As a parent, I can’t begin to understand the pain that Al’s parents are going through.  Knowing that there isn’t anything that we can do to make the hurt go away HAS to be difficult.  The thought of my child being in that situation scares me to death.

Al’s mom, Angela, was my older child’s Pre-K teacher.  She was also his teacher for summer camp a couple of years ago, and I saw her regularly through this school year as my younger child was at the pre-school in which she taught.  So, this isn’t about some stranger to me… this is about a friend.

Ade For Al

On Friday, June 18th, the Arcado Elementary PTA will have a Lemonade Stand at the Lilburn Farmer’s Market at Lilburn City Park.  The Farmer’s Market runs from 4-8pm.  This is to help the family defray some of the costs they are experiencing as they care for Al in Ohio.  Al’s father still has to remain in Lilburn most of the time to work, while  Angela and their 8 month old are in Ohio with a few other family members.

We’d love for you to come out and enjoy a glass of lemonade while helping out the Reals.

Here is a link to the above video if the embed doesn’t work.

Image by mjp* via Flickr

In the sub-$200k arena, there are 240 listings, with about an 11.8 month supply.  Absorption Rates have been slowing since December, but sales were up slightly since March 2009.

Between $200k and $400k, there are 161 listings for sale, and about 27 months of supply. This segment has been getting weaker each month since at least November.  Sales were up by a couple of units in March, but so were listings.

From $400k to $600k, there are still 12 homes on the market. The absorption rate is still around 3 years,.  Of course, there is a seasonal dip around the Holidays and the pick-up isn’t until March and April.

Above $600k, there are 6 listings, but too few sales to have any sort of reliable number of months of inventory.  There have been two sales in the last three months, but prior, there had only been two other sales in 2009 (February and November).  Two of the listings are above $800k, and there is no market activity in the last 12 months for that range…

Lilburn is in Gwinnett County, GA, just outside of Atlanta.  As of the 2000 Census, there were 11,307 people in Lilburn, but that is only including people in the city limits, and there has been a lot of growth since 2000 in Gwinnett County.  It was incorporated in 1910.  Lilburn is home to Parkview High School, and also has students that the Brookwood, Berkmar and Meadowcreek clusters. It is also home to Killian Hill Christian School, Providence Chrisian Academy, St. John Neumann Catholic School and Parkview Christian School.  Possibly the most famous resident of Lilburn is General Beauregard Lee, a groundhog with a better winter prediction record that Puxatawnee Phil up in PA. Dominique Wilkins, formerly of the Atlanta Hawks also lives in Lilburn.

I have a page dedicated to Lilburn Market Data.

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Still working on the details, but there are changes coming.

The end goal is to create more of a hyper-local news site.  As we build towards that goal, we are inviting local businesses to post specials and information for Lilburn area residents.  The real estate content is going to be ratcheted down as the other content is built up.

There will also be a few surprises coming…

In the mean time, if you are a Lilburn, GA, area business owner, and you would like to promote special offers… for free… We’d love for you to use the Lilburn, GA Fan Page on FaceBook to do that.

• Restaurant Menus and daily specials
• Home Service offers
• Landscaping Spring Specials
• There are a lot more interesting possibilities.

When the site is finished coming together, it will have a stream of news local to Lilburn.  We’d love for you to be a part of it…

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Lilburn is in Gwinnett County, GA, just outside of Atlanta.  As of the 2000 Census, there were 11,307 people in Lilburn, but that is only including people in the city limits, and there has been a lot of growth since 2000 in Gwinnett County.  It was incorporated in 1910.  Lilburn is home to Parkview High School, and also has students that the Brookwood, Berkmar and Meadowcreek clusters. It is also home to Killian Hill Christian School, Providence Chrisian Academy, St. John Neumann Catholic School and Parkview Christian School.  Possibly the most famous resident of Lilburn is General Beauregard Lee, a groundhog with a better winter prediction record that Puxatawnee Phil up in PA. Dominique Wilkins, formerly of the Atlanta Hawks also lives in Lilburn.

