In-town Properties Taking On A More Economical Look

I write this from a different perspective than most Americans. I was raised in the oil business. My father was a chemical engineer and an oil refinery manager. While other kids were climbing trees, I was climbing crude towers and oil storage tanks. I cut my teeth on oil.

When I left the Navy, I went into petrochemical engineering - first as an electrical draftsman, then later as a design draftsman and eventually as an electrical designer. I even worked for the infamous Enron on several occasions.

Something I have been aware of for many years is the concept of "Peak Oil" - which is the point where worldwide oil production hits its peak, then begins its decline. This concept was first introduced in 1956 by M. King Hubbert, who accurately predicted U.S. oil production would peak by the early 1970’s… which it did.

The oil futures markets have been rising as a result of the belief that we have finally reached peak worldwide oil production. The industrialization of many countries - particularly India and China - has resulted in demand reaching current production… and the most likely scenario is demand exceeding production - which will cause prices to skyrocket (as if they hadn’t, already).

I don’t paint this situation lightly. It is very serious - especially for those who travel great distances to work. I was recently talking with a friend who told me that he and his wife are now up to $200 a week for gasoline… and she telecommutes on most days. Let’s not forget the couple of hours a day each of them must spend in the car…

So what does this have to do with Atlanta real estate?

Atlanta is a spread-out city, and while we have mass transit - it’s not practical for most people for a number of reasons. Even carpooling, while admirable, is a difficult effort at best - as it lacks convenience… and we all hate to be inconvenienced. The automobile reigns king - and the king is getting more expensive to feed.

Unlike other places with high-rent like San Franscisco or New York,  increases in energy costs in a place like Atlanta have more of a dramatic impact on the typical citizen’s disposable income.

So the two obvious solutions to this problem are to either move closer to work - or find work closer to home. Since changing jobs is difficult for most people, moving is a more likely choice.

Gasoline prices aren’t the only reason to move.

Heating and cooling costs will skyrocket with the cost of energy, so homes that are not energy-efficient are going to lose favor - and those newer homes with ultra high efficiency heating and air conditioning will have added value.

We have witnessed recent increases in our electricity costs, as a result of higher natural gas prices. Southern Company, parent company of Georgia Power, has begun their process for the construction of two additional nuclear power generation units near Augusta, Georgia. While these units will help curb the increasing cost of generating electricity - it will be nearly ten years before these units come online.

Now is the time to act.

You can take advantage of a sluggish housing market and low interest rates by acting NOW. If you are a long distance commuter, take some time to evaluate what your life will be like when your commute costs you $30 a day - and your $300 monthly electric bill is a distant, but happy memory.

Keep in mind that the best time to move UP is when the housing market is DOWN. The beating you take on your existing property is eliminated by the great price you will pay for your next property. Using a good buyers agent will help ensure you get into your next home at the right price.

If your next move is to downsize - my advice is to stay put.

As always, if you have any questions regarding real estate in the greater Atlanta area, feel free to contact me here.

Technology, Tips For Homeowners, Trends | No Comments »

Child Saluting America Flag, originally uploaded by respres.

Jeff Turner of Real Estate Shows posted this image of his son saluting the flag on Flickr - and I found it appropriate to share, as we look to the younger generation to take up the mantle and defend what is right.

I hope you all have a safe and happy Memorial Day… and that you will think of those who have given the ultimate sacrifice so that you and your family can enjoy what many take for granted.

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Here’s Just Another Case Of  "You Snooze - You Lose"

Foreclosures, Investment Properties, Tips For Buyers | 5 Comments »

Atlanta Area News, Blog Buzz, Custom Homes | 3 Comments »

Some Experts Believe That The Worst Is Behind Us

Although foreclosures hit a new high in the Atlanta area this month, the number of foreclosures nationwide dropped in April to 74,570 homes - down more than 5% from March.

While this might be good news, the current outlook is still rather bleak. Foreclosures in the Atlanta area are still double what they were a year ago, and this juggernaut is taking its toll on the residential resale market.

While this market makes it difficult to be successful in selling your resale home - it does make it easy to find good values as a buyer… and the conditions for buyers should remain extremely favorable for the next few months.

While I have been bullish for buyers for quite some time, I am starting to get bullish for investors, as well. Most of the previous owners of foreclosed properties will eventually be in the rental market… and since it is unlikely that lenders will finance these folks with the same type of loans that were used in the past, it might be a while before these previous owners will become homeowners anytime soon.

Since the rental market is improving, the attraction of acquiring rental properties at a good price-to-rent ratio is undeniable… especially when many investors are able to attain good positive cash flow with only 10% down.

