Entries Tagged 'Southeast' ↓

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While housing sales overall were down 20 percent in June for Metro Atlanta, the luxury housing market is still going strong. Sales of million dollar homes are double what they were just two years ago. While the lower and middle segments of the Atlanta real estate market struggle with tighter credit, lower demand, and excess inventory, the high end is doing very well.

And if you think about it, it makes perfect sense. The economy is doing well and in cities like Atlanta that have not experienced soaring real estate valuations their is not much pressure for pricing retractions. While San Diego and northeastern cities experienced tremendous appreciation in their property values, Atlanta just increased its 5–7 percent. So now that other parts of the country are retracting, Atlanta real estate still has value in it. 

So the luxury market is still going strong for Atlanta and it is no surprise. Finding the loan is harder than qualifying for the loan in this segment is still the biggest challenge for most buyers. And writing a jumbo loan in Atlanta with it’s lower appreciation will still be easy as valuations have been moderate so the risk for the lender is less. 

The well-to-do remain largely immune from the mortgage and credit crunch. They have the financial wherewithal to avoid risky loans, like the subprime ones where homeowners pay above-average interest rates. They have liquid assets. And a buyer’s market means they can afford more house.
The typical luxury home buyer covers one-third of the sale price with cash, according to the Luxury Home Council, a Realtors’ trade group. The median down payment for everybody else: about 9 percent…
“The higher you go, more often than not, buyers pay cash and less of the closings are contingent on financing,” says Dac Carver, managing broker with Beacham & Company, Realtors.
Unlike California or Florida, Atlanta home prices haven’t raced out of control, so buyers aren’t necessarily stretching their finances to get into pricey houses. Lenders this year have initiated only 60 foreclosure proceedings against Atlanta-area residential property owners with mortgages of $1 million or more, according to EquityDepot.net. Overall, lenders initiated 36,380 foreclosures in 12 metro counties.
“The upper end is probably insulated from [the downturn],” Reed says. “An interest point here or there doesn’t make much of a difference to them. And most of them can afford to buy more house than they’re buying anyway.” via the ajc.com

The recovery efforts for the gulf coast region after the devestation by Hurricane Katrina are being hampered by the lack of low cost housing units available. Most of those who lived in lower end housing in the gulf region have found it hard to rebuild and easier to relocate to another part of the country.

The House of Representatives are looking to extend housing subsidies to encourage the development of low cost housing in the gulf region to entice builders to rebuild low end housing. Now the trick will be to see if those people will move back.

I know that in Atlanta, we absorbed many families displaced by the hurricanes and most of them have now integrated into the community and have no plans to move back anytime soon. The lack of economic opportunities compared to a vibrant city like Atlanta make the return much harder to do.

The tax provisions are scheduled to expire at the end of 2008, a date that Reps. John Lewis, D-Ga., and Jim Ramstad, R-Minn., said won’t provide enough time to develop the housing needed to replace the tens of thousands of units destroyed or severely damaged by Hurricanes Katrina and Rita in 2005.

“We need to make some tax-law adjustments in order to start the hammers pounding and get the bricks and mortar laid,” said Lewis, chairman of the Subcommittee on Oversight for the Ways and Means Committee.

The shortage of low- and moderate-income housing threatens the recovery of New Orleans and other Gulf Coast communities, said Ramstad, the panel’s ranking Republican. “This is simply unacceptable. This is wrong and must be corrected as soon as possible,” he said. via the Times Picayune.

Who can blame them.

The aftermath of Katrina on the Lousiana coast is still being felt with thousands of homeowners deciding not to rebuild in the towns and parishes along the coast. The devestation has been so great that whole towns are just not even coming back. The federal government has offered extensive funding to get residents to rebuild, but many are deciding to take the insurance money and sell the land back to the state instead of rebuilding and restarting their lives in towns that may be gone for good.

The AP looked at applications to the federally funded Louisiana Road Home program, which dispenses up to $150,000 per homeowner to rebuild or sell out to the state. Nearly 98,000 people have applied so far. Two-thirds of all applicants said they want to rebuild their damaged properties, while more than a quarter have indicated they want out or can’t decide what to do.

But in dozens of towns and neighborhoods, particularly those closest to the coast, the percentages of homeowners on the fence or on the way out are higher than average, with as many as two out of three homeowners not committed to rebuilding. The areas, 31 ZIP codes in all, include several heavily damaged New Orleans neighborhoods such as Lakeview and the Ninth Ward.

