Looking Out From the Garage: February 2010

Marketers and other businesses know that the world has become smaller... but that we stilllike to do business locally... 

There is a national insurance company that has an ad running in at least several states that begins...

Attention Drivers Statewide...

They want to tap into that "local" feeling by inferring that they are only talking to people in one state.  At the same time, they weren't so interested in talking to drivers in just one state that they limited the ad to one state... 

It plays on Satellite TV, on national channels.  If it were on cable, there would be a chance that they could have bought local time, but on satellite, not so much...  That would be why they can't say "Attention Drivers all over Georgia..."  Too many people from Florida, California and 47 other states would ignore the message... 

But they know that we want to deal with someone local when we can...

It doesn't matter if it is insurance, real estate or cars... or anything else.  We would rather have someone that knows the area, understands our needs and lives in the community they service.  We don't want a call center in Fiji... although we might want to VISIT Fiji... 

Attention Home Buyers and Sellers around Lilburn...

We live in Mountain Park...  My kids are in school here in Lilburn.  One of them ice skates at the Duluth Ice Forum.  We swim at the Mountian Park Aquatic Center...  My wife was raised in Sugar Hill.  I have spent most of the last 21 years living in Gwinnett County.  We understand Gwinnett County.  It is where we have chosen to raise our family. 

If you are looking to buy or sell property in Gwinnett County, GA, you deserve a real estate agent that knows Gwinnett County.  Check out the three images just below this paragraph...  Find your Dream Home, Find out what YOUR Home is Worth or Find out about the Market in Gwinnett County.

Image via Wikipedia

During the month of February, as well as the end of January, I spent each Friday afternoon volunteering to talk about business and economics with a bunch of 4th Graders.  This was in connection with Junior Achievement.

It might sound like pulling teeth, but it was really a blast.  The kids were great.  They were engaged and interested.  In fact, by the end of the course, they were greeting my by name as I entered the room…  I was late on the last day, and one of the kids commented that she “was afraid I wasn’t going to be there.”

The whole experience was immensely rewarding.

Just to be clear, these weren’t hand picked students or a special class of high achievers.  These were average kids in an average class…

While the details of the classes aren’t important, there is something else that IS very important.  The important part is that these kids WANT to learn and WANT to have adult come in and talk with them about the larger world.  It helps to be entertaining and to speak to issues and examples to which they can relate.

And there is something else that is important…

As people that are involved in business on a daily basis, we can help these ids understand how business works and how the economic system can benefit them and society as a whole.

It doesn’t matter if you choose to invest your time with Junior Achievement or some other worthy organization, giving to the kids is very rewarding and the payback is exceptional.

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The real estate market for Gwinnett County is in a state of flux.  There are wide variations between different location throughout the county, as well as different price strata.  There are a few themes that are readily apparent, but some locations and price ranges are standouts (good or bad)... 

Some quick county-wide numbers... 

• January, 2010 sales were 352 homes.  This is down 11.1% from the 396 homes in January, 2009,  That was down 14.7% from the 464 homes in January,2008.  (There might still be some stragglers that haven't been entered yet... but there shouldn't be many.  These numbers are as of 2/23/10)
• New listings were 1526 homes for January, 2010.  This is down 21.9% (1953 new listings) from January, 2009.  That was down 17.3% (2363 new listings) from January 2008.  
• Days on Market were down by 19 days to 87.  This is good news, but I honestly don't put much faith in the DoM number. 
  

Overall Absorption Rates...

Take a look at this post for a quick explanation of Absorption Rates.  Listings increased for January, compared to December, 2009.  There were 5612 listings in January, 5219 listings in December.  The "Months of Inventory" numbers for the 12 month, 6 month and 3 month averages are 10.12, 8.80 and 8.68, respectively. 

What this means is that sales seem to be slowing.  However, January is generally a tough month.  In December, contracts usually slow, although closings remain fairly high (November contracts).  So, January always looks a little weaker in the 6 month and 3 month averages.  But, January also showed more months of inventory in the 12 month average, compared to December (8.03 months of inventory). 

