Prudential Georgia Realty
Real Estate Advisor
February 2012

We are providing this monthly real estate advisor report to keep you informed about the latest trends and issues in the real estate market. If you know someone else who might be interested in receiving this report or who may benefit from our expertise, please let us know. This edition provides information on the upcoming spring market plus some helpful tips that can save you money! Better information helps our clients make better real estate decisions.

Listed Inventory - Metro Atlanta

Many markets in our area are seeing very low levels of inventory for sale. The latest numbers in many of our markets show inventory levels down 25% - 30% from last year. The mix of properties is changing as well. For the 20-county metro area, short sales & foreclosures were 60% of the total transactions last year. But remember that real estate is local and many markets are different. We are now seeing lots of markets where short sales & foreclosures were only 20-25% of the transactions. The market conditions are improving for sellers and resales are going to be more popular in 2012!

If you want to attain the highest market value for your property, you must have exceptional marketing. Our Advanced Property Marketing System was designed for the current market conditions and is the most effective approach available. The results prove the case. Since introducing this advanced system, our company has become #1 for listings sold.
If you are interested in selling your property, the spring market will be upon us quickly. Contact us today to get started.

 After years of fairly stable premiums, home owners across Georgia are feeling the sting of increases in home insurance rates. Late last year, the State of Georgia Office of Insurance and Fire Safety approved increases ranging from 7% to 22.9%. Allstate had the highest increase. Your mortgage provider may soon be raising your monthly payments to allow for the change in the escrow for your mortgage. So what is causing these increases and what should you do?

Insurance companies say that the root causes for the rate increases are higher costs due to extreme weather and insurance fraud. Claims caused by high winds, storms and hail damage have been unseasonably high in Georgia. Additionally, rebuilding and repair costs have increased due to materials and energy costs. Another less discussed reason for the rate increases is insurance fraud. According to the insurance commissioner’s office, 12 to 18 percent of the money homeowners pay in premiums are allocated to cover the cost of insurance fraud.

Now is a great time to evaluate your home insurance policy to make sure that you have the best deal. That is why our company has formed a new partnership with Lloyd Pro Group Insurance. They are a respected company and have been helping Atlanta homeowners for over 25 years. We recommend contacting them to analyze your current situation and see if there is an opportunity to get a better policy. They also have options for auto, life and other forms of insurance. The best discounts are often found by bundling multiple policies together. Remember that your replacement costs for your home might be higher than the current market value since most homes today are being sold below replacement costs. To review your policy, please contact Rachel Segarra at 678-781-9032 or rsegarra@lloydprogroup.com.

 The venerable publication the Farmers' Almanac predicts the last frost date for the north Georgia area as March 24th, 2012. This is weeks earlier than the traditional last frost date for the area and may indicate an early spring season. The Farmers’ Almanac closely guards their weather-prediction techniques and although their forecasts are more entertainment than science, it’s never too early to start dreaming of that spring garden – or that new home! Groundhog Day is February 2nd so we will be watching the forecasts from our two local prognosticators - General Beauregard Lee of Lilburn and Gus the Groundhog from Athens. Last year both predicted an early spring. Many of their cousins like Punxsutawney Phil of Pennsylvania are likely to have more dire predictions of an extended winter season. Yet another reason why people are moving from the rust belt to Metro Atlanta. Yes, those buyers will be out early this year. The sellin   g conditions are improving so it might be the right time to get your house ready for showing.

Click Here To Download Some Helpful
Suggestions For Preparing Your Property For Sale

Remember, you only get one chance to make a great first impression - so curb appeal is critical. And now most potential buyers are looking online first. So you first impressions online are critical as well. We already provide the most extensive online exposure with over 40,000 websites, video sites and mobile sites across the globe. We use high-quality photography, videos and digital magazine to bring the unique story of your property to life – online, in print and in person. To learn more about your local market conditions and how to get the highest value for your property this spring, contact us today!

If You Know Someone Who Can Benefit From This Information Or Our Real Estate Expertise, We Would Love To Help Them.
Thank You!