And let’s not forget that the Congress will be passing legislation designed to help cushion the blow that the tide of foreclosures has delivered. While I am not in favor of many of the provisions of the proposed legislation that have been thrown around - I do understand that there can be legislation that would be beneficial to the crisis - and one can only hope that the right legislation will prevail.

As the tide turns, the incredible selection of properties - and their great values - will begin to fade. It’s simply the nature of the beast.

So whether you are considering purchasing your first home - or investing in rental properties in Atlanta - jump in… the water is getting nice and warm.

Atlanta Area News, Foreclosures, Tips For Buyers, Trends | 6 Comments »

P T Barnum Said It Best - There’s A Sucker Born Every Minute

I received a call yesterday from a frustrated seller. She had tried to sell her home, herself… starting last spring. Then she tried a hybrid listing agent who gave her one of those "flat fee" listings in one of our two listing services. Then she tried an agent who has several listings in her neighborhood.

Nothing has worked, so far. Showings have tapered off to nearly non-existence. Now she wants to list with an agent who will guarantee the sale - or buy her home, themselves. 

Of course, I explained that these programs are just scams… but I was unable to convince her otherwise. I guess some people just can’t face the facts.

I originally wrote about this a year and a half ago, where I pointed out the fallacy of these programs… and how sellers are duped into believing their agent will buy their home. I also touched on it again a few months ago. 

If you are needing to sell, don’t be a sucker. Be rational - get educated about your market - and work together with your agent towards your ultimate goal of getting your home sold.

It’s tough work, these days… but you can be successful.

Ask The Broker, Mythbusters, Tips For Sellers, Trends | 5 Comments »

$42 Billion To Be Spent This Year Fighting The Spam Monster

As agents, we all want the next "killer app" that will bring us new business and sell all of our listings. Many of us go to extreme measures in this regard.

When the multiple listing service (MLS) here in Georgia went online, one of the features in it was the ability to email other agents. I knew instantly that this was going to be a bad idea… and I was right. To make matters worse, you have to delete each piece of spam one at a time.

I finally gave up. Who cares if there is 1057 unread emails in my MLS box? I’m not going to read them.

Since the number no longer grows… I can only assume that the agents who were sending this crap decided it wasn’t worth the effort. Instead, they try to send it to one of my real email addresses. Now there’s a bright idea.

Don’t get me wrong… many years ago, I sent out custom emails to area agents regarding special promotions of my listings. Not every listing was broadcast - just those properties that offered a selling agent bonus. But I don’t do that, anymore.

Thirty years ago today, Gary Thuerk - a California computer salesman - sent what is regarded as the first spam email on the ARPANET… which was the precursor to the Internet. Way to go, Gary! It is unknown whether or not it was a successful campaign.

Nowadays, I use spam filters on several of my email addresses - as I often receive over 1000 spam in a single day. I kid you not. And my spam filter is a friendly blocker that simply sends a reply back to the sender asking them to reply to my email so we know that they are a real person - and not a computer spambot.

As a result, the only time I see all these ridiculous spams - including all the real estate related ones… and there are many - is when I peruse my spam queue.

Some of the spammers have caught on and reply to my spam filter so that their spam will get through - and then I have to blacklist them. Banished to the bottom of the trash heap… never to be heard from again. When blacklisted, they don’t even show up in the queue.

It’s sad that we spent $35 billion last year fighting this nuisance… as well as the lost productive time perusing spam queues.  As an agent who receives these spam from other agents, let me inform you - If I have a client for your listing, I’ll find it in the MLS! Geez, is that too hard to understand? Your best marketing tool is right under your nose!

The truth is, the best thing an agent can do for their seller clients is to list the property PROPERLY! Get the info rignt - make sure the listing is accurate - get good images uploaded to the MLS - and for God’s sake… PRICE IT PROPERLY!

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When You’ve Outgrown Your Home - But Can’t Sell It

Home Depot just announced that they will be closing 15 stores - but none in the Atlanta area - and I believe I know why.

Talking with some contractors, I have discovered that more of them are doing remodeling - and that their business is doing well. Finishing basements, renovating kitchens and bathrooms - even room additions - are their frequent requests.

I have a theory about this.

While there are many motivations for people to sell their homes and move - some of them do so because they need more room. Others want the more modern features of newer homes. Many of them love their neighborhoods and communities - and want to move up to another home within their community.

The problem is that most of them are finding it difficult  to sell - which is necessary for them to purchase their next home… or if they lower the price so that it will sell - they won’t have the down payment they want for the home they would like to buy.

This is purely  conjecture on my part - but I believe we are going to see more people deciding to stay in their existing homes and improve them, instead. Add a room - finish a basement - remodel the kitchens and bathrooms… even add a second story.

I know - this is blasphemy on a real estate brokers blog.

I just call them as I see them.

Rehabs, Trends | 3 Comments »