Tuesday, July 31, 2012

No more agricultural well permits in the Flint River Basin!

EPD Restricts well permits in the FRB.

Post by Mike Flynn

With this restriction you can expect a few market reactions. 1 - The price of irrigated farm land will increase. 2- The cost of food production will increase. 3 - Dry land may see some drop in value.

How long will the suspension last? Who knows? Since we are in a 24" rain deficit, it may last a long time.

Monday, July 16, 2012

Is this the next use for eminent domain power?

Post by Mike Flynn

This is an interesting report about a few California governmental bodies joining forces to try and exercise their eminent domain power to stem the housing crisis.

In short, the governments will seize the homes, erase the current lien holder, then renegotiate with the current home owner to reduce the balance of the loan and keep the property occupied.

California eyes plans to seize property.

I can think of few problems here. 1 - This is not the proper role of government. Let the free market work. 2 - If the plan is being designed by Wall Street execs, like the story says, you can bet the ultimate winner won't be the home owner or the tax payers.

Thursday, May 31, 2012

Once again the Herald misses the point.

Post by Mike Flynn

While the body of the story below is correct, the author made the following quote in the comments below the story:

As far as assessments go, the state inacted a three-year moratorium on assessments that ended this year, which also required what was tantamount to a revaluation on property. If your assessment went up, it's likely because A. you had some improvements to your home or B. The value of your home increased. Since assessors now have to figure in fair market value and comparable sales, many assessments actually went down. You apparently were just unfortunate enough to have yours increase.

Where did the writer get that information? Maybe from one of the tax assessors? Because if he had done any real research, he could find NUMEROUS examples of overvalued property. I understand these guys are over worked and under paid, but his comment below the story in just not accurate. Again... the digest value did not grow, it has been inflated.

Also consider the issue of the moratorium. The State froze values at the peak. Real estate went manic from 2002 to 2006, then the wheels came off. Values began to plunge around 2008. Then they were frozen - by the State. Meanwhile, the plunge continued.

Now that the moratorium is over, guess what, properties are over valued. If the reporter would just do some UNBIASED research he too would discover that the digest is over valued.

So if this expiration of the moratorium "was tantamount to a revaluation on your property", where was the army of hourly assessors? When where they given an hour long training session by watching a simple video? What company was outsourced to perform this RE-VAL?

As far as his B answer goes.... that shows a lack of real World experience or knowledge. He could also find many examples of property that has not been written down even with sales (more than 10% below subject) just a few doors down on identical property.

County short fall to be filled by fund transfer.

Monday, May 21, 2012

The tax digest did not grow, despite what you may read.

Post by Mike Flynn

A completely clueless report!

What is missing in the above report is the reality of our current situation. The reporter states that the digest has grown. That is what Denver Hooten said, so he reported it.

The truth of the matter is the value of the digest has been inflated, and since property values are in decline, many owners will be appealing for write downs.

How much over valued is the digest? Well lets look at one specific property to give you an idea.

710 Van Buren is a multi-family unit currently on the market for $29,000. It has five apartments that can be rented for a gross of $870 per month. The property is in distressed condition and has been on the market for 761 days.

Now let's examine how that property is reported on the digest. The property is identified as parcel 0000D/00010/032 and is carried on the digest at a value of $107,900 dollars.

So who is right? For a period of 761 days the free market has rejected this property at a value of $29,000, but lets give them that value just to make a point.

The digest value of $107,900 minus the market value of $29,000 gives us an over valuation by the county of $78,900. 710 Van Buren is over valued by 372%.

This is an extreme example, but there are others. Many others. 

Good commercial site - Slappey Drive

View Larger Map

Listing information - 1307 North Slappey Drive - With a traffic count of over 26,000 cars per day, this one acre lot on Slappey is prime for redevelopment. It has 195' on Slappey - 220' on 7th and 220' of rear alley access. Call Mike at 229-376-2361 for more information.

Thursday, May 17, 2012

Property owners have the right to appeal.

Post by Mike Flynn

Citizens of Dougherty County know that millage rate increases are in their future. The county, city and school board all are projecting short falls. The school board may be as much as $9-million short, and the city is relying on MEAG money to make ends meet.

The one positive aspect of the current real estate market is that owners should, at very least, be given a reduction in the fair market value of their property.

The deadline for appealing the value of your property is 6/15/2012.

You can obtain the appeal form from the Tax Office and valuations of other properties.
Always check both the “value” and “uniformity” box.

Until you receive a final decision from the Board of Equalization or Arbitration, your taxes will be reduced 15% by appealing. Additionally, the Tax Assessors are barred from raising valuation of your property for two years.