It seems like I say it every month, but next month will be interesting...  One of the reasons we have to "kick the can down the road" is that we are only really able to look in a rear view mirror at sales data.  Imagine trying to drive around a track only looking out the back window.  Whenever there is a sharp turn, you won't know until you are in the ditch... 

Under $200,000...

This range continues to be the strongest, but it is weaker than it was last month.  However, the sales season doesn't really pick up until March (February contracts).  There were 251 sales in this price range, with just under 3100 listings (3089).  In the last year, sales peaked at around 540 in both June and July, and then came back up to 532 for October.  They slid to 414 in December.  In January of 2009, there were 270 single family homes sold. 

$200,000 to $400,000...

We certainly don't have the strength here of the lower range, but it isn't terrible.  Looking at the 3 month average, there is about 13 1/2 months of inventory.  There were 93 sales with 1861 listings.  Last year there were 103 sales in this price range.  The same pattern held for sales (strongest in July, then June and October).  As with the under $200k range, the tax credits seemed to push sales in the fall.  As with the under $200k, I expect that some sales were cannabalized from this spring by the first tax credit. 

$400,000 to $600,000...

Here is where we see the car drive off the cliff.  The 3 month average points to having almost 29 months of inventory on the market.  There were only 4 sales in this range for January 2010 (20 sales in January 2009) and 359 homes on the market.  May and November were the strongest months for sales.  I think we are seeing nervousness about jobs and taxes here.  There are few first time home buyers that would meet the criteria for the tax credit here, and the $6500 credit wouldn't figure prominently in the plans of buyers at this level. 

$600,000 to $800,000...

Things are actually slightly better in this range than in the $400k-$600k range.  There is still 27 months of inventory, but there were 3 sales this year compared to just 1 for the same month last year.  There were 127 properties on the market.  In this range, just a few extra sales one way or the other can have a dramatic effect on the statistics.  I also don't believe the tax credits have had much affect here. 

$800,000 to $1,000,000...

The three month average points to just over 3 years of inventory at this price range.  With 51 homes on the market, there was only 1 sale in this range in January... none in January 2009.  In fact, there have only been around 25 sales in the last year, county-wide.  And, while 6-7 months of inventory is considered balanced in the lower price ranges, because of the smaller pool here, we usually see higher numbers... but 3 years is still obviously slow. 

Over $1,000,000...

Nothing to see here...  There are 125 listings and there were no sales last month at this price.  There were 2 for the same month the previous year.  The three month average yield a little over 6 years of inventory.  There were only 42 sales in this range in the last 12 months.  And I don't think I've seen the Absorption Rate go much below 4-5 years of inventory... 

Hot and Not...

• Norcross is hot.  Just 5.1 months of inventory in the under $200k range...  And only 9 months of inventory in the $1M+ range!
• Duluth has just 6.3 months of inventory for the $400k-$600k range... 
  
• Lilburn is lagging right now, with 10 months of inventory for the under $200k level... and while there have just 6 months of inventory for the $600k-$800k range, there have onyl been two sales in that range in the last 3 months (only 4 listings). 
  
• Duluth isn't doing so hot for the other price ranges. 
  
• Lawrenceville, Buford and Lilburn are the big laggards in the $200k-$400k range at 17, 19 and 19 months of inventory, respectively.  
• Overall, Buford is the weakest of the markets I track, at just under 13 months of inventory. 
  

The markets I closely track are Buford, Duluth, Lawrenceville, Lilburn, Norcross, Sugar Hill and Suwanee.  for these areas, I am tracking them by mailing address, not city limits.  Buford, Duluth and Suwanee also include sales from counties other than Gwinnett.  I also track the overall numbers for Gwinnett County. 