Craig Warren

Prudential Georgia Realty

Phone Number:

Cell:  770-654-4455

Office Phone:  678-807-9231

Business Fax:  678-679-0542

Email Address
investingnrealestate@gmail.com

Web Site
www.craigwarren.prudentialgeorgia.com

Mobile Search
www.craigwarren.m.prudentialgeorgia.com

Mailing Address
400 North
925 Sanders Road
Cumming GA 30041

By Dr. Thomas Sowell

The current Occupy Wall Street movement is the best illustration to date of what President Barack Obama's America looks like. It is an America where the lawless, unaccomplished, ignorant and incompetent rule. It is an America where those who have sacrificed nothing pillage and destroy the lives of those who have sacrificed greatly.

It is an America where history is rewritten to honor dictators, murderers and thieves. It is an America where violence, racism, hatred, class warfare and murder are all promoted as acceptable means of overturning the American civil society.

It is an America where humans have been degraded to the level of animals: defecating in public, having sex in public, devoid of basic hygiene. It is an America where the basic tenets of a civil society, including faith, family, a
free press and individual rights, have been rejected. It is an America where our founding documents have been shredded and, with them, every person's guaranteed liberties.

It is an America where, ultimately, great suffering will come to the American people, but the rulers like Obama, Michelle Obama, Harry Reid, Nancy Pelosi, Barney Frank, Chris Dodd, Joe Biden, Jesse Jackson, Louis Farrakhan, liberal college professors, union bosses and other loyal liberal/Communist Party members will live in opulent splendor.

It is the America that Obama and the Democratic Party have created with the willing assistance of the American media, Hollywood , unions, universities, the Communist Party of America, the Black Panthers and numerous anti-American foreign entities.

Barack Obama has brought more destruction upon this country in four years than any other event in the history of our nation, but it is just the beginning of what he and his comrades are capable of.

The Occupy Wall Street movement is just another step in their plan for the annihilation of America ..

"Socialism, in general, has a record of failure so blatant that only an intellectual could ignore or evade it."

Thomas Sowell

When you look at your holiday calendars you may find the months already overloaded with seasonal obligations -- shopping, entertaining, children's pageants, charity work, decorating the house, and so much more. If you are also trying to sell your home, you are under extra pressure to keep your home in "showtime" condition. And that could be the last thing you need before the holiday spirit is broken.

It is understandable why you would be tempted to take your home off the market during the holidays. And the list of justifications is long. If you are too busy, buyers may be also, and you may find your efforts unrewarded by enough showings. And what if you do get an offer? You may be faced with the possibility of packing and moving during the busiest time of the year. Besides, you can give your house a rest, and it will have better momentum after the holidays. Better to just pack it in and start fresh in January, right?

But wait! Top-selling Realtor jennie Ling says taking your home off the market during the Christmas season is a mistake. A vice president of Virginia Cook REALTORS® and the number one sales person in her company for almost every one of her more than 35 years in the real estate business, Ling exclaims, "The house sure isn't going to sell off the market! What is the advantage of that? So you're busy. Let your Realtor do the work. You can leave in the morning, go to work, go shopping, and let your Realtor take care of things."

"The holidays are my best-selling period. Why? Because most people take off work sometime during the season. The husband and wife are both off and want to see houses. I showed homes on New Year's Day last year. I like the holidays because the buyers have more time, and they can look at homes together."

Before you take your home off the market, consider the following points:

• Although buyer activity may appear to slow down, the buyers who are actively looking during the holidays are that much more serious. Ling believes the home market is no more affected at Christmas than during other "busy" period. If that were so, the market would shut down throughout the year as families concentrate on spring weddings, June graduations, summer vacations, and autumn back-to-school activities.
• Many buyers deliberately choose to shop for a home after the busy spring and summer rush. They know that it will be easier to look, and that negotiations will be less stressful. They may not have children, or they may have grown children, so moving to accommodate the school year isn't a consideration. Finding the right home at the right price, however, is.
• Relocating families often don't have a choice in when they can leave for their new destination. Although 68 percent of transferring families have children, many families have to transfer during the middle of the school year. These families are that much more motivated to get their families settled in before either before the January semester begins, or to arrange for the move during spring break in March. If you sign a contract by New Year's Eve, the timing couldn't be more perfect.
• At Christmastime, our culture focuses on family and the home. Preparing for the indoor activities of winter is one of the most enjoyable periods of family life. Allowing buyers to view your home during this most hospitable of seasons lets them better picture their own family life in the attractive environment you have created.
• When is your home ever more beautiful and inviting? You have cleaned and decorated, and your home looks like a picture postcard. If the results are good enough for family and friends, they will surely be good enough to impress your buyers. Get the family team on board to do a five-minute blitz pick-up every morning to keep holiday messes to a minimum.
• With reduced inventories and motivated buyers, you will have all the members of the MLS on your team. You may find you have more showings than you would if your marketed your home during a busier time of the year.
• If you do get a contract, you can arrange the terms to suit your needs. If moving during the holidays isn't an option, you can put in the closing date of your choice. "Most people can close 30 to 60 days after a contract is written, so there is plenty of time," Ling says. "Possession and closings are are very negotiable."

