·        Luxury Homes: We’re seeing an increase in buyers looking at luxury homes. There were several homes over $1 million sold this spring, and showings are on the rise.

·        Sellers Fed Up: Sellers have lowered their prices so much, they often reject the really low offers without countering. It’s still a buyer’s market, but the sellers who have survived this long are becoming less tolerant of the bargain hunters.

·        Fixer-uppers Back in the Mix: We’re getting calls for fixer-uppers, something we didn’t see much of in the past few years. They do, however, have to be priced very competitively.

·        Depth Still Matters: Buyers are still focused on the depth of the water, but several shallow-water homes sold this past quarter. It will help when Google and others update their satellite pictures. Right now, they reflect the peak of the drought which definitely scares away buyers!

·        There are ~ 60 lake houses under contract right now, so we expect the rest of the summer lake sales to be strong.

·        Still Looking for Bargains: No doubt, buyers will continue to shop for bargains through the end of this year. Houses listed at the top of their value range may continue to languish on the market. About one in ten listed lake houses will sell, so the successful ones will probably be the best value available in that price range.

For those who follow the laceType w:st="on">LakelaceType> laceName w:st="on">LanierlaceName> real estate market, it’s definitely a challenge to filter through all the mixed news on the economy and determine how it relates to us. Do the national trends apply to our area? Are we seeing the same percentage of foreclosures? Did the end of the drought help the lake market? Are the mortgage trends helping or hurting our buyers? Here are some answers to ease your mind.

 

laceName w:st="on">SecondlaceName> laceName w:st="on">QuarterlaceName> laceType w:st="on">LakelaceType> Sales:

As you can see in the following chart, most of the news is very encouraging. In the second quarter of 2010, 63 Lanier houses with docks were sold. That puts us almost to the level of the 2007 market peak which had 65 lake closings and exponentially above 2009 which saw just 27 sales in the same period. In fact, in all of 2009, only 138 lake houses with docks were sold. We could easily double or triple that number in 2010.

 

Not surprisingly, the average sales price is down to $444K, a significant decrease from the 2009 level of $506K. Many sellers responded to the difficult market by drastically lowering their prices. Most buyers are still looking for bargain-priced homes, and they are finding better houses in the lower ranges. However, we did see a substantial increase in the number of houses sold in the jumbo category this quarter. (A jumbo loan is 20% down plus a $417,000 loan which adds up to around $520,000 sales price, or anything above that.) There were 15 sales in that range, a 50% increase over last year. The average days-on-market before the sale was 121 – still high but way down from last year’s discouraging figure of 188. The percentage of list price to sales price is back up to 91% which is about average for a normal year. You can see on the chart that 2007 was extremely competitive resulting in stronger offers, and 2009 was clearly a buyers’ market producing lower sales prices. 

Second Quarter Lake Lanier Home Statistics
	2007 (peak)	2008	2009 (worst)	2010
# of lake home sales	65	39	27	63
Average sales price (in thousands)	$638	$577	$506	$444
Avg days on market	96	99	188	121
% list to sales price	95%	93%	89%	91%

* Note that these stats were derived from the FMLS in mid-July 2010. It is possible that other transactions will be added later and change these numbers slightly, but the trends should hold true.

Distressed properties (foreclosures and short sales) continue to impact our home values. Of the 63 lake homes sold in the spring, 15 were either foreclosures or short sales. Because these bargain-priced properties affect buyers’ expectations, most of the other non-distressed homes that sold were priced very aggressively to compete. Of the 500+ lake homes currently on the market, only 4% are distressed; but, you can be sure that those homes will be at the top of most buyers’ lists. Everyone is looking for a bargain right now, and buyers assume that a foreclosure or short sale will always be the best deal. That’s not necessarily true; and, as they discover the hassles of working with an institution on these transactions, that category may lose a little of its luster.

According to Lou Sarris, mortgage consultant for SunTrust, mortgage rates are at fantastic levels – at or near record lows. For lake home buyers who could not get financing in the past two years, Sarris says that jumbo loans are back, and the rates are much more affordable. Because mortgage insurance companies will no longer insure jumbo loans, buyers have to put 20% down on the house; but, the rates are closer to those for non-jumbo loans than they’ve been in years. To qualify, you should be fine if you have a 720 credit score; but buyers with money in the bank, a steady job and a score between 680 and 720 also have a good shot at getting that jumbo loan. We’re even seeing construction-to-permanent and vacation-home loans again. These are all definite improvements over the past two years.

