the ST SIMONS letter

Take Two Aspirin

2009-09-10T13:36:00.002-04:00

NEWSFLASH! Socialized Health Care Expected to Cure Real Estate Crisis ;-)

2009-09-10T13:29:00.003-04:00

As he prepared to take office in December 2008, Barack Obama was speaking of government run health care when he said with a perfectly straight face: "This has to be interwoven into our economic recovery program. This can't be put off because we're in an emergency. This is the emergency!"

Almost in the same breath, and before his tax fraud issues forced him to withdraw his nomination as Secretary of Health and Human Services, Tom Daschle explained the President-elect's incoherent logic as follows: "Addressing our health care challenges will not only mean healthier and longer lives for millions, it will also make American companies more competitive, address the cause of half of all of our personal bankruptcies and foreclosures and help pull our economy out of its current tailspin."

So let me get this straight ... even though most Americans are happy with their current health care plan, we have a "health care crisis." And if we act quickly before all the details are worked out, the new health care plan will heal our collapsed economy and resurrect the real estate market. Here's how this plan looks to me:

1. Suffocate the top individual and business producers in our country with higher taxes

2. Spend trillions on government run health care, simultaneously dismantling the best health care system in the world

3. Make everyone (except old people) healthier so they will suddenly have jobs and begin making mortgage payments on time

4. Play shell games with the debt until it all crashes down on our children and grandchildren

So as you can see, socialized health care is the key to a robust economy and an immediate real estate recovery. It's so simple! Why didn't Fidel Castro think of this? Oh that's right ... he did. I'm sure things must be thriving by now in Communist Cuba.

The recent crash of the real estate market has been traced to government intervention that began during the Carter administration. The 1977 Community Reinvestment Act (CRA) compelled banks to make loans to low income borrowers who would not qualify under ordinary economic criteria. The CRA sought to address perceived lending discrimination in low to mid-income neighborhoods.

The perceived crisis, I suppose, was that banks had been lending only to people capable of repaying their loans. Criminals! And since millions of Americans couldn't afford to own homes, they were unfairly deprived of the American dream by the greedy capitalists. Enter the government. Billions of dollars in sub-prime loans and 30 years later, the whole ponzi scheme unravels and we finally generate a real crisis ... the mortgage meltdown. Thanks President Carter!

And now as we watch in horror, an enlightened new regime takes swift action in the name of hope and change. They are hoping to bail out the economy by making wreckless changes before anyone has time to read the fine print! The bailout is loaded with irresponsible spending, perpetual regulation, and no plausible end game for the trillions in debt we are acquiring. We haven't even begun to experience the "unintended consequences" of this scheme. And the looters who are managing this crisis play for the same team that caused it in the first place.

Thank God for the wisdom and rage of the American people (though it has been a long time coming). Maybe the momentum created at the August town hall meetings will turn the tide. Is there still time to slam the breaks on this socialist freight train that derails our national calling? Can we ever return to the proud and cherished individualism that made our nation great? Yes, but only if we require every capable citizen to pull his own weight in every facet of life and death. Socialized health care is the enemy of our greatness.

Trillions for TEAR DOWNS!

2009-08-07T10:48:00.002-04:00

First Tuesday on the Courthouse Steps

2009-08-07T10:36:00.003-04:00

Glynn County had 90 foreclosures advertised for sale at "publicoutcry" on the courthouse steps for Tuesday, August 4. Haveyou ever witnessed this event? If you have visions of a fasttalking, bellowing auctioneer hustling properties like livestock,it's not like that at all. It's more like nicely dressedlawyers reading gobbledygook to a yawning oak trees.

It's a curious, time honored formality that almost always endswith the lender taking back the property. The lender's attorneyreads the foreclosure notice to nobody in particular, word forword from the foreclosure notice in the newspaper ... completewith metes and bounds, lender successions, to-wits and all thosecertain whatevers. People pass by on their way inside thecourthouse, barely noticing the activity on the steps. Little dothey know if they scratch their noses at the wrong time, theycould be purchasing a beachhouse on St. Simons! At times youcan barely hear over the screaming leaf blowers nearby, a wrongly scheduled activity to say the least.

