Is a clear sky blue?

Sitting down this morning getting my Fox News fix, I noticed a release by the NAR that has me re-thinking a position I have taken...

Here is the link to the NAR news release. To summarize, the position the NAR takes is that housing will start to pick up in 2008. Existing home sales will rebound, although new homes will lag for another year.

Well, I've been saying this for a few months (go back and look at my Gwinnett Market Reports if you don't believe me). And so, when the NAR says the same think, I need to re-assess my position.

Why, you ask?

Because the NAR started calling the bottom of the market and the rebound before the decline was in full swing. And that really ticks me off. I don't have a problem with putting a good spin on things. We all do it, and sometimes we just need to in order to remind people about the other side of the coin. Whether it is a Buyer's Market or a Seller's Market, it is a crappy market for half of the people in a transaction...

But, it's one thing to put your best foot forward, and quite another to say that everything is always perfect. I run numbers for my market... and I make predictions based on those numbers. When I am wrong, I acknowledge it, and when the news just sucks, I say it. I don't try to speak out of both sides of my mouth just to make sure that I'm covered.

Right now, if the NAR announced that skies were blue, I'd run outside to check.

Keep in mind that I am not only a member of my association in order to have access to the MLS (we don't have to be), but rather, I am currently active in the association (until tomorrow's meeting, I am the chairman of the RPAC committee). No, I'm not being deposed... my tenure is coming to a scheduled end.

So, what do we do about it?

Of the 33.548 real estate agents on A/R... as of a moment ago... I'd bet that the vast majority are members of the NAR. I know that the majority are ticked at the NAR over one thing or another. But, I would bet there are about 50 that are actually active in their local association. I bet half don't even know who is President of their local association, much less the state association.

So, get involved. Make your voice heard [I have NO idea this post was going this way].

And, when the NAR issues these reports, grab some salt, and run your own numbers.

Making the change... from Blogger to WordPress

It is a big change for me.

I started seriously blogging back in June on Active Rain. In July I picked up Blogger (Blogspot). I wanted an outside platform that would be more configurable. But, everything was fine with Blogger. I changed the theme a bit to better fit with my personality and subject. All was ok.

However, as I delved deeper into what I wanted to accomplish (in regards to my real estate business), I decided that I needed to offer something more than I would be able to offer with a static website. So, I started researching options.

In steps Joomla. Joomla is a content management system. It is kind of a cross between a blog and a website, but as a blog... not so great. I created GarageHomesUSA. This was what I wanted a site to be. it had depth and organization and was very configurable. Most of my blog material found its way there.

Then came the meltdown.

I've chronicled it previously on the blog, but because i selected a version of Joomla that wasn't stable yet, and because my host had me on the same servers as a few years ago, I had to change serveres with my host. I decided as I was doing that, that one of my sites was not really fulfilling a purpose. LaneBailey.com was just kind of there.

In an "aha!" moment, I decided that the blog needed to be there. I could afford to lose that site to bring my blog "in-house" so to speak. And so, I again dived in to do some research. Opting for another open source application, I chose to run WordPress on my domain. Again, it could function almost as a website as it is another CMS (content management system). However, it is a great blog, but less than optimal for a full site.

So, over the last week, I have been running both the Blogger and LaneBailey site parallel to each other. I will continue to do so for a while. After a bit, I plan on just summarizing my posts from LaneBailey to the Blogger platform.

So, if you are my reader...

I'd love for you to visit LaneBailey and hang out in the shop with me.

As always, I'd LOVE your comments and suggestions. I look forward to hearing from you.

I'd almost consider running to answer this question...

So, it's like this...

First, the video is only 27 seconds long, so feel free to watch.

Now, let me tackle the answer.

Jamie, there isn't a quick and easy answer to the question, but it looks like you think there should be from your video. But, let's look at the causes, and let's see if we can find some possible solutions.