Market stats for Lilburn, January, 2010, indicate that there are 359 (January 31st) properties on the market. Overall, there is about a 10 month supply of properties, with a slight acceleration in sales during October and November, but slowing in December and January.

In the sub-$200k arena, there are 214 listings, with about an 10 month supply. The same pattrern hold that sales accelerated through October and November and slowed after that.

Between $200k and $400k, there are 128 listings for sale, and about 10.5 months of supply. Even though the tax credit for First time Home Buyers wasn’t as important to this segment, it still affected the sales distribution.

From $400k to $600k, there are 11 homes on the market. The absorption rate is around 11 months, and it is definately slowing.  Of course, there is a seasonal dip around the Holidays and the pick-up isn’t until March and April.

Above $600k, there are 6 listings, but too few sales to have any sort of reliable number of months of inventory.  There have been two sales in the last three months, but prior, there had only been one other sale in 2009 (February).  Two of the listings are above $800k, and there is no market activity in the last 12 months for that range…

From LaneBailey.com.  I have a page dedicated to Lilburn Market Data.

Some quick county-wide numbers…

• January, 2010 sales were 352 homes.  This is down 11.1% from the 396 homes in January, 2009,  That was down 14.7% from the 464 homes in January,2008.  (There might still be some stragglers that haven’t been entered yet… but there shouldn’t be many.  These numbers are as of 2/23/10)
• New listings were 1526 homes for January, 2010.  This is down 21.9% (1953 new listings) from January, 2009.  That was down 17.3% (2363 new listings) from January 2008.
• Days on Market were down by 19 days to 87. This is good news, but I honestly don’t put much faith in the DoM number.

Overall Absorption Rates…

Take a look at this post for a quick explanation of Absorption Rates.  Listings increased for January, compared to December, 2009.  There were 5612 listings in January, 5219 listings in December.  The “Months of Inventory” numbers for the 12 month, 6 month and 3 month averages are 10.12, 8.80 and 8.68, respectively.

What this means is that sales seem to be slowing.  However, January is generally a tough month.  In December, contracts usually slow, although closings remain fairly high (November contracts).  So, January always looks a little weaker in the 6 month and 3 month averages.  But, January also showed more months of inventory in the 12 month average, compared to December (8.03 months of inventory).

It seems like I say it every month, but next month will be interesting…  One of the reasons we have to “kick the can down the road” is that we are only really able to look in a rear view mirror at sales data.  Imagine trying to drive around a track only looking out the back window.  Whenever there is a sharp turn, you won’t know until you are in the ditch…

Under $200,000…

This range continues to be the strongest, but it is weaker than it was last month.  However, the sales season doesn’t really pick up until March (February contracts).  There were 251 sales in this price range, with just under 3100 listings (3089).  In the last year, sales peaked at around 540 in both June and July, and then came back up to 532 for October.  They slid to 414 in December.  In January of 2009, there were 270 single family homes sold.

$200,000 to $400,000…

We certainly don’t have the strength here of the lower range, but it isn’t terrible.  Looking at the 3 month average, there is about 13 1/2 months of inventory.  There were 93 sales with 1861 listings.  Last year there were 103 sales in this price range.  The same pattern held for sales (strongest in July, then June and October).  As with the under $200k range, the tax credits seemed to push sales in the fall.  As with the under $200k, I expect that some sales were cannabalized from this spring by the first tax credit.

$400,000 to $600,000…

Here is where we see the car drive off the cliff.  The 3 month average points to having almost 29 months of inventory on the market.  There were only 4 sales in this range for January 2010 (20 sales in January 2009) and 359 homes on the market.  May and November were the strongest months for sales.  I think we are seeing nervousness about jobs and taxes here.  There are few first time home buyers that would meet the criteria for the tax credit here, and the $6500 credit wouldn’t figure prominently in the plans of buyers at this level.

