» Bob Romano

The rise in metro-Atlanta single-family home sales

Bob Romano — Wed, 16 Jun 2010 16:25:10 +0000

By: Bob Romano

Sales of newly built, single-family homes have surged 14.8% to a seasonally adjusted annual rate of 504,000 units in April 2010 (the latest findings to date), as consumers rushed to beat the deadline for expiring home buyer tax credits, according to data released by the U.S. Commerce Department. This was the strongest level of new-home buying activity since May 2008.

And single-family home builders are gearing up for continued demand. In fact, a June 6 report from the Commerce Department said that spending on single-family home construction surged 3.4% in April 2010. Building permits for single-family homes in Georgia rose 30% during the first quarter of 2010, the Atlanta Journal-Constitution recently reported.

Who is buying?
From our experience marketing and selling single-family homes across the metro area, it seems that the growth in single-family home sales is being fueled by buyers from opposite ends of the buying spectrum: young families and baby boomers. Buyers in both demographics are looking for lifestyle changes. Young families are looking to become established in neighborhoods in which they plan to raise families. And many baby boomers are moving to downsize to homes with layouts that allow them to ‘age-in-place.’

What are they buying?
Buyers aren’t looking for the same high-end, one-of-a-kind features, as they have in years past. They’re prioritizing their needs, focusing only on necessary interior features, and there has been more concentration on boxier houses that are less dependent on exterior features. Baby boomers are continuing to look for one-level living (master bedrooms on the main level).

Where are they buying?
Most single-family buyers continue to have their sights on the suburbs, which offer close-knit neighborhoods, convenient access to amenities and very attractive pricing. For instance, NRT Development Advisors is working with Stonecrest Homes on the development of several of the company’s fully appointed new homes in Harmony on the Lakes – Palisades in Cherokee County. These new construction homes start in the mid $200’s. Another new home development with affordable pricing is Millside Manor located in the highly sought after Hamilton Mill area. These homes start in the $160’s.

Smyrna is a hot area for buyers looking for restarts that are closer to the city. Many new construction cluster homes and townhomes in the area are selling for $290,000 to $400,000, much less than the original pre-construction prices. One such development is Vintage Square, a community of three-story townhomes starting at $294,900.

Why are they buying?
NAR president Vicki Cox Golder recently said that buyers are taking a long-term view toward homeownership. “The typical buyer plans to stay in their home for 10 years, so we’ve put the flipping mentality behind us and most people see housing for what it is — shelter that provides social benefits and is also a good long-term investment.”

In the past two years, a majority of buyers endured reverse sticker shock when it came time to sell their current homes in advance of buying new homes, as their homes were valued at much less than anticipated (and, often, lower than what was owed). But recently, buyers have experienced a paradigm shift and instead of seeing the process as two transactions – selling one home and then buying another – they’re seeing this as one complete transaction that balances out, making it not too different than home transactions that took place during the last decade (or in the future, when prices rise again). For instance, while a buyer may lose 30% or so of an investment in an existing home (due to current selling prices), he immediately gains 40% or more in equity in a new home purchase.

How to attract them?
There is good reason to expect this buying momentum to continue. Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich., said, “Now that the [tax incentive] program is over, other great buying incentives continue – including exceptionally favorable mortgage rates, very attractive home prices and the steadily improving economy.”

But, the recession has caused many home buyers to be very conservative and savvy when making selections, so positioning is more important than ever. We’ve found that pricing and location continues to trump everything, so be sure to keep these messages priority in your sales strategy.

Recognize that new construction single-family homes are competing with two- to three-year old resales that are located in established neighborhoods, outfitted with the latest ‘bells and whistles’ and priced to sell. Atlanta experienced a 6% increase in existing single-family home sales in April 2010 over the previous year, according to SmartNumbers, and sales of these homes are likely to increase as more single-family foreclosures come on board from banks in the coming months. Therefore, it’s wise to price new construction homes at or below resale price.

And school zones also continue to be a big play in home sales, as young families are buying with children in mind and baby boomers are cognizant of school districts for resale value. While many buyers are hesitant to budge on their desired number of bedrooms and baths, young families will trade size for location.

When Selling Your Home, Consider a Different Approach

Bob Romano — Thu, 06 May 2010 20:35:01 +0000

By: Bob Romano

When selling your home, consider a different approach to reach your goal. Many home owners today want to move up, down or out of state to improve their lifestyle. Unfortunately many find themselves in a dilemma, their existing home is not worth what they feel they need to make the move. Market conditions on average have effective home values in Georgia 22%, that’s a lot of value and for many it creates a situation that only time will fix. But for those with equity in their home, who are stuck because of the loss of value, thus preventing them from finding a great deal on a new home, there is a solution. However, it does require a paradigm shift. Consider the approach of analyzing the net effect of selling your home at market value and buying a new home at a considerable discount, the net result should pay dividends. Price your existing home to sell in today’s market and go find yourself a equal or better value on your new home, any loss you may incur on your existing home can easily be recovered on your new purchase. Hire a professional to analyze your particular market and price your home to sell, and then get out and find an even better deal.

