Accumulate assets now for the better times ahead

By John Dixon

 If the sun seems a little brighter lately, there may be a reason for it. For the first time in well over five years, the Dow is finally back above the 14,000 level, where it was in October 2007, just before our economy hit the biggest air pocket since the Great Depression. During the crash, assets of all types seemed to go into a free fall -- stocks, homes and commercial properties. People watched as their retirement accounts fell to a fraction of their former value.

But just in the last few weeks, we've seen the Dow climb back above 14,000. I don't want to overstate the impact of that, because the Dow isn't the best indicator of where the economy is. But it has a major psychological importance, because it's still the indicator the press mentions most. And getting above a barrier like 14,000 can give folks a lift. After well over five years -- at least by that measure -- we're finally clear of the horrendous downturn.

And we're seeing positive signs in the real estate market, too. In January, home prices -- as measured by the Case-Shiller Index -- showed the biggest year-over-year gain since before the crash. The National Association of Realtors reports that sales of vacation homes were up 10.1% in 2012, and the median price of a vacation home rose by 24%. When people get scared, luxuries like vacation homes get hit first. So when beach homes and condos start to recover, it means people are feeling pretty good about things.

As I've noted recently, we've been seeing signs of the upturn in our auctions. Our series of five auctions in late March demonstrated the strengthening economy in a dramatic way, as we had capacity crowds and vigorous bidding all over Georgia. Ultimately, the total reached $17.5 million, as hundreds of bidders purchased homes, commercial properties and land to position themselves for a stronger economy.

The economy is notoriously difficult to predict, so it's hard to tell what's ahead. But all the momentum seems to be positive right now, and there are a lot of opportunities ahead. Our buyers know that those who prepare now by accumulating assets will be miles head in the months and years to come.

 

Good end-of-year news as home prices show consistent improvement

By John Dixon

There's a lot to be said for a little good news as we prepare to enter a new year. And we got a good dose of holiday cheer the day after Christmas, when the S&P/Case-Shiller Home Price Indices came out.

There are several things I look for when I'm trying to get a handle on economic data -- especially statistics regarding real estate. Obviously, I look at the raw numbers themselves, but even more important is consistency of direction. A choppy sideways market -- up one month and down the next -- doesn't tell me much. But an established trend can be useful, because it give us a better idea of where things are going. Finally, I like to see some geographic breadth. If properties in one or two areas seem to be catching fire (or going in the tank, for that matter), it may not reflect the broader market.

I was particularly glad to see the latest batch of Case-Shiller Index numbers -- which cover October -- because they contained good news by almost any measure:

• The annual returns for Case-Shiller's 10-city and 20-city indices showed healthy growth (3.4% and 4.3%, respectively). So I have to be pleased with the direction.
• The trend looks good too, with the 12-month rate of change in home values rising 10 months in a row. That number has not only been positive, but improving steadily since December of last year.
•  In 19 of the 20 cities, the annual returns were higher for October than they were for September. All but two of the 20 cities showed positive annual returns. (Chicago and New York were down.) Score one for geographic breadth.

Happy New Year!

 

 

Current real estate prices plus strengthening economy spell opportunity

By John Dixon

When it comes to investing in real estate, the folks in Chicago get it. And those who turned out for our two-day FDIC Chicago auction got some great deals on homes, condominiums, office condominiums and other real estate that should produce excellent returns in the next few years. 

Over two days, we had about 240 attendees, including 122 who came to bid in person. Another 36 participated online.  We sold 79 out of the 81 properties offered. Most of those -- 74, in fact -- were residences and commercial properties. As I'd noted when we first announced the auction, this sale consisted heavily of improved residential and commercial properties.

Across the board, the properties sold for prices that afforded the bidders with some excellent values. While many real estate prices have been firming up for several months, they're still at levels that enable investors to earn excellent returns, and we had a number of properties that were ideally suited to the needs of smaller investors, who figured prominently in the auctions.

Let's face it: When it comes to any investment, half the battle is buying at the right price. For a smaller investor, that means finding a property within your means. But whether you're investing $50,000 or $5 million, it also means investing at a level where the rental income provides a suitable rate of return, or at which you'll be able to make a profit down the road. 

Our auctions of bank-owned properties during 2012 have presented just those types of opportunities. Bidders have been acquiring properties at prices that won't last forever. At the same time, crowds at our auctions have been growing, resulting in solid results for the financial institutions and others for whom we're helping reduce inventories.  

We've had great year, and it's given me a lot of satisfaction to help our sellers reduce their holdings while providing avenues for investors to build portfolios that will make them a lot of money. I have every confidence that 2013 will bring more of the same.

Latest numbers on home stats underscore market strength

By John Dixon

One of the frustrating things about trying to get an accurate reading on economic trends is that numbers tend to bounce around from one month to the next. So when we get a series of numbers that all point in the same direction, it's a good idea to pay attention.

That's the case with the S&P/Case-Shiller Index, which has become the leading measure of U.S. home prices. The national composite was up 3.6% compared to the third quarter of 2011, and 2.2% compared to the second quarter of this year.

Not that I was surprised. I've been saying for a while now that the real estate market was recovering, and the new numbers are convincing:

·         Breadth. A recovery in one or two hotspots doesn't mean much. But of the 20 cities tracked, 17 were above their levels from a year ago.

