Charlie Ragonesi Big Canoe Realestate's Blog: January 2008

Our company name is All Mountain Realty. Our motto is Capturing the spirit of the mountains. This is rather an interesting concept.

In todays world and with folks looking to move to the mountains ,What is the spirit of the mountains? I believe we are blessed in the North Georgia Mountains. The blessing has taken the form of late development. 

Late development has caused us to look at other areas and say , wait a minute. Fannin County is almost 50 percent deeded or in trust Green. Union County, Gilmer and Pickens counties boast some of the best green conscience communities. Lumpkin County has been touted as one of the best counties in the U.S to retire in. None of these counties take in the Georgia side of Lookout Mountain which has been constantly raved about in numerous mountain magazines.

So catching the spirit of the mountains is in fact keeping its essence and creating the capability for people to enjoy it. At least that is what it means to me. And I think in Georgia we have done that really well.  

Rainbow over the Mountains,  Yes really there's a bear in my yard, and the trout fishing is great  

This weekend the doom and glooms were out again. This time it was 60 minutes. They did a show focusing on an area in California where the market truly looks frightening. I was left with a number of questions.

1 The people who were making payments and were sub prime and were about to walk away I thought were the folks we were trying to help. Surely it would be better to refinance them at 6 percent. After all they are making their payments but paying 11 percent. I did not get why they were not being helped. Didn't we do something to help those folks recently? Didn't we have a number the government set up to call?

2 How could any oversight group allow a market to go from 230,000 to 450,000 for a home in 2 years ? Where were the bank officers. Where were the state regulators. Why aren't there appraisers, builders and mortgage folks being indicted for fraud. The 60 minutes show was quiet on that point.

3 Why didn't we see national averages in this show? My market isn't like this. Why do we always see the bad ?

4 Since the banks sold off the paper to the poor slob investors, why are the banks all crying and taking write downs. My wife thinks it is because the banks are hiding bad debts and using this crisis to write them off. Why didn't 60 minutes explain how the banks sold the notes and then took a loss ?

Maybe we could get Andy Rooney to answer these questions. After all he asks all kinds of questions in his 5 minute piece. This piece has become more and more a filler and rambling with little substance and no point. The good news is you can get up and make a sandwich when he is on.

60 minutes used to be a good non tabloid type show. I was really saddened to see how they handled this issue. 

There are tons of blogs and analysis about the Fed rate cut. There is anticipation of a new rate cut next week. But consumer do not understand the relationship of the rate cut to mortgage rates.

Most consumers think a rate cut in the Fed funds market means lower mortgage rates. That is not always the case. In fact this week we saw rates initially go down and them bounce back up. As Realtors in our news letters and information to clients it is important to explain to them that the Bond market has more of a direct impact on mortgage rates. Many buyers especially first time buyers are sitting on the fence waiting for that next rate cut to get them a good mortgage on a home. Many budget minded folks are floating their rate instead of locking.

For our sellers we must make them price realistically and not think a lower Fed funds rate = a lower mortgage rate = lower payments for a buyer, therefore I can price my house higher.

We as Realtors must work hard to educate or clients. Not only about the house they are buying. We must educate them on the finances of buying.

For us year rounders in the mountains winter can be a tough time. Now it is not so tough as say being further North but still. It gets cold. Nights are even colder . Days are short.  Still if you are in communities like Big Canoe , Benttree, or Talking Rock Creek Resorts. There are things to do.

People moving to the mountains need to consider how winter will effect them . If you are in an area that has lots of amenities ,indoor activities and things to do then winter in the mountains is great. The example I use is with those folks who move here from Florida . We call them half backs. They came from further North went to Florida and then after a couple of wonderfully hot hot hot humid summers moved halfway back.

So the point is consider the weather if you are like most who can only afford to live in one place. We in the mountains say Winter is a great time to look and buy. You can see more with the leaves down. You also will know whether our cold, not Northern Cold, but cold, is ok for you. I am not sure where 1/2 back is from here so make your choice one that is good year round. 

I read a Blog this morning by Jay Beckingham in South Florida. Basically he was talking about the 2 types of Sub prime borrowers. Type 1 borrowed, had fun, played, and went broke. Type 2 borrowed, fixed their credit, saved money, was good, and went broke. In the end Type 2 could not refinance because their equity was not there as values decreased.

Suddenly a thought occurred to me reading his blog. When you go to the store and buy something and get a guarantee, if things do not work out you have recourse. In the case of sub prime., the guarantee was if you correct and see the error of your ways you will be able to refinance. Unfortunately those who did correct their errors were caught with negative equity. Not so much because of sub prime but as a general down turn in the market. Wouldn't it have been nice to have a guarantee. Something like, we will give you this loan and when you turn things around we will allow you to refinance the same amount at better rates. Wouldn't that all have made much more sense than what happened and is happening ?