After "crying" the property, the attorney announces the lender's bid and asks if anyone else wishes to bid. "Going once, going twice ... and another bank foreclosure hits the marketplace.

Georgia law allows for non-judicial foreclosure which permits the lender to include a Power of Sale clause in the mortgage documents. This helps the lender bypass the court system (a judicial foreclosure), saving much time and money. In a non-judicial foreclosure, the lender notifies the borrower of default, advertises the property for four consecutive weeks in the official county public notice publication, and then sells the property "at public outcry" on the courthouse steps. (For more information about foreclosure procedures, visit h ttp://www.foreclosurelaw.org/Georgia_Foreclosure_Law.htm ).

There is actually very little drama to the procedure. During my morning visit to the Glynn County courthouse steps on August 4, I observed only a handful of spectators milling around. Most of them were in the real estate business and knew each other by first name. Some came just to observe the process.

From 10:00 a.m. to noon, approximately 30 properties were read. There was only one bidder (other than the lenders) for any property, and he purchased it for a shade over the lender's opening bid. After he counted out $250,000+ in cashiers checks of various denominations, the attorney took his information for title purposes and the transaction was complete. Next!

During one reading, the attorney stopped in the middle to take a phone call. I found that a bit disrespectful as someone's "American dream" was being snatched away. Moments later, the legal profession redeemed itself when I sneezed during another reading. Without skipping a beat, the attorney slipped in a polite "has declared said indebtedness God Bless You due and payable ..." That was probably her one chance to ad lib. It was all very civil and orderly, if not a little casual.

The next step will be for the lenders to file foreclosure deeds with the county clerk (see ____ ) . Most of the foreclosed properties will then show up as listings for sale through various Realtors. They will be described as "bank owned", REO (real estate owned), or foreclosed properties. Those are the listings commanding the most attention in the marketplace today due to their distressed nature and reduced pricing. When the foreclosure volume slows down, we may begin to see a recovery in real estate values. Until then, it's a buyer's market.

No More Please

2009-07-08T14:31:00.003-04:00

Are We Sufficiently Stimulated Yet?

2009-07-08T14:10:00.003-04:00

Have you or anyone you know been rescued, bailed out or otherwise stimulated by the federal government in recent months? Has the economic stimulus plan turned even one shovelful of dirt in our community? Can you name a single jobless person who has found gainful employment as a result of the government's efforts to legislate our economic recovery?

Maybe I don't get out enough, but I don't see it. I see politicians paying off their constituents in a huge power binge, spending trillions they don't have by passing legislation they haven't read. It's the most disgraceful display of government recklessness in American history.

According to The Brunswick News on March 18, 2009, "Decorative lighting for the Sidney Lanier Bridge is the only Glynn County project eligible for funding under the federal stimulus package." Is this the hope and change we've been waiting for ... lights on a bridge that already has lights? I thought we were supposed to reduce global warming, not screw in more light bulbs. While we're at it, let's wrap the lighthouse in Christmas lights and leave them up year 'round for everyone to admire!

Future Stimulus Project?

Is it me, or does all this seem like a bad episode of the Twilight Zone? A place where the President of the United States can actually fire the President of General Motors. Where people are forced out of the world's finest health care system and into a "better" program run by the same people who can't fix Medicare, Medicaid or Social Security. A nation that lines the pockets of its enemies with hundreds of billions in oil revenue while leaving its own oil firmly in the ground. God forbid we should inconvenience a few caribou in the interest of national security!

Now we hear about a second stimulus plan ... I suppose because the first one is working so well. How long will it take the hope and changers to regulate the real estate business? Oh, I forgot. They're already in it up to their ears with Fannie and Freddie and the whole mortgage bailout. Touched off by their political predecessors who believed everyone should have a home whether they could afford one or not, government meddling has now rocked every segment of our economy.