Under a recent statute, if you obtain a reduction in the value of your property by an appeal, the Board of Assessors are barred from increasing your valuation for the next two years O.C.G.A. Sec 48-5-299(c).

Since our city and county have announced their consideration of raising our millage rate (which is already one of the highest in Georgia) it behooves you to take the time to investigate your property’s valuation and its uniformity.

You may access recent sales data in your neighborhood at the following public web site:http://www.qpublic.net/ga/dougherty/  Recent sales can be used to establish the market value of your property.

If you need further assistance please contact me at 229-883-6100.

Tuesday, May 8, 2012

So now the lenders are blaming the appraisers.

Post by Mike Flynn

Has anyone seen a story where a lender takes any responsibility for the current condition of the real estate market? There have been lenders that blame borrowers, Realtors and now appraisers.

Lenders point the fingers appraisers.

The truth of the matter is we all hold some of the blame for allowing the system to run out of control. We all bought into the mania. The entire World did. So now we ALL, this means you lenders too, need to get this market moving again.

A step in the right direction.

Post by Mike Flynn

Maybe this is  the beginning of self corrective measures. It is a shame it took these huge blemishes on DCSS for the board to do the right thing, but the public needed some action.

From The Albany Herald - BOE denies 26 renewals

Notice further down in the story that Robert Lloyd has also been moved from Director of Finance and Operations to director of supply services. 

Friday, May 4, 2012

Dougherty County tax payers need some relief from the Governor.

Post by Mike Flynn
And the hits just keep on coming!

At some point the Governor of Georgia has to give the residents of Dougherty County some relief... Doesn't he?

So far we have:
  • CRCT Cheating
  • Free Lunch Fraud
  • Two million missing from the lunch program
  • Illegal orders to an officer of the law
  • Illegal use of TAX PAYER DOLLARS to bail out incarcerated students
  • Multiple instances of sexual misconduct  
What else does the Governor need? I am not going to criticize the hiring of the Dr. Murfree, but at some point he and finance director Robert Lloyd should be forced to speak with the GBI. I am not accusing them of wrong doing, and if there have been no laws broken, they should welcome the opportunity to speak with law enforcement.

Tuesday, May 1, 2012

Busy day... Deal removing Miller County school board members... Is DCSS next?

Post by Mike Flynn

Dealing with the problems!

The Governor is exercising power granted to him last year. How long before he sets his sights on Pine Avenue?

Albany facing spending cuts!

Post by Mike Flynn

From the Herald: Albany facing tax increases and spending cuts!

It looks like City Manager James Taylor gets it, but how will the commission vote when cuts affect their districts?

From the Herald - In what Taylor called a “blinding flash of the obvious,” commissioners could save money by reducing duplications in service that currently exist within the city government.
“It seems unreasonable to me to ask the citizens to pay more when we have likely efficiencies that can or should be made,” Taylor said. “In the military, we’d call that a blinding flash of the obvious.”

I wish the writer had followed up this statement and asked if Taylor was suggesting that city/county consolidation should be reconsidered.
Another huge issue is property valuation. When the county re-valuated the tax digest, the country was in the middle of a false real estate boom driven by manic lending. Now that the bubble has burst, values are returning to normal, which can be as much as 30% below their value carried on the digest.

The writer also suggest that taxes have been cut over the last two years because millage rates have been lowered. That is a semantics issue. The rates may have gone down, but the tax payers were writing bigger checks to the city because the valuations were unreasonably high. The revenue to the city went up drastically after the re-val, but the tide is starting to go out now.

Some properties are trading at 50% discounts off of their last recorded sale. The tax income to the city is going to contract for years to come, so while these cuts are a step in the right direction... you ain't seen nothing yet!

Adding to the problem is the fact that the percentage of stake holders is low. According to the US Census, 48.5% of county residents own their home, while the state average is 67.2 (The national average is around 67% and Lee County is 77%). In short, property owners are out numbered in Dougherty County, so the commission will have to show some courage to stand up to the majority.

Here are a few suggestions:

1 - Take an inventory of city owned property and sell any deemed to be excess.
2 - Lease or sell Chehaw. I know this is a county property, but a private park operator may have more flexibility. Wild Adventures in Valdosta is a good model.
3 - Lease or sell the Civic Center - Cut a deal to a private promoter to take over operations. Even offer favorable financing and exempt it from the tax digest for five years. At the end of that time, tax it at full value. 

