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8-6-07 Property tax problems ahead for Oconee - Housing Slump is part of an economic cycle- supply and demand

It……..will eventually impact the Tax Digest. If not decreasing, the Tax Digest will at least not grow as fast as in the past. This should be a concern of the Commissioners and School Officials who have been benefiting from the “Boom” and increased land and house values………. …….. Traffic and gas prices do not encourage the commute from an Oconee County residence to a Metro-Atlanta job. …………. Our local roads cannot handle the increased volume of traffic. Just watch the roads when schools open next week!

AVOC

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August 5, 2007

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Property tax problems ahead for Oconee - Housing Slump is part of an economic cycle- supply and demand

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By Wendell Dawson, Editor, AVOC, Inc

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While local papers seem to avoid the subject (ad revenues), other sources indicate the Housing Market has slowed down in Oconee County as in other parts of the country.

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There is an existing supply of built homes in Oconee that exceeds demand.   Eventually, this will drive prices down.   While there is a time gap, it will eventually impact the Tax Digest.    If not decreasing, the Tax Digest will at least not grow as fast as in the past.   This should be a concern of the Commissioners and School Officials who have been benefiting from the “Boom” and increased land and house values.

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In addition to supply and demand, other factors come into play in Oconee County.   Traffic and gas prices do not encourage the commute from an Oconee County residence to a Metro-Atlanta job.    The roads to Atlanta are overloaded and the GA DOT does not have the money to improve them.   Oconee, in its recent fast growth policies, has allowed its infrastructure to be overwhelmed.   We have exhausted our water and sewer capacities and its takes years and “big bucks” to get more.Our local roads cannot handle the increased volume of traffic.   Just watch the roads when schools open next week!

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Much of the local economy is impacted by the Housing Market.   It will impact ad revenue; bank interest rates and profits; individuals employed in the industry; suppliers and contractors; homeowners wishing to sell, etc. Large Metro-Atlanta volume builders helped with Oconee’s over supply of houses.   They can afford to drop prices and “volume sell”.   This will not help the local builders.

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Some will say we are still booming.However, the list of building permits and the news nationally does not support that.   National experts say it can continue into late 2008.One can get an idea about the slowdown by driving on the local roads and through newer subdivisions. 9-2-05 Is There a Housing Bubble in Oconee County, Georgia & the United States?

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Housing Industry is big but has its Ups and Downs.


SEE:

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6-9-06 Builder in Oconee County MPD (Brookshire) bites the dust"

5-7-07 Oconee’s Master Planned Developments have mixed history and success

9-2-05 Is There a Housing Bubble in Oconee County, Georgia & the United States?

4-20-06 Pop Goes the Housing Bubble - Some say

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Some say worst slump since the 30s

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The Daily Reckoning UK

http://www.dailyreckoning.co.uk/article/ussufferingtheworstslumpinhousingmarketsincethe30s0317.html

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July 4, 2007

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US Suffering The Worst Slump In Housing Market Since The 30s

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By Bill Bonner

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The US is suffering the worst slump in the housing market since the 30s, say the news accounts.  How bad is it, really?  Hard to say. The national statistics show a modest decline in prices or even an increase, in some areas - with mounting inventories of unsold houses. In Las Vegas, the number of resold houses in May this year dropped by 28% from last year. The wheels of Financial Fate may grind slowly but they grind exceedingly fine. And Americas middle class is beginning to notice. Home values and the $ 6 trillion U.S. mortgage-backed securities market are locked in a downward spiral, reports Bloomberg.


The Athens Banner-Herald

http://www.onlineathens.com/stories/080507/business_20070805018.shtml

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August 5, 2007

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Slow sales steer sellers to rent, reduce prices

Buyer's market

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By Don Nelson

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The Athens housing market, like the rest of the nation, has been slumping since its peak in 2005, but the first half of this year has been particularly hard. The National Association of Realtors recently reported that June sales of existing homes dropped by 3.8 percent and was the fourth straight month that existing home sales volumes had declined. The NAR noted that the housing market had reached the slowest sales pace since November 2002. Analysts said home sales have reached the worst slump in 16 years, according to an Associated Press story.

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The housing sales statistics have rocked the stock market for the past week and a half, despite news that the median price of an existing home has edged up slightly to $ 230,000, a 0.1 percent increase from June 2006. Eleven months have passed since the last year-over-year price increase.

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More and more homeowners who are unable to sell their property are opting to rent the houses at this time, said Angela Coggin with Re/Max realty in Athens.