Soon our opportunistic leaders will declare the only way out is through more regulation. Many believe the government will control the entire banking industry by year end. It's the crisis that keeps on giving. "You never want a serious crisis to go to waste," says Obama Chief of Staff Rahm Emanuel.

Well, here's a quote from yours truly: If conservatives don't recapture momentum in the 2010 elections, we may never see a real estate recovery.

I fear we could be forever trapped in the Twilight Zone, a place where the government regulates every real estate transaction and decides who owns what property. We may soon see the day when prices, commissions and quotas are set by a real estate czar. They will use the concept of eminent domain in ways never before imagined.

Think about it. Talk about it. Vote conservative.

2009-06-11T21:48:00.001-04:00

Encouraging Signs for St. Simons Island Real Estate

2009-06-11T21:42:00.002-04:00

They say it's always darkest before the dawn. And trying to navigate the marketduring the last few months has been like walking through the forest at night ...you never know what you're going to bump into. But there are encouragingsigns and at least some reason to believe the timing may be right for reluctantbuyers to jump back into the local market.

St. Simons Island had 25 MLS residential sales reported last month. While nota particularly high number historically, it is the strongest month since 25 inJune of 2008. There were 30 in May 2008. The Islands as a group have producedan average of only 10 MLS residential sales per month over the past six months,so 25 sales in May of 2009 is a welcome result. (see Transactions report forarea by area statistics).

Further, the area is starting to see a return of the million dollar sale after several months of frightful darkness. May 2008 produced 6 such transactions in Glynn County while the previous two months produced only one. (See Warranty Deeds report for all the details). While not an earthshaking total, this signifies that at least some buyers are seeing well enough through the darkness to pull the trigger on large transactions.

It should not be forgotten that the Islands were the first area locally to feel the effects of the real estate slump. Island sales started declining as early as 3rd quarter 2005 while Mainland sales didn't weaken until 4th quarter 2006 (see Transactions report). So it should surprise no one if the Islands lead the way out of the forest.

Nationally, pending home sales have been up three months in a row. This is considered a leading indicator of future results and a good sign for the market (see Pending Home Sales article). The National Association of Realtors also report that April existing home sales were up 2.9% over March 2009 while still down 3.5% from April 2008.

Coupled with the above signals, economists are now predicting rising mortgage rates (see Quick Takes article). Buyers currently on the fence should strongly consider jumping into the marketplace, especially if they anticipate borrowing under the $417,000 Jumbo Loan threshold.

KRAZY GLUE

2009-05-06T12:54:00.002-04:00

TAX ASSESSOR STUCK ON OLD VALUES

2009-05-06T12:31:00.003-04:00

By Patrick Anderson

Recently the Brunswick News published an article entitled "County expects shortfall" reporting that local tax revenues are declining. This is not surprising given the current economic conditions. However, there is a remarkable statement in the article that asserts: "property tax collections remain strong!"

Here is a direct quote from the article published April 29, 2009:

"Building permit revenue has declined by about two thirds from what was projected, a reflection of the stagnant housing market and poor retail sales. But not everything has taken a plunge. Property tax collections remain strong and the county expects it will have at least a 99 percent return."

I cannot be the only one scratching his head over that last statement. Presumably the information comes from local property tax authorities. The ISLANDER reported a similar statement from Glynn County Finance Director Phyllis McNichol back in late January (CLICK HERE for the article). So my question to Glynn County is: How can property tax collections remain strong in the midst of the worst real estate market since the early 1990's?

A partial answer is that many Glynn County residential properties are protected by the Scarlet Williams homestead exemption. This allows Glynn County property owners who live in their residences to be taxed at a "frozen" value based on when they filed for the exemption. So even though their value is dropping, they are likely paying taxes on an even lower value. So collections could easily stay the same for those with the exemption.

But that does not explain why there has been no reduction in tax collections from the thousands of parcels who do not qualify for homestead exemption ... commercial properties, unimproved lots, acreage, second homes, rental properties, vacation homes, etc. The owners of these properties are the ones with the most at stake when property values change. And these properties have been some of the hardest hit by the real estate crisis.