Michael Kurth, a McNeese State University economics professor who has done research for the Louisiana Recovery Authority, said he is not surprised. “With the scale of destruction that occurred in those coastal areas, it wasn’t a matter of `Let’s return in a month or in two months,’” Kurth said. “In a lot of cases, you couldn’t go back to what was there before. It’s just not there.” via FOXNews.com

A study out of the University of Florida paints a picture that concurs with what we have been saying about the states real estate economy. Essentially the report indicates that the condo market is very overbuilt, the single family housing units have slowed but prices have remained fairly stable, and multifamily and commercial real estate are either holding their own or trending positively.

This is no surprise as Florida spent 2003–2005 feeding the speculators who were flipping condos primarily and single family home otherwise. Apartments and new construction were all converted to condo’s to feed this demand, with the resultant oversupply when the market turned. Now that the speculators have left there is a surplus inventory that will have to be absorbed, while there is a shortage of rental apartments and commercial properties as all of the construction was in condo’s.

“Condominium markets are clearly struggling and single-family markets are softening, although, contrary to some news reports, we don’t see evidence of prices tumbling,” Archer said. “But the picture is pretty healthy when you look at everything else. One important indicator of the real estate market is occupancy rates, and these appear to be stable or increasing in most markets, including apartments, office buildings, retail space, and industrial warehouse and distribution space.”
More than 70 percent of those surveyed said now is a bad time to build condos, and 46 percent said the same thing about single-family housing, but for 10 other property types the respondents were predominantly neutral or even positive, he said.
The foundation for the upbeat view about business property is the relative health and growth of Florida’s economy, Archer said.
“Employment is very good and the fundamentals that drive rental income and occupancy are still very strong,” he said. “In addition, interest rates have remained perhaps a little more stable than some people expected via the University of Florida News

One of the hardest hits areas in the real estate downturn is South  Florida, and the outlook does not look good for 2006 and the first half of 2007. David Lereah, chief economist for the National Association of Realtors was in Florida presenting to a real estate meeting.

“Is this a bad year? Yes,” David Lereah told more than 400 people at the Hilton-Palm Beach Airport in West Palm Beach. “Are you going to bust? No.” Lereah predicted that price increases for existing homes in South Florida, once at 25 percent and 30 percent, will fall to about 5 percent and that sales declines in many markets will continue at double-digit clips.

But with the regional economy staying strong and interest rates still affordable, the state’s housing industry should pick up in the middle of 2007, Lereah said. Particular markets may not, depending on inventory levels,” he said.

South Florida is one region where the number of homes for sale has increased substantially since last year. Listings have more than doubled in Palm Beach County, according to the Regional Multiple Listing Service. The MLS figures don’t don’t include the town of Palm Beach. via the South Florida Sun-Sentinel.

As with anything in this world, the new KIA Plant in West Point, Georgia that we have followed so closely has been approved by the state, but some local residents are unhappy with the new plant being placed in their neighborhood. I can understand as living in a rural area is important to folks, and their quiet location will be disturbed.

However, this is not going to change the outcome, and the folks there will most likely get fair market or higher for their homes as other homeowners or developers will want to purchase the property to provide housing and commercial opportunities to the community as it grows.

A standing-room-only crowd packed the Gray Hill Community Center Friday evening seeking answers to questions that have arisen since Kia’s March 13 announcement to build a $1.2 billion automobile manufacturing and assembly center on Webb Road near I-85.

Commission Chairman Tim Duffey and Commissioner Ken Smith fielded questions ranging from whether property taxes would be going up for Gray Hill residents, to where the new interchange would be built on the Interstate, whether they could be annexed by the city of West Point and even if new development could cause their wells to run dry.
Almost everyone there shared a common concern that the way of life they’d known for a long time was about to change and to change in a big way.
Gabbettville Road resident Jim Gilmore said that the Kia announcement had been widely treated as good news but that there was another side to that story and “We haven’t been heard from yet.”
Gilmore said he’d left such crowded places as Houston and Atlanta in search of a place that offered the nice, quiet way of life that can be found in the Gabbettville community today. With the Kia plant coming that way of living is going to change. In search of what those changes could be, Gilmore said he’d gotten on the phone and called the Georgia Department of Transportation in Atlanta. He said that the people he talked to had been very nice and did their best to answer the questions he asked. via the Valley Times.

The selling of a small business can be difficult and heartbreaking. Trying someone to find to buy your business at a price that you see as fair is a difficult and frustrating affair. A Flower Shop in Palm Beach Gardens, Florida is looking for the right person to buy their business, and are hoping 100 dollars and the correct and most heartfelt essay can provide the winner with a low cost way to get their dream business.