Friday, April 20, 2012

FORBES - Top 10 cities

Post by Mike Flynn

Here is a list by Forbes ranking the top 10 cities in the US based on growth rate. Texas is kicking tail right now with 4 of the top 10. Atlanta barely makes the list at number 10. Red States grab 6 of the top spots and swing state North Carolina grabs another 2.

Forbes - Top 10 fastest growing cities in the US.

Friday, April 6, 2012

Keys to a growing community.

Post by Mike Flynn
The Macon Telegraph

This is a good story in the Macon paper which points out that Warner Robins is one of the fastest growing communities in the country. Maybe there are lessons to be learned from them.

Houston County Commission Chairman Tommy Stalnaker attributed metro Warner Robins’ growth to a variety of factors, including a low crime rate, good school system, low cost of living and the overall quality of life in the community. Many people move here to work at Robins Air Force Base, then stay here when they retire, contributing to a continuous source of growth, he said.

Thursday, April 5, 2012

New city formation talk is picking up steam.

Post by Mike Flynn
WALB Story on formation of a new city.

While the language isn't exactly accurate, the thrust of the story is. The group talking about this movement won't like the word secede. They aren't seceding, they are forming a new city.

Judging from the comments below the WALB story you can begin to understand why this is a popular idea. The majority of dollars generated from sales tax and property tax are in the Northwest section of the city and county, but the majority of the dollars generated aren't spent in improving that area.

I can tell you from contact with the group, they are frustrated that the consolidation issue was never put before them at the polls, and they feel they will have better luck in Atlanta. From what I have been told, this is a top down process. Local leaders can rally against it, but they have no legal authority to stop it.

Nathan is correct it will take years, but this has been done before. This group does not have to reinvent the wheel.

Wednesday, March 21, 2012

Is it time to form a new city? Maybe...

Post by Mike Flynn

The link below is positive since there has been some behind the scenes organization to form a new city in Albany's Northwest sector. Just think what a new city with the tax base of the Albany Mall, Doublegate, and Chic-Fil-A could do!

Judge tosses lawsuit to dissolve new cities

Monday, March 5, 2012

This is a big part of the problem...

Post by Mike
This just came out on Zerohedge. It tells the story of a couple that has lived in their 4,900 square foot Maryland home, for FIVE YEARS without making a single  payment. Oh... and they put nothing down on the purchase.


Wednesday, February 29, 2012

Mortgage conditions are improving.

Post by Mike
While the lending market is still very tight, the conditions are improving as stated in this article: Money starts to flow back into real estate.

We still have a ways to go, but all signs are pointing to a bottom. The FED's zero interest rate policy (ZIRP) guarantees your dollars will not bear any interest in deposit accounts. Wall Street is still struggling with the image of a rigged game. Hard assets are being viewed as the best investment in our current environment, and real estate can produce income and return while gold and other tangibles don't.

Plus remember the old adage "buy low, sell high". Real estate is definitely undervalued.

Thursday, February 23, 2012

NW Albany redevelopment a step in the right direction

Post by Mike
In case you missed it, this is great news for Southwest Georgia. The Albany Inn sits on four prime acres at the intersection of Westover Road and Dawson Road. It may be the highest traffic count in Albany.

If the new owners had operated it as a weekly stay hotel, it would quickly degenerate into a floop house and every property in the area would have been affected. This redevelopment of the site is exactly what Albany needed.

New development in NW Albany

Wednesday, February 8, 2012

Is it time to buy tangibles?

Post by Mike
This is a little dated from November of 2011, but the logic is very sound. We may be in the investment environment of a lifetime. Remember what happened after the Savings and Loan disasters? Sure there was some temporary pain, but once the reset was finished.... we were off to the races again!

Link: Investing in tangible value.

Halftime in America!

Post by Mike

Call me a stupid old jock, but I really liked the Clint Eastwood commercial during the Super Bowl.

I would have added a few things like:

"Okay we had an early lead in the first quarter, and then kept fumbling the damn football. So now we are down at the half. What are you prepared to do about it?"

And, not to get too political, but I would have included something to the effect of:

"Our quarterback has been trying, but he just doesn't seem to know how our system works. Sorry Obama, I got to pull you for the good of the team."

Tuesday, February 7, 2012

40 States Sign Settlement

Post by Mike

Forty States, including Georgia, signed the Foreclosure Settlement with the big banks. This will limit their ultimate exposure and may free up lending in the States that agreed to the terms. Notice I said MAY FREE UP LENDING. As usual, the banks are the big winners in the settlement. They now know their ultimate exposure and can not be sued for more damage.

This will be held up as a huge win for the public, but in my opinion, the numbers are too small. The banks were loaned $700-billion when they were in trouble, but only agree to a $25-billion settlement for the damage they caused in the real estate sector.