If you would like to see what the average mortgage rate is on any given day, visit bankrate.com.

For a large percentage of lake homeowners, the drought made their coves look like a muddy mess. People whose docks have weathered all previous lake level fluctuations became high and dry for the first time during the recent 100-year drought. Now that the lake is back at full pool, everything is fine, right? NO!

For buyers looking for a lake house, the first thing they do is use the satellite view in Google to see the cove. That shot is from the peak of the drought, so most of the coves are dry and many of the docks are grounded. For the multitude of fence-sitting buyers, that's enough to discourage them from buying a Lake Lanier home altogether, or it makes them concentrate on houses that are on big, deep water only. Personally, I prefer the privacy and peace of a cove, and they might, too; but, they are limiting their choices needlessly. There's a reason they call it a 100-year drought! It's comparable to all the pictures of New Orleans depicting only the mess that Katrina left rather than the beautiful, recovering city that it is. For us, it is in our best interest to get the word out that our wonderful Lake Lanier is back! Those Google images of grounded docks and dried-up coves just lower our property values, lower the values of the non-lake homes around us, and makes all houses in this area harder to sell!

Here's what you can do:
On Google Maps (or other search engines that offer satellite shots), you can search for any property on the lake. If you can't think of any, just use Browns Bridge Road, 30504. When the map displays, there's a link at the bottom right that says "Report a Problem." Click on that link and follow the prompts to report the effect that the old shot is causing in our local economy, and ask them to update it. It's not just a housing problem. That negative image affects marinas, local restaurants, retail, and virtually every business in the counties that surround the lake. Thanks so much for pitching in!

I thought y'all might want to know that there are 52 lake houses UNDER CONTRACT right now. (not sold, not for sale, but in the period between contract acceptance and closing). I ran that report because I am ridiculously busy and I'm hearing of other agents writing contracts left and right. To put it in perspective, in all of 2009, 138 Lake Lanier homes were sold. We might beat that number in just June and July of 2010! The best part is that when people see a lot of sales going on, they jump off the fence and get in the game. I expect next month to be just as good or maybe better. It's just going to get more and more competitive; so, if you're thinking about buying, do it now before rates and prices go up. If you're thinking about listing, there are buyers!!!!! Better grab 'em while they're hot!

In the midst of difficulty lies opportunity. - Albert Einstein

I just attended the Atlanta Housing Summit, a twice-yearly event where experts share data, trends, and predictions about the metro-Atlanta market. If you read this blog often, you know that I am a big believer in the power of numbers. Whether you’re listening to a politician, a sales person, a member of the media, or a neighbor, chances are they are slanting the message in some way. With numbers (statistics, graphs, data), you can’t slant their meaning. They represent trends that have been observed in the past; therefore, they make it easier to predict the future. For that reason, I am a huge fan of this event where numbers rule.

I track statistics for Lake Lanier real estate, but this group tracks housing information for the greater metro-Atlanta area, including Hall County. For you bottom-line people, you’ll be glad to hear that just about everything related to home sales is trending in a positive direction. One of the speakers quoted a Case-Shiller statistic that said Atlanta real estate bottomed out in March of 2010. (Lake Lanier real estate hit bottom in November of 2009 and has trended up since then.) Here are some of the other interesting points from the summit:

¨      I knew that the value of lots has dropped, but I was amazed at how much. In many of the metro counties, lot price have dropped 90% or more. Yes, you are reading that right. A lot that was $100,000 at the peak of the market might sell for $10,000 right now. I don’t think they talked about why, but I can tell you. With so few builders building, there are very few buyers for lots. It’s Econ 101: when demand falls, so does price. In this case, demand plummeted and prices followed. This was too much of a fall, an overcorrection, and it is likely to be corrected upward if the economy continues to improve. For now, it’s great news for buyers but bad news for sellers. FYI, according to their stats, the lot values in Hall County dropped less, just 76.6%.