Technology Allowing for Anytime, Everywhere Banking. The convenience of the "mobile wallet" for making payments and accessing bank accounts from anywhere, at any time, could change the definition of "banking hours" -- and the need for bank branches.

In a recent Deloitte LLC video presentation, Brian Johnston, principal, Deloitte Consulting LLP, said that, "Out of the top 25 banks, I am not sure that there is one out there that doesn't have some type of focus or initiative in place right now on the mobile channel."

In terms of sizing it up, Johnston said mobile technology is currently an $86 billion market in terms of mobile payments, having grown 300% over the last three to four years.

"We see significant growth over the next three to four years," he said. "By 2015, there are forecasts out there that say it will be a $400 billion market."

Right now, banks are trying to figure out how to create and set up the mobile channel, he said.

"For instance, certain transactions that occur within a branch are 50 times cheaper if it occurs through a mobile application or mobile channel," Johnston said. "So, how do you shift customer behavior from a branch into that mobile environment?"

The Great Recession has already taken the steam out of new bank branching activity. In the last two years, there has been more bank branches closed than opened. New branch openings per year have been cut by more than half the annual activity in 2006 and 2007; whereas annual branch closings have increased by about 50%, according to FDIC statistics.

Now there is also a threat out there on the banking side from mobile technology: disintermediation, Johnston said.

"We are seeing certain applications pop-up recently that really aggregate financial accounts and aggregate bill pay providers and that application is really linking it," said Johnson. "So, it is really taking the bank out of the loop. The barrier to entry is probably low, so we are not quite sure how that is going to play out, but at any time you have some type of aggregation device which can really bring financial accounts together, I think there is some type of reason for concern."

With the growth of mobile wallets, customers will want to bank any time, everywhere, Johnston said.

"So banks really need to be able to cater to those needs and understand that it is a much different sort of behavior than what we have seen in the past with other generations, and if they don't focus on that type of behavior, I believe it could be a lost generation," he said.

"When I look out five to 10 years and see how the banking industry is going to evolve, I wouldn't be surprised if we see a pure mobile bank, (one with) no branches, no call center," Johnston said. "All of the legacy channels won't be there. It will just be purely a mobile-channel bank, and we will see how things evolve, but I think the technology exists and the customer behavior in terms of the younger generation is there that we may see that evolve over the coming years."

Traditional brick-and-mortar retailers are waging a multi-front war on the rapid advances in online retailing to compete for the growing legion of shoppers armed with the latest in mobile technologies.

Retailers are battling outdated tax laws that give virtual stores an advantage, while also battling these retailers for market share, and they are also ruthlessly evaluating sales performance across their portfolios to trim excess square footage that is not meeting expectations.

In the latest salvo fired by store operators against their online counterparts, Simon Property Group Inc., the country's largest owner, developer and manager of retail real estate, filed a complaint this past week against the State of Indiana asking the courts to force the state to collect sales tax on goods sold by Amazon.com.

According to the suit, Amazon.com is required by Indiana law to collect sales and use taxes to the state for sales made over the Internet, but has consistently refused to do so.

In a statement, Simon said, "We have a responsibility to ensure the laws are equally applied to everyone. Main Street retailers are being harmed by this unequal playing field in Indiana, and their existence is being jeopardized and threatens the employment of hundreds of thousands of retail employees in our state."

Industry representatives at the International Council of Shopping Centers (ICSC) are also weighing in. Speaking at an ICSC confab in Texas last month, Brad Greenblum, president of Greenblum Investment Partners in Austin, TX, said Texas lost $850 million of revenue last year to online retailers.