·         Persistence. Both on a month-to-month and year-to-year basis, we've seen steady progress. The 10-City and 20-City Composites have risen month-over-month for six straight months.

 From the investor/buyer perspective, this is really good news. Real estate is still a great value, especially compared to the prices we saw before the credit crisis in 2007-2008, so there's a lot of room to grow. Yet, the upward trend is well established, showing that the market has stabilized and begun to gather steam.

That means, of course, that our upcoming two-day auction of 100 properties for the FDIC in Chicago will offer some excellent possibilities. We have an especially strong lineup of residential properties, many of which are concentrated in the Cicero area. We'll start at 11 a.m. on Saturday, Dec. 8, and 2 p.m. Sunday, Dec. 9. I look forward to seeing you there.

 

North Georgia auction demonstrates growing strength in real estate

By John Dixon

 I've been involved in lots of successful auctions in my time, but the three-day auction we conducted last week (described in the press release below) was special by any standard. The turnout was outstanding, and the seller was pleased with the results.

It also reinforced my view that the real estate market is bouncing back, perhaps more quickly and strongly than people realize. We had a lot of perceptive bidders who understood that the best time to buy is at a low point in the cycle. But they could also sense that the bargains they've seen for the last couple of years won't continue indefinitely, and they wanted to build their portfolios while they can.

Smart bidders!

John

Hundreds of bidders turn out for $8 million auction of bank-owned properties

GAINESVILLE, Ga. (Oct. 22, 2012) -- Bidders showed up in Gainesville by the hundreds last week for a three-day auction of approximately 175 properties, including office buildings, land, restaurants, homes and home building sites, among others.

The result was a combined total exceeding $8 million, according to John Dixon, president of John Dixon & Associates, which partnered with the Metro Brokers Bank Asset Team for the auction for Community Bank & Trust.

"We expected a strong turnout because of the variety and quality of the properties we were selling, but this was frankly a stronger turnout than even our optimistic estimates. It was three days of pure excitement," said Dixon.

Ronald Gailey, assistant vice president-special assets for the bank, said he was pleased with the outcome. "We achieved our goals and then some. The folks at John Dixon and Metro Brokers Bank Asset Team did an excellent job. Crowds were great, and bidding was vigorous across the board," he said.

Over the three days, the auction drew approximately 550 bidders -- 250 who jammed into the room for live bidding and another 300 who joined the auction via Internet simulcast and cast their bids remotely. And those numbers do not include those who attended on more than one day, Dixon said. "Many came all three days, but are only counted as one bidder. We had standing room only crowds all three days."

 On Tuesday, a group of properties in the northeastern corner of the state sold for approximately $3 million. On Wednesday, properties spread out over north Georgia sold for approximately $2 million, and on Thursday, properties stretching from Rome to Augusta sold for another $3 million.

John Dixon & Associates, based in Marietta, Ga., is a leading auctioneer of bank-owned properties throughout the United States. Individuals seeking additional information may contact the firm at 770-425-1141 or visit www.johndixon.com.

 

Major Buying Opportunity!

By John Dixon

The local Chamber of Commerce may not have been thrilled when the S&P/Case-Shiller Index pointed out that Atlanta was the only city in its 20-city composite with a double-digit negative annual return on home prices, but real estate investors should welcome the news.

Wall Street demand for homes good news for investors, banks

By John Dixon

Bidders at John Dixon auctions frequently hear the bid caller say something like, “Buy yourself rich.”

Now, that message is starting to catch on -- not only among small investors, but among some on Wall Street as well. And the bigger investors especially seem to be focused on single family residences.

Fortune this week noted that one major private equity firm now owns 2,000 homes, reportedly one of the biggest portfolios of homes ever accumulated (excluding Fannie and Freddie).

And some are reaching even higher. Also quoted was a UC Berkeley professor and consultant who advises real estate investors. He said he knows of two dozen investment funds currently buying up single family homes, and some hope to own as many as 10,000 homes around the country.
If this trend continues to build the way it appears it might, it’s good news for banks who are still sitting on large inventories of real estate -- and for the individual investors who’ve been quietly building up their own portfolios of homes for rental or resale.

While it’s true that institutions have lots of buying power and armies of analysts, they’re not especially nimble. Investors who are ahead of the curve may see nice increases in values because of this new and significant source of demand. My guess is that there’s still time for smaller investors to accumulate properties before the institutions begin to bid up values.

For banks, it makes auctions smarter than ever. When prices are starting to rise, an auction is the surest way to make sure investors pay the current market value.

Meanwhile, our advice continues to be the same as always: Buy yourself rich!

You can sell your home -- if you're willing to accept the market price

By John Dixon

Home prices down, but how much further can they go?

By John Dixon

NAR statistics consistent with auction results

By

Bank Failures 2008-2011

By John Dixon

Nearly everybody knows that the banks have had a rough time of it since the credit crisis of late 2007, but not everyone is aware of just how many banks have failed.

The maps below are based on a spreadsheet showing the failures for the last four complete calendar years. Keep in mind that some of the markers overlap, so some are hidden behind others.

Here are the actual numbers:

• 2008 - 24
• 2009 - 139
• 2010 - 156
• 2011 - 91

2008 Failures

2009 Failures

2010 Failures

Bank Failures 2011

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