Pockets of Atlanta Real Estate Industry Remains Stagnant for February 2015

The shortest month of the year saw a mix of positive and negative factors in the Atlanta residential real estate market; however, being focused on pockets of the consumer segment can return a 60% growth year over year as experienced at Southeast Mortgage in February. 

The Cal-Culator, Atlanta’s leading residential real estate index, will hold steady at 6.3 for another month due to a continued decline in mortgage delinquency rates and a long awaited increase in inventory offset by declining home sales and investment in the Atlanta market.

The February Cal-Culator

Let’s Start With the Bad
Investors’ Dollars in Atlanta & Home Sales: The Atlanta Business Chronicle reported that home sales in metro Atlanta fell 37 percent from December 2014 to January 2015 and were also down 9.7 percent year over year. The decline was attributed to investors buying fewer homes in the area.
Substantial Decline in First-time Homebuyers: The National Association of Realtors also released data that nationwide, existing-home sales fell 4.9 percent ­to the lowest rate in nine months. First-time homebuyers, a vital demographic in the housing industry, declined to 28 percent, the lowest rate since June 2014. According to NAR Chief Economist Lawrence Yun, “January housing data can be volatile because of seasonal influences.”

Now for the Good News
Inventory: According to the latest data from the Atlanta Board of Realtors’ latest Market Brief, Atlanta housing inventory increased 13.6 percent year-over-year and by a staggering 54 percent from the previous month. Last year’s local real estate industry was tainted by the Atlanta housing crunch, which seems to be easing thus far in 2015.

Mortgages: For the 12th straight quarter, mortgage delinquency rates (defined as the rate of borrowers who are 60 days or more late on their mortgages) declined, according to TransUnion’s latest mortgage report. The vice president of research and consulting at TransUnion noted that the mortgage delinquency rate “continues to be well controlled as it slowly recedes to pre-recession levels.”

It’s no surprise that the short month combined with multiple threats of snow around Georgia didn’t propel the real estate market as far as hoped. However, housing experts are still extremely optimistic about the remainder of 2015 and are not overly concerned with this brief bout of sluggishness.
“Low interest rates, rising sale prices, economic expansion and balanced inventory support my expectation that the market will continue its strong and steady growth,” said Atlanta Board of Realtors President Ennis Antoine. “I believe the dynamic economic recovery we are seeing is going to have a major impact on the 2015 Atlanta housing market.”

The next Cal-Culator will be released March 7. Stay tuned to see if next month will reflect a positive come back after a month of stagnation.

www.southeastmortgage.com
770-279-0222

The Cal-Culator Turns One !

We’re excited to share that it has been one year since Atlanta was introduced to The Cal-Culator, Atlanta’s first residential real estate index. The inaugural index was 5.1 when we began last summer. For comparison’s sake, in July 2007 when Atlanta home prices were at their peak, the Cal-Culator would have been a 9. Approximately 18 months ago in March 2012, the Cal-Culator would have been a 1.5. Now, the Cal-Culator stands at a very respectful 6.3, a 0.1-increase from last month. Increased inventory, increased new single-family homes and continued declining foreclosures contributed to the slight increase in the index.

 

Home Sales
Since August, sales of newly built, single-family homes have been at the highest level in six years. Sales of new single-family homes in August rose 18 percent nationally from July and 33 percent above 2013 levels, according to the latest data released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development on September 24. The South posted a 7.8 percent change month-to-month and a 27.2 percent increase from 2013.

“This robust level of new-home sales activity is a good sign that the housing recovery is moving towards higher ground,” said National Association of Home Builders Chief Economist David Crowe. “Historically low mortgage rates, attractive home prices and firming job and economic growth should keep the housing market moving forward in 2014.”

The data also reflected a slight increase in inventory, which now stands at a 4.8-month supply.
Unfortunately, after four consecutive months of gains, existing-home sales fell 1.8 percent nationally and 4.2 percent in the South in August, according to The National Association of Realtors.

“There was a marked decline in all-cash sales from investors,” said NAR chief economist Lawrence Yun. “On the positive side, first-time buyers have a better chance of purchasing a home now that bidding wars are receding and supply constraints have significantly eased in many parts of the country.”

Foreclosures
CoreLogic’s latest report on foreclosures revealed a 22.2 percent decline in foreclosure   nationally year-over year, though Georgia is still fifth on the list of states with the highest number of foreclosures. The 12-month sum of completed foreclosures is at its lowest point in nearly seven years.
Though August marked the 34th month of consecutive foreclosure decline, economists still have significant concerns about the current state of homeownership.

“Clearly there has been a large improvement in the market the last few years, but five years into the economic expansion the foreclosure inventory remains at nearly three times the normal level,” said Sam Khater, deputy chief economist at CoreLogic.

Home Prices
Though home price gains have eased, the S&P/Case-Shiller Home Price Indicies showed that the 20-City Composite (where Atlanta is included) had a small increase of 0.5 percent month-over-month, according to data released September 30. Atlanta also posted a 0.5 percent month-over-month increase and a 6.7 percent 1-year change.

