Despite all the not posting I have been doing, the world continues to present an increasing number of interesting topics worthy of comment. But for now, I want to blog a bit about three things in the next week (an ambitious goal to be sure).
First, what happened to the real estate market being a top priority in the federal economic stimulus package? Second, the current state of foreclosures in Athens, GA and what buyers (and sellers!) need to consider when navigating the real estate market. Third, getting an insider’s perspective on property values in the Athens, GA regional area through a discussion with Brian Bowen, our contributing writer/appraiser at Classic City Guide. Brian is pretty busy with two little ones at home and a rocking refinance market occurring just as the Spring buying season kicks in here. For the uninitiated, the buying season in Athens typically begins and ends about a month earlier than the national market, this being tied to our university and public school schedule. Take away message: If you are thinking of selling your home in Athens, you better get on it….
So that’s the plan. I am hoping to meet Brian at his office in the next little bit and pepper him with questions, which I will turn into a narrative for the blog. If you have any questions you would like to have included put them in the comments section, and I will ask them.
Topic One: Where’s the Beef? What Happened to Stimulating the Real Estate Market?
So much of what we’ve been hearing about the economic recovery has the real estate market as an essential part of the recovery debate. We’ve been told the economy won’t get “back on track” until we deal with the tremendous number of foreclosures and ensuing fallout in the marketplace. Deal is the operational word here, and how foreclosures are dealt with is where politics and ideology come into play. Let me explain.
About three weeks ago now, Georgia Republican Senator Johnny Isakson introduced a plan for a nationally subsidized 4.0% mortgage rate along with a $15000.00 tax credit for homebuyers. The details never really had a chance to gain traction before the story stopped being told. Not sure what happened there, but the seemingly sound plan was dead on arrival. Here’s how it would have worked: With the economy tanking and investors looking for a relatively safe place to put their cash, treasury bills grew increasingly attractive and money has been pouring in at a good clip. This gives the government serious purchasing power, so they could borrow money at 3.0%, loan it at 4.0%, and even with potential downstream defaults, the 1.0% margin would be enough for the government to actually realize a profit associated with this particular real estate stimulus plan, especially since defaults of the magnitude we are experiencing right now would probably not occur since lending practices would surely be more stringent. The plan was not without its critics, and a good report on the whole story can be read/listened to here.
Add to that 4.0% plan a $15000.00 tax credit, and we’re talking a one-two punch to the ailing real estate market right at the beginning of the national buying season. Many of the foreclosures would get snatched up by enthusiastic, fiscally responsible buyers, further accelerating the healing process. I couldn’t help but feel we were on track for a robust Spring. Then it stopped. No more talk of it. No national headlines, nothing. Wha’ Happin?
Politics or Ideology?
Could it be that partisan politics are taking a front seat to the recovery, seeing how the 4.0% rate was floated by a Southern Republican Senator. Or could it be that President Obama, the self-touted populist president, was actually being a populist president? Was it politics or ideology that drove him to ignore an otherwise sound idea that seemed pretty dang easy to enact? Mr. Obama has repeatedly called for measures to help people stay in their homes. He gets one shot at the market, apparently, so will he shoot in favor of the real estate industry by creating what he knows will be a profitable situation for them (the 4.0% rate and 15k tax credit)? He answered that one already. It was a resounding no. Is he thinking; “Why would I reward predatory lenders and the unsavory agents, who failed to properly counsel their clients when they surely knew their buyers had no business being in certain, if any, homeownership situations?” Seems possible. But what about today’s buyers and sellers? Don’t they deserve to benefit from the republican plan? And what about honest realtors who try at every turn to serve and protect their clients from doing anything rash or too fiscally risky? And this: What of those who maybe knew from the get go that they had no business buying a home in the first place and now stand to be afforded a few more months or years of pretending?