The trade group is pushing for legislation called the Main Street Fairness Act. The legislation would allow states to collect taxes from out-of-state sellers, which the ICSC claims would even the playing field for brick-and-mortar locations.

Shift in Marketing Dollars

On another front, nearly six in 10 middle market retail executives reported their companies are shifting marketing dollars away from old media toward new media, such as social media campaigns, according to the third annual Retail Finance Outlook study released by CIT Group Inc.

As part of that shift, 68% of respondents report increases in marketing and deals through social media channels, including Facebook and Twitter. In addition, 63% report that their web sales are growing (28%) or growing faster than other channels (35%).

In a sign that this trend will continue, some 58% of retail executives said they believe they need to improve their new media marketing strategies, while a further 7% characterize their companies as "late starters" in the new media game.

Jeffery J. McNaught, a partner specializing in real estate with the law firm of Lindquist Vennum in Minneapolis, told CoStar that even this approach is double-edged sword.

"It's easier, less work and more efficient to buy [some] items online. Smartly, such retailers like Best Buy have their own online stores, and have worked with the 'one stop' retailers like Newegg, Amazon to get their products on screens everywhere. But that is a sale lost for a brick/mortar franchisee or retailer on the ground."

As more retailers drive more sales to their Internet channels that is also creating changes in retail space utilization.

Suzanne Mulvee, real estate strategist, for CoStar Group, addressed that trend at CoStar's quarterly State of Retail Market webinar last week.

"I think the retailers are trying to make the bricks complements the clicks," Mulvee said. "I was at the ULI (Urban Land Institute) fall meeting and had the opportunity to speak with some retailers and found there are some that are already successful. Staples, for example, is very successful in deriving the bulk of its sales from the Internet."

But, Mulvee added, "Staples and all retailers are thinking very strategically about what they want and need on their floor. What they’re finding is, they don’t need as deep an inventory as they have previously. That takes space out of the back room of the store, but it doesn’t necessarily take the space out of the front end."

"That said, as far as the technological changes that are happening in what you can purchase on the Internet, Best Buy is a great example," she added. "When Best Buy first saw its explosive growth and was opening its stores en masse, they were filled with CDs and DVDs predominately. [However] you don’t buy CDs and DVDs in stores any more, or very seldom. You’re looking to purchase those online."

Mulvee agreed that its very challenging for retailers to determine which will be the next product category that will become digitized see sales diminish in physical stores. "Where retailers are looking to combat this is by adding more service and necessity goods," she continued.

"The defenses that retailers have lined up, I don’t know if they’re going to be sufficient for all [retailers] to weather the impact of the Internet," Mulvee said, adding that, "so I think you’ve got to be very selective about who you have in your center."

Even being picky isn't necessarily a guarantee for center owners, real estate executive say.

Chad M. Firsel, president and founder of Quantum Real Estate Advisors in Chicago, said retail stores are becoming the testing grounds for consumers who want to feel and touch an item before they go order it online.

Paul W. Adler, vice president of Rand Commercial Services in New York, told CoStar that, "Smart retailers are morphing their physical plants to deal with these changes in the market. The dinosaurs will disappear. Mobile tech and online buying centers, distribution outlets and distribution portals will be a new emerging market."

Harvard Business School professors Rajiv Lal and José B. Alvarez, addressed the topic last month in a paper entitled: "Retailing Revolution: Category Killers on the Brink."

Lal and Alvarez contend that mass-market retailers, particularly big-box "category killers," are under critical pressure from online competitors. For retailers that can react quickly enough, this upheaval is survivable. But those slow to see the tsunami wave on the horizon stand to be swept away.

The two define "category killers" as those highly focused retailers that specialize in a specific category of goods, including Barnes & Noble, Best Buy, and Staples. Their wide assortment, aggressive pricing, large stores, extensive store network, and deep expertise in the categories they served proved a massive competitive advantage.

But now, online competitors are threatening to make such large chains of retail stores, many of which spent much of the last decade adding floor space, less productive. And the impact of emerging technologies, expanding price and assortment transparency, and the increasing amount of excess retail space has created new challenges. The two believe that ultimately the war will be won on a new front: product and branding.

"Clearly, this is a new world for store retailers," Lal and Alvarez conclude. "To compete with online competitors, retailers will need to be agile both in eliminating or downsizing categories that do not benefit from their stores' assets, and in introducing new categories that cannot be bought without the help of the core assets of their stores."