Join us next month on November 11 for the October Cal-Culator as we hope to continue into the index’s second year with positive gains in the housing industry.

www.southeastmortgage.com

The October Cal-Culator Reflects a Month of Housing Decline

The October Cal-Culator Reflects a Month of Housing Decline

Posted on November 11, 2013 by admin

After months of gaining steam toward recovery, the Atlanta residential real estate market has taken a bit of a plunge. The October Cal-Culator ranks a 5.0 after last month’s 5.9. A decrease in mortgage applications, decline in pending home sales, higher mortgage rates and the government shutdown all contributed to this month’s lowered Cal-Culator index.

The October Cal-Culator

The Mortgage Bankers Association’s latest data from September showed mortgage applications for new home sales decreased by 1 percent.  The National Association of Realtors reported its Pending Homes Sales index, based on contracts signed last month, sunk 5.6 percent, the largest decline since May 2010 and the lowest level since December 2012. Rates on 30-year fixed-rate mortgages rose to an average of 4.49 percent in September, almost a full percentage point higher from the 3.54 percent average in May, according to Freddie Mac.

The negative news can partially be attributed to how well the housing market was performing earlier in the year. In the first half of the year, the housing market was rebounding with pending home sale numbers the highest they had been in more than two years. Homebuilders took note and more than 72 percent of homebuilders raised their prices by June, many by double digits. Around the same time banks began raising interest rates. As a result, potential homebuyers are submitting far fewer offers, a sign that the hot real estate summer of 2012 is beginning to cool off.

“The problem is that people are just confused. Early last year the real estate market was starting to recover and homes were supposed to be a bargain“, according to an article in The Wall Street Journal, “Home Shoppers Kicking the Tires, But Delaying Deals.” “Then, as if overnight, you couldn’t find a home and boom-time relics like home-flipping and bidding wars were all of a sudden back.”
It’s no surprise that the 16-day government shutdown had a major, negative effect on the housing market. Hopeful homebuyers were unable to gain loan approval as the Internal Revenue Service, Social Security Administration, Federal Housing Administration and other governmental organizations were not in operation, thus unable to provide needed documentation. Mortgage lenders were unable to obtain IRS 4506T documents needed to close most borrowers’ loans. It is estimated that Washington set the real estate market back a minimum of six months.

Despite many factors contributing to a lowered Cal-Culator, there are a few positives from last month in the Atlanta residential real estate realm.  According to the National Association of Realtors, the majority of metropolitan areas, including Atlanta, are experiencing strong annual home price growth.  In the South, existing home sales prices are up 12.2 percent from the third quarter of 2012. Additionally, Atlanta has seen a huge rebound in the number of home listings, an increase of 14.4 percent compared to a year earlier. The increase in inventory is significantly helping ease Atlanta’s current housing crunch.

The next Cal-Culator will be released Dec. 10 and will hopefully reflect a more positive shift in Atlanta’s housing industry.

Avoid Being a Victim of Mortgage Fraud - Kathy Gyselinck, EVP SEM

Avoid Being a Victim of Mortgage Fraud

Posted on July 2, 2012 by admin

 

Just this week a federal judge sentenced a former Auburn attorney to nearly four years in prison for mortgage fraud. James Boyd Douglas Jr. handled mortgage refinancings and real estate closings and was found guilty of embezzling $2.3 million from clients.



An Atlanta area women and her brother ran a real estate scam in Baldwin County and was sentenced to 18 months in prison and ordered to pay more than $1.6 million to the victims.

Unfortunately, you’ll find fraud in every industry and the mortgage industry is no different. Although it’s only a very small percentage of real estate participants that perpetrate fraud, it’s still critical to protect yourself.
Allegations of fraud are taken very seriously and are investigated by the FBI, which defines mortgage fraud as “a material misstatement, misrepresentation, or omission relied upon by an underwriter or lender to fund, purchase, or insure a loan.”

There are two types of fraud: fraud for property, which involves applicants that embellish their incomes or conceal their debt to qualify for a loan. Although this is fraud because they have signed documents with deceptive information, the intention of these people is usually to repay the loan.
The second type is the kind that the consumer has to be aware of: fraud for profit. This type of fraud generally involves misrepresentations on appraisals, multiple loans and schemes to deceive lenders or borrowers.

Here are some steps from an FBI advisory on how you can avoid becoming a victim of mortgage fraud:
• Get referrals for real estate and mortgage professionals when you want to buy or sell a home. Then check them out thoroughly with state, county or city regulatory agencies. In a previous column we addressed the need to check lenders with the Nationwide Mortgage Licensing System.
• Do your own research into what other homes in the neighborhood have sold for. You can also research recent tax assessments.
• Beware of “no money down loans.” These can be a sign that you are being enticed to buy a home you can’t really afford.
• Don’t let anyone talk you into making a false statement on your loan application. Don’t lie about your income, where the down payment is coming from or the amount of debt you have.

Just remember this statement from the FBI:“Mortgage Fraud is investigated by the Federal Bureau of Investigation and is punishable by up to 30 years in federal prison or $1,000,000 fine, or both. It is illegal for a person to make any false statement regarding income, assets, debt, or matters of identification, or to willfully overvalue any land or property, in a loan and credit application for the purpose of influencing in any way the action of a financial institution.”

• Never sign a blank document or a document containing blank lines. Review all the loan documents. If you don’t understand what you are signing, get an attorney to review and explain them to you.

— Kathy Gyselinck

Remember, just because someone seems like a nice guy or goes to your church, doesn’t mean you should do business with him.