IN REAL ESTATE, NEVER IGNORE THE PAST

AJC 30 JUN 2013

IN REAL ESTATE, NEVER IGNORE THE PAST
Prices Are Up In Metro Atlanta, Across The Nation

by John Adams

This time last year, the big push was to get buyers off the fence, to try to convince them that they would be better off buying in the summer of 2012 at 4% interest for a thirty year fixed rate loan than sitting on the fence waiting for prices and interest rates to fall.

As it turns out, that was particularly good advice.

Interest rates have pretty much stayed the same since then, bouncing around just under and just above that 4% rate. But consumer confidence has grown since then, and much of metro Atlanta’s excess housing inventory has been either purchased or never hit the market.

Thus, we are now in a seller’s market.

As a result, prices are up about 16 percent since then, and the fence sitters may have waited too long to get the house they want at a monthly payment they can afford.

Sellers have figured out that the metro Atlanta market is heating up, and they are getting more aggressive every day in both pricing and negotiating posture.

To make matters worse for all of us, Ben Bernanke and the Federal Reserve recently announced that the availability of artificially low interest rates, intended originally to stimulate the sluggish economy, may be gradually withdrawn starting in 2014.

That news conference threw the stock market into a tailspin, where equity investors are unable to contemplate business in the reality of the actual cost of capital for home loans.

The gradual reduction of asset purchases known as “quantitative easing” is referred to as “the taper,” and many in the financial sector believe it is likely to lead to higher interest rates for all borrowers, and specifically for home buyers.

Flash back to 1970, when the average home on a lot in America sold for about $25,000. A gallon of gas cost 36 cents, and the average new car was about $3,900.

Between 1970 and 2007, the average price of a home in America increased steadily about ten times, to around $265,000.

The big question is: can it happen again?

Some would have you believe that real estate prices are driven primarily by speculation and by greed. Others would say that government subsidy in the form of the ever-sacred mortgage interest deduction has, in the past, fueled home prices. There is no question that low interest rates make ownership more affordable.

But where does equity growth fit in today’s picture?

It’s pretty much a fact that, on average, if you bought a home in metro Atlanta, it’s worth about 15% more today that it was a year ago.  That’s impressive. That’s equity growth.

And if that continues, I can guarantee that we will see a rebirth of buyers not wanting to miss out on the next great boom in housing prices.

Equity growth is an extremely powerful motivator for home buyers, giving them confidence that they are not making a staggering financial mistake, and that, in fact, they may be making a wise investment.

And apparently, equity growth is back.

OK, go ahead and tell me I am way too optimistic. Tell me it’s people like me who fuel speculation on housing prices and artificially drive up appraisals.  I can take it.

But I’ve been in this real estate market for four decades, and I’ve seen prices rise and prices fall. I told you last summer that prices had dropped below the cost of construction, and that such low prices were economically unsustainable. And I was right.

If the Federal Reserve follows through with its announced timeline of tapering off quantitative easing, I believe interest rates will continue to rise, and that prices will follow, slowly at first, but continue to rise.

At some point, this nation will exit this stubborn economic malaise. When that happens, unemployment will fall.  And you and I will look back at the summer of 2013 and say “I sure wish I had bought more real estate then.”

FINAL NOTE: If you own real estate in DeKalb, Fulton or Cobb counties, you still have time to appeal your property tax assessment for 2013, but you need to move quickly.


Appeal Your Assessment Now or Forever Hold Your Peace

AJC 16 JUN 2013

APPEAL YOUR ASSESSMENT NOW OR FOREVER HOLD YOUR PEACE
Miss This Last Chance and You May Regret It

by John Adams

I am just about ready to declare the Great Recession over.  Home prices stalled, then dove in 2006, and apparently hit bottom in 2012. Most (not all) have seen some recovery in home values since then.

I know that unemployment is still a major problem, and I know that Dr. Bernanke is still artificially holding down long term home loan rates, and I know that there are thousands of foreclosed homes still in limbo.

But as I look around, I see a dramatically reduced inventory of homes for sale, I see prices beginning to firm up, I see fewer vacant houses festering in otherwise attractive neighborhoods, and I even hear Dr. Bernanke making nebulous statements about the direction of interest rates.  All of these are signs of real progress.

Looking back at the human anguish and real estate wreckage left by this recent unpleasantness, I can find little worthwhile. But I have spotted one silver lining that you can enjoy, if you move quickly.

