GULFCONDOSALES

Greetings from the Gorgeous Gulf Coast! “The Pro Team” had a busy year. We were lucky enough to be able to work hard and serve our client’s needs to the extent that we had the best year we have had since 2004!

Interest in our island is climbing again. We are seeing our inventory fall well below where it has been since 2006. These two things combined should help shore up our market in the coming years. We have seen our median sales price of gulf front condos rise from $260,000 in 2010 to $280,000 in 2011. It is the first increase since the continual decrease that we have seen since 2005. It isn’t much, but it is a good start! There is still one more year of 7 year arms to roll over so we may still be dealing with short sales and foreclosures for a while.

The lending atmosphere continues to be a tremendous challenge. Fortunately “The Pro Team” has the knowledge and expertise to assist you, whether you’re buying or selling, to navigate this arduous journey of financing. In the $350,000 and under range we are seeing many more cash deals than in the last decade as boomers take their money from where it isn’t making them anything to invest in their dream of affordable second homes or condos. As such, we think we will see positive movement in our market, finally.

We wish we had a crystal ball to tell you how that will translate in pricing, but we do not. The national economy, the election, tax regulations and such will continue to test the real estate market for a while. However, I think we can count on interest rates at least for the next year to continue in the 3.875% to 5% range. This should help our continued transaction rate through 2012.

The good news is the number of sales of condos and homes on Pleasure Island (includes Fort Morgan, Gulf Shores, North Gulf Shores, Orange Beach, Perdido Key, Al) has continued to rise over the last few years:
Closed Homes Closed Condos
2009 – 377 2009 – 1005
2010 – 390 2010 – 1030 Year of Oil Spill
2011 – 459 2011 – 1208

We, of “The Pro Team” are always available to answer your questions about the market and/or your particular needs regarding property here along the Alabama Gulf Coast! You may not be ready to buy or sell yet, but if you know of someone who is, “The Pro Team” will always treat your referrals in the same manner you are accustomed to. You can always count on us to be ready with stellar service, experience and professionalism. We are here to serve you!

“The Pro Team” would like to wish you a Happy New Year!

Wherever you turn these days, it seems that someone is talking about “Green”, or “Leadership in Energy and Environmental Design (LEED”) certified buildings, and “Zero Energy Homes”. Each of these share a commitment to reduced energy consumption and the “re-use, repurposing and recycling of materials”, “improved indoor air quality” and use of “environmentally friendly” and “renewable products”. Green or LEED buildings generally generate 20 to 70 percent in energy savings, while a Zero Energy Home (ZEH) by definition must generate enough energy to meet or exceed its own heating, cooling and electrical needs in any given year.

With all of the recent attention being given to energy conservation, you might not realize that a handful of individuals began vigorously exploring ways to significantly reduce energy consumption in the early 1970’s. Since then, energy saving practices have been refined and expanded and have been incorporated into projects ranging from small homes to large commercial buildings, schools and fire stations to government buildings. Recent projects have successfully demonstrated the economic viability and sustainability of incorporating rigorous energy and conservation standards into new construction without increasing budgets or extending schedules.

Many conservation efforts are most easily incorporated at the time of initial construction, however some are easily adapted either as a stand-alone project or as part of routine equipment replacement.

Heating, Cooling and Electricity - High efficiency furnaces and/or heat pumps - replacing old furnaces with higher efficiency models or possibly converting from an older type of heating and/or cooling device to one utilizing newer technology can lead to significant energy savings. Many furnaces built just 15 years ago are quite inefficient when compared to models available today.

Insulation - adding additional insulation in attics, crawl spaces and exterior walls are all potential areas for reducing energy costs. Also, by sealing cracks in the attic around areas where ceiling lights and fans are installed or wires are strung can also cut energy costs substantially. When all these small openings are added together, they can have the same effect as having a window left open.

Horizontal Loop Ground Source Heat Pump System - this relatively unheard of heat pump system runs coils 4 to 6 feet underground to tap into the constant temperature of the earth’s soil to provide either heating or cooling depending upon the season.

Windows - installation of wood or vinyl encased triple pane windows significantly reduces heat loss and eliminates drafts.

Building Site Orientation - for new construction, orienting a building to utilize the southern exposure along with window placement allows for the exploitation of both natural lighting and solar heat.

Light bulbs - the days of the incandescent light bulbs may be numbered as legislators across the nation discuss legislation to ban their use in favor of the more efficient LED and CFL lighting technology as a measure to reduce energy usage.

