Category Archives: First Time Home Buyers

Pending Home Sales in Gwinnett Make Huge Jump in March 2010!

Real estate is on the move in Gwinnett!  According to latest data, Gwinnett’s pending sales rose to a nearly three year record level of 931, in March 2010.  Pending sales represent offers reached between buyer and seller, which are in the process of making the long journey to the closing table.  Will every one of these offers close?  No.  However, most of these will make it successfully through the closing process further shrinking existing inventory and making great places for people to live. 

Let’s take a closer look.  The number of contracts written is important because it shows us a good example of current buyer demand.  Many events can curtail a successful closing, but that doesn’t take away from the point that buyers are ready to buy.  Some challenges to reaching the closing table are, appraisal issues, final loan underwriting or the inability for buyer and seller to reach agreement on repairs are just a few.  However, as long as the buyer remains qualified, he or she will move on to the next opportunity and begin again.  So, while closing data is still the final measure of success, contracts written helps us see which way we’re moving.  We must look back to the 975 contracts in June 2007 to find a month greater than the 931 contracts of March of 2010. 

What’s a shot of good news without a dose of reality to follow?  While pending sales are on the rise, values continue to remain low.  Average sales price for Gwinnett in March 2010 came in at $166,491, which is considerably lower than the March 2007 figure of $229,676.  In 2008, Gwinnett’s average sales price started the first half of the year in the $200’s eventually falling to finish the year at $180k.  In 2009, average sales price dropped a bit lower, ultimately moving up and down in the $170k to $160k price range.  The less dramatic price swings in 2009, combined with the March 2010 average of $166,491 almost matching that of March 2009’s $166,876 give hope that we may have formed a bottom.  This is great news moving ahead, but don’t expect prices to climb back up as quickly as they fell. 

So then, what’s moving you ask?  In Gwinnett the price point knocking it out of the park is from $100k to $200k.  Over the last six months 1,700 homes in the $100k to $200k price range sold in Gwinnett County.  The next highest performing price block was up to $100k with 962 sales over the past six months.  In third position was the $200k – $300k price block with 519 home sales.  Gwinnett home sales above $300k saw only 299 transactions over the last six months.  There are several reasons for increased movement in the lower price blocks.  One thing to consider is that many of the homes selling today were in higher price blocks a couple of years ago.  Additionally, we come back around to buyer behavior.  The slowdown in our economy has dramatically impacted what people are able and willing to spend.  Today’s ready, willing and able buyer is likely more frugal, does not want to become “house poor”, expects more for the money AND doesn’t have an existing home to sell.  First time home buyers are giving a tremendous boost to our market, and it’s not just because of the tax credit.  First time home buyers will continue to buy after the credit expires because they can!  Today’s first time home buyer is far savvier than in years past and they recognize great opportunities.   Remember, more first time home buyers in the market will eventually give the person looking to sell and move up a market for his/her home, enabling that move up purchase to happen.  For this reason, I expect the below $300k price points to continue to lead the way back to a more pleasant market.  Now…I’d better remember what I did with my patience!!!

** This article was written based on charts from REDataCenter using data from GAMLS.

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Filed under Buyers, First Time Home Buyers, Gwinnett County, Market Trends, Market Update, Sellers

National Open House Weekend – April 10 & 11, 2010

I am very excited to be participating in “National Open House Day” April 10 & 11, 2010!  Sponsored by the National Association of Realtors (NAR) and Georgia Association of Realtors (GAR), National Open House Day is expected to be a great opportunity to see what’s available in your market. 

This weekend, I will be featuring a beautiful 4 bedroom, 2.5 bathroom home at 1080 Sutherland Drive, in the Sutherland subdivision, in Winder, GA.  This home is nearly new and ready for its new owner.  You will get the benefit of new construction without the hassle of buying from the bank, or having to install all of the “little things” usually needed when moving into a new house.  This home is well positioned on a large, level lot.  Its popular “Mariah” floor plan is a real benefit.

Sutherland is a fabulous new community, conveniently located off of Corinth Church Road and Hwy 11, in Winder.  There is a community pool with clubhouse, neighborhood fishing pond and plenty of green space set aside for residents to enjoy.  Sutherland is located in the Apalachee High School cluster, convenient to Hwy. 316, moments away from Eagle Greens at The Chimneys Golf course and an easy commute to Gwinnett County or Athens, GA.

Come out April 10th & 11th to see what Sutherland has to offer, or just follow the   REALTOR balloons in your area to see what great opportunities await you!

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Filed under Barrow County, Buyers, Communities, First Time Home Buyers, Sutherland

Will FHA Announcement Bring About Quicker Sale Of Foreclosed Properties?