¨      The number of houses under contract has trended up for 11 months in a row. Historically, it had trended up for 40 months, then trended down for 35 months during the recession, and now has pointed upward for 11 months.

¨      The inventory of homes on the market has been reduced significantly. It is now at about the same level as it was in 2005. This means that every house put on the market will have a much, much greater chance of selling. Hopefully, this will make buyers less picky.

¨      According to Case-Shiller, the metro-Atlanta market home values dropped 24% since its peak in ’07. I think the national number is higher than that, though that wasn’t discussed in the summit.

¨      Resales are up for the third quarter in a row. Steve Palm, owner of Smart Numbers who gathers these statistics, was very optimistic about the 2^nd quarter numbers. I think I heard him say it might be as high as 20%.

¨      Building permits are also on the rise. Builders have to be careful that they have the right combination of location, price, and product; but, it looks like the building industry might be starting its comeback – thank goodness!

¨      Another interesting number they shared involves resales versus new construction. Obviously, there hasn’t been much new construction lately which explains this stat. In 2003, the ratio of resales to new home sales was 5/4. Today, it’s 6/1. To be honest, I’m surprised the gap is not larger than that.

¨      Other interesting facts about new homes being built today: The most-often-chosen cabinet color is dark stain. Most kitchen floors in new homes are hardwood. The most common # of bedrooms is four, and three is a close second.

The other topics they discussed were somewhat political. Since I agree with them, I’ll share a few points and my thoughts. They showed a chart of what happens to the GDP when taxes go up.  That has a profoundly negative effect on the housing industry. Conversely, when taxes are lowered (as in the Reagan cuts), GDP goes up. I wish I could show you the chart which illustrates that relationship in an effective, almost scary way. Bottom line: we need to vote for folks who will not raise taxes on anyone. A double-dip recession will not help the rich or the poor.

Finally, I just wanted to put in a plug for Steve Palm of Smart Numbers who is one of the speakers at the summit. He is a rock star in his world, and I love listening to him. My clients send me doom-and-gloom articles every week; but, the only numbers I believe are the ones from Smart Numbers. He tracks EVERY metro-Atlanta sale and has for several decades. Since I’ve been listening to him, he has successfully predicted many, many market turns that other “experts” missed. Any investor looking at a big project in metro Atlanta would be well-served to contact Steve at Smart Numbers first to see if the investment makes sense. He can save you millions (or make you millions if it’s a good deal). He doesn’t make a decision then look for the numbers to justify it. He looks at the numbers first, then evaluates the deal. I have a lot of respect for him. His web site is www.smartnumbers.com.

I’ll be posting 2^nd quarter stats in July. Meanwhile, see ya on the lake! ~ Bev

 

Lanier is up and so are lake home sales

 

The statistics for first quarter Lake Lanier home sales are in, and there are many encouraging signs. Even though it was a cold, dreary season, lake home sales are up 30% over the same period in 2009. As always, Gainesville and Cumming are the most popular cities for buyers, but we saw a resurgence in sales for Dawsonville this quarter – from only one in 2009 to six in 2010.

 

From January through March of this year, there was very little activity in luxury home sales. The highest price home sold for $650K. The average sales price also dropped from $424K in 2009 to $364K in 2010. That is not a surprise since there were no higher-priced homes sold.

One of the most encouraging statistics was the number of days on market for homes that sold in the first quarter. Last year, it was 123; but in Q1 of 2010, that number dropped to 108. Not only does this reflect an improvement in the market, but it also shows that sellers are pricing their homes more competitively to start.

 

Subjectively, we are seeing a lot more competition on the most aggressively-priced lake homes. Homes that have been on the market for over a year are starting to move. As spring gets into full bloom, there is likely to be an increase in higher-priced home sales. We are already getting those calls. As the interest rates rise, buyers seem to be a little more action-oriented and reasonable with their expectations. Buyers who have been unable to “pull the trigger” have missed out on some of the best deals in years. They are learning those lessons and acting more decisively.