I am excited about the growth prospects for Gwinnett County, GA.  In the last few weeks we have had another announcement of a company moving their headquarters to Gwinnett.  We have a wonderful quality of life, and there are abundant recreation opportunities...  The Gwinnett Braves and Gladiators, Lake Lanier, one of the best parks departments in the country and proximity to all that metro Atlanta has to offer make this a GREAT place to live and work.  I've been proud to call Gwinnett County home for most of the last 21 years.

Ken is a great guy and has excellent and up to date information.  If you are looking for a house in Gwinnett, this might be the program for you...

While speaking with a prospective client, we touched on home marketing.  As we were discussing it, I was asked about venues and their importance...  "Should we be on Craigslist, MLS, Trulia, Zillow, etc?" 

My reply was "Of course... we want to be as many places as we can keep track of... but most of the activity will likely be generated by the MLS." 

But the question went deeper... into the best marketing tool...  And I replied that it was the list price.  The list price is the most important marketing tool in the agent's arsenal.  I love having a box full of tools.  In my garage I have several boxes of tools.  I always want to make sure I have the tool that is going to get the job done.  In home marketing, it is no different. 

But what I see many agents missing is the importance of having the WHOLE arsenal. We talk about:

• Ad Copy
• Photos
• Videos
• Websites
• Listing Syndication
• Signs (and Custom Signs)
• Price
• Staging
• Virtual Tours

But at the base, there is a simple fact...  If the price isn't right, buyers won't look at the rest of the marketing...  As agents (or FSBOs) we can syndicate our listings to hundreds of sites, we can have the coolest sign on the planet... but there will be few click-throughs to the listing information. 

So, we HAVE to get the price right...

But it doesn't stop there.  After the prospective buyer clicks through to the listing, they will bail if it is lame...  If the pictures don't rock (or aren't there), if the virtual tour isn't compelling, if the ad copy doesn't inspire, if the video isn't building interest then there is scant reason for buyer to visit the property.  There are just too many properties out there where the supporting ad materials ARE exceptional. 

So, we have to have top-notch supporting material...

If you think that it is over then... think again.  All we have done so far is get the prospective buyer into the home...  We need to wow them one more time in order to get them to write an offer.  That is where staging and property condition come in...  Buying a home is an emotional decision.  Buyers select the home they will ultimately buy based on their comfort level in the home.  While there are plenty of logical considerations, I can honestly say that I have never had a buyer weigh the decision solely with a spreadsheet. 

So, we have to WOW them when they step through the door...

It is a progression.  If we miss any step along the way, we increase the time on market or decrease the eventual price.

Ok, who knows what an "unboxing" is? 

For those that so, you are a a geek.  I am too. 

For those that don't, it is generally an EXTREMELY dry video where a reviewer opens the box of a groovy new product and introduces the viewer to all of the cool stuff inside.  Usually there is a monotone voice over that makes Golf announcers seem exciting. The reviewer pulls out each and every piece and describes it's function... 

"This is the AC wall adapter.  It charges the battery and can run the laptop from AC power."  Really?  Whoda thunkit?

Patrick Boivin slapped that model to the ground and kicked it in the teeth... Ninja style.  This has got to be the coolest unboxing I have seen. 

NINJA'S UNBOXING

I wonder if unboxing videos are going to undergo big changes as a result...  Probably not.

While doing a little bit of research for my Video Sunday post on LaneBailey.com, I ran across this video...  I have to say...   it brought a tear to my eye. 

A lot of my friends on Active Rain know that my 5 year old plays ice hockey.  He loves it.  He isn't particularly good, but he's 5...  And there is such joy on his face while he is out on the ice playing.  And as I watch the Winter Olympics, I often think about the parents... and the sacrifices THEY made in order for their kids to become these incredible athletes. 

In order for Garrett to play ice hockey, in addition to the money (racing is more expensive...) there is the time.  The nearest rink to us is 30 minutes away.  It isn't such a big deal right now, but if he were playing league hockey, he would have two practices and one or two games each week. 

