Looking Out From the Garage: January 2008

From the Wall Street Journal, via today's REALTOR(R) Magazine Daily News...

So, the agents and brokers involved expect to keep commissions from sales that didn't actually happen?  Give me a break.  

I don't care if the builder (seller) pre-paid the commissions, and I don't care if the commissions weren't covered in the contract... they shouldn't have to be.  To anyone that isn't a moron it should be implicitly obvious that the commission was for SELLING the condos, not getting a contract that falls through.  When the heck did real estate agents start getting paid for almost selling a property?  

The media outlets in FL should print the names of these idiots, and then their competitors should just mention that these people didn't think their job actually included selling the property, just bringing contracts that failed to close.  

Does that mean that if I have someone bring a contract on a property I list that I have earned the commission... even if they don't close?  I don't think so.  It makes NO difference if the commission was advanced...  That has no bearing on whether the job was done.  

I get so annoyed when real estate professionals do STUPID things and tarnish the whole profession.  How can we expect the public to see us as ethical and honest when these bozos don't lose their license in addition to being required to pay back the cash they effectively stole.

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I just couldn't help but look at these two items from the REALTOR(R) Magazine Daily Report.  Do they read the stories? 

Is it just me, or should one notice a connection between these articles. 

If we see a decrease in demand for office space, do we not expect that commercial real estate will soften?  Should we really rush to join the commercial ranks just in time for the slowdown?  

I just can't wrap my head around the logic that would make these articles co-exist.  

If the NAR really wanted to build credibility, a good first step would be to start paying attention to little details like this.  A great second step, since the ball would be rolling, would be to not issue the "The worst is behind us" report every time crappy numbers come in.  

>>Rant OFF<< 

I have had a wide variety of people in the car lately.  Through volunteering for the NHL, I have been interacting with some players, owners, musicians and others.  Oddly, there is one thing I have noticed that I hadn't seen previously...

Texting.

Seriously.   

Players that are 23 years old are sitting in the van pounding out text after text since they spent the previous few hours on a plane.  60 year old executives are doing the same thing.  The 40 year old and 25 year old musicians were in the same mode... and everyone in between.  

The only threads that carried between these people is that they are busy, successful and not in their home area.  But, they were of a variety of ages, races, nationalities and economic strata.  Agents, players, owners, retired players, celebrities... all of them were texting more than calling.  

I have been hearing about it... and doing it some.  But, the level that I have seen over the last few days has been surprising.  

And do you know what?   

I wish they were texting our assignments.  It would have been so much easier than getting the call and writing everything down.  I know that the Nextels are great for keeping in touch fast, but I wonder if texting would be more efficient, leaving the voice calls for confirmation and problem solving.  

So, I think that my real estate business is going to be involving texting more and more...  email to text message could be a seriously cool tool...  I'm not that fast with the thumb pad.

**If you didn't notice, the guy in the hat in the forground is sending a text...** 

For anyone paying attention to my other blog, you already know that I am driving NHL VIPs around during the All-Star festivities here in Atlanta.  I'm picking up players, owners, celebrities and Hall of Fame players.  It's a blast...

But I am learning a few things.  

Here are the links for details about what I have done so far...

Part I

Part II

Enough about that... except for Ken needing to see the Dodge Challenger in Part II...

The folks with the NHL and the transport company have a tough job.  Several months before getting the information like when people are flying into the airport, they have to write a schedule and figure out how many drivers will be needed, and at what time.  So, without knowing when they will need to move people, they have to guess...

And then, when the rubber hits the road, they have to tame a bunch of fans, and send them out to pick people up quickly and efficiently.  We can't be star-struck (THE Wayne Gretsky?), or belligerent (there are players I'd like to see left at the curb...).  Weather?  We have to deal with it.  This game happens in Hockey Markets... the cold in Atlanta is NOT a problem.  

So, how does this relate to real estate?  

At one point we had 15 vehicles lined up at the uber-secret staging area.  We all had assignments we were waiting on... but we didn't know exactly when the people would clear baggage claim.  Because things would change, and people wouldn't be on a flight, or there would be more people (families, etc.) we would have to adjust at the curb. 

We do the same thing.  We are ready and lined up.  We have our properties, and we have our buyers.  But we don't know exactly how things are going to shake out.  We have to adjust.  The market might be strong, or not so strong... but the clients don't care... they just want to get where they are going... without having to put up with a big hassle. 

Oddly, this is giving me a different look at everything I do.  

If you are here in the ATL... and see one of the vehicles, I might be in it.  Alyssa Milano might be in it.  Bobby Hull might be in it.  If either of them are riding with me, I'll let you know on my blog. 