1.  First, know that you are likely paying more than your fair share of property taxes on any real estate you own. The Atlanta Journal-Constitution has repeatedly documented that Georgia’s 159 counties have been slow to reduce property tax assessments, while in fact, property values have been falling.

Your home (or other real estate) has likely lost value faster than the county has cared to admit (as reflected in your assessment).

2.  Know that most people don’t care. Well, they may care, but not enough to do anything about it. The fact that they are paying more than their fair share is fun as the basis of a general complaint at a cocktail party, but that’s about it.

3.  It’s really easy to protest your 2013 assessment.  I’ve given you a sample blank form and instructions on my website.  You have to spend 46 cents on a stamp.

But is it really worth the hassle factor?  I emphatically say “yes,” and here is why:

*  By law, property assessments for the current tax year (2013) are based on the value of your property as it existed on January 1, 2013.

*  On New Year’s Day of this year, we were beginning to see some positive signs of a recovery, but not much. We were still reeling from a disastrous 2012.

*  The value of your home at any given time is a function of the sales prices of similar homes located nearby which have sold in the 12 months PRIOR to the date in question.  Sales since that date are meaningless, as they have not yet occurred for our purposes.

This means that, for most of us, the really terrible sales of comparable homes, even the foreclosure resales, are indicative of the value of our home on January 1, 2013. That figure is likely lower than the value we might see today.

And finally, here is the icing on the cake:

Most county tax assessors have a three-year review cycle for real property that is appealed to the local Board of Equalization (BOE) and has experienced an adjusted value. In plain English, that means if you appeal to the BOE and get your valuation dropped, even by a penny, then the tax assessor will likely leave that value in place for the current tax year, plus two additional years.

Because your home is likely over-assessed, your chances of seeing a successful appeal are high. And if the BOE grants you any relief whatsoever, its dollar savings will be magnified by a power of three unless you make a major improvement or sell your home during that period.

So why am I so fired up about this appeal process?

Because your deadline is fast approaching, and no one is talking about it.

Your tax assessor is required to mail you a NOTICE OF ASSESSMENT, and that usually is delivered in May or June. Some counties are faster, some are slower.

Once mailed, the owner has exactly 45 calendar days to file a protest, and after that date, no protests or appeals may be accepted.

If you live in Gwinnett, Hall, Clayton, Henry or Forsyth counties, it’s already too late.  Your final deadline has passed.  If you live in Cherokee, Cobb, Fayette, Fulton or DeKalb, you still have time, but not much. For other counties, call your local tax assessor and ask for the deadline for protesting your assessment.

If you miss the 2013 deadline and fail to appeal your assessment, you are stuck with it for this year, But worse than that, your comparable sales for your 2014 value will be drawn from sales this year, and selling prices so far are much higher that in recent years.

Statistically, one in three owners who file an appeal receive some reduction in property valuation. This year, I suspect it will be substantially more than one third. But you’ve got to ask.


Property Tax Assessment Appeal Form

CLICK TO DOWNLOAD PT311A



Property Tax Reduction Workshop

DO YOU OWN ANY PROPERTY IN GEORGIA?

2013 Property Tax Reduction Workshop

Only $79 includes complete 2013 manual and forms
CLICK HERE TO REGISTER
If you have ANY problem registering, please email us at orders@money99.com OR Call us at 404-373-6000.

WORKSHOP DATES AND LOCATIONS
Sat June 29 Atlanta , 9 AM – Noon at Hilton Garden Inn, 1501 Lake Hearn Drive
Atlanta 30319
OR Video & Audio recording

TAX APPEAL DEADLINES:
Cherokee County-June 27; Fayette County-June 28; Cobb County-July 01; Spalding County-July 08

If you own real property in Georgia, you are likely paying more than your fair share of county property tax. In this fast 3 hour course, veteran property owner John Adams guides you on the path to lowering the property tax assessment first with the county tax assessor, then with the Board of Equalization, then finally with the Superior Court of the county in which your property is located.

CLICK HERE TO REGISTER
NOTE: If you have ANY problem registering, or prefer not to register online, PLEASE send an email to orders@money99.com or call 404-373-6000, option 4 (We are working on our shopping cart).