Causes:

• The fed, trying to keep the economy rolling after the terror attacks of 9/11 kept rates low. Those low rates made a lot of people think about taking advantage of them to buy homes... lower rate, better payments.
  
• Consumers decided to take advantage of that opportunity to not only buy houses, but to tap the equity in their homes while refinancing, since they could cash out, and keep the same payment.
  
• Many of those consumers got greedy and wanted to get more than they really should have. Instead of getting another 30 year fixed when they refi'd, they chose to go after something wilder and instead of 5.25% for 30 years, they got an interest only ARM for 2.5%... and then bought a bass boat and a new Tahoe.
  
• Buyers got the same kind of greedy. About the same time they figured out that they could get a $400,000 house with a real loan, they found out they could get a $600,000 home with a mortgage that they had no business being in. But, they wanted it and didn't care.
  
• Other buyers also got greedy, but in a different way. They found out that they could get out of their apartment, and into a house without spending any money. They could buy a house with 100% financing. They didn't care about the terms... it was less than their rent.
  
• Some mortgage brokers got greedy, too. They put people into whatever worked for the moment without regard to the future ability to repay. As soon as the loan closed, it was sold... so who cares.
• Some agents got greedy as well. They actually suggested that buyers get something wild just to get a bigger commission.
  
• Back to the fed... They raised rates in order to cool inflationary issues. Those "exotic mortgages" started to get pretty exotic...

Solutions:

• Personal responsibility.
  

Do you really think that any of the above things should be fixed by the government? I mean really.

• The fed was doing the right thing to respond to the financial needs of the country. Technicians may argue about whether it was too much, too little, too early or too late... but it was the right strategy.
  
• Nothing wrong with refinancing for a better rate. Nothing wrong with taking out a little cash to make the house better.
  
• When people start paying off credit cards things get a little gray. As we move into Tahoes, bass boats, and vacations, we are leaving gray and heading towards dark. Doing with an exotic mortgage product is just plain stupid.
  
• Buying too much house because you just want to... and can find a mortgage product that will let you... just plain stupid.
  
• As much as I like first time buyers, and want EVERYONE to own a home, some people just aren't ready. Not understanding what you are committing yourself to is... not responsible. (I won't say stupid, because first time buyers NEED a break, and they need the guidance of responsible professionals).
• I think that loan originators that don't care about the future of those that they pawn off crappy, unsuitable products upon are crossing an ethical line. it isn't going from bad to good, either.
  
• Agents... same thing.
  
• Again, the fed did what they needed to do for the situation. Same arguments as the first point.
  

So, there is the answer to your question.

Now, on to your point that you didn't ask a question about...

Why has your neighbor's home been on the market for six months?

The price is wrong for the market, marketing, or condition. It isn't the same real estate climate as two years ago. The house needs to be priced where it belongs, not where they buyer hopes it will be. Perhaps they can't afford to sell it at the price it should be at. If so, maybe it is because they were covered above.

The short answer is that as President, I won't do much to "fix" this problem. I will, however, tell people that the government is not their Mommy, and they need to be responsible for their own actions. If there is a surgical way to make the actions of greedy mortgage originators and real estate agents illegal, I'll pursue it. But, as is often the case, broad legislation usually hurts more people than it helps.

Is that my whole minute?

Housing Starts down slightly, but Multi-Family are up...

So, what does that mean? First, let me toss out the original story.

Daily Real Estate News | November 21, 2007

Home Starts Up, Mostly Due to Multi-Family
U.S. home builders broke ground on more apartment buildings in October, driving housing starts up 3 percent to an unexpected seasonally adjusted rate of 1.229 million, the Commerce Department reported Tuesday.

But builders trimmed permits for future building projects by 6.6 percent. They also cut back 7.3 percent on single-family homes to a seasonally adjusted annual rate of 884,000, the lowest level of single-family home building since the last recession in October of 1991.