"With this constant evolution of product categories, retailers will also need to be much more cognizant of how they develop and interpret their brands as they become more flexible in their offerings. Can you be an office supply store if you do not sell paper? What does it mean to be an electronics shop if the focus is on mobile devices and you don't sell televisions?"

"Store productivity will come only if a store becomes known for offering a shopping experience that is consistent with the needs of the category," the Harvard professors said. "An ever-evolving retailer that understands how key store-level assets can be deployed in a category to create a compelling shopping experience will separate the winners from the bankrupt over the next decade."

Lets talk accountability, shall we? When you're accountable, it means you accept responsibility for your actions and the result of those actions....good or bad. A true leader doesn't blame others or the external environment. There are always things you could have done and things you can do to change the outcome. Don't play the victim because being a victim is the exact opposite of being a leader. Victims are passive. They don't feel they have any control over the outcome. In contrast , leaders are pro-active. They take initiative and are able to change any outcome. Leaders do not allow the blame to fall on anyone internally or externally, they accept the decisions and move forward. They  are accountable to the task at hand and do it with confidence. Leaders recognize the ability to lead in others and help to develop their skills, support their endeavors and trust them to make mistakes and allows them to learn from those mistakes. Being accountable is asking questions, getting answers and taking ownership. Being accountable also is the act of holding others responsible for their actions, it is not demoralizing another individual for any reason, nor is it being condescending , intimidating or bullying others into doing something. Accountability is a process with a beginning and an end, it's about staying with the process until it's complete and always treating others as you would want to be treated. Live and let live. 

If you plan to use a mortgage for your next home purchase, you’ll want to keep your credit scores as high as possible. Credit scores play an out-sized role in determining for which mortgage product you’ll qualify, and to which rate you’ll be assigned by your lender.
 
The higher your credit score, the lower your mortgage rate will be.
 
What Is A Credit Score?
 
History has shown that the best way to predict a person’s behavior over the near-term future is to look at that person’s behavior in the recent past. It’s a concept similar to the First Rule of Physics — an object in motion tends to stay in motion.
 
We can apply this theory to consumer credit, too. A person who has recently paid his bills on-time should continue to pay his bills on-time in the near-future.
 
This is the basis of credit scoring; using your past to predict your future.
 
To mortgage lenders, your credit score represents your likelihood of making on-time mortgage payments for the next 90 days. “90 days” matters because, after 90 days without payments, a homeowner falls into default.
 
Higher credit scores correlate with lower default risk which explains why people with high credit scores tend to receive lower mortgage rates than people with low credit scores. This is true across all loan types, including conventional, jumbo, and FHA mortgages.
 
Like most else in finance, those with the lowest risks get to pay the lowest rates.
 
Lenders Use The FICO Scoring Model, Exclusively
 
There are three main credit bureaus in the United States. They are Equifax, Experian and TransUnion. Each offers a bevy of credit-scoring products, available for purchase on their respective websites. Prices range from “free” to several hundred dollars.
 
None, however, are particularly relevant in the home-buying process. This is because the nation’s mortgage lenders rely on a different credit model — the FICO model.
 
FICO is named for the Fair Isaac Corporation. It was “invented” in the 1950s and has become the mortgage industry standard for credit ratings. Today, FICO scores are omnipresent to the point that people generically refer to all credit scores as “FICO scores”.
 
This is akin to calling all adhesive bandages “Band-Aids”. FICO is the brand name — not the product.
 
FICO scores range from 300-850.
 
Credit Scores Change Mortgage Rates
 
Your FICO score has always influenced the mortgage rate for which you’re eligible. In 2008, though, it began to change your loan fees.
 
In response to major mortgage market losses, in April 2008, both Fannie Mae and Freddie Mac introduced something called Loan-Level Pricing Adjustments (LLPA). Loan-level pricing adjustments are “discount points” added to a mortgage rate, based on a specific borrower’s risk to the lender.
 
A discount point is a loan fee, paid at the time of closing. 1 discount point is equal to 1 percent of your loan size.
 
Example : A $300,000 mortgage that’s assessed 1 discount point will have $3,000 in extra fees due at closing.
 