Most of us understand the laws of supply and demand: if supply goes up and demand goes down, prices plunge. The supply of Glynn County residential inventory has risen rapidly from 0.94 years supply in December 0f 2007 to the current 2.82 years supply (1.74 on the Mainland and a shocking 5.59 on the Islands where we a high percentage second and vacation homes ... CLICK HERE for the full report)

The National Association of Realtors maintains that the housing inventory is balanced between buyers and sellers when there is a six months supply (or 0.50 years). At the current 2.82 years supply, it's absolutely ludicrous to maintain that values have not declined in Glynn County.

Speaking of the NAR, even their chief economist Lawrence Yun is commenting on the reluctance of local taxing authorities to lower values (see the article "Sticky Local Property Tax" elsewhere in this issue, or CLICK HERE).

When values go down, the local tax assessor has a duty to adjust every parcel to fair market value. That's the law. So how is it that during the most depressed real estate market since the early 1990's, Glynn County "property tax collections remain strong?"

The only logical answer is that the Board of Assessors is returning property at higher than fair market value. As a taxpayer advocate who has appealed dozens of parcels on behalf of over-taxed property owners, I have found this to be almost universally true, especially on St. Simons Island where there are a higher percentage of owners not protected by homestead exemption.

Not too long ago you could roll a cabbage down aisle three at Harris Teeter and clip the ankles of about five realtors (myself included). Today you will only hit one ... the other four are now ex-realtors cruising the aisles at Winn-Dixie.

Comedy aside, there are too many people losing their property through foreclosure (almost 4 times the normal level ... CLICK HERE for the report), too many realtors looking for new jobs, and too many construction workers desperate for a paycheck for property values to "remain strong." It's an economic impossibility.

Yet the County Board of Assessors office invests itself in denial, forcing taxpayers to fight for fair market value through a cumbersome and one-sided appeals process. The assessors have taken a very stubborn position when it comes to lowering values in this declining market.

If you took my advice and filed for a lower value in 2009, you are about to find out exactly how stubborn they can be. I urge you to fight with all your might for fair market value. Please let me know if I can be of assistance.

Email the author at Patrick@PatrickAnderson.net

Mr. Goodwrench

2009-04-05T19:09:00.005-04:00

MILLION $ SALES BECOMING ENDANGERED SPECIES

2009-04-05T16:38:00.006-04:00

by Patrick Anderson, St. Simons Island, GA. There are currently 185 residential listings priced at $1 million or more on the Golden Isles MLS. Can you guess how many in that price range have sold during the last three months? Twelve to be exact. One was a bulk sale of condominiums and almost all the rest were sold by Sea Island Company. None were listed on the MLS.

Even more troubling is the overall decline of sales in the $1 million + price point. (Bear in mind the chart shows only MLS listed sales which do not include Sea Island Company sales nor other transactions that were not listed with a Realtor). When comparing the 1st quarter 2009 with the same quarter in previous years, we see the numbers peak at 18 in 2006 and drop all the way to zero in just three years.

Of course all price points have dropped precipitously since 2006. But it's clear from the numbers that lower price points are somewhat less affected by today's real estate slump than higher price points.To illustrate the impact of losing the top end of the market, we need to look beyond the units sold and measure the decline in dollar sales.

The next table shows 1st quarter sales in dollar sales broken down by the various Glynn County geographic areas. Again, you see the dramatic decline from 1Q 2006 to 1Q 2009. The Glynn County market has lost $116,000,000 in quarterly sales since 1Q 2005.

It's interesting to note that the Mainland had a stunning increase from 1Q 2005 to 1Q 2006, while the Islands had already started their decline during that period.

It stands to reason that the resort/second home character of the Islands would cause those areas to decline first. When money gets tight, discretionary spending is the first to go. And what could be more discretionary than a second home?

Another way to look at it is by isolating South St Simons (the beach area) where we have lost over $37 million in quarterly sales from 1Q 2005 vs. 1Q 2009. Back in 1Q 2005, the beach area accounted for over 33% of county wide sales. But in 2009, the number has dropped to only 16%.

