Back in 2006, due to a sever drought and record low lake levels, the Army Corp of Engineers issued a moratorium on dock permits. That lasted 3 years and was ultimately lifted in 2009. Towards the end of 2009, with 174 additional dock permits available the Corp decided to enact a lottery style system to determine who would get any of the remaining available permits.
The problem though was that many people who requested permits weren’t actually allowed to have them, due to water level, room between neighboring docks or the amount of available shoreline for that particular property.
Additionally, this was in the depth of the recession. There were some developer/owners granted permits that never built. Their intention was to build large community docks and if that didn’t occur by a specific date, those permits became available again. Some of those permits must have been renewed because now the number of dock permits available are far fewer.
Cut to today, the Corp began again to accept permit requests. The requests will only be accepted Tuesday thru Thursday and on a first-come-first-serve basis. One you submit your request you’ll have 90 days to provide the necessary documentation in order for your permit to be evaluated.
Now there are only 50 available permits. If you think you might qualify for a permit, it is in your interest to apply soon. If you’re not sure about your qualifications, you can get more information from the Corp of Engineers at 770-945-9531 ext 3262 or at their office in person: 1050 Buford Dam Rd, Buford GA.
2013 was the best year for home price appreciation since 2006 in our area and by all accounts was a welcomed shift in our housing market for sellers in north Atlanta. While we continued to see prices rise as we moved into this year, they rose at a much slower pace.
Demand in 2014 began to soften, in part because of the previous years rapid rise in prices and buyers perceptions of value. While prices have gone up, the number of homes sold has been down over the previous year. Another factor that reflects softening demand has been the drop in homes selling for more than asking price. While the number of homes selling over asking price has dropped 7.4% in North Fulton and Forsyth County, the drop is far higher in places like Cherokee and Gwinnett Counties, as reflected in the following chart.
Another factor that played into softening demand was the limited inventory in 2013 and the beginning of 2014. That, however, has begun to change. With a rise in home values and the growth of new home construction, inventory levels have jumped up; most notably in Gwinnett and Forsyth Counties.
Prices are up, which is great for sellers, but buyers have more to chose from now and are running into fewer multiple-offer situations as evidenced by the drop in above asking sales prices. Industry analysts are predicting a strong housing market this fall and for 2015, predicting an increase in the number of homes sold.
An increase in transactions would be a sign that buyer fatigue is waning and would give buyers a lift in confidence after last years surge in home prices. But it isn’t bad news for home sellers. Current inventory levels reflect a sellers market but as those levels rise, there could be shift back to a buyers market. I don’t see this as a big risk and, in the end, a balanced market with healthy inventory levels and healthy sales is ultimately good for both home buyers and home sellers.
Usually when you mention a ranch home to someone in our area you think old 1970’s brick ranch. There are a few of those out there. All over North Fulton and Forsyth County too. There are quite a few different styles of ranch homes in our area and they run through all the price ranges, from under $100k to over a million dollars.
But ranch homes are far outnumbered by larger, 2-story homes. In fact, ranch home sales make up a very small percentage of overall sales. At the time this article was written, there were only 86 ranch homes in North Fulton county actively listed for sale and some of those were over $1M because they are on large acre tracts. If you just look at homes on 2 acres or less then it’s fewer than 70 homes. With just under 350 ranch homes sold in the past 12 months that equates to 3 months of inventory. That’s what we would consider a tight market.
Out of all listing inventory in North Fulton, ranch homes make up about 5.5% of all available inventory. You can imagine that someone looking for a this type of home might have a hard time finding what they like.
In the 1970’s ranch homes made up 67% of all new home construction nationally. Now it’s about 45%. Ranch home construction is on the rise a bit with our aging boomer population and the increase of active adult communities, but ranch homes are still a limited commodity.
90% of home owners over 45 years of age say they want to age in their own home. And by 2020 45% of all homes will have someone 55 or older. It’s only natural that ranch homes will be even more in demand in the coming years.
So owners of ranch homes, take heart. And home flippers, maybe you want to make your next project one of those old brick ranches.
Tags: Ranch Home
This experience occurred some time ago but I run into so many buyers, and other agents, who have never heard of this that I think it’s worth revisiting. We had a buyer under contract and set to close on a bank owned foreclosure. Of course, with foreclosures you have the ability to perform an inspection but typically they are purchased as-is. Banks usually won’t make repairs unless something very serious is found.
