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     It's been a while since I've updated this beautiful lake area, mostly because the market has been so uneven & spotty that there has been no really clear picture of what direction is prevalent right now. The area overall is such a mix of property types and market segments that what is pushing one segment may have absolutely no influence in another. The gated golf communities on Lake Oconee do drive the area but the downside of that is when they don't do well, the entire area suffers. Construction here tanked a few years back as the luxury market went down the tubes. There were so many jobs that were construction & building trades related that the trickle down effect of unemployment, foreclosures, tighter finance requirements, ARM resets and overall panic sent waves of distress through the entire market & forced some major employers out of business or onto life support. 

     Now, as is happening all over the country in luxury properties, the top of the line market segment is back in the saddle. The wealthy that did well during and after the recession have snapped up stunning properties at a discount and breathed some life back into the construction and building trades for the high end projects. The mid ranges still suffer though. It is easier to sell a 2 million plus property than something for $750k. Finance is still tight & cash is king. Spec homes are an anomaly & there is virtually no construction in the FTB or move-up market segments. With unemployment still ranging from 8.6 to 11% in the lake area, those market segments are unlikely to change. 

     This recovery is different from many economic downturns as there have been few times when distress was so closely associated with the real estate market. In the past, as things improved economically, demand for housing also went up and many business's prospered directly from that. The resulting dependency on good employment numbers to tweak demand has made location, location, location and even more vital indicator in todays' market. The buyers are where the jobs are and no amount of investor purchases can fuel the market the same way.

I have been happily sitting in a rural/resort area on Lake Oconee and have counted blessings that the subprime was not nearly as devastating as in other parts of the country. What I have feared was coming is starting to show up now though. Alt-A & Option Arm loans made in 2006 - 2007 & on are starting to make their way to the legal ads. This area has many upscale, gated, golf communities on the waterfront and a large proportion of those are 2nd/vacation homes. This month, I have seen more than ever before being advertised in the foreclosure papers and I don't think it's stopping anytime soon if the BPO orders are any indication.

Florida is by far the closest to my kind of market as so many homes there are not primary residences- lots of vacation homes, condos & the like. There is virtually NO help for this market as there is no incentive for loan mods and these are not homeowners that will be put on the street - they are investors who bought a 2nd home and now can't keep up with the payments or refinance because the payment has gone up while the value has gone down. I can't help but think that the 2nd home market will be on the ropes for some time to come. Not much finance-not many qualified buyers with enough cash to buy the mid-level homes coming to market & priced too high for investor flipping. I think it may be a rocky ride for a while.

Is anyone else seeing this type loan predominate? LPS analytics has a report that paints a pretty grim picture of where 'prime' loans may be going as well as 'mini-jumbo'. Owners are hanging on but the question I ask is 'how long can they last?"