The clock is fast ticking for Tax Year 2013, and time for your appeal is running out. DO NOT MISS YOUR DEADLINE!!! The first step is to file your APPEAL OF ASSESSMENT on DOR form PT-311-A, which triggers the appeal process. But once your county deadline passes, you must accept their assessment. If you miss the deadline, you won’t be able to challenge your value for this year.
CLICK HERE TO REGISTER

This course will teach you:

* How to research your value on Jan 1 after the fact.
* How to file your APPEAL OF ASSESSMENT – any why.
* Why you must meet with the appraiser.
* What actual data you must have.
* How to find the best comp sales.
* How to PROTEST your valuation
* How to APPEAL your case to the Board of Equalization.
* How to present your appeal.
* How to Take Your Case to Superior Court.

and much much more!

This course qualifies for 3 hours real estate continuing education credit from the GA Real Estate Commission.

CLICK HERE TO REGISTER

If you are unable to attend in person, you can order the video/audio CDs and manual and forms kit for the same price of $79, with FREE shipping. Same guarantee applies. Price goes up after Seminar Date.

DON’T MISS YOUR FINAL CHANCE TO LOWER YOUR TAX BILL FOR 2013

SEATING IS LIMITED IN EACH LOCATION. REGISTER WITH CONFIDENCE. This class is unconditionally guaranteed to be right for you, or your money back.


What Is the California Homeowner Bill of Rights?

The purpose of the Homeowner Bill of Rights is to provide protections for homeowners facing foreclosure and to reform some aspects of the foreclosure process. It aims to ensure that homeowners are considered for, and have a meaningful opportunity to obtain, available loss mitigation options, such as loan modifications or other alternatives to foreclosure.
The Homeowner Bill of Rights is part of California Attorney General Kamala D. Harris’ response to the state’s foreclosure crisis and largely came about as a result of the recent national mortgage settlement between 49 states and certain lenders.
However, whereas the national mortgage settlement is only applicable to the five settling banks and their customers, the Homeowner Bill of Rights extends Read more →


Other information

ARE YOU STILL UNDERWATER?

Most Metro Atlanta Homeowners Still Strugglng

by John Adams
June 2, 2013

The phrase “being underwater” with your mortgage is an apt description of the way it feels to owe more on a home than it is worth. The borrower struggles to get enough air to breathe, all the while being pulled down by an unseen weight.

Lenders seem remarkably callous to this condition, allowing multiple and repeated applications for forbearance or modification to fall on muffled bureaucratic ears.

At the same moment, the lenders in Georgia often advertise the home for foreclosure, an inherently unfair practice known in the lending industry as “dual-tracking.” I consider the practice nothing short of predatory. It should be illegal here, as it is in some other states.

So, how many fellow Atlantans are struggling with their home equity?

Despite all the good news lately about increased sales activity, the sobering truth came out last week from the economic team at Zillow Real Estate Research. The group used loan data from TransUnion to calculate home equity based on current outstanding loan balances in the thirty largest metro areas nationwide.

According to the research, just over 1 in 4 American homeowners (25.4%) is in a position of actual negative equity, meaning they owe more than their house is worth.

Here’s the bad news:
Read more →


DO YOU UNDERSTAND YOUR MORTGAGE?

AJC 19 MAY 2013

DO YOU UNDERSTAND YOUR MORTGAGE?
Buyers & Sellers Don’t, But Certainly Should
by John Adams

After several years of a real estate depression, home buyers in the Atlanta area are back!

Buyers entering the market now are faced with bidding wars and are taking measures such as removing contingencies and offering to close in less than 30 days in order to make their offers look better.  Sellers, for their part, are wanting to make sure that buyers are prequalified for a mortgage loan.  The last thing a buyer wants is a contract with a buyer who may not receive loan approval.

A recent survey of over 1,000 buyers by a major market player indicates that many buyers are not familiar with the concept of how a mortgage works or how to obtain loan approval. Read more →


Send a Message to John Adams


THE VIDEO CAMERA CONUNDRUM

Buyers Demand It, Sellers Aren’t Using It

by John Adams

Put yourself in the shoes of a typical prospective home buyer. Your name is Bob Buyer.

If you are interested in the metro Atlanta market, there is about a forty percent chance you are relocating here from another city, and you are just beginning to explore the idea of buying a home here.

You log in to Google and enter “buy a house in atlanta”. You get back 183 million results in less than one second.  The first listing provides no useful information.  You scan the rest of the first page for results. Read more →