Prior to the closing one of the last things on a buyers list that usually gets done is lining up their home-owners insurance. Getting insurance is a simple as making a call to your insurance agent and providing some basic information on the home. So, by the time buyers get around to contacting their insurer we are well past all the due-diligence and contingency periods.
Needless to say, the buyers were surprised when the buyers insurer told them that there was a previous claim on the property for a new roof, which was paid out to the previous owner. No proof of repair was ever provided to the insurance company so the claim was still “open”. Because of this, the buyers insurer said there was pre-existing damage that had been paid on and they would not insure this home. That’s right, they would not insure the home. After checking with other insurance providers we realized that this was the answer we were going to get everywhere.
The bank, as you can imagine, gave us a very quick and one-word response to our request for them to put a new roof on….No. So, we’re past all contingencies, we can’t back out and keep our earnest money and my buyers can’t put insurance on the home unless they put a new roof on first.
Ultimately the insurance company agreed to provide insurance as long as the repairs were completed within 60 days of closing. We managed to get the bank to pay for half the cost of the roof. While our buyers weren’t expecting to pay for any new roof when we were just days from closing and the bank originally told us they wouldn’t pay anything, half the cost became a pretty big victory.
The truth is, the value will be defined by the banks appraiser. In order to determine that value, they will look at precedent. What have other similar homes sold for recently.
When we prepare a market analysis for a home owner we look at recent sales as well. In many cases, determining that value isn’t terribly difficult. Most communities have similar homes and enough sales on a regular basis to offer more than enough comparable sales. The differences between homes are typically updates and finishes. In those cases determining value is usually straight forward.
Valuing a unique property can be far more challenging. For example, a recent property we looked at is a lovingly restored farm house built in 1912 on a couple of acres of land. You can bet there aren’t many homes just like that selling every day. On the property was the original smokehouse that has been converted into a potting shed and has had a greenhouse added. The barn has been converted into a workshop as well.
Circumstances like this warrant expanding the geographical area in which you look for comparable sales. But when you do find comparable properties to work with you’ll have to make some judgment calls on the features. Finding properties with barns or workshops would be great but maybe it’s a detached garage and not a barn. How do you adjust value for a structure while trying to take into account things like character or scarcity in the case of the greenhouse?
With character, scarcity and unique restorations you have to make some “educated assumptions”. There will be some latitude you have with values but you still must be guided by precedent. Maybe there is a sixth value for a home - what the market will bare - but it still has to pass muster with an appraiser.
Tags: unique homes
On the 5th of each month I post a “Chart Of The Month” on local or national real estate.
This chart shows the median sales price for homes sold in Cumming, GA over the past two years. Note the dramatic rise in the median sales price from November 2012 to November 2013 and the flattening of the median sales price moving forward from that point.
There is a softening of demand in the market and that is being reflected in both the number of homes sold and the median sales price of those homes.
The increase in inventory levels for residential detached homes for sale in Forsyth County. Comparing inventory levels from June 2014 to June 2013.
On the last day of each month I post a “Big Number” or interesting figure related to real estate in our area.
At various times throughout the year we have looked at the year-over-year numbers for single family home sales in Forsyth County. The importance of comparing the numbers to the previous year rather than the previous month is so we can see seasonally what housing is doing in our area. We know that it wouldn’t prove surprising to know that there are fewer home sales in December than there are in July.
Now that we are half way through the year we can take a more encompassing look at the housing market. With that in mind, we have the following chart showing single family sales, comparing the first six months of this year to last year.
The numbers do correlate with what we have seen on a monthly basis, which is that the number of home sales have declined from last year, and a 25% drop is pretty hefty. Asking prices have risen, which has resulted in higher average sales prices and higher median sales prices. Finally, days on market are shorter.
The question most people what to know is what will we see moving forward. Federal reserve chair Janet Yellen is warning that sales have “leveled off” due to higher interest rates and believes this recent leveling off of the housing market is likely to be “more protracted” than they had expected. That is nationally.
Locally, I do believe for the rest of this year we will continue to see sales remain lower than last year. Sales prices will not increase at the same rate as before but will remain above last years numbers. There are no shortage of buyers, just a shortage of buyers willing to pull the trigger.
But, with the further threat of rising interest rates, those buyers may become motivated to find something sooner rather than later. Cash buyers…you’re in the drivers seat.