Archive for June, 2008

AASU Economic Monitor Says Regional Housing May Have Stabilized

Posted in For Buyers, For Professionals, For Sellers, Real Estate with tags , , , , , on June 10, 2008 by Peter Nelsen

Armstrong Atlantic State University Center for Regional Analysis has released its Economic Monitor for the 1st Quarter of 2008.  In it, Dr. Michael Toma acknowledges the challenging economic conditions facing the coastal empire, but offers a few bright spots for the housing sector saying, “it is possible that some of the leading indicators may have ‘found a bottom.'”  He went on to say this about the housing market specifically:

Although residential construction in the Savannah metro area has suffered through a three-quarter recession, the sector may be at the bottom of the cycle. During the first quarter, the number of building permits issued for single family homes increased 3.2 percent from the previous quarter, after the usual seasonal adjustment to the data. On an over-the-year basis, permit issuance appears to have bottomed out in the last quarter of 2007. Other evidence suggests that the inventory of new unsold homes is beginning to back down from cyclical highs. The average value of a new home building permit issued decreased modestly to $157,500, but has been moving within a relatively narrow range for several quarters. (Dr. Michael Toma, AASU Economic Monitor 1st Qtr 2008 )

 
This is similar to what I have felt about the existing home sales market in our region.  I have said recently that I believe our below $250,000 market has picked up considerably and is somewhat strong. Which I believe will translate into a stronger $250,000 to $350,000 market this Summer and culminate in a Fall market with homes under $500,000 selling well again.  I do think the $500,000 to $1,000,000 market will not return until next Spring however.  Our luxury market continues to be on par as luxury Buyers are less affected by slowing economic factors and should do well right into next year and beyond.  Dr. Toma’s report concluded with a brief wrap-up which I will include here as my conclusion:

In conclusion, the two-quarter decline in the leading index continues to send a clear signal that the economic environment in the Coastal Empire will remain challenging through 2008. While some promising (perhaps fledging?) signs of stabilization are emerging from the regional housing market, the area’s labor market will be hard-pressed to absorb surplus labor in the short run. 

(Dr. Michael Toma, AASU Economic Monitor 1st Qtr 2008 )
 
 
 

 

Ed McMahon Fighting Foreclosure On His Beverly Hills Home

Posted in For Buyers, For Professionals, For Sellers, Real Estate with tags , , , , , , on June 5, 2008 by Peter Nelsen

I watched this story last night on Access Hollywood and had to post it here as warning and a lesson.  This morning it was picked up by the Today show on NBC.  This is particularly sad story for myself as I have been welcomed into the McMahon home on a few occasions with his adopted stepson, whom I attended college with.

I say a warning because this threat of foreclosure is affecting a large sub-section of our society and I feel that everyone needs to be aware that anyone can be in this situation at one time or another.  Many are able to turn their situations around, as I hope the McMahons will.  I also think that the lending institutions are aware of the mounting threat and have some systems in place to help those that are proactive and contact the bank before being in default.

When I say lesson, I mean a lesson for home sellers and real estate professionals.  Both of these groups need to look at the details of the McMahon story and take them into consideration.  The home has been for sale for two years for $6.2 Million.  It has been reported that the McMahons are in delinquency of  $644,000 and that they have loans of $4.8 Million.  Your real estate professional should be your real estate adviser.  The McMahons have known they were in default for at least a few months to wrack up $644,000 in arrears and that information should have been made crystal clear to their agent early.  In response, their real estate professional could have advised an immediate and decisive price reduction to get the home sold. 

If you are currently facing foreclosure, tell your real estate professional as such and how far along in the process you are.  Let me repeat, tell your real estate agent you are facing FORECLOSURE.  Many real estate professionals have experience in dealing with foreclosures and the lending institutions who are filing these defaults.

Would you rather sell your home for less than what you owe and be a little in debt with a decent credit score or have your financial situation splashed on national television for everyone to see and your credit destroyed if you go all the way to foreclosure?  Okay, so your foreclosure might only make the local newspaper, but your friends and neighbors will find out and your credit will be affected.  Not being able to pay your mortgage is NOT a crime, but allowing the bank to take it without a fight is.  Be proactive and enlist the help of a real estate professional who knows how to deal with preforeclosures, including marketing to investors and savvy home buyers looking for a deal as well as aggressively pricing the property.

Lastly, I want to address the main factor that affected the foreclosure situation and the wrong way to place blame.  The neck injury which kept Ed McMahon from working, thereby creating a disability, should have been covered by some sort of disability insurance.  Everyone should consult their insurance professional when purchasing a home and inquire about not only hazard and life, but as important disability insurance.  It is more likely you will be injured and unable to work than the likelihood of death, as shown at MetLife.  In placing blame, it was not the paparazzi that have kept the McMahon home from selling; it was probably the price and the “black mold” history.  Perhaps the home needs a new tag-line like, “Live like a celebrity, paparazzi included at no additional charge for a limited time!” or more simply “Home in Foreclosure, Celebrity Legend Considering All Offers”.

Ed McMahon Fighting Foreclosure On His Beverly Hills Home