It is important to note here that while I do not have hard numbers in front of me, the majority of buyers who took advantage of risky loan practices have actually made good on their end of the bargain. They knew the stakes they were playing for and have kept up their end of the deal by making ends meet, establishing austerity measures in their households to insure that the essential food, clothing, and shelter minimums were being met instead of going crazy at Pier One Imports, IKEA, or going on credit-access induced spending sprees. Many who played the wink and nod game with lenders didn’t build a house of cards. Perhaps many of those being foreclosed on right now weren’t simply victims of predatory lenders, but with a similar wink and a nod, were in cahoots with them. They rolled the dice but threw caution to the wind. Perhaps these folks should be held accountable by our new president, lest they be given the wrong message. The same goes for bank bailouts, by the way.
The March 4th Rollout
So the Republican RE recovery plan came and went almost unnoticed, and now March 4th is the big day for the Obama Administration RE recovery roll out. We’ll see. I was just sad to see the fairly sound-seeming idea presented by Senator Isakson not given the proper attention/debate (I am registered non-partisan, by the way). This at a moment in history,
apparently, when every minute counts. That plan was introduced on February 4th and could have been put into action by now. According to those who know more about this stuff than me, anything presented in early March could end up not getting implemented until too late in the buying season for any substantive effect to be felt this year. If the real estate market is the centerpiece, why is it the last thing being put on the table? If people are drowning, shouldn’t we be acting more quickly? Sounds kind of familiar, no?
Hopefully the Obama plan will include measures to aid everybody involved in real estate: buyers and sellers; those who made smart decision as well as those who may have wittingly or otherwise gotten sucked into this mess. And if the president’s hitherto undisclosed plan has the effect of keeping irresponsible people in homes they should not be in, then that “bailout” should come with mandatory government-subsidized financial counseling for each household receiving assistance. Perhaps there should be funds in the recovery package ear-marked for this since financial counselors are part of our economy too.
Our household is filled with austerity measures right now, and it sucks, but it is working. If we don’t require accountability from households with questionable leadership, then we are only going to prolong the inevitable and the agony. March 4th is about here. My birthday is March 5th, and although this is not all about me, I’d like cause to celebrate. I’m sure we all would. JP
Excellent piece on short sales on NPR today. Hits the nail squarely on the head, and at this risk of sharing this with the millions of readers of this blog, resulting in a grinding halt to the economic turnaround currently being propelled by the 8000.00 fed tax credit and the new 1500.00 state tax credit, I will share it with you now. But please, if you choose to avoid short sales after this, go ahead, but don’t avoid the market altogether! The country needs you, buyer! 
The Georgia Homebuyer Tax Credit Has Arrived!
I thought you might be interested to know that as of yesterday, Governor Perdue signed House Bill 233 into law essentially freezing all property tax assessments in Georgia for 3 years. Effective January 1, 2009 through 2011, counties may not increase the value of any property, even when that property is sold, subject to a few exceptions:
If you listen to the talking heads in the media these days, you’d think there were foreclosures on every corner of every neighborhood, like gorgeous low hanging fruit in mid-summer. Let me set the record straight: Nothing could be farther from the truth.
In the Athens area, the buyers purchasing in the 100-200k range are driving the market, due in part to incredibly low interest rates and the 8000.00 tax credit. Fortunately, I have been working with a number of buyers in this range this Spring. That’s the good news. But here’s the challenge: finding my clients good properties to call home. Make no mistake about it, there homes out there, to be sure. A quick MLS search in the Athens five county area shows 833 single family properties listed between 99900.00 and 199900.00. And this doesn’t include FSBO’s. But too many of these properties are not worthy of consideration in my opinion. Many are very risky foreclosures. Then there are the un-maintained homes that need roofs, HVAC, water heaters, interior/exterior paint, updated baths and kitchens. 
A couple days ago, The National Trust for Historic Preservation announced its 2009 list of a dozen unique cites to visit for a less than usual travel experience.
poignant/memorable when he is hanging out with the locals.
By the way, those of us who own homes in ATH never complain about the effect coverage like this has on our investments.
January is National Radon Action Month. Radon is a naturally occurring radioactive gas caused by the breakdown of radioactive materials, mainly uranium, within the earth. Radon is the second leading cause of lung cancer in the United States and the leading cause of lung cancer among non-smokers. If you are a smoker, your radon risk is much greater.
I thought 