“We thought that having a real estate agent would be a boring way to sell the shop, and we wanted to have more fun with this, so my mother, who is a former high school English and history teacher, and I thought of this essay contest,” said Wendy DeSousa, who has owned the Dial-A-Flower shop with her mother, Linda Varnell, for 10 years.”The only problem is that yesterday, I caught her ‘grading’ the essays,” DeSousa said.”It needed some commas,” Darnell added.The owners estimate the business is worth about $100,000. They hope to get 1,000 “Why I want to own a flower shop” essays from folks willing to pay $100 each to enter the contest, the Jupiter Courier reported Monday.The business will be given away with all the stock, except for the delivery van.”We’re not really looking at how the essay is written,” DeSousa said. “We’re looking for someone’s essay that appeals to us, who

AP Wire | 03/20/2006 | Flower shop to be sold for essay, $100.

The Lake Oconee region is one of the fastest growing areas in  Georgia as the market for second homes is still growing. A new development by Synergy Realty is going to create an 1,400 home development on the lake. Lake Martin and Lake Lanier,  two of the top lake front communities near Atlanta have shown signs of nearing build out and pricing has risen dramatically.

Synergy Realty Services LLC plans WaterSide at Lake Oconee, a $70 million, 1,400-home development that could include a 250-room hotel, a 30-slip marina and 25,000 square feet of retail space.

Lake Oconee, about 70 miles east of Atlanta, has become a draw for metro residents, and developments have sprung up around it in Greene, Putnam and Morgan counties.
WaterSide at Lake Oconee would be developed over five years on 993 acres.
Morgan County is already home to 1,100-acre Madison Lakes. In Greene County, there’s the 14,000-acre Reynolds Plantation, which began development in 1986 and which has 90 miles of lakefront property. The 251-room Ritz-Carlton Lodge, which opened in 2002, is part of Reynolds Plantation.
WaterSide at Lake Oconee would be on the west side of Lake Oconee south of Interstate 20, and have 550 single-family homes, 500 villa-style cluster homes in active adult communities, and 350 condominiums and townhouses, said Randy Herron, Synergy’s principal.
Lot prices will range from the $50,000s in neighborhoods with lake access to more than $500,000 for lakefront lots. via Atlanta Business Chronicle

Map of Lake Oconee Region

In another interesting and weird twist down in New Orleans and Louisiana politics, Governor Kathleen Blanco is concerned over the package for the 4.2 billion dollar rebuilding package proposed by President Bush. In typical Blanco form, it was the package that she and the Louisiana Recovery Board approved and applauded earlier. Now it is not enough or too restricting.

In Washington for the National Governor’s Association meeting, Blanco said she is worried that the restricting the housing money to “mitigation” uses could turn the worst flood-damaged sections of the city into green space, off limits to residential or commercial development.
“If (the proposal) stays like it is, it will be New Orleans National Park,” Blanco said. “It will be a problem for us unless they change the language.”
The housing money, included in a $19.8 billion supplemental spending package unveiled by the Bush administration two weeks ago, specifies that the money be subject to section 404 of the Robert Stafford Disaster Relief and Emergency Assistance Act.
Under the act, the state could spend the money to raise homes or fortify them against future flooding. The homes also could be purchased outright. But if they are, they cannot be placed back into commerce, only used as green space or wetlands.
The Bush proposal was originally hailed by Blanco and her Louisiana Recovery Authority, which helped negotiate the deal. It appeared to break an impasse over how Louisiana would cope with its post-Katrina housing shortage as it attempts to draw residents back to the region. via The Times Picayune.

The Orlando Sentinel has a great wrap up of the significant real estate revenue for the major companies doing business in Orlando. Here are some excerpts:

• Realty Capital of Orlando posted $109 million in deals last year, up from $80.5 million in 2004. Sales, leasing and management activity all soared in double digits.
• Signature GMAC Real Estate posted $400 million in sales last year and a record $12.5 million in gross commission income, according to general manager Lisa Gould.
• D.R. Horton Homes sold 2,412 houses last year in the Orlando area with the average sale at $240,000.
• Nicholson Homes had more than $100 million in sales last year in six area communities.
• Royal Palm Homes sold more than $88 million in homes, lots, condos and town homes in 2005.
• The condominium sales division of Signature GMAC Real Estate posted more than $11 million in pre-construction sales at Urbana, a 236-unit condo at Hunter’s Creek in south Orange County.
• Lake Forest Realty in north Seminole County had more than $90 million in sales last year, up more than 20 percent from 2004. via OrlandoSentinel.com

It will be interesting to see the numbers for 2006 and see how they line up. If the Bubble Bloggers are correct, there should be significant downward pressure on these numbers.