It's clear that higher price points and second homes are the hardest hit segments of Glynn County's real estate picture. Predicting when the market might return to normal is a matter of conjecture tied to other factors in the economy.

It is the goal of this publication to reward subscribers with the earliest possible indications of market recovery. the ST SIMONS letter monitors local transactions, inventory, market conditions, and other key real estate indicators on a monthly basis. Our subscribers will be among the first to recognize "the bottom" and in the best position to invest in the next up cycle for St. Simons and Glynn County real estate.

No Joke

2009-03-09T00:02:00.007-04:00

Short Sales Made Simple

2009-03-08T17:11:00.011-04:00

by Tori Anderson, First Founders Financial

The topic of Short Sales arouses much curiosity these days. A Short Sale is a negotiated agreement in which the lender accepts less for a property than what is owed. There is always a hardship involved, and the most common causes are:

• Health/Medical situations
• Increase in an ARM
• Predatory lending/borrowing practices
• Divorce or separation
• Over-use of credit
• Job loss or job transfer
• Two house payments
• Declining market values

Though a Short Sale and a Foreclosure both result in the property transferring to a new owner, there is a world of difference between the two processes, as shown below:

Although a looming Foreclosure might prompt either a Short Sale or a Loan Modification, the Short Sale helps a person DIVEST of a property, while a Loan Modification helps a person RETAIN a property.

Maybe you’ve heard the expression “the quickest way out is through.” The Short Sale is a perfect example of this principal at work. Why? Because for thousands of property owners, it is the most graceful way out of an impossible financial situation. It paves the way for a new start.

Perhaps the scariest part of a Short Sale is communicating with the lender. Trying to reach decision makers can be a frustrating process. A third party negotiator (Short Sale Specialist) is often the answer. A good Short Sale Specialist will work with you and your Realtor to determine (1) whether you qualify and (2) the optimal short sale price. They handle all paperwork and negotiate with the lender while your Realtor markets the property at a reduced price … one that will insure a quick sale even in a slow market. Some Short Sale Specialists even guarantee the Realtor’s commission.

Short Sales are up dramatically. In these times of falling property values and financial hardship, more and more people are qualifying for short sales. Realtors® in Pasco County, Florida report short sales are as high as 60 percent of the properties they’re selling. Homes in all price ranges are affected – from under $100K into the $Millions. Experts say the trend in Residential Short Sales will run for about two more years, and then another few years for Commercial Short Sale properties. They say it will take about 5 years to work our way out of this situation.

Short Sales help people get back on their feet and moving on the right financial path again. They are a solution that will help bring our country, our fellow citizens and ourselves back to a position of strength.

If you would like more information about Short Sales, CLICK HERE to contact the author.

Tori Anderson, Consultant

Short Sale Specialists

Pork & Beans

2009-02-07T23:53:00.002-05:00

Battling Unfair Property Taxes

2009-02-07T23:44:00.003-05:00

by Patrick Anderson

In a time when property values are dropping like never before, it may be shocking to learn that the tax assessor can easily pin you with last year's value and, unless you take action before April 1, you will have no right to appeal.

The Georgia tax code requires that property owners file Form PT-50R Property Tax Return every year. Surprised? Most people have never filed one. No problem, though ... the code also provides that if you don't file PT-50R, you are deemed to have filed at the same value as the last year. That's usually OK since property values historically increase from one year to the next.

However, in a declining real estate market, you SHOULD file Form PT-50R. If you don't, you are telling the county that you believe your value is the same as the prior year. The Tax Appraiser is not likely to disagree in this instance, especially if they are overworked and understaffed. AND unless they change your value, you have no right to appeal.

Remember, by not filing PT-50R, you have told them that you believe this year's value is the same as last year's.

Filing Form PT-50R forces the Tax Appraisal Office to look at your fair market value. If they agree with the value you put on your return, great! You've saved money. If they disagree with the value you put on Form PT-50-R, they will send you an assessment letter with a different value. THAT is what triggers your appeal right.