$600,000 to $800,000…

Things are actually slightly better in this range than in the $400k-$600k range.  There is still 27 months of inventory, but there were 3 sales this year compared to just 1 for the same month last year.  There were 127 properties on the market.  In this range, just a few extra sales one way or the other can have a dramatic effect on the statistics.  I also don’t believe the tax credits have had much affect here.

$800,000 to $1,000,000…

The three month average points to just over 3 years of inventory at this price range.  With 51 homes on the market, there was only 1 sale in this range in January… none in January 2009.  In fact, there have only been around 25 sales in the last year, county-wide.  And, while 6-7 months of inventory is considered balanced in the lower price ranges, because of the smaller pool here, we usually see higher numbers… but 3 years is still obviously slow.

Over $1,000,000…

Nothing to see here…  There are 125 listings and there were no sales last month at this price.  There were 2 for the same month the previous year.  The three month average yield a little over 6 years of inventory.  There were only 42 sales in this range in the last 12 months.  And I don’t think I’ve seen the Absorption Rate go much below 4-5 years of inventory…

Hot and Not…

• Norcross is hot.  Just 5.1 months of inventory in the under $200k range…  And only 9 months of inventory in the $1M+ range!
• Duluth has just 6.3 months of inventory for the $400k-$600k range…
• Lilburn is lagging right now, with 10 months of inventory for the under $200k level… and while there have just 6 months of inventory for the $600k-$800k range, there have onyl been two sales in that range in the last 3 months (only 4 listings).
• Duluth isn’t doing so hot for the other price ranges.
• Lawrenceville, Buford and Lilburn are the big laggards in the $200k-$400k range at 17, 19 and 19 months of inventory, respectively.
• Overall, Buford is the weakest of the markets I track, at just under 13 months of inventory.

The markets I closely track are Buford, Duluth, Lawrenceville, Lilburn, Norcross, Sugar Hill and Suwanee.  for these areas, I am tracking them by mailing address, not city limits.  Buford, Duluth and Suwanee also include sales from counties other than Gwinnett.  I also track the overall numbers for Gwinnett County.

I am excited about the growth prospects for Gwinnett County, GA.  In the last few weeks we have had another announcement of a company moving their headquarters to Gwinnett.  We have a wonderful quality of life, and there are abundant recreation opportunities…  The Gwinnett Braves and Gladiators, Lake Lanier, one of the best parks departments in the country and proximity to all that metro Atlanta has to offer make this a GREAT place to live and work.  I’ve been proud to call Gwinnett County home for most of the last 21 years.

from GwinnettGarageGuy.com

I ran across an article that parses IRS data on which states are gaining population and which are losing population.  GA is doing pretty well on the list… only a couple of states gained more population that we did here in GA.  Texas and North Carolina picked up more households than the 37,000+ Georgia picked up.  The big losers were Michigan and New York.

The information was assembled by the AP from IRS data points.  Here is a link back to the article.

The fun part is figuring out why…  Jobs, taxes and corporate relocation would be the things that would pop to the front of my mind.  Michigan has been getting pounded for a decade on the jobs front.  As the economy slowed down, that wasn’t improved.  New York, New Jersey and California have all increased taxes on the wealthy, and there has been a flight to lower tax states like Florida and Nevada as a result.  Texas has also been very business friendly.  North Carolina has become a central point for tech oriented companies, and might even get a bigger reputation that Silicon Valley in CA.

Georgia has reasonable taxes and a friendly business climate.  Hartsfield Airport in Atlanta connects to the world in a way that few airports elsewhere can… Atlanta is VERY connected.  The climate is mild, but not as hot as FL during the summer…

But there is no question that the I-85 corridor, extending through Alabama, Georgia, South Carolina and North Carolina is one of the best business corridors in the country right now…

Last year I wrote about Senate Bill 55 in the Georgia Senate.  Basically, the bill required the Counties to include foreclosures in assessments.  Previously, assessments for taxes excluded foreclosures, so they (falsly?) increased values and tax revenue to the counties.