Keep in mind this is without a doubt the best time to buy a home I have seen in my 25 years in real estate. Don’t let it pass you by.

Diversification and education is your winning formula in challenging times

Bob Romano — Tue, 12 Jan 2010 22:26:25 +0000

By: Bob Romano

Whether you are referring to investing in real estate or investing in your career, diversification and education are your best options for surviving – and thriving – in difficult markets. So often we get in comfort zones and choose not to see the opportunities that are available in challenging times, many times because we anticipate the fear that change brings.

The best way to control change is to create it yourself. Agents today are embracing the changing market place and learning new skills from the numerous companies offering education and training on a wide array of subjects. This new breed of agents has developed skills in all areas of real estate – managing to juggle new home sales and resales, and even developing a healthy mix of foreclosures and short sales. As a result, today’s most successful real estate agents have grown more in the past 3 years than in their entire careers. Adversity makes the strong survive and grow.

As our economy regains momentum during the next 12 months, the housing market will not lead the way out of this recession as it has in so many recessions in the past. Therefore, real estate agents must continue to work smarter than ever before and learn new skills that will serve them well for years to come.

Learn, Grow and Survive in 2010.

The current market demands creative solutions

Bob Romano — Mon, 27 Jul 2009 21:23:02 +0000

By: Bob Romano

In a challenging market, many builders and developers find themselves facing a difficult decision when staffing a community. Traffic levels and sales have not been adequate to support a full time dedicated on site sales professional.

For these circumstances, Coldwell Banker has a solution that is aimed at solving this most basic need to staff a community. CALL-A-KEY is a program that allows prospects to view completed homes on their schedule, not just when the office is open. Prospects want to look at new homes on their schedule not just when the sales center is open, and most new home communities open at 11AM and close at 6PM, if at all, in these trying times.

Upon arrive at a beautiful new home that has CALL-A-KEY technology, a prospect may access a home simply by calling a phone number listed on the sign, once the operator verifies the prospects identity they receive a 4-digit code allowing access to the home. Instantly, the prospects name and cell phone number is sent to the on site agent and manager for follow up. WOW, how many prospects walk through your homes without ever having the opportunity to follow up.

Coldwell Banker NRT Development Advisors has used CALL-A-KEY technology on many of its listed homes and has benefited from the hundreds of potential homebuyers that have taken advantage of the after-hours tour – in fact, two of these homes are under contract now!

Rebuilding Atlanta’s singlefamily market: What opportunities exist for builders?

Bob Romano — Fri, 26 Jun 2009 20:47:16 +0000

By: Bob Romano

As we look at the next 12 months and the opportunities available to builders and developers, we recognize a few traditional opportunities in the market place.

Buy and hold homesites

Because banks are selling foreclosed homesites at a fraction of their original costs, many investor groups are buying them to hold for 3 to 5 years until the demand for homesites returns. But this also provides a profit opportunity for builders who are able to buy and hold homesites in isolated sub markets and then sell them for a profit in a few years.

Look to infill neighborhoods and subordination opportunities

As we rebuild our single family market in the 15-county area, we see a greater influence from national and regional builders who are increasing their marketshare considerably from years past. They have the resources to purchase lots from banks, developers and investor groups and often focus on the larger scale communities, making it more difficult for the small- to medium-sized builders to compete. The opportunity remains for the smaller communities or close-in infill neighborhoods that the national builders find difficult to manage. Custom builders and lot owners may find subordination resurfacing as a viable method of stimulating construction and securing construction loans. Determine if there’s an opportunity to establish a partnership with the builder and agree to subordinate the lot value in return for a percentage of the sales price once the home has sold.

Reengineer homes and reduce size and features

The downward pressure on prices from new and resale homes in the 15-county market area means that builders are often competing with new bank owned homes and short sales that are priced below the replacement cost of a newly constructed home. As a result, builders should re-engineer their homes and reduce the size and features to help offset the costs to compete, even though this strategy may be difficult in the short term, because purchasers have many choices for both new and resale homes with loads of features and space.

Reinvent yourself

There are opportunities for builders to reinvent themselves for service banks, home owners and other industry professionals. There are many banks that choose to sell homes “as is” and there are many buyers who would like to take advantage of these great deals, but both need qualified builders to finishes these homes and bring them up to move-in quality. Repackaging your skills in today’s market will help you survive this down turn and be ready to capitalize on the numerous opportunities available in the next 12 to 18 months.