And now, for the real news...
For a change of pace, I'm going to take a moment to cover some of my personal insights into the construction and design industry around Georgia and the rest of the country. Needless to say, things are still more than a little tumultuous leaving may businesses and individuals in limbo regarding their construction and design projects. Is there good news? Yes and no. It all depends on your take on the situation. Of course, please take what I say here with a grain of salt. This is going to be centered on information I have seen firsthand in regards to my personal business and in discussions with others in the field.
Construction is, most definitely seeing a slight surge in various spots around the country. From what I have seen, a lot of the pop coming in Atlanta appears to be in the area of remodeling. There are several reasons for this, much of which is directly correlated to a lack of prominent growth in the new construction side of the house. Overall, the biggest factor in this shift has to do with financing, or more importantly, the lack thereof.
It's no secret that financing on most real estate projects is still a nightmare, both for attempting a new home or to try to find equity for a remodeling project. The main factor in this is, of course, the foreclosures that are still growing like wildfire. Despite common logic, existing home buyers are having to compete with foreclosure and fire sale properties for appraisals. A flawed practice, in my opinion, but something none of us have the ability to affect a change to. So what does this mean?
Basically, a house with someone currently paying the mortgage and maintaining the residence is being forced to compete with the values on houses that have either been partially built or abandoned in the foreclosure boom. As such, those of us that are managing to stay in our homes are suffering greatly on our values. To the point of little to no refinances, no chance of selling and breaking even and little to no options of selling. Are there exceptions to the rule? Sure, but they definitely seem to be few and far between. This it the major reason we're still showing a large drop in new construction and the remodeling projects being on a smaller scale than they have been in the past. Quite simply, the values aren't there.
My proposal, for what it's worth, would be to establish a dual appraisal system to bring things back on an even keel. Essentially, run one appraisal system for foreclosure/abandoned houses and another for currently occupied residences. In this, we could look at possibly getting house values back up to a realistic appraisal level while allowing the foreclosures to continue at a lower amount, which would be more accurate. If this were to occur, I believe a substantial shift would begin to occur in the construction and real estate industries to bring it back to a normal line. Until this is done, we are all at the mercy of foreclosures finally getting sold off and shifting to a correct sales pattern.
Now if I could only find a way to get this suggestion heard or implemented. Without being in government, its on the impossible side of getting the correct ear to listen.
In the opinion of everyone reading this, does this seem a reasonable step in the correct direction to start a cure to the construction and real estate nightmare we are living through?
Construction is, most definitely seeing a slight surge in various spots around the country. From what I have seen, a lot of the pop coming in Atlanta appears to be in the area of remodeling. There are several reasons for this, much of which is directly correlated to a lack of prominent growth in the new construction side of the house. Overall, the biggest factor in this shift has to do with financing, or more importantly, the lack thereof.
It's no secret that financing on most real estate projects is still a nightmare, both for attempting a new home or to try to find equity for a remodeling project. The main factor in this is, of course, the foreclosures that are still growing like wildfire. Despite common logic, existing home buyers are having to compete with foreclosure and fire sale properties for appraisals. A flawed practice, in my opinion, but something none of us have the ability to affect a change to. So what does this mean?
Basically, a house with someone currently paying the mortgage and maintaining the residence is being forced to compete with the values on houses that have either been partially built or abandoned in the foreclosure boom. As such, those of us that are managing to stay in our homes are suffering greatly on our values. To the point of little to no refinances, no chance of selling and breaking even and little to no options of selling. Are there exceptions to the rule? Sure, but they definitely seem to be few and far between. This it the major reason we're still showing a large drop in new construction and the remodeling projects being on a smaller scale than they have been in the past. Quite simply, the values aren't there.
My proposal, for what it's worth, would be to establish a dual appraisal system to bring things back on an even keel. Essentially, run one appraisal system for foreclosure/abandoned houses and another for currently occupied residences. In this, we could look at possibly getting house values back up to a realistic appraisal level while allowing the foreclosures to continue at a lower amount, which would be more accurate. If this were to occur, I believe a substantial shift would begin to occur in the construction and real estate industries to bring it back to a normal line. Until this is done, we are all at the mercy of foreclosures finally getting sold off and shifting to a correct sales pattern.
Now if I could only find a way to get this suggestion heard or implemented. Without being in government, its on the impossible side of getting the correct ear to listen.
In the opinion of everyone reading this, does this seem a reasonable step in the correct direction to start a cure to the construction and real estate nightmare we are living through?
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