Oh well... the golden rule... "He who has the gold, makes the rules..."

Housing Wire - 40 States Sign Settlement

Friday, January 27, 2012

Post by Mike
Here is an interesting chart that shows Georgia as being relatively stable as far as values are concerned. Before the crash in years 2000-2006 the state was in the 0-40% price change range. After the crash 2006-2010 we are in the -20-0% range, and for the 10 year period 2000-2010 we are still positive in the 0-40% category.

Thursday, January 26, 2012

Loan modification plan actually gives the banks some cover.

Post by Mike
For a man that claims to care about the average Joe, this President is about to plow struggling home owners. Even this left leaning web site calls him on the plan and exposes how he will rob your 401k in the process. Please forward.

Naked Capitalism _ Obama gives the banks a get out jail free card.

Wednesday, January 25, 2012

Mitt Romney's State of The Union

Post by Mike
Okay, this is a man who understands the problem from a business perspective. There is no class warfare or HOPEY CHANGEY wishing for utopia. He gets it. These are excerpts from a speech made by Mitt Romney. His remarks are in bold. Read them and ask yourself who is best fit to address our current problems.

We’re just so overleveraged, so much debt in our society, and some of the institutions that hold it aren’t willing to write it off and say they made a mistake, they loaned too much, we’re overextended, write those down and start over. They keep on trying to harangue and pretend what they have on their books is still what it’s worth.

The banks are scared to death, of course, because they think they’re going to go out of business… They’re afraid that if they write all these loans off, they’re going to go broke. And so they’re feeling the same thing you’re feeling. They just want to pretend all of this is going to get paid someday so they don’t have to write it off and potentially go out of business themselves.”

This is cascading throughout our system and in some respects government is trying to just hold things in place, hoping things get better… My own view is you recognize the distress, you take the loss and let people reset. Let people start over again, let the banks start over again. Those that are prudent will be able to restart, those that aren’t will go out of business. This effort to try and exact the burden of their mistakes on homeowners and commercial property owners, I think, is a mistake.

Link here: Mitt Romney's State of The Union

Tuesday, January 24, 2012

Post by Mike
The AJC is reporting several major banks have reached a settlement of $25-billion for improper mortgage practices. Link to the story here: http://www.ajc.com/business/25-billion-mortgage-settlement-1314190.html

My question is... ARE YOU KIDDING ME? $25-billion? TARP was $700-billion and all they can muster is $25-billion?

The timing of this is somewhat suspicious. Expect to hear something about it in Huesein's campaign speech.

Monday, January 23, 2012

Hard data pointing to a loaded spring.

Post by Mike
Conditions are right for a big swing in the housing and real estate recovery, and here is hard data showing we are sitting on top of a loaded spring.

Last week I suggested that inventories, values and interest rates were at low levels. Today I found the following charts. The first one is from the U.S. Treasury and presented by the CFR. It shows how home prices have declined since the end of the recession as compared to the other post war recovery averages.

My theory is that the inventory was so large (and lending so loose in the boom) that working the mess through the pipeline had caused this deflation.

The next chart is from the St. Louis Fed. It shows M2, or the money supply. Obviously, the FED has been pushing money into the system. The only problem is it has not been reaching the broader economy, as shown in the third chart which is the velocity, or movement of money. 

While the FED has been doing it's part, the banking sector and corporate America appear to be sitting on piles of cash. Also notice the low interest rates.

Like a compressed spring, the tension is building in the system. At some point buyers are going to borrow, banks are going to lend, and all that money on the sidelines will spill into the market.

When that happens, you are going to see the bull return to the real estate sector. Why real estate instead of stocks? A few reasons - 1 - Wall Street has lost a lot of trust. 2 - Real Estate is depressed. People like to buy low and sell high.

Get ready, the real estate market will inflate again.  

Wednesday, January 11, 2012

Market inventory hits a three year low.

Post by Mike
A comparison of the last three years in the local real estate market may be indicating a market bottom. The attached is data pulled from the Albany MLS system.

First the bad news:
-Overall, the market has contracted by $25-million since 2009. Gross residential sales for that year in the Dougherty and Lee County markets were $125-million, while gross sales in 2011 totaled $100-million.

-Average sales price has also dropped in the same period from $146,824 to $134,155.

Now the good news:
-The total MLS inventory for the market at the end of December was a total of 779 properties. That is the lowest that number has been in three years.

Values are down, inventory is down and interest rates are down. The market could be on the edge of revival.

Click the image to enlarge the report: