Looking Out From the Garage

Everyone knows there is a football game.  But that isn't the only contest each year...  The Superbowl has become the biggest venue for advertisers each year... ok, ONE of the biggest venues.  Along with the Daytona 500 (next week) and the Olympics, the Superbowl is looked to for the best in TV advertising. 

Honestly, I'm not that much of a football fan.  I have watched the Vikings since I was a kid (Fran Tarkenton, Alan Page, the Purple People Eaters...), and I manage to catch about 30 minutes of football a year.  But I record the Superbowl so that I can catch the ads. 

I stumbled across something on Twitter tonight that gave me a little joy...  ALL of the Superbowl ads.  I don't know how I missed a couple of these (some might have been regional...).  But I got the chance to watch them all again. 

Which ones are YOUR favorites?

Why?

Image via Wikipedia

I'm here for you.  I have been getting these emails for years from builders promoting their inventory of homes.  In some cases, they are offering incentives to agents to bring buyers to their communities.  In other cases they are offing incentives to buyers.  Sometimes, there are both...

I finally figured out how to help people find those deals, or know why their agent might be "hot" on a particular community.

I have sold some new construction in the area, and know how to help a buyer get the best deals, so I thought this might be a good outgrowth of that.

Let me also state...  The cost of the buyer's agent is built into the cost of the home.  It is very rare that builders cut a better price for unrepresented buyers.  There are a variety of reasons.  One of the biggest is that builders are reluctant to cut the price of their homes.  If they do, those lower prices show up in the comps that will be pulled for an appraisal.  That lowers the value of the community...

So, if you are interested in a new home in or around Gwinnett County, GA, give me a call. Also, feel free to subscribe to Builders.LaneBailey.com.  That is my new site to track builder deals.  These are basically the unfiltered flyers that the builders and their agents send out.

The agents on site are very nice people.  I have worked with a lot of them.  But remember, they are contractually obligated to represent the best interest of THEIR client.  And their client is the builder.  They aren't going to tell you that the community is in trouble, or what dangers that might bring.  They aren't going to tell you if there is another community with a better deal.  They aren't going to tell you if there are factors in the community that might affect resale value.  You need an agent on YOUR side.

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from LaneBailey.com

Last year I wrote about Senate Bill 55 in the Georgia Senate.  Basically, the bill required the Counties to include foreclosures in assessments.  Previously, assessments for taxes excluded foreclosures, so they (falsly?) increased values and tax revenue to the counties.

While that makes it tough for the counties, it is a needed break for home owners.  The counties complained that they would lose revenues... well, the people are losing revenue, too.  They have to suck it up.

In the last year, the bill quietly passed and was signed into law by Governor Sonny Perdue.

Here is the link to the original post.

from Lanebailey.com

I have been wondering about this for the last couple of weeks...  There are a few things about that give me pause.  We've seen the Dow climb a bit, but I don't think there haven't really been increased profits to explain it.  And where there have been increased profits has been largely from overseas operations. 

Sure, there are some companies that are bucking that trend... but I still wonder. 

A good bit of the increase in overseas profit comes down to exchange rates.  the US Dollar has been pounded in currency markets.  This means that companies with overseas profits will see an increase in the profit measured in Dollars, even if there hasn't been an increase in the local currency. 

And with the increased and continuing deficits, strengthening the Dollar isn't likely.  To start with, it isn't in the government's best interest to keep inflation in check too much... although they DO need to keep interest rates down.  As the currency suffers from inflation, the debt the government owes becomes less valuable (easier to pay off).  Of course, if interest rates rise, the service on the debt increases. 

Back to the markets... 

Normally, when the markets rise, it is because there is an expansion of business.  We are seeing contraction or stagnation in most sectors.  The market increases because there is an expectation of higher profits... we don't really see a lot of that, either. 

Instead, many analysts think the market is rising because it is the only place to put money where there is any sort of reasonable return.  Saving accounts are paying less that 1%.  CDs and other longer term investments are paying not much more.  Obviously, real estate isn't hopping in the short term, and many are still worried about the long term prospects.  So, some of the market rise can be explained by a flight from other investments... 

If we look back at the stock market bubble of 2000, we know that it started with people investing in the stock market based not on an a reasonable expectation of future corporate profits, but because the returns looked to be better than anywhere else.  People were chasing a "hot stock" or the "next big thing".  In many ways, this market has a lot of similarities with a momentum market like that. 