But what about the families of these Olympians?  Many of them practice EVERY DAY.  And many of tham have practiced every single day since they were kids.  The parents vacation time involved going to tournaments.  Their leisure weekends involved more tournaments and practices.  They became experts in equipment and managing travel.  Their kids had to learn time management in order to participate in school, but the parents had to enforce it and keep everything on track... 

Coach, Manager, Psychologist, Motivator...  Mom, Dad... And I bet that there are no prouder people in the world than the ones that look on... win or lose... while their kids "play."  And I can  only imagine the disappointment if their child falls or wrecks out of competition... 

Here's to the Moms & Dads of all of the Olympians. 

To Their Moms, They'll Always Be Kids (P&G Commercial)

In 1992, Geoff Bodine was a stock car racing good ol' boy (albeit, one from New York).  He was knee deep in being one of the best NASCAR drivers of all time.  In fact, he hold a Guiness Record for the most wins by a racer in one season... 55 Modified wins.

But something else happened in 1992...  Bodine was watching the Winter Olympics and saw something he didn't like.  The American Bobsledding teams were struggling.  Their equipment was all imported from Europe and they were having a hard time with it.

In bobsledding, the technology is VERY important.  suspension, aerodynamics, even material durability and fabrication all play vital parts.  And the international elite teams aren't sharing their best technology... it is a competitive advantage.

Bodine thought there was a place for American technology for American teams... and as a racer, he thought he might know some people that could help.  The first call went to Bob Cuneo of Chassis Dynamics.  They formed Bo-Dyn...

NASCAR is known around the world as the motorsport where drivers only turn left... but the Bo-Dyn has proven that they can make sleds that turn left AND right... VERY well.

The rumor is that next year, production will be moving to Concord, NC.  Once there, they hope to pull in more support from other NASCAR competitors.

But there is something else that is interesting about the Bo-Dyn story.  They GIVE these sleds away.  And they are THE sleds to have.  A Russian team came knocking, holding $100,000 to get one of the American state of the art sleds... they left without a sled.  But for the American teams, they are free. 

That is the other thing that Bodine was able to leverage for USA Bobsledding... sponsorship.  American companies providing technical and financial support for American competitors. 

The result is the "Night Train" with which American teams are competing at this years Winter Olympics.

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Mike hit it in the head.  If you are looking for a house, rates are NOT going to stay here forever. 

My wife WANTS a Nexus One.  If you aren't familiar, that is the new Android phone from Google.  It is seriously cool.  It might be the smartest of the smartphones. (watch the Apple iPhone fans go nuts over that little comment)

That is where the problems start... 

We have been T-Mobile customers for a long time.  She is 10+ years... I came on about 6 years ago.  And Google/T-Mobile seem to be putting up as many roadblocks as they can find to halt existing customers from getting the Nexus One.  In fact, the way they are even handling new customers should qualify as a #fail. 

We have a family plan... but Google/T-Mobile doesn't allow the Family Plans to work with the Nexus One.  And even if we change to the Unlimited Plan that we have access to (as long time customers), they consider this a "downgrade" and would hit us with an additional equipment charge. 

Did I mention that the ONLY plan available for the phone only has 500 minutes?  Either of us can kick 500 minutes in a week.  The unlimited nights and T-Mobile to T-Mobile calls would help, but we usually use about 1500 minutes a month. 

My wife thinks that most of the plan related difficulties revolve around Google's policies.  And they are the 8,000 pound gorilla.  They will likely get away with whatever they want. 

But T-Mobile has some blame here, too.  the lovely Mrs. GarageGuy has talked with several customer service people at T-Mobile (Google doesn't seem to talk to anyone).  Each time, she gets a different story.  T-Mobile hasn't managed to train everyone on the ins and outs of the most anticipated phone available to them. 

All around, it is a fail. 

Wouldn't is make sense...

to make the customer seem valued?  Wouldn't it be smarter to make buying something easy?  Isn't it obvious that the people that would be prime candidates for this phone would use more than 500 minutes a month? 

It is just a big fat Cluster Fail...