Looking Out From the Garage: November 2008

If not, I grabbed some extra...  I posted it on my blog on Thursday, but it has been refrigerated and is still wonderfully fresh... as fresh as these turkeys can be. 

They are definately not part of the 101... 

But I don't want to give it all away. 

For the youth, these serve as abject lessons of things to avoid in the future. 

For those of us with more experience, they are wonderful reminders of times gone by... 

Visit and enjoy...  Get a good laugh...

I enjoyed watching the Speed Channel series 101 Cars You Must Drive...  But I didn't agree with all of the choices.  There certainly were some interesting picks, but some were a bit lame.  I think they chose about 30 of the cars based on what was available. 

So, I decided to write a series on the 101 cars I want to drive...  And that means 101 posts about cars.  I have been working on posts since October 20th, and I am up to 11... and I have the next three decided.  But I will just toss out the current selections for your viewing pleasure.

1. Ariel Atom
2. Scorpion 4x4
3. Mallett Corvette
4. Bowler Nemesis
5. Lancia Stratos
6. Jeep Wrangler/CJ
7. Shelby Mustang
8. Ford Bronco
9. Lotus 7
10. Subaru WRX STi
11. Any Desert Racing Trophy Truck
12. Shelby Cobra

I think there are some interesting rides on the list.  I'm really curious as to what will come up next...

Ok, you’ve seen the TV commercials and scoured the Thanksgiving paper.  You know that the best deals require that you get to the store by 5:00am… or even 4:00am, right?

Sleep in, call me, and let’s go get you a new house (ok, a new to you house…) and save $100,000.  That is even better than picking up a new flat screen for $300 off!

I have found a few deals.  They range in price from around $100k, to just over $300k.  The deals range from 5% off of what you would have expected to pay last year, to 25% off what someone DID pay last year.  I wrote a little bit about each of these properties last week. Here you go…

About $100k

About $170k

A little over $200k

A little over $300k

Instead of fighting a bunch of people to get the last Speed Racer Mach 6, get something that is going to make you happy for years…  And make you money!

Give me a call.

from LilburnDwellings.com

Friday, December 5th

6:00pm - Lighting of the Tree

Come and join us for the Lilburn Christmas Tree Lighting in Lilburn City Park. 

7:30pm - Christmas Concert

Right after the lighting of the Lilburn Christmas Tree, join your Lilburn neighbors at the First Baptist Church of Lilburn at 7:30pm for a Christmas Concert.  The church is at 245 Main Street in Old Town Lilburn. 

Saturday, December 6th

10:00am - Lilburn Christmas Parade

David Chandley of WSB-TV will be the Master of Ceremonies for the 2008 Lilburn Christmas Parade.  It will run down Main Street from Church Street, ending at Lilburn City Park...

11:00am-2:00pm - Christmas in the Park

Lilburn City Park will host the Christmas in the Park celebration.  There will be face painting, carolers, inflatable bouncers, Santa... and a lot more. 

5:00-8:00 - Candlelight Tour of Historic Homes

The Lilburn Women's Club is sponsoring this event which features six historic homes in Historic Lilburn, as well as the Wynne-Russell House.  For more details about the Candlelight Tour, visit the City of Lilburn website. 

Merry Christmas and enjoy!

The Case-Shiller Index of home prices came out yesterday.  It is an interesting index because it concentrates of resales and looks at the new prices of properties that have previously sold.  In theory, it is tracking the same houses over time to see what values are doing.

In looking at the methodology, I think that there are some weaknesses in the way things are looked at, but the data is still  interesting and relevant.

For the Atlanta area, C/S saw a 9.5% decrease in values from Sept. 07 until Sept. 08. and a 1.3% decrease from August 08 to September 08... which followed a 0.3% decrease from July 08 to August 08.

Oddly, in the numbers I track for for Gwinnett County, average prices (not nearly as accurate... especially month to month) were down 8.4% year over year in October.  September to October saw a 4% increase... but I wouldn't count on that number.

Case-Shiller also have an index which is useful for tracking long term appreciation and comparing markets.  Atlanta was at 122.72.  That in and of itself means nothing, but when comparing it to other areas it does have some use.

• Despite a 31.3% year over year drop, Las Vegas still comes in at 146.58.
• Los Angeles is at 184.54 with a 27.6% drop over the last year.
• Cleveland, Dallas and Detroit are the cities that are lower than Atlanta.  Dallas is very close.  the other two cities are in a slump that pre-dates the current recessionary economy and in fact pre-dates the mortgage meltdown.
• Basically, Atlanta is down to 2004 price levels.  Specifically, July/August 2004.

There are a couple of points to keep in mind with this data...

• The overall market is not a single individual house.  There are homes right now on the market that are at great prices.  There are homes on the market that are so over-priced it isn't even funny.
• The big questions revolve around...
  • Where is the support level?  2004?  2001?  1998?  Nobody knows for sure...
  • How will any stimulus or rescue package affect values?
  • At what point will consumers feel confident again?

We obviously don't know.  But I do see some investor activity because there are properties that are cash-flow capable at current prices.  I am also seeing properties that are attractive to people looking for a primary residence.  Finally, there are a LOT of properties that just aren't realistically priced.

I am looking forward to seeing the new numbers from FMLS at the beginning of December.

from LaneBailey.com

My favorite video home tour/evening news/font of video information maven posted something about being positive. 

I'd love for everyone to skip back to her post and give her some love... not a hard thing to do, as Tara is a wonderful person.

I joined Utterli yesterday at the urging of Ken Cook... and about 50 other people.  And then this morning I finally took the time to write a post that had been kicking around in my head for a couple of days...  You can guess the post and the title.  I posted the actual text over on LilburnDwellings.com.  But I wanted to do something special for my friends here on Active|Rain... 