Most property owners don't know have a clue about this little intricacy of our property tax code. And as such, many are in jeopardy of getting saddled with last year's tax value and no appeal rights, unless they take action before April 1.

WHAT TO DO

If you believe your value has decreased since January 1, 2008, and if you are not otherwise protected by homestead exemption, you may wish to file a 2009 Property Tax Return before the April 1 deadline. You can download Form PT-50R from the Georgia Department of Revenue website at http://www.etax.dor.ga.gov/ptd/adm/forms/pt.aspx

You can obtain further information on property tax matters from your accountant, or by contacting Patrick Anderson & Associates, Inc. The firm specializes in property tax strategy and represents many local and out of town owners in Glynn County property tax appeals.

KILROY WAS HERE

2009-01-06T20:12:00.003-05:00

THE REST OF THE STORY

2009-01-06T19:59:00.003-05:00

Radio legend Paul Harvey (he's still broadcasting by the way) is known for his captivating tagline: "...and now you know the REST of the story." That's our role at the ST SIMONS letter ... to peel back the layers of the real estate onion and show people what's going on behind the scenes. To point out the obvious and especially the not so obvious.

For example, if the only reports you read in the ST SIMONS letter are "Transactions" and "Market Conditions," you might leave with a bad taste in your mouth (if you're a seller). But if you peel back another layer and read "Warranty Deeds," you get to taste some of the sweet part of the onion.

The difference is, "Transactions" and "Market Conditions" are based on MLS reported sales. In order to make it on those reports, a sale must have been listed by a licensed Realtor(R) and advertised on the local MLS. But MANY sales occur outside the MLS. For example, Sea Island Company transactions rarely show up on these reports because the company marketing strategy does not include traditional MLS listing as a component. Likewise, a FSBO (For Sale By Owner) offering is not captured by the MLS.

The place to find these transactions is by looking at our "Warranty Deeds" report. Whenever a real estate sale is made (with few exceptions), a deed is filed at the county courthouse and a transaction fee of $1 per thousand is paid. These filings are compiled and published in "Warranty Deeds." By studying this report, you see not only the MLS transactions, but also the sales that occur "under the radar" so to speak. You also see the names of the buyer and seller, the price, and the property description. It's fascinating reading if you want to know what's really going on in local real estate!

In December there were 174 warranty deeds filed in Glynn County. 23 of them were sales for over $1 million ... the sum of which totalled more than $46 million. Surpisingly, none of them were MLS sales. So if you study MLS based reports as sole indicators of real estate activity, you would be missing some very important information not to mention some of the best water cooler gossip in all of Glynn County.

The MLS based reports are invaluable in studying traditional real estate activity. The historical information available has substantial weight. And the ability to compare time periods helps form logical conclusions about the general state of the market.

But don't forget to study the reports based on court filings: "Warranty Deeds" and "Foreclosure Deeds." Only then will you know the REST of the story.

KILROY WAS HERE

2008-12-08T15:51:00.001-05:00

BAD NEWS ~ GOOD NEWS

2008-12-08T15:36:00.002-05:00

When you analyze what's going on in the real estate market today, it's easy to focus only on the bad news. But for every negative, you can find a positive if you look hard enough. For example:

Bad news ... prices are dropping. Good news: the market is coming back to reality. In all honesty, real estate prices had gotten too high. There was a fundamental imbalance in the relationship between rents and mortgages. By that I mean, it was becoming increasingly advantageous to rent instead of buy. It was becoming harder and harder to make a rental property produce an acceptable return.

What sustained prices was the expectation of continuing appreciation, and the prospect of re-selling for a handsome profit. It seemed like it could go on forever, but the momentum has shifted. And now there is a glut of inventory on the market, with most buyers sitting on the sidelines waiting for the prices to bottom out. Right now, it's painful for all but a few. But it is a necessary adjustment for the health of the future market.