The levels varied regionally. Home starts in the Northeast rose 8.5 percent overall, and starts of single-family homes rose 29.5 percent. Single-family starts in the Midwest were up 15.1 percent with the overall increase at 21.1 percent.

In the South, overall starts dropped 4.6 percent and single-family starts fell 19.5 percent. Starts in the West rose 5.8 percent overall but single-family home starts dropped 8.1 percent.

Source: Thomas Financial, Dennis Moore (11/20/07)

Here is the link to the story from the NAR.

Of course, I want to focus on the numbers for the South. Starts are down by 4.6%, but SFR (Single Family Residential) Starts are down by 19.5%. That tells me that MFR (Multi-Family Residential) is well up. Why would that be? Well, MFR is another way of saying rental property. So, if builders are getting more orders for rental properties, the buyers are confident that they will be able to fill those units. It also means that buyers are confident that they will be able to pay off those units with the tenants moving in to them.

I have previously mentioned that it was looking like rents were expected to increase faster than previously expected. The "Sub-Prime Mortgage Meltdown" would be the main reason. People that were on the edge of affording a home before the SPMM are out of the market now. That increases demand on rentals... until the supply catches up, the price will rise.

So, let me sum this up into a nice, neat package.

• If you are a credit-worthy buyer, this might be a good time for you to exploit that. The market has a LOT of inventory, and deals are to be found.
  
• If you aren't buying, look for rent to go up.
  
• If you don't know if you are able to get credit, talk to a reputable mortgage broker. They can tell you if you are able to qualify for something, and what the terms will be.
• Rates are still incredibly low.
  

I am a long way from saying that everyone needs to rush back in to the real estate market. If your credit is shaky, I would recommend you sit on the sidelines a while longer while fixing your credit and building up some cash. I would also still counsel you to talk with a mortgage broker. A good mortgage broker can tell you the real ways to increase your credit scores.

If you need any referrals to a good mortgage broker, feel free to contact me through my website.

Open Property Search for Gwinnett County, GA and surrounding

I've gone and done it now... I opened up the search capability on my website. Search the MLS without having to register or give up your private information.

As long as there have been real estate agents, we have been gatekeepers of information. In the early days, agents and brokers held their own listings. They wouldn't even share them with other agents and brokers. Then, somebody figured out that other agents had listings, too... and they might be willing to all cooperate and share... and EVERYBODY would benefit. And so the Multiple Listing Service was born. It was real estate brokers in a specific area cooperating with each other and making all of their listings available to each other.

It was... "The Book." I can remember back in the 1980s (and the book goes back WAY before that) going to the agent's office to see "The Book." It was guarded, and seldom allowed out of the office. It was updated every week or three... depending on the market. But, agents guarded it like a treasure. The information was power...

And then came the listing computer. I remember this as well (no, I wasn't in the business. I was a buyer). One actually had to go to the office of the agent to look at "The Terminal." It was on an intranet, and tied into the MLS. Agents could only see it at the office, and there were still books, but the listings were updated daily, and somewhat searchable on "The Terminal." But, if a buyer wanted to have access to new listings, the agent had to pour over the machine each day or every few days to see what was updated.

Then came "The Website." Soon, the listings were available via IDX (this is a data exchange where the listings are sent to all of the brokers that want them). Because the internet was still not widely adopted, and the information was prized, the only way to access "The Website" was through a broker's site... with a password... that one got by giving up their information.

Now, the information is out there. We all have it. I have it on one of my websites as an IDX feed.

When I surf, I hate putting in my private information. I want to be anonymous until I desire to give up my information. I assume that most web surfers are like me. So, I decided that I needed to give the same anonymity to my surfers that I want when I am out on the web. The Golden Rule and all that.

There was a little reluctance from some of those that were entrenched with the "control of information", but they have caved... Search away.

