NORTON NATIVE INTELLIGENCE
'MARKET WATCH'
September 2010 Issue 273
The Norton Agency, For 81 Years The Region's Largest Insurance and Real Estate Firm.
"The Power to Perform"
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In This Issue:
Datamine: Most affordable popular retirement locations
Regional Tracts: Elbert and Jackson Counties
National Tracts: MIT study on home values and foreclosures
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For our latest research and data reports: http://www.thenortonagency.com/932/Market-Trends.htm
DATAMINE
The real estate downturn has turned some very popular retirement destinations into bargains. To determine where the prices are most attractive, U.S. News & World Report examined price-to-income data for 384 metropolitan statistical areas. This expresses the relationship between owner income and home values.
Here are 10 retirement havens where homes are most affordable by this measure:
1. Bend, Oregon
2. Napa, California
3. Fort Meyers, Florida
4. Fayetteville, Arkansas
5. Las Vegas, Nevada
6. Santa Fe, New Mexico
7. Punta Gorda, Florida
8. Phoenix, Arizona
9. Santa Cruz, California
10. Burlington, Vermont
Source: U.S. News & World Report, Luke Mullins
(07/08/2010)
REGIONAL TRACTS
Jackson County getting 400 new jobs - An international electronics company is preparing to bring 400 new jobs to Jefferson. Systemax, parent company of electronics retailers Tiger Direct, Comp USA and online retailer circuitcity.com will open a 459,160-square-foot building on Hog Mountain Road.
Shane Short, president of the Jackson County Chamber of Commerce, says it will include a large warehouse and distribution center space, a small call center, some offices and a 40,000-square-foot retail outlet.
Short could not say exactly when Systemax will open its new facility, but expects it to be no later than this fall.
Systemax will be the fourth national or international company to move into Jackson County this year.
Elbert County, Plastics Manufacturer to Locate Plant in Elberton - Governor Sonny Perdue announced that Germany-based plastics manufacturer Moeller Tech will locate a manufacturing plant in Elbert County. The project is expected to create 75 direct jobs and represents a $9.75 million investment in the local economy
A division of the Moeller Group, Moeller Tech produces injection molded plastic parts for the automotive industry. The company's Elberton plant will manufacture plastic injection molding for BMW.
"It has been an exciting time for Moeller Tech to find a home and set up a new plant in a Southern state to supply our automotive customers. We looked across different states and were very pleased to settle in Elberton," said Moeller Tech CEO Wolfgang Bruns. "We found that the plant, together with the attitude and commitment from the local community and Development Authority was second to none, and we look forward to a long, healthy and prosperous future together."
Moeller Tech will locate in an existing 130,000-square-foot Elberton facility already outfitted for plastics manufacturing.
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NATIONAL TRACTS
MIT Study: Foreclosure lowers a property's value by 27%
Foreclosed homes permeate the American landscape. According to data from the Massachusetts Institute of Technology (MIT), they make up about one in 12 houses with under $1 million left on the mortgage. these foreclosures drive down home prices, and MIT gives two reasons for their depreciating effect: Foreclosed homes add to the housing supply and the financial firms that acquire the houses want to unload them promptly.
However, since foreclosures often occur in economically struggling areas, it's hard to determine how much of the drop in a home's value is due to its foreclosure, and how much can be blamed on the economy in general. MIT economist Parag Pathak and two Harvard researchers, John Y. Campbell and Stefano Giglio, have conducted a study to put a price tag on foreclosures.
Specifically, they've determined how much a foreclosure affects a home's value, as opposed to a home going on the market because the owner has died or declared bankruptcy. The three colleagues examined 1.8 million home sales in Massachusetts from 1987 to 2009. By looking in granular detail at real estate prices, they concluded that a foreclosure reduces the value of a house by 27 percent, on average.
By contrast, other types of forced sales lower home prices by smaller amounts, When a house is sold after the death of an owner, the researchers found the price drops 5 to 7 percent on average. When an owner declares bankruptcy, the value sinks about 3 percent.
The researchers believe that their discovery of the gaps between these various price reductions is a key to isolating the effects of foreclosures. They suggest that a central cause of the larger foreclosure discount is that the condition of foreclosed houses often deteriorates much more than it does for other kinds of houses whose ownership changes hands.
The tendency of foreclosed homes to fall into disrepair lies behind the other main finding. The presence of a foreclosed house in a neighborhood reduces the value of the homes around it. In their estimation, the value of a home drops by 1 percent, on average, if it is within roughly 250 feet of a foreclosed home, namely because the vacant home may not be properly maintained and because foreclosures are typically resold quickly for a discount, their sale price can affect valuation comparables.
