October, 2006:
Good news: I'm Selling Agent of the Month, and I'm
thinking about giving away Home Protection Plans to celebrate.
I'll tell you what. When you buy a house through me this October,
or list a house with me this October (and it sells while I am the
listing agent), I will pay for the Home Protection Plan. The
upside for the buyer is obvious, and that's why it's an upside for the
seller as well. The buyer knows he or she is being protected.
The saga of the real estate articles continues. I
started with GoArticles.com and have moved on to AssociatedContent.com.
Now, though, I'm courting one of the biggest of the internet
players. It's a long shot, but if it happens, I'll be sure to let
you know.
Okay, enough about me. What about the
market? Out west the prices keep going up while demand
drops. Here, though, we're backing off of our prices. Why
the difference? First of all, it's not homogenous. Most
counties in the state are going up, but Baldwin had a big speculative
market along the water where prices are now coming down. You also
have waterfront homeowners who want out and can afford to sell at a
discount if they have to. That's where you see the biggest drops,
but home prices are going down, too. We reduce our prices because
that's what it takes to sell, and we can afford the reduction.
That is the difference between East Coast and West
Coast, in broad, ugly terms. The West Coast cannot afford to
sell. The values of their property SHOULD be dropping, but the
owners are by-and-large trapped by new and refinanced mortgages.
It's either sell high or foreclose.
Markets that cannot afford to react to market pressures
are inherently risky.
I lived in Southern California for twenty years and in
doing so learned quite a bit about the fault system that causes the west
coast's infamous quakes. (I lived in Van Nuys in 1996, when the
Northridge quake struck.) Quakes happen because tectonic plates
are moving but the friction at the faults (where the plates rub against
each other) resists that motion. Eventually the fault can no
longer resist the pressure, and what should have been small movements
over long periods of time is now one huge correction. The results
are devastating.
Analysts have been watching for a correction in the
California market for years, but despite their doom and gloom the market
continued to sure upward. Until now, however, demand continued to
outweigh the other data--such as the affordability index. Nothing
else mattered, as long as people were still willing to buy.
Now we have crossed a threshold that may be building up
pressure on a real estate market fault. The market is in decline,
even as prices continue to rise. There must either be a release of
pressure--a reduction in price or an increase in demand--or we may soon
see catastrophic results in that and similar markets. The damage
will be seen in a huge number of foreclosures and/or a sudden and
drastic drop in price.
Doom and gloom? If I still had holdings in such
markets (or if I held my license there) I would be concerned. I do
believe we'll see drastic results from this failure to react to market
pressures. However, the bright side is that markets like
California have baffled true analysts, let alone simple agent/writers
like myself. The Golden State may prove her critics wrong yet
again.
Be that as it may, I'm still happy to be in Baldwin
County, Alabama.
Until next time,
Wade Ogletree (251) 404-0016 or 877-Fairhope.
September, 2006:
Obviously, I've had some time off from my blog.
There have been many reasons, and you may forgive me if I tell you that
there are signs the market is turning around. Agents are getting a
little busier these days. Investment continues to drive the
market, but the residential end of things is showing promise, as well.
Also, my real estate articles have gotten in the
way. Here are some of the latest offered by Associated Content.
Some of the articles I publish there have been seen here
and elsewhere, but I am giving them some exclusive material as well.
I'm sorry to say that the next GO Zone Forum, Sept. 12,
is not open to the public, however, I am working on setting up a public
forum soon. Get in touch with me if you'd like to attend: Wade
Ogletree (251) 404-0016 or 877-Fairhope.
July, 2006, Week Three:
As I said with the first
installment of the resurrected blog, I write real estate articles.
Yet until now my "real estate articles" section of this site
was filled with other people's work. That's fine, if the articles
are worthy enough, and I will continue to post exceptional articles from
writers around the globe, but, for the most part, I felt we could do
better.
I just finished posting two of my
own articles there, feel free to check
them out. Net Operating Income: Cutting Out the Noise
and Cash Flow: In the Right Direction. Obviously these
articles deal with investment real estate, but I don't want that to
scare off homebuyers. Buying a home is an investment, and it
should also be your doorway into the larger world of real estate.