If you wish to give me your information, I'll be happy to put you on my email list. Or, you can get my RSS feed from my blog, confident that I am still in the dark as to your identity. If you want to look through my site and search the listings and then use another agent for the transaction, that's ok. I hope that you decide that I should represent you.

Enjoy.

Oh yeah... You can do the search through ANY of my websites. LaneGetsResults, LaneBailey, GarageHomesUSA or directly.

Gwinnett County Schools looking at a major redistricting

I'm a little late to the party on this, but I would bet that there are a lot of people that were even further out of the loop than me...

The Gwinnett County (GA) Schools are looking at a major redistricting. I have put them in the list based on the High School Cluster. Some of the schools affected are elementary, some are middle schools, others are high schools. The clusters that look to be affected are:

• Grayson
• Mill Creek
• Lanier
• North Gwinnett
• Central Gwinnett
• Dacula
• Grayson
• Archer
• Mountain View
• Collins Hill

Here is a link to the information on the Gwinnett County School System website.

It looks like there are a few Elementary Schools that will be affected in 2008, and then the bulk of the plan will be taking effect in 2009. In all, there will be 12 new schools added, and 3 replacement schools.

The Board of Education held public comment meetings on November 13th and 15th. They will be issuing their decision on December 13th.

While wandering a little deeper in the school system's website, I came across their future projections. On this page, I see that the school system projects (conservatively) that they will need 35 new schools before 2012. By my math, it looks like the recently proposed changes only cover 1/3 of that need, so I would expect more of the same.

Can we ease the water shortage?

It looks like there is an idea to do just that.

If the US Fish and Wildlife Service signs off, the water coming off Lake Lanier could be dramatically cut. Right now, we have about 79 days left. If this plan goes through, there would be a reduction in the Apalachicola River of about 10%, but the outflow from Lanier could be cut more than that... maybe even more than a year.

So, we'll see what this does for the drought situation. Of course part of the problem is that the USFWS hasn't decided when they'll decide... Of course, it isn't like there is some sort of clock dripping... I mean ticking in the background.

Here is a great blog with sources and further info regarding our wonderful water situation here. I'll also keep posting as I get new info.

I'm giving away $1000...

...to a Senior at Parkview High School in Lilbun, GA. Now we just need to see who it is.

Sometime next week I hope to announce the details, but I have decided to offer a $1000 scholarship for a graduating Senior at Parkview HS. I hope that I am able to expand the program to some more schools in Gwinnett County in the next few years, but this is a start. I'm meeting next Monday with the counsellor at the school that administers these types of things, and we are going to figure out the rules and requirements.

So, if you are a high school senior at Parkview, or know one... let them know. There will be some qualifications, but they won't have anything to do with real estate or any other career choice. It will also not be income restricted or based on GPA or other direct school performance... or athletic performance.

Curious?

I'd love comments...

One Day Sale!!! For a condo... And an Uber Open House!

I'm sure I'll post up about it again later in the week, but mark your calendar for November 11th.

The Tuscany is a condo development in Midtown Atlanta between 8th and 10th streets (there isn't a 9th street there) and between Juniper and Piedmont. It has a decided Mediterranean style (ya think? It is named Tuscan, not Canadian) with tile roofs and plaster exterior walls. Inside, there are a variety of floorplans, and we will have resale units of most of them, ranging from 675 square foot one bedroom units, up to 1181 square foot two bedroom condos. In all, there are twelve units for sale in this desirable complex. We will have at least seven of them open on November 11th.

Unit #2324, that I have listed is a one bedroom with an additional den. According to tax records (all of the quoted Sq. ft. are from tax records), this unit is 966 square feet. The pictures all over this post are from #2324. It has a spacious master suite with a walk through closet. The kitchen is off of the living room and dining area, allowing a more open view between rooms. The kitchen also features solid surface counter-tops and a eat-in bar. There are wood floors throughout the condo. For more, look at my previous blog post about #2324.