While that makes it tough for the counties, it is a needed break for home owners.  The counties complained that they would lose revenues… well, the people are losing revenue, too.  They have to suck it up.

In the last year, the bill quietly passed and was signed into law by Governor Sonny Perdue.

Here is the link to the original post.

from Lanebailey.com

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It is worth a read…

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The biggest thing in housing in the last few months has been the First Time Home Buyer Tax Credit.  It has had a GIANT pull on the market, and when it “expired” (it was renewed and expanded before it actually expired, but the effect seemed to expire) it altered the direction of the market… as it did when it was enacted.

Let’s get a few numbers for Lilburn out of the way…

• There were 384 listings as of 12/31/2009
• In November, there were 36 sales
• The Absorption Rates for Lilburn break down as follows:
  • 12 month average – 10.04 months of inventory
  • 6 month average – 8.35 months of inventory
  • 3 month average – 9.76 months of inventory

The link above explains Absorption Rates more fully, but basically, it tells us how long it would take to sell all of the property on the market at the current rate.

Sales for Lilburn in November were up 38.5% compared to November 2008.  This was after October was up 15% year over year.  Days on Market had also dropped by 7 days to 96 days.

By Segment…

The market is divided up into six segments, but two of them didn’t have any activity in the last 12 months.

Under $200k…

There were 227 listings and 24 sales in November.  Looking back the 12mo/6mo/3mo Absorption Rates were 8.7/7.4/9.1 months.  I expected the 3mo rate to be a little better because of the accelerating sales, but that wasn’t the case.  The Under $200k segment is the strongest, though.

$200k – $400k…

There were 133 listings and 9 sales in November.  The 12mo/6mo/3mo Absorption Rates were 12.7/9.9/10.5 months.  I also expected the First Time Home Buyer Tax Credit to have a little more impact on the 3mo rate, but sales began to slow anyway.  The $200k – $400k segment looked like it was staging a rebound.  Hopefully it will pick up again after the Holidays.

$400k – $600k…

There were 15 listings and 2 sales in November.  The 12mo/6mo/3mo Absorption Rates were 10/9/11.3 months.  This segment wasn’t as affected by the tax credit as lower priced homes.  The change in absorption rates looks like it might be a little more seasonal…  As a sneak peak, the December numbers look a lot better so far (I won’t have final numbers for a couple of weeks).

$600k – $800k, $800k – $1m and Over $1m…

There were a total of 9 listings and 2 sales in the last 12 months.  The absorption Rates can be calculated, but they really aren’t meaningful.  One extra sale or one missed sale make a HUGE swing in the data.  Also, these homes are not likely to be affected by the old tax credit or the newer expanded tax credit.

Click here to search Lilburn properties.

It isn’t complicated, but if you are unfamiliar with the term, if can be confusing.  And unlike “Bacon Double Cheeseburger”, it isn’t really self explanatory.

What is Absorption Rate?

There are a couple of components to Absorption Rates.

• Inventory Level
• Sales Pace over a specified time period
• How long the inventory would take to be “used up” at the current level and pace…

That is it in a nutshell.  But, let’s look at a few examples, as well as some caveats.  By the way, this isn’t just for real estate, but can apply to anything that might be considered a commodity…

Let’s say that your family eats frozen pizza twice a week, and you have 6 Digiorno’s Pizzas in the freezer.  If you don’t go to the store to pick up more, and you continue eating them at the same pace, you have a three week supply of frozen pizza.

Obviously there are a couple of ways that you can alter that situation.

• You can start with more pizza
• You can alter how often the family eats pizza

Now, maybe you buy your pizzas at Costco, and go there once a month…  Even though you have 6 pizzas in the freezer, if you aren’t going to be going there for another month, you might want to pick up a few more.  If you buy 3 more pizzas, you will have a 4 1/2 week supply, which will carry you through another month.