 

The top of the lake market was September of 2007. Most lake agents agree that the bottom was October of 2009. The following table shows some of the important first quarter trends during that period:

 

Year (Q1)	Total lake homes w/ docks sold	Average sales price	Highest price home sold	% of sales price to list	Days on market
2007 (peak)	50	$614,521	$1,550,000	96%	85
2008	28	$622,035	$1,650,000	92%	110
2009 (worst)	23	$424,047	$973,000	82%	123
2010	30	$363,840	$650,000	90%	108

 

Looking forward, the Lake Lanier real estate market is likely to continue its recovery. Spring and summer are always the selling season for lake homes, and early signs indicate that this will be one of the best seasons in several years. The lake is up, the rates are still low (at least for the time being), prices are very competitive, and there is plenty of inventory to choose from. If you’ve been waiting to buy a lake home, now is the time. 

Even though it was a rainy, cold, dreary February, we managed to close 9 houses on the lake (with docks). February is usually the slowest month for lake sales. Given the horrible weather, it was a pretty good month. I'm seeing houses that have been on the market for years finally being sold! It is really, really encouraging. Here are the FMLS stats for February:
 
Total lake houses with docks sold: 9
 
Broken down into sales by city:
- Gainesville: 5
- Cumming: 2 (although most of my inquiry calls are for Cumming)
- Buford: 1
- Murrayville: 1 (not much has sold in Murrayville during the recession, so this is exciting)
- Dawsonville: 0
- Oakwood: 0
- Flowery Branch: 0

Average days on market for lake houses sold: 109

Average sales price: $352,444.

If it turns warm, I expect March to be a good month for lake sales; but, I think April will be the start of the hottest market in almost three years. The lake is up, the rates are still low (at least for the short term), and sellers have lowered their prices to compete with the foreclosures / short sales. I think there will be a three or four-month window when all the pent up demand is going to explode. Buyers better get to it or the great deals will be gone. I have a house under contract right now that is a great example. It's been on the market for a long time; but, with our latest price drop, we quickly had a great offer and as many as three backup offers (verbal). I haven't seen that level of competition in years! I closed a house in February that sold for 96% of its list price. During the recession, the average ratio for sales price to list price got as low as 85%. These are all signs that positive changes are coming.

So, my advice to buyers is to start your search right away before the best deals are gone. Stop waiting for the market to hit bottom. It did that four months ago and is now on the rise. For sellers who have held off because of the economy, we're about to have a window of demand that will only last until the rates go up. That's predicted to happen by the 3rd quarter of this year; so, go ahead and list your house. It doesn't cost you anything! You need to be realistic about the price, but keep in mind that even though your house isn't worth what it was three years ago, all the other assets you might invest that money in have also fallen in price. Though you may not make as much money, your buying power is the same! Do it now!

If you need advice on Lake Lanier real estate, feel free to call me at 770 536-4416.

January is rarely a big month for lake sales, and this one was no exception. Seven Lake Lanier homes with docks were sold. Of those, five were in Gainesville, one was in Cumming, and one was in Dawsonville. The prices ranged from $195K (tiny house that has been on the market for a long time) to $659K. The average number of days on the market was 158 but the lowest price home had been for sale for over a year. The average sales price was around $329K. Of the seven houses sold, FIVE had special circumstances (foreclosures, estate owned, corporate owned). This is consistent with the number of calls we're getting from buyers who want to look at foreclosures and short sales only. Everybody's looking for a bargain, and they're finding them!

I can tell you that I have seen activity pick up considerably in February, and I think it will be a much better month. There are at least a dozen families looking for lake homes in the $300s, and I'm seeing activity in the higher priced homes as well. We are actually seeing bidding wars on the most aggressively priced homes, something that kind of disappeared as the buyer's market swelled. People are actually considering fixer-uppers again. Hallelujah!

There are some federal financial programs that end in March, so interest rates are sure to go up by at least 1/2 to 1 point. For every point the rate goes up, buying power decreases by around $50K. If you're thinking about buying a lake house, DO IT NOW. You'll get more bang for your buck if you do it right away. Nationally, home prices are on the rise, and that's true of Lake Lanier houses, too. I believe we hit bottom in the 4th quarter of '09 (around October), and the market his turned up since then. Get off the fence. It's time to buy.