Foreclosures stable in North Georgia as rate increases nationwide

Carolyn Crist
ccrist@gainesvilletimes.com
October 17, 2010

Nationally, more homes went into foreclosure this summer than in any three-month stretch since the housing market began to fall in 2006. In Hall County, however, the numbers are hovering at the same level.

"We've been trending around 300 foreclosures for some time and do not anticipate double or triple that," said local real estate expert Frank Norton Jr. of The Norton Agency. "We've already gone through the big surge and should see these numbers through the first half of the year before dropping into the 200s."

A total of 288,345 properties were lost nationwide to foreclosure in the July-September quarter, according to data released Thursday by RealtyTrac Inc., a foreclosure listing service. That's up from 270,000 in the second quarter, the previous high point in the firm's records dating back to 2005.Banks have seized more than 816,000 homes through the first nine months of the year, and are on the way to seize 1.2 million by the end of 2010.

"The third quarter accelerated foreclosures because 12 months ago we saw major job losses, and the banks are trying to clean up their portfolio by the end of the year and move the inventory out by the end of December," Norton said. "It's unfortunate, but it's all a part of the overall economy cleaning itself up."

On Wednesday, officials in 50 states and the District of Columbia launched a joint investigation into the use of robotic signatures on foreclosure papers, and many owners may challenge foreclosures in court because of allegations that banks evicted people without reading the documents.

Norton isn't seeing much of the controversy in Georgia.
"We as a state have efficient foreclosure processes, and I don't foresee any challenges or lawsuits," he said. "For example, I see foreclosure notices in the papers, and one may appear one month and the next month it appears again because someone has corrected a title or problem. There seems to be more policing in Georgia."

Major national lenders have put a moratorium on foreclosures until the robotic signature issue is addressed. The delay could amount to a temporary lull followed by a spike in home repossessions early next year, which would further affect home sales and prices.

The states most affected by the foreclosure freeze accounted for 40 percent of all foreclosure activity in the third quarter and 36 percent of homes taken back by lenders, RealtyTrac said. Sales of homes by lenders made up 18 percent of all U.S. home sales in September, the firm said.

"Someone needs to put their eyes on every foreclosure and explore if the owner qualifies for government stimulus money or any method to keep the homeowner in the house," Norton said. "In Georgia, when a bank forecloses, they're only recovering about 65 to 68 percent of their costs. If they were to negotiate with a short sale, which is taking a little less, they could recover about 81 to 82 percent."Norton foresees a "huge" short sale market in 2011 and recently sent about 95 percent of his agents to a continuing education workshop to certify them in short sales to help customers.

"It's to the banks' advantage to work through a short sale than to foreclose," Norton said. "One of the things we have to pay attention to is trying to mitigate their losses by working with the seller and homeowner. We're seeing this a little bit more."Economic woes, such as unemployment or reduced income, continue to be the main catalysts for foreclosures this year.

"About 20 to 30 percent are still subprime, and many are Hispanic, but most that we see are still job loss. I still expect 300 to 325 in the Hall County market over the next six months," he said. "If job loss stabilizes, it'll come down the second half of 2011, but there are still too many people with job loss foreclosures in the pipeline."

While bank repossessions rose in the third quarter, new defaults continued to decline.About 270,000 properties nationwide received default notices, the first step in the foreclosure process, down 1 percent from the second quarter and down 21 percent from the same period last year, according to RealtyTrac, which tracks notices for defaults, scheduled home auctions and home repossessions.

More than 930,000 homeowners received a foreclosure-related warning between July and September, up nearly 4 percent from the second quarter but down 1 percent from the same period last year, RealtyTrac said. The latest tally translates to one in 139 U.S. homes.

The selling market hasn't completely stopped in northern Georgia. Norton's agents are still selling cabins in the woods, houses less than $250,000 and houses on Lake Lanier below $500,000.

"Right now we have hover buyers out there," he said. "When a new house comes on the market, they go see it immediately, but if it doesn't meet their exact needs, they go back to hovering."

The Associated Press contributed to this report

Read more...

Region's 'Road to Recovery' paved with tourism dollars

By Staff

Frank Norton Jr. speaks to the group at North Georgia College and State University Wednesday DAHLONEGA - A group of more than 100 students, faculty, and business and civic leaders from around the region gathered at North Georgia College and State University Wednesday morning to hear an update on the region's economy.

"The Road to Recovery" was presented by Frank Norton Jr., president of The Norton Agency, a regional insurance and real estate firm based in Gainesville.

Over the last decade, a growing population and healthy economy pushed the housing and construction industry into the number one industry in much of the region, Norton said. But the recession caused the growth engine to stall and brought the housing market to a near stand-still.

"Now it's paused, so tourism is second and agribusiness would be third," he said. "That pause, because of the housing and second home market and the development and the lending component and the banking component and buying refrigerators all being interrelated … all of that is now paused."

Many communities in north Georgia already are well-poised to use the tourism and hospitality industries to bring in revenue and move forward into recovery, Norton said.

"The stay vacation that we're experiencing here is the new norm. … That is coming to the mountains and leaving some of your dollars here," Norton said. "This hospitality/tourism, I believe, in this age of austerity that we're all moving toward, is going to be a strong component of what we need to be doing in north Georgia for employment."