Looking over the railing of the top level balcony, one looks down on Juniper. It exemplifies just how close to the center of it all this is. It's a block and a half to a MARTA rail station. Piedmont Park is just a couple of blocks away. If nightlife is the thing, there is a plethora of clubs along Peachtree and Crescent between 11th and 14th streets (Vision, Twisted Taco, Front Page News, Opera, Club Metro and others). There are also great restaurants like Spice, Mitra, Park Tavern and the Vortex.

And, on November 11th, the seller will be taking $10,000 off of the price of this great condo in a fantastic location. Macy's does it, we can too. You could be in for Christmas... or even Thanksgiving. It is available for immediate sale.

Stop in on November 11th (next Sunday). We'll be holding it open from 2 until 5. We look forward to seeing you there.

You can also stop in to www.955Juniper2324.LaneBailey.com to see more.

Where does this guy get his data?

I just can't help myself...

I just ran across this little release from the NAR. Basically, the CEO of Countrywide says that the subprime mortgage mess could widen the home ownership gap between whites and minorities. However, in the same daily brief, the NAR sent out this piece as well. it states that the sub-prime mortgage problem is striking across the board, cutting across racial, income and regional differences.

Which one is it?

Same newsletter, completely different results. Whom to believe?

Off to Wiki we go...

Of course, I don't have the numbers for the last couple of months, but I doubt that Angelo Mozilo has a good set of numbers, as well... but I'll concede his might be better than mine. However, looking at wiki, it seems that home ownership is not only at an all time high, but is increasing for EVERY group.

Of course there are going to be blips, but I feel confident in saying that the basic trends of the last several decades will continue. Overall home ownership has been on the increase for a few decades... again there have been a few blips, but according to the census bureau, this trend has been holding sine 1940.
So, will any of the media bother to mention these little items? It wouldn't surprise me if there wasn't any mention.

By the way, here in GA we are above national averages.

X Prize

So, how many of you have heard of this? The X Prize.

Back when I wrote the A-Z series, it was my back up plan for the letter X. Currently, it doesn't have much relevance to real estate, but one day it might.

The original X Prize was $10,000,000 to be awarded to the first entrant to launch a craft in to space, and then turn around and do it again with the same craft within a short period of time. Another current X Prize is for Genomics.

The X Prize that grabbed my attention is the Automotive X Prize. The basics involve developing a car that is capable of at least 100mpg, can carry 4 people, and emit under a certain amount of pollution... and it has to be marketable to real people. No carbon fiber, $1M concept cars that look like a cross between a VW Bus and a bar of soap. Think about something more like an accord that has some evolved technology and can be sold for under $30k. I've even decided how I think it might be possible...

"But, this relates to real estate how?"

I'd love to see an X Prize that involved low cost building designs for developing countries. Of course, I'd like to see this developed in a manner that it could positively impact local economies, providing jobs and profits...

Just a thought... and this isn't what I would do with the money.

Lane's "Crazy Idea of the Day"

Barely after midnight, and I have already had my best crazy idea of the day...

In almost every form of motorsport, the drivers are festooned with the names of all of their benefactors. As Kurt Busch stands in Victory Lane, chugging a Coke, wearing a Miller hat, and holding a quart of Mobil1, all of us know that they pay his way. Of course those are the best products on the planet... they pay his check.

When Jimmy Johnson talks up Lowe's, or Jeff Gordon mentions his new energy drink, we know why. There is no question.

But, what I want to know is...

Who spent the big bucks for Hillary Clinton? What about Fred Thompson? John McCain? Barack Obama? Who paid for their last elections, and who is funding them now?

Maybe politicians should get nifty suits like NASCAR drivers. It would be interesting to see who's name shows up where.

Wouldn't that be fun?

Imputed income

Familiar?

Let me give you a quick idea of what it is. Keep in mind that I am not a tax professional, or a lawyer... just a real estate agent.