About that “Specified Time Period”

In order to quantify sales or usage pace, we need to look at a period of time.  Back to our pizza…

With Thanksgiving happening recently, the fridge is full of turkey, so maybe in the last week we haven’t had any pizza…  But, things were really busy before that, so we had 3 pizzas in 6 days.  So, if we look at just the last week, we had 0 pizza… theoretically, 6 pizzas would last forever.  That can’t be right.

So, we look at a longer time period.  Over two weeks we had 3 pizzas… 1.5/week.  That means that the 6 pizzas would last 4 weeks.

But wait…  If we look at the last 4 weeks we had 8 pizzas… that is where we came up with the 2/week consumption level.

How about in Housing?

The generally accepted number in housing for inventory level is 6 months. That means that is 100 homes are selling each month in a given area, then having around 600 homes on the market would be fairly balanced.

If there are only 200 homes on the market, sellers have the upper hand.  Basically, supply is smaller than the demand.  That is referred to as a seller’s market. Sellers have their pick of buyers, can push up their prices and be less willing to offer incentives.

If there are 1200 homes on the market, buyers have the upper hand.  Now the supply is outstripping demand.  That would be the classic definition of a buyer’s market. In this case, buyers can make more demands of sellers and prices are generally pushed down.

Careful though…

Right now in Gwinnett County Georgia there are several markets happening all at once.  I compile sales data for a variety of markets and micro-markets and see conflicting data…

• In Gwinnett County, overall we have about an 8.6 month supply of homes.
• In Duluth, for homes under $200,000, the supply is about 6.1 months.
• In Suwanee, for homes under $200,000, the supply is only 4.6 months.
• Also in Suwanee, for homes over $1,000,000, the supply is 45 months.
• (please note, these are all using a 6 month sales average)

A little more about time frames…

Generally, in real estate we use 3 month, 6 month and 12 month averages.  To arrive at these, we look at sales data for the time period (3, 6 or 12 months), divide it out monthly, and then divide that into the number of available homes in that market.

The fun part is that we can glean additional information by comparing these three numbers.  Let’s go back to Suwanee…

• The 12 month Absorption Rate for homes under $200,000 is 5.2 months of inventory…
• The 6 month Absorption Rate for homes under $200,000 is 4.6 months of inventory…
• The 3 month Absorption Rate for homes under $200,000 is 4.3 months of inventory… (note, the November sales data isn’t yet complete, and this number is actually going to get better…)

Comparing these numbers tells me that that sales in this segment were actually accellerating.  As we got more recent, the average sales per month increased.  Of course there are a few things to keep in mind…

Limitations and other notes…

To start with there is “seasonality”.  This means that there is an expected change in the pace of sales because of the time of the year.  Here in the Atlanta area, sales generally pick up in the late spring and early summer.  They also tend to fall off of a cliff in January.  So, just because we see an accelleration doesn’t mean that it isn’t natural.

The next thing we have to consider is “outside influence”.  Right now, that would be the First Time Home Buyer Tax Credit.  It was originally slated to expire at the end of November.  So… there was a rush to get under contract in October.  And a rush of closings in November.  We’ll have to see if the pace holds…

Which brings us to the next point…  We can’t predict the future. We can look at the past and we can theorize about how outside influences are going to alter future trends.  But that is it.  How many times has the NAR said that “Now is the time to buy” or that they “see growth moving forward”?  Obviously over the last couple of years, they were WAY wrong.  I have made my share of mistakes.  Sometimes it is because we make wrong assumptions, and in other cases, things change…  Maybe the government changes FHA qualifications…  Perhaps there is a new tax credit…  A large employer could relocate…

I hope this helps you understand the real estate (and other) markets a little better.  Market reports are often dry and full of stats, but understanding them can be a great way to understand why the market is moving.  Understanding why helps you better understand what you should do.

from LaneBailey.com