HouseAccording to a January 15th HUD press release, the rule requiring sellers to hold title to real property for at least 90 days prior to sale (also known as title seasoning) has been temporarily waived, with very strict guidelines and conditions.  This temporary waiver has tremendous positive implications for Gwinnett real estate and home values. 

What is Title Seasoning?

The process of a seller holding title to real property for 90 days before another sale or title transfer takes place is commonly referred to as title seasoning.  This FHA requirement was brought about to ward off mortgage fraud committed through illegal house flipping.  Illegal house flipping occurs when a property is bought and sold (often 2 or 3 times in a row) quickly, before title and security deeds are properly recorded with the intent of defrauding lenders, sellers and purchasers.  Unfortunately, while this solution has helped to stop the criminals engaging in mortgage fraud, it has penalized legitimate investors making it extremely difficult for them to help bring about quicker market recovery.

Why is this temporary waiver important? 

Until now, if an investor purchased a property – let’s say “on the courthouse steps”, improved it with repairs and/or renovations, and then marketed it for sale, that property would not be eligible for FHA financing until the 91st day, when title seasoning had taken place.  Since our current market is so heavily dependent upon buyer’s using FHA financing, this process significantly limited an already small pool of potential buyers.  In the absence of FHA financing, only buyers with cash or conventional loans are qualified to purchase these properties.  Furthermore, not all conventional loans allow purchase prior to completion of the title seasoning period.  These challenges typically bring about longer market times and lower sales prices.  Since investors and neighborhoods alike are placed at greater risk the longer a property sits vacant, it is in everyone’s best interest to bring about a quick market sale.  Greater risk and difficulty means fewer investors will be willing or able to make a difference.  The FHA knows that being able to return rehabilitated properties back to market for quick sale has been critical to successful Neighborhood Stabilization Programs.  This is why these programs were granted waivers in 2009. 

Why do we need investors?  House for sale

Right now, we need investors to lead the way in market recovery by acquiring distressed properties in poor condition and rehabilitating those properties to become market ready.  Though many potential homebuyers start out looking for “the deal” in foreclosures, most often the scope of work needed far exceeds the skill set and financial resources of the typical homebuyer.  Investors have the financial resources, contracting knowledge and relationships to restore these properties back to life.  In most cases, this is accomplished in far less than 90 days, and the properties are returned to market at fair and competitive prices quickly attracting buyers.  This is a win/win situation for the investor, buyer and community as it takes a distressed property off the market, provides good quality and affordable housing helping to preserve neighborhood value.  The 91 day title seasoning period brings about increased risk to both investors and neighborhoods by delaying sale and occupancy of these rehabilitated properties.  It also denies many buyers the opportunity of purchasing a quality product at a reasonable price, as FHA loans are not available during this time.  Vacant homes increase the risk to the seller and the neighborhoods in which they are located by providing greater opportunity for crime and vandalism.  Since FHA financing has increased from 5% of all market sales to 40% of all market sales, it is important for that pool of buyers to have the opportunity to purchase these homes. 

FHA/HUD Guidelines for waiver

The following is an excerpt of the guidelines issued by FHA.  The title seasoning waiver begins February 1st, 2010 and is planned to end in 2011.  In order to preserve the integrity of the 90 day seasoning requirement and prevent illegal flipping, conditions and guidelines have been provided:

  1.  All sales are to be arms-length transactions.  There should be no identity of interest between buyer, seller or other parties participating in the transaction.
    1. Sellers must hold title to the property
    2. No pattern of previous flipping of property (multiple title transfers in the last `12 months).
    3. Property must be marketed open and fairly in MLS, Auction, for sale by owner and or developer marketing (contract assignments are likely to be a red flag).
  2. Sale prices of 20% or more over and above seller’s acquisition cost will require certain actions by the lender:
    1. Appraisal verifying that the increased price is supported due to the seller’s completion of sufficient legitimate repair and rehabilitation work to the property.
    2. Inspections may be ordered by lender and provided to buyer, prior to closing. 

This is a short recap of the FHA guidelines.  Read the full text using the link above.

House soldGwinnett has recently seen increased sales in markets up to $200k.  This increase has been brought about by low housing prices, historically low mortgage rates, the 1st time homebuyer tax credit and investors who are purchasing, rehabilitating and selling distressed properties on open market.  Mortgage rates are expected to rise in 2010, and we can’t ride our way out of this market on the backs of first time homebuyers alone.  We need investors to purchase homes in disrepair and make them market ready to stabilize home values and provide affordable, desirable housing options.  I am incredibly hopeful that this waiver will sustain our positive momentum while still providing reasonable protection against future mortgage fraud.


Filed under Buyers, FHA, First Time Home Buyers, Great Buying Opportunities, Gwinnett County, Mortgage, Sellers