Higher efficiency appliances - installation of high efficiency appliances will significantly reduce energy consumption, particularly for appliances that run all the time, are energy consumers or are used with high frequency.

Water Consumption
Water heaters - there are several energy saving strategies available when it comes to water heaters. When opting to use a traditional storage tank the location of the tank can have a significant impact on both the amount of water consumed as well as the cost of heating the water. The most economical placement is to have the tank as close as possible to where the water is used most so there is less water wasted waiting for the hot water to arrive. Adding insulation to the first foot of the pipe coming out of the hot water tank will reduce heat leakage. An alternative to the traditional hot water heater is the tankless water heater that only heats the water as needed by running the water through heated coils. This method eliminates the need to keep water hot all the time and the energy required to do so.

Landscaping -by designing and implementing a landscape centered on plants native to your locale that are also drought tolerant will reduce landscape watering requirements.

Rainwater cisterns with filtration systems - also gaining popularity are rainwater cisterns that store water from rooftop collection systems to be later used for irrigation. Sizes vary and can be selected based up on rainfall averages, collection area size, and available storage locations.

Impervious Paving Systems - porous surfaces reduce the impact on surrounding areas by allowing rain water to penetrate surfaces and be absorbed into the soil. Reducing runoff helps alleviate premature expansion of storm water treatment facilities.

Indoor Air Quality - Flooring - several options exist when making flooring selections that will increase air quality. For those willing to either reduce the quantity of carpeting or forego it all together, selecting sustainably harvested wood or bamboo is a good alternative. However, for those set on having carpeting, selecting carpets made using natural fibers with a low-pile can reduce the collection of allergens. Also, air quality will remain stable when carpeting is installed using tacks rather than fume emitting glue.

Paint - better air quality is achieved by using low-VOC (volatile organic compounds) and low-toxic interior paints and finishes instead of other paints and finishes that release higher levels of chemicals and toxins.

Additional Energy Sources - Solar - once thought of as an “alternative” source of energy, solar panels are gaining popularity. Solar panels remain an expensive option; however, their cost has dropped significantly over the last number of years making them less cost prohibitive. Although solar panels will work in any climate, sunnier locations will result in higher productivity. To encourage the installation of solar panels, governmental agencies as well as some utilities have created different incentive and rebate programs to lower the cost.

Wind - although not practical for the average home owner due to its high installation costs ($40,000 or more), it does remain an option for those located in areas with sufficient wind and land resources. Generally a home tower will produce between 8,000 - 18,000 kWh per year given sufficient air movement and require being located on at least an acre of land.

http://coastliving.epubxpress.com/link/COA/2011/2011/24?s=0

Q: What was the biggest challenge in your market in the past two years? How did you overcome it?
A: The recession has really wreaked havoc on our local market. Our market is a resort market on the gulf coast that normally has a healthy supply and demand for sales and rentals. Discretionary funds for a large portion of the country simply dried up causing a free fall in values. The failings in the countries’ banking system coupled with the reduction in values caused financing for investments such as gulf front homes and condos to be riddled with reasons why the lenders wouldn’t lend. Sellers were scared and losing their properties to foreclosure or short sales. Both processes became the norm instead of the unusual. Buyers were hesitant to enter the market, afraid it would keep falling. My team and I decided early on that the best way to deal with both the buyers and the sellers was to talk about the elephant in the room. We decided that this was the time when our clients needed our professionalism and honesty the most. We began an education campaign for our buyers and sellers, which we felt was very important since a high percentage of our clients are not from this tiny waterfront community. We stayed in contact through state of the market letters constantly updating everyone not only about values and trends but also the processes of foreclosure and short sales. In doing so, we kept the confidence of current clients and built a new following of buyers and sellers.

Q: What’s the key to surviving in a down market? How have you done it?
A: Optimism and compassion! Compassion for those owners that need you so dearly to help them wander the minefields of modifying loans, foreclosure and short sales. Optimism for those interested in entering the market, educating them on all aspects of resort ownership and assisting them in navigating the financing challenges of waterfront properties.