BTW (especially for the real estate agents reading), we can't hand out our cards to our passengers.  But, if you end up in my car, you are welcome to use me if you get traded here... 

Just wandering around the net for a few minutes I ran across something that is either the dumbest thing or coolest thing I have seen in quite a while. 

"... next November, Japanese astronaut Koichi Wakata will launch from the ISS (International Space Station) a 20-centimeter airplane. The tests carried out on the ground in a wind gallery suggested this little space plane might survive the descent to the Earth. 

That is right, Japanese Astronauts will be launching a paper airplane from space to land on earth.  In its decent, it is expected to reach Mach 20.  It will be treated with special chemicals to prevent it from bursting into flames during re-entry.  

What does this have to do with real estate?  Absolutely nothing.  Nothing at all. 

I am going back and forth a little.  I can't decide if this is something that was dreamed up as a result of too much sake, or if it is pure genius.  Think about it for a few minutes.  A paper airplane going about 13,500mph.  There is no telling where it could land.  I just can't get past the 13.500mph... 

I just ran my search to see how many homes were currently active in Gwinnett County that had 4 car or larger garages. 

151

The top of the range hasn't changed, the $10.5M home is still there, but there are a couple more below the previous $154,900... there is a property at $149,500 and another at $139,900.  The median price is $719k. 

I described a lot of the property details here a few weeks ago.  While there has been a little churn in the properties, the overall range is similar.  There are some great deals here. 

Since the beginning of the year, three properties with a four car or larger garage have gone under contract in Gwinnett County.  Another of the properties is under contract with a contingency and kick-out clause.  Five properties have expired and seven more have been withdrawn.  That means that there are 17 new listings since the last time I updated a few weeks ago. 

If you are interested in a home with a big garage, and you want to be on the list to find out about the new listings first, let me know.   

If you have a home with a serious garage and you are looking to sell it, find an agent that works with auto enthusiasts... that would be me...  I look forward to your call.

Would you believe that in the Heart of Dixie one can join a Hockey League?  What about Ice Skating lessons or practice Figure Skating?

The Duluth Ice Forum is Gwinnett County's hottest place to get cold.  From beginner Ice Skating to Figure Skating competitions and kids or adult Hockey Leagues, the Ice Forum hosts it all... and public skating. 

The Ice Forum is also the practice facility of the Atlanta Thrashers NHL franchise.  Not only are the practices here, but they are open to the public and free.  It is a great opportunity to get a close up look at the game, as well as possibly pick up some autographs or shake hands with the players.  NHL players are quite approachable, and many of them will hang out and chat with fans and sign autographs until the crowd is gone. 

My son is going to "Snowplow Sam" lessons each week.  He wants to play hockey and has to pass through a few levels of lessons first.  So, we are there one evening each week for him to take his class.  We also try to go on another morning each week to a public skate so that he can practice what he's learned while I skate with him.  

While the evening sessions of the public skate tend to be pretty busy, the mornings aren't.  Also, the morning sessions tend to lean more towards families and seniors.  So, there isn't much rowdiness.  It is a great time to take a three year old that is challenging himself to not "plow snow."   

Atlanta has several other ice rinks as well, including a Kennesaw rink that is affiliated with the Duluth Ice Forum.  There is "The Cooler" in Alpharetta, and the "Marietta Ice Center" in Marietta.  There are a few more rinks on the south side of Atlanta as well. 

If you are relocating to Atlanta and looking to have a skating rink nearby, give me a call...   

Wandering through the REALTOR(R) Magazine Daily Report yielded a story about the Cashflow 101 game from Robert Kiyosaki (Rich Dad).  It uses the game environment to teach stock investment analysis and real estate investing... kind of like a Monopoly for would be investors. 

It looks pretty interesting... but it is also pretty expensive at $195 for the game.

I guess the question would be... Have you played?  If so, what did you think? 

If you haven't played, would you like to?   

I might be willing to put together an Atlanta based group of gamers if this is a good way to teach investment strategy and techniques.   

While glancing through today's REALTOR(R) Magazine Daily News Brief, there were two stories that jumped out at me.  One was a call to action, and the other looked like the groundwork for a call to action later...

The first was:  Withholding Mortgage Help Could Hurt Everybody.  Among other things, it said:

The Center for Responsible Lending, a consumer group, found that an increase of 1.1 million foreclosures would lower the prices of as many as 44.5 million homes by a collective $223 billion. "If we don't help homeowners having problems paying their mortgage, everyone's net worth is going to go down," says Zandi.

There is also mention of crime increasing with the foreclosure rate, and a mention of a CNN poll that showed 51% of respondents feel that those facing foreclosure need to butch up and deal with their problems.  