Here's another one: Bad news ... people in real estate and related trades are suffering financially. Good news ... most of those people have found or will find other sources of income. During the gravy years, it was a little bit too easy to make money in real estate, new construction, and mortgage lending. Now I see fellow realtors taking on jobs that have nothing to do with real estate, but take advantage of their sales and interpersonal skills. A homebuilder/remodeler I know just sold off his tools and has finally commited himself to playing music full time (his true passion). So yes, there's a shake-out going on. And while it's painful for many, it's a necessary and ultimately beneficial process.

As for the stock market, I'm trying to hang on to my stomach as we ride this roller coaster. My broker keeps telling me to stay the course, and so far I've taken his advice. The most comforting thought I can offer is a quote from a business associate from 20 years ago. During a downturn in the market, he said: "Oh well, it was just paper then, and it's still paper now."

$45 Million Nothing to Sneeze At

2008-11-06T17:41:00.002-05:00

It's not all bad news for the Glynn County real estate market. Public records show ten transactions in October for more than $1 million each totalling over $45 million combined. Eight of the ten happened under the normal MLS radar screen (see WARRANTY DEEDS article for transaction details).

September records revealed just 4 transactions over $1 million totalling $13,710,000. August also had 4 totalling only $5,765,400. The encouraging message in the October results is this: there are still people out there willing to bet huge sums of money on the value of Glynn County real estate. And why shouldn't they?

Despite the national real estate slump, St. Simons Island and the rest of Glynn County is still possibly the biggest sleeper on the eastern seaboard. Consider:

Most people outside Georgia have never heard of St. Simons, Brunswick, Jekyll, or Sea Island (but they will)
St. Simons Island, Sea Island and Jekyll Island are North Georgia's favorite beaches
The Atlanta metro economy is diverse and powerful
In the next two decades, retiring baby boomers will be flocking to the coast for retirement
The Golden Isles has some of the best weather in the country
We have some of the most beautiful scenery in the world

It's just a matter of time before prices start to climb again in Glynn County. In the meantime, the smart money is taking advantage of great values now and planning for the future.

Another important message in this story is no single statistical report tells the whole story. MLS based reports are good indicators of trends, but they miss transactions that don't involve property listed by members of the local Board of Realtors. So it's important to also pay attention to the public record based reports (WARRANTY DEEDS, FORECLOSURES).

October's amazing spike was due in part to two commercial transactions totalling $24 million. But even without those, the results eclipsed the previous two months by a wide margin. There were eight very impressive residential sales making up the $31 million balance ... six on Sea Island and two on St. Simons.

the ST SIMONS letter looks forward providing subscribers with in-depth information revealing the truth about Glynn County real estate, good or bad.

LIST IF YOU INSIST

2008-10-08T20:11:00.007-04:00

It's counter-intuitive for a real estate professional to recommend someone NOT list their home for sale. After all, we're trained to go after listings like hounds to rabbits! But, now is not the time to collect a bushel of listings that sit on the market far too long. It's not good for a Realtor's reputation, and it's not good for an owner's property value.

A home that stays on the market too long is a sitting duck for low ball offers (if it gets any at all). And in case a buyer is not aware, the MLS tells every buyer's Realtor exactly how long a home has been listed, how many times it has been reduced and to what level. So every potential buyer using a Realtor should know just how vulnerable a seller might be.

If a seller doesn't HAVE to sell right now, they would be wise to UN-list their property and wait for a better market. Glynn County has a two-year supply of unsold listings on the market. There have been 169 foreclosures filed so far this year. Buyers are scarce and credit is tight. Do you really need to sell that home right now Mr. & Mrs. Seller? It would help the market if owners would take their homes off the market and Realtors would advise more people to wait before listing.

If someone needs to sell, that's different. But many properties stay listed because blindly optimistic sellers imagine, even in this market, that some under-educated bumpkin from out of town will come along and pay full price for their property. Those transactions are few and far between even in good times. So I recommend NOT listing that property if at all possible.

As an alternative, many owners are offering their property for trade ... an increasingly popular strategy during the slow real estate market. If a seller is planning to buy something else after they sell, there's probably someone out there who wants what they have and has what they want. Finding them is the big challenge.