Q: There has been a huge shift to online consumerism in recent years, and that extends to the home search. What new marketing strategies have you adapted to remain competitive?
A: I have worked diligently to produce and maintain a website that is based on content for the consumer that wants to study real estate markets in their own private spaces and in their own time. My team and I have believed all along that this is to our advantage and the consumers. We decided to make our website as user friendly as possible with as much information as possible with no responsibility for the consumer to contact us unless they simply wanted to do so. We have always believed that we, the Realtors, are and will be an important component to the consumer as the process of research progresses to the process of buying or selling and through our willingness to share with the consumers they would naturally gravitate towards the team that lead them to the point of contacting a professional.

Q: How do you overcome negative perceptions consumers have about the market, especially from the media? How do you educate them?
A: Presentation is EVERYTHING! Everyone hears and reads what the media is saying. However, my team and I feel that our buyers and sellers simply want a realistic take of the market conditions that we the local professionals who work in the trenches day in and day out can provide. We do not dwell in the negative but nor do we hide from it. We also do not over optimize the market situation. We educate them with the only thing that matters, market statistics, its trends upwards and downwards. Then we help them to evaluate their personal wants, needs and desires to assist them in making the best decisions for themselves, whether it is buying or selling.

Q: What’s more important in today’s changed market: Looking for ways to be more profitable, or focusing on client relationships?
A: To me it goes without saying that you must always be looking for ways to be more profitable. My team and I decided to reduce our print outlay and spend more on improving our web presence. We have reduced our office size as well. Believe it or not we seem to be more productive in a smaller space because we are rubbing elbows and our competitive natures really kick in! But the end all and be all is the maintaining and nurturing of our client relationships before, after and during the sale. It is the ONLY way to be successful for life. In this case, this is when the old fashioned ways really help….. we call, we write and send educational information to them on a regular basis to remind them that we are their realtor for life.

Greetings from the gulf coast!

Hop you had wonderful and happy Thanksgiving holiday!

Attached below for you is a recap of October’s sales activity.

October – Sales Activity for Gulf Shores, Orange Beach & Perdido Key

Condo New Active Avg Under Sold Avg
Sales/Listings Listings Listings Listings DOM Contract Listings Sold DOM

$0-$199,999 53 363 247 34 30 183

$200k-$299,999 35 309 290 34 18 268

$300k-$399,999 34 264 288 39 14 211

$400k-$499,999 27 231 322 11 8 116

$500k-$599,999 16 134 327 3 1 714

$600k-$799,999 22 127 315 0 4 276

$800k-$999,999 4 60 289 2 2 520

$1mill-+ 5 47 336 3 0 0

Total: 196 1535 126 77

Avg active “List” price = $407,961

Avg “Sold” price = $286,215 & Avg “Sold” price to “List” price = 91 & Avg DOM =222

Homes New Active Avg Listings Under Sold Avg
Sales/Listings Listings Listings DOM Contract Listings Sold DOM

$0-$199,999 22 130 217 31 15 156

$200k-$299,999 13 113 217 9 5 301

$300k-$399,999 11 93 249 4 2 92

$400k-$499,999 9 76 302 2 2 348

$500k-$599,999 2 55 272 0 1 94

$600k-$799,999 11 96 309 4 1 104

$800k-$999,999 7 57 305 1 1 618

$1 mill-$1,999,999 4 60 382 2 2 513

$2 mill+ 1 21 420 0 0 0

Total: 80 701 53 29

Avg active “List” price = $606,846

Avg “Sold” price =$318,338 “Sold” price to “List” price = 94% & Avg DOM = 226

Hello everyone,

The U.S. Treasury Department on Monday released a plan to speed up and encourage Short Sales as a means to help families avoid foreclosure. We’ve been offering Short Sale proposals to public officials for over a year, and although the new guidelines aren’t everything we were hoping for, they do represent a significant improvement over the current situation.

Short Sales have been difficult to close, and these new measures are a huge step in the right direction. One major highlight: A lender must give a yes or no answer to an offer within 10 days. Also included: a moving allowance, incentives for sellers and lenders, commission rules, and a stipulation that releases sellers from debt liabilities.

Here’s an initial Reuters news story outlining the new policies.

As we’ve said throughout 2009, the key is to become experts in the process. We expect a tremendous increase in Short Sales during the coming year, and it’s vital that RE/MAX Associates continue to lead the industry in Distressed Property skills and training.

At RE/MAX International, our staff is quickly developing resources to help you understand the new Short Sale guidelines and explain them to your buyers and sellers.

Be sure to open the Mainstreet Link e-mail you receive tomorrow. It will contain the latest news and details about the Treasury plan, as well as video and print materials you can add to your marketing presentations. We’re also putting consumer information on remax.com and will be communicating ongoing developments via Facebook and Twitter.