The tourism industry would benefit from unified marketing across the mountains region as well as more destination attractions in the area, Norton said. But the region as a whole needs to address certain areas to begin moving into recovery, he said, including:

· Transportation and accessibility to jobs for potential employees
· More education for residents, including high school, technical trades and recreational education
· Quality of life issues such as environment, health care and affordable housing at multiple price points
· Government infrastructure such as roads, recreation, welcome centers, parks and trails

Norton has been presenting the Native Intelligence forecast for more than 20 years and the 2011 forecast will feature input from an undergraduate class in the university's Mike Cottrell School of Business. As part of his forecast, Norton identifies 10 trends that bear watching in the coming year. In January, one of the trends will have been researched and presented by North Georgia students and faculty. The students already have begun working on the research for that presentation

Read more...

LAKE LANIER MIDYEAR 2010

Lake Lanier is in a period of healing. Rocked by a triple whammy of perpetual low water levels, economic collapse affecting affluent buyers/sellers and the shaking consumer confidence evaporating 2nd home buyers. The vibrancy of the market must be kick started – re energized.Now that we’ve reached full pool sidelined sellers have flooded the market and inventory has soared● ● listings up from 341 to 477 in 6 months.

But the good news, NO THE GREAT NEWS, is that closed sales are up 40% resulting in months of supply dropping from 36 to 31.8 months. In a normal market, had supply remained level that might have been down to as much as 22 months. Prices of homes sold have dropped significantly. Sales of foreclosures, stressed sales, long aged listedproduct and short sales have applied downward pressure on sales prices. Mid year average is 426,500.

The harsh reality of the market is that the overhang in inventory and the National economic doldrums will continue to place pressure on ALL SELLERS. Buyers today have their mask on and gun out ready to rob the bank. Reality is today’s sellers must dress their property for success. A million dollar house has got to look like a million and a half. The best homes price, best presentation , best condition sells first.

Reality is the first offer is still always the best.

Reality is that before you tread into Lake Lanier market you must have a professional “Lake” broker by your side. Today’s lake broker understands how to guide the buyer or seller through this moving asteroid belt of moving parts.

The Reality is that in a market in flux, sellers must be patient, deliberate, and focused. It took 4 years for the lake’s environmental health to recover. It will take an equal amount for it’s economic health to do the same.

Read more...

HOUSING MARKETS, JOB MARKETS FATES TIES

Melissa Weinman

mweinman@gainesvilletimes.com
August 27, 2010

If the housing market and the job market are any indication, economic recovery is a slow journey.
The Labor Department reported that requests for unemployment benefits nationwide fell sharply last week - a hopeful sign the job market is improving. The drop in first-time claims to a seasonally adjusted 473,000 was the first decline in a month. Still, unemployment claims remain much higher than in a normal economy.

Signs are less promising in the housing market. The cumulative effects of unemployment and underemployment are still causing people to lose their homes in Northeast Georgia.
"The lingering unemployment and job loss is increasing the number of job loss foreclosures," said Frank Norton Jr. of the Norton Agency in Gainesville. "Much of the foreclosures we saw in 2007, 2008 and 2009 were builder and subprime-related foreclosures. We are now seeing more job loss foreclosures in this region.
"They may even be underemployed today and can no longer afford their mortgage."
About 9.9 percent of homeowners nationwide had missed at least one mortgage payment as of June 30, the Mortgage Bankers Association reported Thursday. That number, adjusted for seasonal factors, was barely down from a record high of more than 10 percent as of April 30. The number of Americans who are missing payments and falling into foreclosure has followed the trend in unemployment. The jobless rate has remained near double digits all year.

"Ultimately, the housing story, whether it is delinquencies, homes sales or housing starts, is an employment story," Jay Brinkmann, the Mortgage Bankers Association's top economist, said in a statement. "Only when we see a consistent increase in employment will we see an increase in sales and starts, and a sustained improvement in the delinquency numbers."
Norton said people in Hall County are still buying houses because they are able to take advantage of lower prices and interest rates.
"Our sales are still brisk as compared to 2008 and 2009," Norton said. "We're seeing maybe 40 percent of all houses are either foreclosures or stressed sales. We've seen an increased number of traditional sales over the last 90 days as people who want to sell have become very realistic about their sales price. It's still very much a buyer's market."
Foreclosures and distressed home sales have pressured home values and made it difficult for builders to compete with the low prices. Some potential sellers also have been discouraged from putting homes on the market. The recent drop in unemployment claims comes after a steep rise the previous three weeks that sent claims to their highest level in nine months. Even with last week's decline, the four-week average, a less volatile measure, rose to 486,750, the most since November 2009. Jobless claims fell steadily last year as the economy began expanding, dropping from a peak of 651,000 in March 2009 to about 460,000 at the start of this year. After fluctuating around that level for most of this year, claims started climbing again last month.
In a healthy economy, claims generally fall below 400,000. Norton said Northeast Georgia has been lucky to attract new jobs to the area.

"On the positive side is that Hall, Jackson and Forsyth (counties) are getting a disproportionate share of new businesses relocating into this area," Norton said. "Georgia State (University) has released that there's been about 5,000 new job announcements since Jan. 1 for businesses on the north side of Atlanta.
The Associated Press contributed to this report
http://www.gainesvilletimes.com/section/6/article/37112/

Read more...