Classifieds or small display ads are one way to search for a trading partner. Another is by advertising on a real estate trading website like RealEstateExchange.com or PropSwapGlynn.com. These are sites where prospective trading partners can find each other, evaluate each other's property, and initiate contact if there is sufficient interest. PropSwapGlynn.com lets you search within each of Glynn County's 10 geographic areas for a match. Each ad shows what that owner has to offer, and what that owner is looking for in trade.

Here's the big trade advantage: it doesn't matter whether it's a buyer's market or a seller's market. Both parties are buying AND selling, so any built-in market advantage is neutralized. Traders are free to focus on relative values rather than discounts. If one property is worth more than the other, the difference can be made up in cash, additional trade, or even owner financing.

While trading real estate may not be not be the most widely practiced transaction mode, it is an intelligent solution in a difficult market. If there are no other options, by all means list that property. But if at all possible, consider NOT listing until the market gets better.

CHICKEN LITTLE WAS WRONG

2008-09-10T00:38:00.012-04:00

If you only look at the statistics on the ST SIMONS letter, you might conclude that Chicken Little was right ... the sky is falling. But one item in particular this month reminds us that there IS a bigger picture.

Sea Island Company has teamed up with two other developers to rezone a 7,800 acre tract of land in northwest Glynn County (see Glynn County Commission lead story). This is significant because Sea Island Company ALWAYS looks at the big picture. And they own the lion's share of this tract.

Sea Island Company is undoubtedly the most important influence in Glynn County and perhaps all of Southeast Georgia real estate. They own most of the developable land on St. Simons Island, their glistening image and super luxury products attract world class clientele, they landscape public intersections to enhance their surroundings, make land donations for the benefit of the community, and their obsession with quality rubs off on everything around them.

Knowing how brilliantly Sea Island Company grooms a single acre on Sea Island and St. Simons Island, seeing them involved in over 7,800 acres with a potential for over 17,000 dwellings over the next 30-40 years staggers the imagination.

A review of the Conceptual Master Plan reveals a broad multi-use plan. "The goal of the development is to produce a high quality, environmentally sensitive community." A minimum of 25% of the gross acreage will be maintained as open space.

So despite the slumping real estate market, and only a month after the announcement of a 25% cutback in their labor force, Sea Island Company is looking well into the future. They are in it for the long haul and their leadership is inpiring.

After all, what can have more intrinsic value than land? And where has more wealth been created by Americans than in land ownership and development?

Our real estate setbacks, if we choose to view them in those terms, are only temporary. And as we weather the storm, it's reassuring to know there are giants in our midst who visualize clearing skies ahead.

Chicken Little should pay more attention to the ground below his feet or stay out of the real estate business.

WHERE'S THE BOUNCE?

2008-08-11T22:07:00.005-04:00

The number one question on the minds of local real estate investors is: "When will the market turn?" The mission of this newsletter is to help subscribers answer that question before anyone else. By putting a microscope on local real estate statistics and spotlighting area development activity, we hope to assist our readers in making profitable investment decisions for the future.
Obviously St Simons Island and Glynn County have been affected by the national downturn in real estate. When analyzing the local market, it's helpful to consider the factors that drive local real estate activity in the first place.

On the mainland, a diverse and growing local economy fuels a vibrant real estate market that only recently showed signs of slowing down. Most of the demand has been for mid-priced homes in North and West Glynn County. The statistics clearly show that sales in Mainland Glynn were still going strong until the 4th quarter of 2005 when unit sales first declined against the same prior quarter. (Click chart to enlarge)

Note how in 2004 the number of sales on the Mainland versus the Islands was almost identical. However, by the end of 2006 the Mainland was turning over twice as many homes as the Islands. Clearly, homes with moderate price points targeting permanent residents had became a focal point for realtors in Glynn County.

Unit sales in the Islands started declining during the third quarter of 2004, over a year earlier than the Mainland. This is not particularly surprising given its resort character, higher price points and heavy reliance on second home buyers. It will be interesting to see which segment first shows signs of recovery. We'll be watching closely.