I guess the easiest way to say it is that it is phantom income. For our current purposes, let's look at a short sale. Let's say that the seller owes $300,000 on their home. In the short sale, the property sells for $225,000. Obviously the difference is $75,000. When the bank takes the loss, they report the write-off as income to the "recipient", the seller. So, that year they get a huge income boost. And they owe taxes. Nice, huh?

Congress is working on altering the tax laws so that people aren't stung by this in many cases. We'll see what happens.

But, that's not all...

A few years ago, a plan was floated to Congress to actually expand imputed income. Some lobbyists felt that there were people that were "unfairly" gaming the current system, and taking advantage of others. How were they doing this, you ask? They bought homes to live in.

You see, these people weren't paying increasing rents. Instead, their fixed rate loans had largely the same payment for years. So, while renters were facing increased rents over time, homeowners had the same payment until they moved or {gasp} paid off their homes. That isn't fair, is it? (trust me, I am shaking my head...)

What to do? Well, figure out what the market rent would be for a homeowners property, and then charge them the difference as imputed income. So, our villain (Biff the homeowner) pays $2000/mo. for his house payment. If he were to rent a similar house, the cost would be $3000/mo. So, obviously our villain is getting over. He is saving $12,000/year compared to the less fortunate (those would be the renters...). So, maybe he should have to pay tax on the extra income.

Luckily, some of our congress critters figured out that they would be committing suicide at the ballot box if they actually tried to implement something like that. Not to mention that every extra penny collected would be swallowed up by the new agency that would have to figure out the rental value of every owned home in the US.

ggrrrr..

Shhh... Can you keep a secret?

This is a serious work in progress.

Three days ago, I didn't know anything about Joomla. I got past the installation, and started populating with content. The first thing on the agenda is getting all of the articles and pertinent blog posts migrated (copied) to the new site as well as put meta tags and descriptions on them.

While all of this is going on, I am having to design menus and figure out the best way to organize the content. The organization has to intuitive for a user that doesn't know what might be there. I think that the organization is the toughest part of this.

So, if you want to play along, feel free to drop in. If you are on in the evening, you might even see the site change around you while you are there. Buttons will pop up on menus. Themes will change. Content will show up... and then move.

It certainly isn't "live" for public consumption, but for those that like watching races just to see wrecks... this might be fun... and it will last for weeks.

Market Update for Gwinnett County, August 2007

It time for me to make my prognostications for the coming market, while recapping that which has happened. Please keep in mind that even on the 18^th of September, the numbers for August WILL change. I will come back and correct them before posting the October results. I originally posted the June number on July 10^th, and they had changed pretty significantly by August 6^th when I reviewed and corrected them.

The numbers for August, even this late in the month don’t look like they can be complete. If the numbers hold up, the market took a dramatic down-turn in August. I think that as we approach the end of the month, the numbers will correct (I have seen this for a while now).

Prices are pointing up, but I don’t think that will continue. I think we need to see a drop in prices to spur buyers into action. I don’t expect that to be much, but a modest decrease of maybe 2%. Currently we are up 5% vs. last year. June was up 5%, and July up 2%. This might also be partly a function of some of the new home sales on the higher end of the market. I would really like to see this flatten a little, as I think it would spur a little more buying.

Time on the market is also trending up vs. last year. We are up to 95 days. That is almost 4 weeks (25 days) more than this time last year. Last month was 80 days on market, but that was also 10 days more than July 2006. May sales were the lowest this year at 76 days on the market. In fact, May was the lowest since last October (2006) when the DoM was 72 days.

By now, I think anyone in the housing market has heard of the Sub-prime Mortgage Meltdown. It is still a big player on the market. Buyers that were marginal even six months ago are out of the market now. Buyers that are solid are still solid. If anything, those buyers are in a stronger position. Since there are fewer buyers, they have increased strength with sellers. Furthermore, I’m starting to see lenders trying to court those strong buyers. Face it, mortgage lenders make money by loaning money. They can only stop writing for so long before they need to look at making money again. Obviously the marginal buyers aren’t popular with the secondary market, so getting “A paper” mortgages back into the stream will become more of an imperative… and so I expect to see rates slide a little for the best buyers.