The bubble of 2000 led to a severe recession.  The bubble of 2008 led to a severe recession.  I'm just wondering if we still aren't through with the 2008 bubble...

Two years ago I wrote about whether it was time to sell here in Gwinnett County...  Wow have things changed in the last two years.

The basic logic is the same now, but looking in the rearview mirror, it sure is tough to justify back then.  Of course, back then I didn't know what the last two years would look like.  My crystal ball was a little dirty.

To start with, where I was talking about $2000/mo rent for a $200,000 home, now the home is likely worth $170,000 and the rent would be unlikely to exceed $1500.  Of course there are neighborhoods that command higher rents... they also have stronger sales and support for higher prices.

Anyway, here is the read.

from LaneBailey.com

Eddie Alterman at Car & Driver Magazine is the one that inspired the title...  In one of his columns he refered to the new Lexus LF-A as the WTF.  And I think there is good reason. 

This car has been in development with Toyota for 10 years.  The problem is that in the 10 years it has been in development, the targets have all moved.  A LOT.  Let's look at some specs...

• Nürburgring Nordschleife Lap in 7:24 (Toyota claimed)
  
• Top Speed is 202mph
• Curb Weight is 3263 pounds and power to weight is 5.9lb/hp
• 0-60 is 3.6 seconds
• Sticker Price will be between $350,000 and $375,000

Those seem to be impressive numbers, except for one thing... that price is out of line with the rest of the performance. There is also the matter of the styling, which has been compared to the Nissan GT-R... or a Supra that spent too much time in the plastic wing aisle at Pep Boys.  It isn't that it is terribly ugly, but it just isn't unique. 

Since we brought up the Nissan GT-R (I have trouble not refering to it as the skyline):

• Nissan claims a Nürburgring Nordschleife Lap of 7:26.7 (video confirmed)
  
• Top Speed is 193 (Nissan, but Motor Trend said 195)
• Curb Weight is about 3800lbs and power to weight is 7.9lb/hp
• 0-60 is 3.5 seconds (after March 2009)
• Sticker Price is between $80,000 and $90,000

Wow.  A slight performance increase and a MASSIVE price increase. 

Now, let's toss a third into the mix...  Let's try a car more tuned for performance and a little less towards touring.  The Corvette ZR-1:

• GM did a video confirmed Nürburgring Nordschleife Lap of 7:26.4
• Top Speed is 210mph
• Curb Weight is about 3352lbs and power to weight is 5.3lb/hp
• 0-60 is 3.3 seconds
• Sticker price is under $114,000

Now we have race... 

But the big question for me is why did it take 10 years to develop this car?  It would be one thing if is was amazing, but the only amazing thing about the car is the price.  The lap time at The 'Ring is respectable, certainly.  But it is barely beating cars that cost a fraction as much. 

Some industry insiders say that part of the reason is that Toyota hasn't ever really tried to break ground.  They take the ideas of others and tweak them...  Even with the LF-A, the car that is to be their image car, it looks like another makers design. 

I don't have a beef with Toyota.  they are the number 1 carmaker in the world, they obviously can do some things right (current acceleration issues notwithstanding).  But without a personality and a soul, why would someone spend $350,000 for a car that underperforms its peers while costing SEVERAL times as much.

Are we getting ready to see a rise in rates in a couple of months?  I can't see how they can stay where they are...

Ken Cook, from America Home Key Mortgage, is an FHA expert and extremely knowledgeable about the Mortgage Industry in general.  And of course he is on top of the recent and pending changes HUD announced for the FHA. 

The Federal Housing Administration, the division of the Department of Housing and Urban Development which insures home mortgages for qualified borrowers, has recently announced pending changes which will affect all borrowers and specific borrowers.

Reports show FHA defaults and foreclosures to be at 18% of the total number of loans where the average number of defaults and foreclosures on other loans is 14%. In an effort to avert the need for a taxpayer bailout there have been several changes initiated and proposed.

The rest of the article is here.  It examines the changes to the Mortgage Insurance Premium, enforcement enhancements, changing seller funding from 6% to 3%, and limitations on the 3.5% down payment.

The bottom line is that many buyers have their best shot at getting an FHA mortgage before all of the changes take place.

More current mortgage industry info can be found here on Ken's blog.

The whole year of 2009 was challenging in some segments.  In other segments, it has shown surprising resilience and strength.  Sugar Hill is one of the markets in Gwinnett County, GA, that has shown relative strength, even into the last quarter of 2009.  And it started off quite strong.

Looking back over the last couple of months for Sugar Hill, GA, the market has been pretty consistent.  The biggest thing has been the First Time Home Buyer Tax Credit.  It has had a GIANT pull on the market, and when it "expired" (it was renewed and expanded before it actually expired, but the effect seemed to expire) it altered the direction of the market... as it did when it was enacted.  In Sugar Hill, the effect either wasn't as strong, or it lasted all year.

Let's knock out a few numbers...

• There were 155 Listings as of 12/31/2009
• December currently reports with 20 sales
• The Absorption Rates for Lawrenceville break down as follows:
  • 12 month average - 6.33 months of inventory
  • 6 month average - 5.89 months of inventory
  • 3 month average - 6.08 months of inventory

The link above explains Absorption Rates more fully, but basically, it tells us how long it would take to sell all of the property on the market at the current rate.

Sales for Sugar Hill in December were up 17.6% compared to December 2008.  This was after November was up 78.6% year over year.  Days on Market also decreased by 39 days to 46 days.  One thing to keep in mind though is that there may still be sales that are unreported. 

By Segment...

The market is divided up into six segments.  There is very little data on the highest three price segments, so I don't break them out as much.

Under $200k...

There were 87 listings and 8 sales in December.  Looking back the 12mo/6mo/3mo Absorption Rates were 5.5/5.5/5.3 months.  I was a little surprised by the consistency.  And since 6 months of inventory is considered a balanced market, these are pretty good numbers.  The Under $200k segment is the strongest.  And that is good company because each of the bottom three segments has some mojo.

$200k - $400k...

There were 59 listings and 11 sales in December.  The 12mo/6mo/3mo Absorption Rates were 7.4/6.6/6.6 months.  I also expected the First Time Home Buyer Tax Credit to have a little more impact on the 3mo rate, but sales remained steady.  The $200k - $400k segment has been reasonable all year.  Looking back at our historical numbers for the last couple of years, these are great numbers.

$400k - $600k...

There were 6 listings and 1 sale in December.  The 12mo/6mo/3mo Absorption Rates were 8.0/9.0/6.0 months.  This segment shouldn't have been affected by the tax credit as lower priced homes. I was a little surprised at the way the sales picked up in the last quarter.  But when it all boils down, it was because there was one sale in each month of the last quarter.

$600k - $800k, $800k - $1m and Over $1m...

There were a total of 3 listings and no sales in the last 12 months.  The Absorption Rates can't be calculated.  An extra or missed sales make a giant swing in the data.  Also, these homes are not likely to be affected by the old tax credit or the newer expanded tax credit.

Click here to search Sugar Hill properties.

Anyone that hangs around my blogs knows that I am a fan of Top Gear, the BBC show that combines seriously cool cars, interesting challenges, speed, British humor and irreverent reviews. 

I think it would be terribly cool to have a similar show here in the US... with cars that are actually available in our market.  While part of the attraction for the British series is the "out of market" cars that aren't available here, that might be outweighed with more cars that ARE available here. 

Apparently, it almost happened... and could still happen.  NBC was in talks with BBC America to produce and air the show here.  Rumor has it that the talks are over, a pilot was made, and the show is canned.  But... there are a few details here... 

• The hosts were to be Adam Carolla, Tanner Foust and Eric Stromer.
• It was going to follow the same format as the British show:
  
  • Top Secret Test Driver comparing cars on the track
  • Star in a Reasonably Priced Car
  • Challenges
  • The rumors even had them working on similar videography style...

Of course there are some key differences in the landscape between BBC and NBC.  To begin with, BBC isn't commercial supported, and auto manufacturers would be the primary revenue source for a US series.  So, while on Top Gear (Great Britain) the hosts are free to trash cars from all sorts of manufacturers without regard to advertising revenue, in the US, on NBC, that likely would be a major concern... 

I'm also not sure that the guys selected to host would be able to pull off something as entertaining as Clarkson, Hammond and May have on the BBC. 

However, if NBC (or another entity) decides to make it happen, I could be made available.  I have a certain amount of snark that I could deliver...  I also have a history in racing sports cars, so while there is no way I am qualified to substitute for "The Stig", I could be a co-host...  I love the challenges and would certainly be willing to take those on. 

TopGear USA Show Reel