Now hindsight is 20/20 but at the end of the day good people took these loans with the understanding made by lenders that if they turned their situation around they could have the American dream and refinance. Who holds the lenders feet to the fire? Who says hey you told me I could do this. Where is my Guarantee. Maybe next time we go around with this...Oh yes memories are short and there will be a next time, we can offer a guarantee to those who meet the criteria of the programs. Then Jay Beckingham would not have to say , Ain't it a shame.

I posted a blog with pictures for the first time the other day called Winter in the Mountains. Some of the responses I got asked about snow. Now wouldn't you know it. Here I am a couple of days later socked in with snow and some ice. Linda Carrig also wrote a blog about the snow today.

This leads me to believe I should have written a blog asking for more business or at least 6 numbers for a Lottery ticket. So for those of you who asked here goes. Yes we did have snow last night in the Atlanta and Northern regions. Also unfortunately it changed over to sleet by morning. However around 1 oclock today I should be able to get out and about. Now remember I am 2,500 feet up so it melts a little slower.

The point is that it all looks great. We have the fire going. Being in the southern end of the mountains means that even this inclement weather does not stay with us for long. That's is one of the things that make the North Georgia Mountains a place to be.

Visit us on line at www.georgiasno1agent.com

Who says Mountain property has to be billy goat steep. There are some great valleys in the mountains. The picture above show a great setting . It is 61 acres . The pond is stream fed and full of fish. This is a winter picture and the pond has been recently dredged. So there is great top soil for spreading. The price ??? 7,500 an acre. On a paved road. Could be divided into a few horse farms. Great stuff!!

This second picture is obviously not winter. But you can see how the green valleys and the mountains just go together. So if you are interested in Mountain property but want some flat space it can happen. The evenings are cool and our land is great for horses as well as people looking to get away from it all

I am mostly optimistic. However recent events lead me to less than optimistic predictions for us and our economy. I have posted around this issue before but now it seems to be more and more becoming a reality.

When something does not make sense then usually you are missing a piece. In this case what never made sense to me was how the Fed could cut interest rates in light of over the top government spending. The result , look at gas prices, has been a devaluation of the currency. So yes we want to help the housing market but....

Well the most recent turn with Citi Group helps explain it all. Foreign money is the answer the big guys are looking for a way  to solve the liquidity problem. What makes investing in U.S. institutions so appealing for foreigners is a cheap dollar versus their currency. So if you look at B of A buying Countrywide at a good price the same kind of thing holds true for a cheap dollar making foreign dollars investing in the US attractive.

Now I am not one of those Xenophobic Americans. But this "solution" to irresponsible lending is being paid for squarely by you and me. It is being paid for in Higher imported good prices. It is being paid for in Higher gas prices. Have you taken a vacation out of the country lately ? You tell me how far your dollar goes. Now in the end this will translate into less rather than more home buyers as peoples discretionary income is dried up.

To the extend the Fed cuts interest rates they are complicit and part of the problem. To the extend the Bush administration deficit spends they are part of the problem. The Big guys are bailing themselves out on your back. So do not look at an interest cut with unabashed joy and as a panacea to our housing woes. I think quite the opposite is true. If the economy tanks then it really doesn't matter what interst rates are! 

I am a wordy cuss so with a little help from Rick I thought I would let the images do the talking.

When you look out into the mountains the leaves are down. But the sky is crisp and blue. This is some of the best time to be in the mountains. You can see the land and what is around you. You are not masked by the foliage.

Some times it happens that instead of Flowers on tress you get a frost. The beauty of the North Georgia Mountains are that the winters are pretty, as opposed to harsh. Walking around and looking at the ice in the tress is great. You smell the smoke from the fireplaces and it is very quiet and peaceful.

This is my first blog with pictures so I promise it will get better. But the point is winter time is a great time to shop in the mountain. Especially here. Walking land when the temperature is in the mid-fifties is really ideal. Now you have an idea of why I am smiling in my picture

Want proof that the so called housing crisis, mortgage meltdown, drag on the economy, is just that, so called, look at the paper. Either the folks at Band Of America are stupid or..... I am voting for not stupid.

Yes they did get Countrywide cheap. But the bottom line here is that the guys and gals at B of A see a market that is strong. They are saying weak but spending their dollars in the opposite direction. Basically they are making big bucks by forcing prices down , taking losses and not worrying about financing loans for increasing values. Where is the media quoting the obvious ? Why would B of A buy Countrywide at any  price if the market was in free fall meltdown or crisis. They wouldn't!!! But they would move in to scoop up bargains in anticipation of a good market that they can make big bucks in. It makes me mad and sad because folks who need to sell for whatever reason are caught in the cross hairs of big guys trying to make big bucks.