Trends Tracker: May be good time to 'buy low'

Jim Parker of the Post and Courier has followed up my Q4 2006 report of The Charleston Market Report with an article in today's Saturday Real Estate section. One point I would like to make about the article is that I still have my Series 7,63 and 65 securities licenses . I currently do not manage investment accounts because I do not have time. I would rather focus on other ventures and refer investment accounts to professionals in our firm who strictly focus on the stock and bond markets.

What's ironic is that in the very same section on page 2G is an article by Kenneth Harney titled, "Appraisers under the gun to bump up home prices." I will link the article once it is available on the internet. In a nutshell the article dicusses the pressure banks and lenders are putting on the appraisal industry during a slow real estate market to "hit the number" on the report so the transaction closes. This is a double edged sword for appraisers because if they do not "hit the number" they could lose their best clientele, whom are bankers, lenders and real estate agents, to some other appraiser who is willing to bend to the pressure. Basicly, if these loans do not get pushed through the banker, mortgage broker and real estate agent may not eat that month. It is what it is, which is a commission oriented business.

Last week a reporter from Money Magazine called me to interview me about the same subject. I declined to be quoted in the article because I told him it relates to an incidence that happened in Sept. 06 that is now in the past.

What is also ironic is that I can directly relate to what Mr. Harney is discussing because the very same pressure he is discussing cost me my job with a local appraisal firm in Charleston in September 2006. This decision was made because I was quoted on the front page of the Post and Courier stating we were in a "lending bubble" NOT a "housing bubble." Since that time 15 subprime lenders have gone belly up and many, many more are on the way. There is also government regulations being made to try and help protect borrowers from getting "screwed" on their next mortgage in the future.

For those of you who have followed the Charleston Market Report from the beginning will know that what happened to me and Atlantic Appraisals was an unfortunate situation for all parties involved. The article that spurred the controversy was run on Wednesday and I was fired on Friday because approximately 30 banks and lenders called Atlantic Appraisals on Thursday calling for my head. They got their wish.

I was also attacked by Mr. Lorcen Lucey, the owner of Lucey Mortgage, about my analysis and my website in a letter to the editor. I responed to Mr. Lucey on my website and he never called or wrote me back. The editorial he wrote to the Post and Courier was full of inconsistencies about me professionally and the mortgage business. That was the end of that and I moved on.

If you go on my website you will notice I do not have google ads and I do not charge a subscription fee. I started The Charleston Market Report so that the professionals in real estate, buyers and sellers had a starting point to make smarter investment decisions. Putting the report together is time consuming but I hope it makes a difference. I still stress people use a Realtor and do their own due diligence for what is normally the largest transaction they will ever make.

Let me just state that I still have tremendous respect for Atlantic Appraisals. They do excellent work and have approx. 7-8 MAIs in the office, which is almost unheard of in any appraisal company. I still have very strong relationships with most of the partners and appraisers at the firm. I have moved on with my life and leaving Atlantic Appraisals is one of the best things that has ever happenned to me. I learned a tremendous amount about real estate while I worked there and have no regrets.

All I can say to the banks and lenders is that you will be hearing and seeing more of me soon. I am working on some exciting ventures that are directly related to your business. I would just recommend that anyone in the mortgage business right now make sure they are properly acting as a fiduciary for their clients.

Stay tuned.....


Trends tracker: May be good time to 'buy low'



BY JIM PARKER
The Post and Courier


In scouring real estate figures in the Charleston area, Brad Rundbaken sees lots of signs of a weakening market. For instance, sales in Berkeley, Charleston and Dorchester counties are down 18 percent from the same period in 2005.

That's no big surprise, since the national housing picture also is sagging. But is there a silver lining? It depends on how you look at it, said the former financial analyst, who sounds like a stock broker in his Charleston Market Report for the final quarter of 2006.

"In my opinion, all this bad news, and the 'kernels about to pop,' will present real estate buyers good opportunities in certain Charleston areas," he said.

"There are plenty of sellers offering concessions, and there are sales well below list price in our market right now. As inventory, days on market (and) foreclosures rise and credit tightens, these factors will present an opportunity for qualified buyers to do some hard negotiating with sellers," he said.

For his quarterly report, the researcher tracks a host of national and local housing and economic trends, from inventories to mortgage interest rates.

Along with sales dropping in fourth quarter 2006 from a year before, the average sale price dipped 0.2 percent to $309,999 from $310,494 a year ago.

Houses were on the market an average of 71 days, 69 percent higher than the 42 days average at the end of 2005. And the current inventory of homes for sale is 6.6 months, compared with 3.4 months a year ago.

Rundbaken said that condominium and townhome sales have struggled even more than single-family housing, plummeting 36 percent from the end of 2005.

"Charleston County has been hit the hardest for home and condo sales because of the affordability problems and rapid appreciation," leaving residences priced too high for the market, he said.

Foreclosures, where lenders repossess homes because owners fail to keep up payments, are a mixed picture.

The good news, he said, is they are down from a year ago. The bad news is they've increased from the third quarter.

"Unfortunately, the out-of- control lending industry over the past few years leads me to believe that foreclosures will only get worse before they get better in this town and across the country," he said. "I also believe we will see more foreclosures coming from the upper end of the market as appreciation and equity in homes stagnates, inventory gets higher and interest-only loans reset."

Rundaken said the main source of the inventory problems is the condo and townhome segment. An encouraging sign is the rate of increase slowed between third and fourth quarters compared with last year. But he cautioned, "The question remains: Is this due to sellers getting frustrated with current market conditions and pulling homes off the market or are (they) just waiting until the spring?"

Reach Jim Parker at 937-5542 or at jparker@postandcourier.com.