The current mortgage climate is tough. For buyers with weak credit history, the market is almost closed. Alt A loans (stated income, no documentation) will be away from the market for the foreseeable future, except for the rarest of good credit buyers. And expect that 0% down and even 3% down loans will be reserved for those with better credit.

I think it is getting to be time to say that smart investors need to get back in the market. Buy & Hold strategies will be heavily rewarded in the long run. Prices are good, rates are kicking for those with good credit. There might be a slight easing of prices in the coming months, but I wouldn’t count on it, and we won’t know that we’ve hit bottom until we are off of it.

Finally, remember that we can only get an accurate look in the rear-view mirror. We will only KNOW there has been a change in the market when we see it has already changed. We’ll know that change has taken place when we see all of the best deals are already gone.

Eminent Domain Abuse

This should be one of the keystone and defining issues for the NAR. I know that the NAR and some of the state associations are working (too) quietly to curb governmental abuses of the Power of Eminent Domain.

If you are unfamiliar with Eminent Domain, it is the power that governments of various levels have to condemn private property for public usage. Don't be thrown off by the word condemn, it has needn't have anything to do with condition of the property. Some examples of non-condition related, proper eminent domain would be property needed to build or expand roadways, public schools, or other needed institutions, like fire stations, police stations, etc. Occasionally, eminent domain is used to correct a blighted area. However, that has not been that common, and usually involved abandoned property, rather than taking property from an active owner.

But, in the last decade or so, there has been an acceleration of governmental use of the power of Eminent Domain. Often, this hasn't been about roads, water facilities, police and fire stations, or other legitimate public uses. It has been stretched by courts and governmental authorities for such purposes as shopping centers, more expensive homes, high rises and other private uses. Just do a Google Search for Eminent Domain Abuse. Oh wait, I did... The Castle Coalition has an interactive map that allows one to view highlights (lowlights?) of abuses by location. Here are a few from various sources.

From CBS News:

Jim Saleet worked in the pharmaceutical industry, paid off his house and then retired. Now, he and his wife plan to spend the rest of their days there, and pass their house on to their children.

But Lakewood's mayor, Madeleine Cain, has other plans. She wants to tear down the Saleets' home, plus 55 homes around it, along with four apartment buildings and more than a dozen businesses.

Why? So that private developers can build high-priced condos, and a high-end shopping mall, and thus raise Lakewood's property tax base.

The mayor told 60 Minutes that she sought out a developer for the project because Lakewood's aging tax base has been shrinking and the city simply needs more money.

As much as I hate to pile on Wal-Mart (nobody is forced to shop there, people do it because they want to), they have been at the center of more than their share of Eminent Domain cases.

From Reclaim Democracy:

But if the city of Denver has its way, these small businesses will be evicted to make way for a Wal-Mart super-center. The city's Urban Renewal Authority has threatened condemnation if the property owners refuse to sell and has offered Wal-Mart $10 million in public subsidies.

Wal-Mart leads the pack in attracting subsidies, this year collecting $10 million in Denver; $500,000 in Dallas; $36.7 million in Scottsdale, Ariz., (as part of a shopping center that includes Lowe's); $9 million in Bartlesville, Okla.; and $17 million in Lewiston, Maine.

Just wander around that search and you'll some surprising things. The most important reason the NAR needs to be involved is that we represent people. And these people are buying their dreams. What good is buying the dream if the government can come along and decide that they can get more tax dollars if they just take away someone else's dream?

I'll step down from my soap box for a few minutes now.

I called this one a month ago...