Thank you.

Dave Liniger
RE/MAX International Chairman and Co-Founder

First Time Homebuyer Tax Credit Extended Into 2010!
Plus…A New Tax Credit for Certain Existing Home Owners!
It’s official. President Obama has signed a bill that extends the tax credit for first-time homebuyers (FTHBs) into the first half of 2010. This program had been scheduled to expire on November 30, 2009.
In addition to extending the tax credit of up to $8,000 through June 30, 2010, the extension measure also opens up opportunities for others who are not buying a home for the first time.
So Who Gets What?
The program that has existed for FTHBs remains intact with the one exception that more people are now eligible based on an increase in the amount of income someone may now earn.
Additionally, the program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Deadlines
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.
Higher Income Caps in Effect
The amount of income someone can earn and qualify for the full amount of the credit has been increased.
Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible.
Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.
Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sales price of $800,000.

First-Time Homebuyer Tax Credit – Frequently Asked Questions
Here are answers to some commonly asked questions about the tax credit.
What is a tax credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.
What is the tax credit for first-time homebuyers (FTHBs)?
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.
Who is eligible for the FTHB tax credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible. This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.
As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.
How do I claim the credit?
For those taking advantage of the tax credit in 2009, you may choose to either apply for the credit with your 2009 tax return or you may apply for the credit sooner by filing an amended 2008 tax return with Form 5405 (http://www.irs.gov/pub/irs-pdf/f5405.pdf).
Can you claim the tax credit in advance of purchasing a property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.
Can a taxpayer claim a credit if the property is purchased from a seller with seller financing and the seller retains title to the property?
Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Examples of this would include a land contract, contract for deed, etc. According to the IRS, factors that would demonstrate the ownership of the property would include: 1. the right of possession, 2. the right to obtain legal title upon full payment of the purchase price, 3. the right to construct improvements, 4. the obligation to pay property taxes, 5. the risk of loss, 6. the responsibility to insure the property and 7. the duty to maintain the property.
Are there other restrictions to taking the credit?
Yes. According to the IRS, if any of the following describe your situation, a credit would not be due.

You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.
You do not use the home as your principal residence.
You sell your home before the end of the year.
You are a nonresident alien.
You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
Your home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
You owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2009, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2006, through July 1, 2009.
Can you buy a home from a step-relative and be eligible for the credit?
Yes. Provided the person you are buying a home from is not a direct blood relative, the purchase would be allowed.
Can parent(s) who will not live in the property cosign for a mortgage for their child and the child that is a qualifying FTHB still be eligible for the credit?
Yes.
Can a separated spouse who has not owned a home for four years qualify for the FTHB tax credit if the spouse has owned a property anytime in the last three years?
No. However, the spouse may be eligible for the repeat buyer credit. The best path to take in any situation regarding income taxes is to speak with a professional tax preparer or CPA.

BofA Implements Equator (REOTrans) Platform, as Short Sales Gain Ground
10/22/2009 By: Carrie Bay

California-based Equator (formerly known as REOTrans) says it has launched the industry’s first-ever short sale module for a large national lender.

Although Equator declined to name the lender, the San Francisco Chronicle has reported that Bank of America is the company in question. A representative from BofA recently told the paper that they were using the Equator platform to manage the short sale process.

“This is the first time that short sales have been handled through an electronic platform,” said Equator CEO Chris Saitta. “With our new system, everyone works together in real time, dramatically improving communication and approval timelines for our client, its borrowers, vendors, and real estate agents.”

Short sales, in which a lender and borrower reach an agreement to dispose of a property threatened by foreclosure at a price that is “short” of the amount owed

on the mortgage, have become more popular among lenders lately as a viable method for dealing with distressed properties. According to Equator, the number of successful short sales has increased spectacularly across the country in the wake of the foreclosure crisis.

Kevin Kieffer, a Realtor with Keller Williams Realty in Danville, California, told the Chronicle, “A year ago I wouldn’t touch a short sale. It would be random prices banks wouldn’t agree to, you would be tied up six months hoping to get a property sold. But now we’re seeing banks up front negotiating prices and giving us criteria. They’re getting creative to make things move.”