So, armed with my trusty headset and Utterli, I recorded my "dramatic reading" of 'Twas a Month Before Christmas. 

Ken and I are working on a couple of nifty projects together, so he got a big billing...  Look for a widget for WordPress blogs that be based on a mortgage calculator... with live rates, one click application for the reader/consumer, and the mortgage broker will know that the consumer came to them from a particular calculator... from a particular real estate agent or website. 

Ken is doing all of the heavy lifting.  I just keep coming up with impossible ideas. 

Enjoy the audio clip...

Can't post the audio clip in A|R... Every time I try it changes. It posted fine in WordPress. I don't know what the issue is... Sorry. Follow the link directly to Utterli, or go to Lilburn Dwellings above and you can hear it.

Link to Lane's Dramatic Reading

I am re-blogging this post.  Matt is working on REtechSouth, and is looking for people to give him killer app ideas.  I know that we have those ideas. 

Instead of commenting to me, please go back and deliver the comments to the original post. 

Thank you so much.

While cruising around today, I ran across a great post by Linsey Planeta.  You should go give it a read.  Primarily it is about real estate agents finding a little piece of positive info and blowing it out of proportion...  And to that extent, she has hit the nail on the head. 

But then in the comment stream I noticed something about how the increase in sales was largely due to getting the foreclosures moving through the system... and that they didn't count.  Nothing could be farther from the truth.  Prices are down because foreclosures are polluting the numbers... true.  Sales are up because the lower priced foreclosure are clearing... true. 

But that is part of the cycle... it HAS to happen.

Right now, foreclosures and distressed properties are the old and sick of the housing inventory herd.  In order to return to a healthy market, the old and sick inventory have to get eated by the predators.  They need to be culled.  In my area, inventory levels are still very high.  They aren't as high as they were a few months ago, but they are higher than they would be in a market that is even slightly out of whack. Absorption rates and sales statistics won't look healthy until the herd is healthy. 

We can try to be the guy in the video...  but we aren't always going to win.  We have to accept the circle of life...

Earlier today, I read a fine post by Larry McGee.  In his post (which I would suggest you read because it illustrates how a failed closing affects more than just a couple of people), Larry mentions that the correction to real estate prices can be very painful.  And, in the comments, one commentor mentions that the current financial crisis is an outgrowth of the housing bubble and crisis. 

I agree... and I don't. 

I think that the financial crisis IS based in the housing crisis and the "sub-prime mortgage meltdown".  I think that in many ways, the credit crunch was brought about by the SPMM... but there isn't a cause and effect relationship there... rather, they are both the product of an imperfect storm. 

• Lack of corporate ethics
• Lack of leadership in the private and public sector
• Lack of personal responsibility
• Failure of individuals and companies to save
• Desire for instant gratification

Each of these items is a flake on the snowball that our business and financial system is currently stuck under... 

The credit crisis isn't because there isn't money to lend... it is because nobody trusts the balance sheet of anyone else.  Companies are reluctant to loan to other companies because too many of the loans of the past were not as advertised.  One certainly can't blame them for failing to trust when trust has been dashed... 

The signs of the impending SPMM were getting clearer in the financial community... and in the halls of government.  Some members of the Congress were calling for new oversight to the GSEs (Fannie and Freddie), but others blocked attempts to slow their growth.  The President tried to bring up the issues... but wasn't able to make his voice heard.  Corporate executives and those that were in a position to alter corporate behavior knew that there was a problem, but failed to act.  In short, instead of leading, these people, from the President to Members of Congress and CEOs all just knuckled under because it was easier than fighting. 

Home buyers bought houses that they knew they couldn't afford.  Real estate agents sold people houses that they were pretty sure people couldn't afford.  Mortgage brokers and bankers gave people loans that they knew would go bad.  Right down the line, people passed the buck...  The real estate agents said "if they can get a loan..." and morgtgage brokers said "if they tell me that is what they make..." and the buyers said "if they are willing to let me have it...". 

But now we are starting to get to the root causes... 

We have become a society built on consumption.  We lack a balance.  We have a negative savings rate... there is no money in the bank, but instead we carry our lives as a loan balance.  That isn't sustainable.  And isn't like the government hasn't asked for it... and the companies that are getting slapped in the face in the current financial doom asked for it.  Credit has been easy, and savings has been punished.  Spending above and beyond our means has been promotoed, encouraged and rewarded.  From the tax code to college tuition plans, assetts are punished... savings is punished... investment is punished. 

And that brings us to instant gratification.  As a society, we have knuckled under to the pressure and we are running the rat race full speed.  Instead of seeing the car at the dealership that we would love to own, and saving and scrimping until we are at a point we can afford it, we took another line on the house or just leveraged a little more until we could justify it.  We cashed out on the house in order to add a flat screen and a butt-kickin' stereo.  We didn't save for the vacation... we charged it.  When we got a great piece of news, we hit the expensive sushi house for dinner.  When we got a bad piece of news, we hit the expensive steak place.  We rewarded ourselves before we earned the reward. 

Housing is at the center... but it isn't the root.

Housing is where the credit crisis surfaced.  But it could have been cars, it could have been college loans.  It could have been credit cards.  It could have been business loans...  It could have been anything.  But now, houses are where it surfaced...

The causes are WAY deeper than sub-prime mortgages.  They are way deeper than a housing "bubble."  The causes go to the root of the society that we have become.  In fact, one could make a case the trace it all of the way to individuals ceding responsibility to the government or to their employers for everything that is uncomfortable.  Health insurance, retirement, housing, food...  All of these are becoming something that society doesn't want to "deal with", but rather something that someone else should handle. 

Until that changes, we can count on financial strife.  We can count on instability.  We can count on the beast being ready to bite us in the utt as soon as we aren't paying attention.