage designed site down at the beginning of summer thinking I’d have it redesigned and up again in no time.  Well, after months of monkeying around with Joomla and finding myself drawn more to the functionality of the Wordpress blog I had been toying with, I have officially combined my blog with my real estate website.

Basically, it’s all the same thing so why have two different sites?  So as of this past week, I pulled the plug on Joomla and began re-working everything here.  I am still working on the content and structure of the site… the blog part is easy.  It’s the more static information that I provide under ‘real estate,’ local area’ and ‘local directory’ that are really time consuming.

Hopefully, it will result in something I can be proud of and that visitors to my site will enjoy!