It was my father who first got me
into owning rental properties, and my wife and I were not an easy group
to convince. This was before I entered the real estate field, and
we saw too many liabilities and too little return. I think that's
fairly standard among those newly considering rentals. It's easy
to get scared. Now, though, they are responsible for my family's
financial stability and growing net worth. It's hard to remember
those times before we were investors, hard to think that way again.
Now, more than ever, is a great
time to invest (or buy a home if you don't currently own one) on the
Gulf Coast. The GO Zone Act of 2005 is making it possible and
profitable. That's really my big news for this week. I want
to help you understand the possibilities open to you. I've begun
that with my GO Zone material
and am building on that with a commitment to host GO Zone Forums
throughout Baldwin County and perhaps beyond. Keep up-to-date with
the forum schedule at
gozoneforum.com.
Also, in the future, more of my
articles and more of this blog will be dedicated to GO Zone information
and education, so stay tuned. If you're interested in finding out
more or acting on what you've learned, remember to give me a call: Wade
Ogletree (251) 404-0016 or 877-Fairhope.
July, 2006, Week Two:
Down Payment Assistance
Need down payment
assistance? There's good news, and then there's bad news,
both from the US government. Which would you like first?
The bad news is that the IRS has
potentially shut down many of the nonprofit down-payment assistance
programs that have been operating over the last decade. This is a
blow to some buyers, but I cannot fault the IRS in this move. What
they did was to take away the tax exempt status of organizations that
were seeming to provide down-payment gifts to home buyers but were
actually taking the money from the sellers to do so--along with a nice
bonus for themselves. Organizations that actually do provide gift
money will still be protected, but such groups are much more rare.
The good news is that thanks to
the Gulf Opportunity Zone Act of 2005, those counties affected by last
year's hurricanes, Baldwin County included, have access to loans at low
interest rates and help with the down payment. There are
restrictions, however, and we'll need to get you together with a knowledgeable
mortgage lender to see if you qualify.
The down payment help available
through the GO-Zone bonds applies to up to 6% of the purchase price and
comes in the form of a second mortgage. The rate for this is
5.375%, or in some instances, 0%. The rates for the first mortgage
are 5.375% and 5.75%.
If you have further questions,
call me, and I'll put you in touch with the people who clued me in to
this great opportunity. Wade Ogletree (251) 404-0016.
July, 2006, Week One:
I write Real Estate articles for
Internet sites, potentially all over the world. Today, I have
faced the fact that I can no longer avoid writing articles for my own
site as well. So here is the happy return of my Real Estate Blog.
Unfortunately, the entries from the earlier version of my blog have been
cast into the virtual rubbish heap, and so, we start anew.
My most popular article to date is
a short one entitled: "Rentals Are Not Forever." I'll
kick off the reborn blog by reprinting it here.
Rentals Are Not Forever
One of the ideas perpetuated by many of the Real Estate Investment "gurus" is that once you buy a rental property, you continue to hold on to it. This may be the right approach at times. After all, your fixed interest mortgage will remain the same as rental rates go up. Often, rentals make no money except in tax benefits over the first couple of years. They produce a cash flow only when rental rates surpass carrying costs.
There are other factors to consider, however. One is that the tax benefits will eventually have to be repaid. The depreciation you enjoy each year will be reclaimed when the property is sold. More importantly, however, is the increase in value of the property. Consider its current value and the return on investment. If you were considering the property as a new investment, would you buy it now or would it make more sense to place your money elsewhere? If you would not buy it today, then it probably makes little sense to hold on to it at the current price. If your return on investment would be better elsewhere, it is time to sell.
That's the entire article.
Short and sweet. I will add to it here just enough to say that I
offer, for free, the tools that will help you analyze your rental
property and make the right choice. Visit my Property
Analysis page to see for yourself.
Wade Ogletree
COLDWELL BANKER, JME Realty
Fairhope, Alabama
(251) 404-0016
1-877-Fairhope
EMAIL ME
Hometownbaldwin.com