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"What they are beginning to be inclined to do is to rent through the winter months and then put it back on the market in the spring," …….

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"It appears that some buyers are looking for more signs of stability before they have enough confidence to make an offer," said Lawrence Yun, senior economist for the NAR, according to the AP story.

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The owners of two of four lower priced homes listed by Athens real estate broker Steve Sgarlato recently leased their properties, and a third expects to rent as well, he said.

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The homes were priced between $09,000 and $50,000 and one has been on the market for close to a year.

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Home sellers also have adopted the tactic of reducing the asking price of their homes, Sgarlato and Coggin said.

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There were slightly more than 3,500 single-family homes, townhomes, condominiums, duplexes and mobile homes for sale in the Athens area as of Aug. 1, compared to about 3,000 the same time last year, according to Multiple Listing Service figures, Sgarlato said. The Athens area includes Clarke, Jackson, Madison, Oconee and Oglethorpe counties.

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"It's a buyer's market in a bad way," Sgarlato said. "It's a scary number for a Realtor."

During the summer - normally an active selling time - the number of homes being sold should well exceed 200 per week, Sgarlato said, but as of Aug. 2, the average weekly sales figure was just more than 100. (The MLS showed 455 homes sold in the previous 30 days.)

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To add to the challenges, more than twice the number of homes are coming back on the market than are being sold, Sgarlato said. And the MLS listings of homes for sales don't include available properties that owners haven't sold and have removed from the listings.

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As of Aug. 1, more than 7,000 homes had been taken off the market or their listings expired, he added.

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A rising foreclosure rate and new homes being built, have added to the housing surplus as have overpriced properties, Sgarlato said.

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Staiano said 2007 has been a particularly tough year, but he expects the market to rebound.

"Give it a little time and it's going to come back," Staiano said.


The Atlanta Journal-Constitution

http://www.ajc.com/business/content/business/stories/2007/07/19/beazer_0720.html

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Housing slump, lawsuits hammer Beazer Homes

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By Julie Hairston

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Amid the worst housing sales slump in more than a decade, 2007 has been a particularly trying year for Atlanta-based Beazer Homes.

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Its stock price has plunged to values less than half the size of its January levels.

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Legal and housing experts expect Beazer's troubles to drag on well into 2008, but predict that the company will ultimately emerge intact though perhaps structurally altered.

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The thick of Beazer's turmoil began in March when a series of reports in the Charlotte Observer detailed foreclosure rates of more than 20 percent in Beazer communities near Charlotte, N.C. News of the inquiries and lawsuits soon followed.

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But the troubles have made investors wary.   Beazer stock, which was trading at more than $ 46 per share at the beginning of the year, plunged to less than $ 23 per share after the company fired its chief accountant for attempting to shred documents in violation of Beazer policies.

On Thursday, Beazer's stock hit $ 20.73 per share.


Housing Market dragging from foreclosures

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Access.North.GA.Com

http://hosted.ap.org/dynamic/stories/M/MORTGAGE_DEFAULTS?SITE=WDUN&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2007-07-26-13-25-30

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July 26, 2007

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Investor Losses Seen in Housing Slump

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By ALEX VEIGA
AP Business Writer

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LOS ANGELES (AP) -- The national housing slump could lead to billions of dollars in losses for Wall Street investors as it drags on for at least another year and mortgage defaults increase, economists said Thursday.

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The outlook on eroding credit quality in the U.S. mortgage market by Moody's Economy.com anticipates that more than 1.2 million first mortgage loans will default this year and another 1.3 million will follow next year.

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Hedge fund investors will lose between $ 100 billion and $ 125 billion as a result, he said.

"We do expect losses in the sub-prime market to be very severe," Zandi said.

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Home prices, which have been flat or declining in many once-booming areas, should bottom out in the second half of next year with price declines about 10 percent off their peak, he said.

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The rise in defaults and ongoing housing slump will have an impact on the broader economy, he said.

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"I do think we'll see more of a spillover into consumer spending, which is weakening, and I think will weaken further over the course of the next couple of quarters next year," Zandi said.

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Subprime loans to borrowers with spotty credit scores account for the biggest slice of defaults. But borrowers with all types of loans, including Alt-A and prime loans, which are typically accessible only to the most creditworthy borrowers, are also defaulting.

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In all, there is $ 10 trillion in mortgage debt outstanding, Zandi said.

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The decline in housing prices is driving the rise in defaults, as many financially strapped homeowners are unable to sell their home or refinance before missing payments.


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