The second was:  Latest Re-Fi Boom Leaves Many Out in the Cold.  And, it had a few choice quotes like:

At 6 percent about 37 percent of homeowners could refinance their mortgages and save money on monthly payments, estimates Bear Stearns Co., but many of them can’t refinance because in the current environment their mortgage is too big or their credit score is too low.

It goes on to say that those that will be able to take advantage of the low rates are those that have 30% equity or a credit score above 679.   

So Lane... I see dots.  Are you going to connect them?

Sure.  A few months ago everyone figure out that people that had gotten the "too good to be true" loans were going to have to pay the piper before much longer.  We started hearing how many people (that had chosen these loan products) were going to be damaged and/or lose their homes.  A call to action was initiated, and our glorious legislators, seeing votes, responded.  Forget the Constitution.  People are looking for the government to help them out of their mistakes. 

Now, we are seeing rates that hearken back to 2005... and nobody (except me... [sidebar]ok, I really wasn't alone, and I blew the timeline.  I thought it would take more than a year to sort out, but it only took a few months) saw that coming.  But, there are millions of families that can't get those rates because their credit scores aren't good enough. 

Basically, they aren't going to have the same advantages as their more responsible neighbors.  That's gotta suck.  Before, millions of families were going to be displacedby those evil banks, because of their poor decisions.  Now, millions of families will be paying more to those evil banks, because of their poor decisions. 

How long before a bunch of our "esteemed" legislators start looking at the numbers and notice that there are WAY more people with sucky credit than there are bankers?  And how long after that until they figure out that more votes are to be had attacking the evil banks than in allowing the greedy corporations to continue to stick it to people that have enough money for a new bass boat, a Tahoe and a flat screen TV, but not enough to pay their mortgage? (where is an eye rolling smiley when I need it?)

My final thought... and it is a doozy... Maybe we need to let values drop.  Maybe values HAVE gotten out of line, and that paper wealth needs to evaporate.  Easy for me to say... didn't happen here in Atlanta.  We didn't have that kind of boom.  But, look at the Dutch Tulip bubble in the 17th Century.  Did anyone suggest that those that lost money or wealth should have recourse for their voluntary actions?  What about the tech boom of the 1990s?  I lost money.  Wealth evaporated.  Did the government bail us all out?  Did the markets correct?

A friend of mine forwarded a Moody's study that was called "Aftershock - A study of the post Mortgage Meltdown."  I went through it, and most of it is pretty dark... but then I started to notice something.  The maps didn't look that bad.  Ok, they didn't look that bad for the Southeast in general, or for the area around Atlanta, GA in particular.  It isn't all happy, happy, joy, joy.  

The first map is a map of the depth of correction for different areas around the country.  Green = good, red = bad...

The red areas are forecast to have a more than 10% correction.  Orange areas are between 5% and 10%.  Blue areas are less than 5%.  Green areas are not expected to decline.  

The second map is looking at mortgage defaults.  The Atlanta area isn't faring as well in that regard, but the national average is 1.8%.  I think that while it certainly isn't good that the Atlanta area is tracking along with the national averages , it certainly isn't calamitous.  One other fact to keep in mind is that the Atlanta market led the nation in mortgage fraud for quite a while.  It was only recently that we relinquished that title... and we are still in the top five.  

The final map is a lot more important in my view.  That is a measure of economic expansion/contraction.  Again, we can see that the Atlanta area is in the green, and looking good.   

In this case, green means that the area is expanding economically.  Blue is in a recovery.  Orange is at risk.  Red is in a recession.  

So, from each of these maps we can glean a little piece of the puzzle.  And it certainly is a puzzle.   

While there certainly is a mantra of All Real Estate is Local that has been echoed here, and has now been picked up by the NAR, there is a national component.  With very few exceptions, bad news is like an infection and it infects nearby areas.  Good news doesn't get to act like an antibiotic, though.  It certainly helps, but it isn't the cure-all to say that real estate is local, and my market is rocking.  

As a counter point, I think it would be nice if some media personalities could look past their own backyard to see that DC, LA, NYC and Chicago aren't THE housing market.  They are just a part...

For us here in Atlanta, the fundamentals are strong.  The economy is good.  The national issues are taking away with one hand (adding fear to the market) and giving with the other (incredible interest rates).  Rental rates are rising, so owning your own home or investing in rentals that offer positive cash flow are good ideas. 

If you are going to own your home, talk with a GOOD mortgage broker.  Get a mortgage that you understand, and can afford.  Get a home that you can afford.  Take advantage of the fear in the market to find good deals.  That doesn't mean that list prices are a good deal, and it doesn't mean that they aren't.  You also need a quality real estate agent to help find the right properties, and determine the right price.