I just got today's REALTOR Magazine Online Daily Update. This was one of the stories that was featured. It is about how foreclosures are up. They make up 10% of the listings in CA, as opposed to 1.7% last year. But, at the same time, distressed properties aren't listed at much of a discount compared to other properties.

A month ago, I posted this update for part of my area. If you struggle through to the end, you'll see this passage:

Foreclosures will start to get more attractive if the lenders start to get realistic about the prices. I see many of these homes priced well above comparable homes plus needed renovation (even with free labor). Until the prices on these properties drop down low enough to allow rehabilitation, these properties won’t sell in any significant number. There are some that are selling, but not to experienced investors or “flippers”. A good example is a home selling at $175k in a subdivision that should net $185k - $200k. The property needed around $20k in renovations to bring it up to area standards, not including most labor. A possible $5k profit is not sufficient for an investor to consider the property. That limits its market to investor/occupants. As the number of foreclosed properties increases, these limited buyers will dry up.

Did I call this one?

When the REOs start dropping, they may start moving. Right now, the banks still think they can get the money out of them that they are into them for, despite the fact that they are over-priced and under-quality. I think when we see a bunch of the REOs start to get attractive, we'll see more balanced listings/solds ratios.

Cobb County places restrictions on number of adults in single family homes

I just saw a clip on Fox News (please don't whine about the source) that Cobb County has passed a new regulation limiting the number of adults living in a home. The basic restriction is that there needs to be 390 square feet for each adult. They also limited the number of unrelated adults in a particular household to two.

The Cobb County Commission says this is the keep property values higher by reducing stacking and de facto rooming houses in the county. Some activists are complaining that this is aimed at latinos and illegal aliens.

We'll see how long it takes for a court case to be filed. I'm curious which way this will sort out, and the effect for other communities that may consider similar regulation. The libertarian in me thinks that if people want to be stacked like cord-wood in their own homes, they should be able to. The homeowner in me would be pretty ticked if there were 8 adults living next door and parking all over the neighborhood because they didn't have enough space.

DeKalb County Limited Building Moratorium

I just received this from Jenna Graber, the DeKalb Association of REALTORS PR person. It was forwarded from the Greater Atlanta Home Builders Association. Quoted as follows:

On Tuesday, July 24, the DeKalb County Board of Commissioners adopted a 30-day moratorium on the issuance of certificates of appropriateness, land disturbance and building permits respectively for non-conforming multiple lots of record held in common ownership. The moratorium only impacts these properties and does not prevent a landowner from rezoning land. The county will seek to amend this process so newly created lots are not smaller than those currently allowed in the existing zoning ordinance. This measure was taken to address inf ill development in older communities where larger non-conforming lots were being subdivided to create multiple homes. According to Commissioner Jeff Radar, the County does not plan on extending the moratorium beyond 30-days. For a copy of the ordinance, please contact Leroy Sutton at 678-775-1473 or via email at lsutton@atlantahomebuilders.com or Chris Burke at cburke@atlantahomebuilders.com.

Chris Burke,
VP, Government Affairs

For those of you that weren't aware, there has been a lot of chatter and activity in DeKalb County about "infill." Infill is the increasing the number of homes in an area, either by building on previously unused areas in established subdivisions, or by breaking up a larger lot into smaller lots and increasing density. Of course, there are two sides to the coin. Those in favor of infill (especially builders and some residents with larger lots) cite that there is a shortage of housing closer in to town. They also point out the increased value of surrounding properties as newer (and often, bigger) homes come into the area. On the other side of the issue, many homeowners argue that services and infrastructure are already stretched in many areas. Increased load on water, sewer and roads devalue their property.

I can understand and appreciate both sides of the issue, and think it DOES merit closer inspection on an area by area basis. Some of the corridors that have had increased infill are well able to handle at least the traffic loads (I'm not going into the sewer to see how that is coming along). Other areas can't deal with the traffic they have, and increasing it would be VERY damaging. Further, some can't support more or bigger roads.