Equator says the keys to a successful short sale are accessibility, responsiveness, communication, and fulfillment. By adopting its short sale platform, the company says large lenders, such as the unnamed Bank of America, can ensure troubled borrowers have 24/7 access to a portal through which they can provide the necessary information to process a short sale and receive real-time status updates electronically.

“Short sales can be a daunting, complicated, frustrating task for everyone involved,” Saitta said. “This fresh approach using our sophisticated platform makes it fast and efficient for all parties involved.”

Equator’s short sale module also automates decisioning for the lender, handles approvals for faster turnaround, provides quick fulfillment, and assures full compliance with government programs, Saitta said.

Recent Articles

What Happens when Uncle Sam stops buying mortgages???
Currently, 85% of new mortgages are guaranteed by Government backed entities( FHA, FNMA, GNMA, Freddie Mac) and the Fed buys 80% of the securities into which these government backed mortgages are packaged. This dominance of the Fed and the reliance upon the Government to fund mortgages can not last forever. The Federal Reserve’s $1.25 trillion special program to buy Fannie Mae and Freddie Mac securities is two-thirds complete and is scheduled to close at the end of the year. What happens then???

More than half of the country’s home mortgages are now being originated by only 3 banks; Wells Fargo, Banik of America, and J.P. Morgan Chase. The problem is that these banks are acting only as originators of mortgages, and immediately sell most of the mortgages that they create to Fannie Mae and Freddie Mac and hold very few of them on their own balance sheets. Combined, the 3 dominant banks actually held 3.5 % fewer mortgages on their balance sheets in the firs half of 2009. (note: the statistics for this post came from a wall street journal article U.S. Bets the House - WSJ.com )

This strategy of the banks to sell almost all of their mortgages has fed their bottom line with strong loan origination and mortgage servicing fees with very little risk. The fact that banks are unwilling to hold mortgages for their own investment demonstrates that the interest rates of these mortgages are artificially low , driven down by the government purchase of them, and the banks are thus unwilling to invest their own money in them.

When the government stops funding mortgages, where will the capital come from? In the recent past, capital for mortgages came from mortgage backed securities funded by investors through Wall Street. This type of security is now dead. Investment by private capital ( banks, individual investors, and pension funds ) will only happen if interest rates are allowed to increase to a level to compensate investors for the perceived risk in these investments.

Because of this, I believe that there is a very real risk of interest rates escalating substantially after the first of the year, especially if signs of inflation start to emerge as the economy strengthens. Because of this, I have been encouraging buyers to buy now, if they are buying a home for the long term, as this may be the best time in the foreseeable future to buy a home.

Dear All,

I am finally getting the time to sit down and write the report, the market has shown no signs of slowing down which it typically does at the end of July. Infact The ProTeams best month to date was September which is historically our slowest month of the year. RE/MAX of Gulf Shores has already sold more than 100 million dollars worth of real estate this year.

Condo activity, there is a correction for the number of units sold in June, my last report said 98 units closed infact 110 units closed. July 98 condos sold, 100 U/C
August 78 condos sold avg price $359,268, 118 U/C at an avg of $328,385
September 100 condos sold avg price $302,348, 132 U/C at an avg of $331,243

We have seen the number of condos for sale fall from its high of August 07 when there were nearly 3000 units for sale, there are now approx 1700.

I feel confident in saying 2009 will have been the last of the worst years and hopefully we will start to see a gentle increase next year in some of the lower priced units especially as the number of foreclosured condos are slowing down.

The last time we saw a consistantly high number of units selling each month was back in 2005. Prices are down approx 50% which is why I think we are seeing such an increase in first time condo buyers & investors tempted by the rental yields which are up from 05.The last few years have seen a number of new attractions, malls and good restaurants opening in the area tempting more and more people to the area.

I have sold a number of units this year to first time buyers who had visited the area for the first time this year.

Single family homes have also seen an increase in activity recently.

August 30 homes sold avg $258,572, 51 U/C avg $256,681
September 38 homes sold avg $331,938, 46 U/C avg $298,803

There are currently just over 700 homes listed which has dropped from over a thousand in September 2007.

With the news that Bay Minette may be getting a new green car production line creating approx 5000 new jobs may help absorb the houses on the market and should be an added stimulus to our market in general.

Lots are still the most difficuly thing to sell and finance, currently it is cheaper to buy an existing home rather than build your own, i do have a number of lots offered for sale with owner financing available which is certainly creating a little more interest from potential buyers especially as there are plenty of hungry builders willing to do deals to get the work.

Thank you

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