Fannie Mae and Freddie Mac know that low credit scores correlate to high default rates so, like an insurance policy, they assigned the highest costs to the highest-risk borrowers.
 
Assuming a 20% downpayment, look at how discount points change based on credit score. Fees get massive for FICOs under 700.
 •740+ FICO  : There are no discount points required. This loan is “low risk”.
 •720-739 FICO :  0.250 discount points are charged to the borrower, or $250 per $100,000 borrowed
 •700-719 FICO :  0.750 discount points are charged to the borrower, or $750 per $100,000 borrowed
 •680-699 FICO :  1.500 discount points are charged to the borrower, or $1,500 per $100,000 borrowed
 •660-679 FICO :  2.500 discount points are charged to the borrower, or $2,500 per $100,000 borrowed
 
Now, not many new home buyers just have that kind of extra cash just laying around. Therefore, as an alternative to paying discount points with cash, many choose to “roll up” the fees into their respective mortgage rates. In general, 1.000 discount point can be “traded in” for a 0.250 increase to your mortgage rate.
 
Example : A consumer with a 680 FICO score is required to pay 1.500 discount points at closing, or can alternatively accept a mortgage rate increase of 0.375%.
 
This is why it’s important to keep your credit score high. There are real dollar costs for having scores under 740.
 
Improving On Your Credit Score
 
If your credit score is not as high as you’d like, the good news is that you can take steps to raise it — sometimes without even changing your spending habits.

  Safety Alert!
Here are some reasons why we don't allow cell phones in operating areas, propylene oxide
handling and storage area, propane, gas and diesel refueling areas.
 
The Shell Oil Company recently issued a warning after three incidents in which mobile
phones (cell phones) ignited fumes during fueling operations
 
 In the first case, the phone was placed on the car's trunk lid during fueling; it rang and the
ensuing fire destroyed the car and the gasoline pump.

  In the second, an individual suffered severe burns to their face when fumes ignited as
they answered a call while refueling their car!

 And in the third, an individual suffered burns to the thigh and groin as fumes ignited when
the phone, which was in their pocket, rang while they were fueling their car.
 
 You should know that: Mobile Phones can ignite fuel or fumes

 Mobile phones that light up when switched on or when they ring release enough energy to
provide a spark for ignition

 Mobile phones should not be used in filling stations, or when fueling lawn mowers, boat, etc.

 Mobile phones should not be used, or should be turned off, around other materials that
generate flammable or explosive fumes or dust, (I.e., solvents, chemicals, gases, grain dust, etc...)

  TO sum it up, here are the Four Rules for Safe Refueling:
 
1) Turn off engine
2) Don't smoke
3) Don't use your cell phone - leave it inside the vehicle or turn it off
4) Don't re-enter your vehicle during fueling.

 Bob Renkes of Petroleum Equipment Institute is working on a campaign to try and make people
aware of fires as a result of 'static electricity' at gas pumps.
His company has researched 150 cases of these fires.

 His results were very surprising:

 1) Out of 150 cases, almost all of them were women.

 2) Almost all cases involved the person getting back in their vehicle while the nozzle was still pumping gas.
When finished, they went back to pull the nozzle out and the fire started, as a result of static.

 3) Most had on rubber-soled shoes.

 4) Most men never get back in their vehicle until completely finished.
This is why they are seldom involved in these types of fires.

 5) Don't ever use cell phones when pumping gas
 
6) It is the vapors that come out of the gas that cause the fire, when connected with static charges.

 7) There were 29 fires where the vehicle was re-entered and the nozzle was touched during refueling
from a variety of makes and models.
Some resulted in extensive damage to the vehicle, to the station, and to the customer.

 8) Seventeen fires occurred before, during or immediately after the gas cap was removed
and before fueling began.

 Mr. Renkes stresses to NEVER get back into your vehicle while filling it with gas.
If you absolutely HAVE to get in your vehicle while the gas is pumping, make sure you get out,
close the door TOUCHING THE METAL, before you ever pull the nozzle out.
This way the static from your body will be discharged before you ever remove the nozzle.

 As I mentioned earlier, The Petroleum Equipment Institute, along with several other companies now,
are really trying to make the public aware of this danger.
  
I ask you to please send this information to ALL your family and
friends, especially those who have kids in the car with them while
pumping gas.
If this were to happen to them, they may not be able to get the
children out in time.