Richard's Real Estate Thoughts: May 2009

Visited Art ‘til Dark this afternoon. It is a regular outdoor art showing sponsored by Winder Binder Gallery. Some talented folks. Sculpture, painting, glass blowing, handicrafts. The originality of these artists always amazes me.

Today I met Charles McFarland, a local sculptor. He has worked in steel for over 2 decades, but had only recently turned his skills into creating art. His pieces are both large and small. He works both freelance and by commission. His customers include many corporations in Chattanooga, but also individuals.

Here are two of the larger pieces by Charles McFarland being displayed at the Art ‘til Dark show.

Today I also met Gypsy Hundley, a painter from North Carolina. As we talked, I mentioned that last week at the Who-Fest I met another artist whose work used the bright colors and imaginative drawing. Gypsy said, "Yes, my sister, Kim."

Two very talented ladies. With striking use of beautiful colors.

Visit Gypsy's Folkart on myspace.

Gypsy's sister, Kim, was here today also, but I missed her. From her booth at Art ‘til Dark.

David Smotherman runs Winder Binder Gallery on Frazier Avenue, where the regular Art ‘til Dark shows are held. He also sponsored the Who-Fest last weekend.

Give him a visit and see these great and inspired pieces. The next show is June 6, at the start of Riverbend.

Winder Binder Gallery
40 Frazier Avenue
Chattanooga, TN 37405
Phone: 423.413.8999

 

The Chattanooga Market had a first last Sunday with its Beast Feast BBQ Cookoff. Some of the best BBQ chefs in the area set up shop. Despite the weather, the crowds came and stood in line to taste the best. We could buy a plate or a ticket to sample all.

The crowd gathers to taste the best of the best BBQ in Chattanooga.

The categories and results were:

People’s Choice

v  Southern Smokehouse

v  Hillbilly Willy’s BBQ & Catering

v  Big Ben’s BBQ

Best Chicken

v  Hillbilly Willy’s BBQ & Catering

v  Moss Place BBQ &Catering

v  Lockhart’s Fire & Smoke BBQ

Best Beef

v  Hillbilly Willy’s BBQ & Catering

v  Southern Smokehouse

v  Kenny’s smokehouse BBQ

Cooking at the Beast Feast

Best Pork

v  Kenny’s Smokehouse BBQ

v  Hillybilly Willy’s BBQ & Catering

v  Dixie BBQ

Best Beast

v  Hoss’s (Almost Famous) BBQ by Terry

v  Kenny’s Smokehouse BBQ

v  Southern Smokehouse

And strawberries are in season at the Market	Always great music

This Sunday is Big Band Day. As part of the EPB CFL Day Electric Power Board (EPB) will give away 3,000 free CFL (compact fluorescent light bulbs) bulbs. You can also return used  CFL bulbs. Also come and learn from the Master Gardeners of Hamilton County "to give you the "dirt" on gardening and answer any questions you may have about your plants and gardens at home."

It is great to live in Chattanooga.

The tax credit down payment is back. Well maybe not so much.

HUD announced today the details of the "new" program that have been much anticipated and in the news recently with a lot of false information. I expect that today's announcement will add to the dissemination of false information.

The policy allows certain entities to offer tax credit advances with second liens. This is the approach already taken by THDA for Tennessee purchases. Other states have similar programs.

The purchaser may not receive cash back as a result of the tax credit advance.

The second lien may not exceed the total amount needed by the borrower for down payment, closing costs, or prepaid escrows.

As an alternative to a tax credit second mortgage, approved entities may PURCHASE the anticipated tax credit refund.

More information is available in the reissued Mortgagee Letter 09-15.

News articles are already out on this HUD announcement, but in actuality I cannot find very much in the mortgagee letter that is new. There seems to be more in the headlines than in the details.

Maybe someone else can find more. It looks to me like the last paragraph in the announcement is almost a threat. "FHA will monitor the purchase of tax credit transactions closely." The primary concerns are overcharges for the tax credit advances and use of this program by entities involved in the transaction. This last is a nod to the former seller funded down payment programs that were discontinued this past fall.

 

 

Over the Memorial Day weekend Chattanooga was treated to a folk art festival. The third annual Who-Fest was held in Chattanooga. Despite some weather, dozens of folk artists set up shop and a good crowd came out to see their work.

Crowds along one of the walks of artists tents

 

The festival brought talented artists from all over. There was a great variety of art forms, from painting and sculpture to hand crafts and glass blowing. All amazing.  

Kimberly Dawn was one of the many fabulous artists who displayed their work. Kimberly is also an established illustrator of children's books. Percy Porcupine and No More Handprints are two of her books.

 

Music variety was also provided for the crowd who wanted to set on the open grassy Hill Overlook at Renaissance Park.

Crowd sitting on hill overlook, listening to live music

 

 

Art appreciation includes free bongo lessons

 

Wildflowers along walk to the art festival

 

An added feature was the location. Renaissance Park is an example of Chattanooga's commitment to renewal and a tribute to its past. The park is open and grassy. The site of Who-Fest very appropriately overlooks the Renaissance Wetland, a 1.5 acre man-made, natural  water filtration site.

 

Renaissance Wetlands

A new concern in the current US economic crisis is the credit rating of the United States.The fact that questions about the US credit rating is enough cause for concern. The strength of the dollar backed by the “faith and credit” of the US government has guaranteed low interest rates for government borrowing and provided a perception of safe investment for everyone.

UPDATE: As I was writing this post the bond markets underwent the worst adjustment I have seen with bond prices dropping, pushing mortgage rates up drastically. Best I can see, at issue are concerns over the US credit rating and heavy borrowing.

This confidence is now in question. To the point that the Treasury Secretary felt required to address the question, the reality of the issue is apparent. Pressing concerns even further is that the United Kingdom credit rating seems to be close to a downgrade with S&P’s decision last week to drop their outlook on Great Britain from stable to negative.

The dollar is facing renewed challenges as the global currency. While this is not new, the matter is getting new play, especially from China.

The rapid expansion of the US debt is the primary concern of debt markets. The growing foreclosure problem compounded with what appears to be permanent job losses especially in the automotive industry add to concerns over the US credit rating.

The immediate impact though is upward pressure on bond market rates, including mortgage back bonds. This is leading directly to increases in mortgage rates, despite the best efforts of the Federal Reserve to target rates below 5%.

At present the credit rating is AAA. Is there cause for concern?

Nightfall is one the treats of living in Chattanooga.

It is a free, summer, outdoor concert series

The opening night performance this year was last Friday. There was a large crowd, and everyone had fun.

 

 

 

 

 

Dexter Thomas Band at Nightfall 09

 

The lead off band was Dexter Thomas Band. They played some rock and roll standards. The singers were outstanding. Kept waiting for India Galyean, the female vocalist, to break out something from Janis Joplin. She has that kind of voice. They did not, but maybe they will read this and next time....

Lil' Malcolm & The House Rockers at Nightfall 09

 

Friday's headliner was Lil' Malcolm & The House Rockers. They brought a zydeco funk rock sound all the way from St Charles, LA. They really played to the crowd and had the whole place dancing real quick.

The Chattanooga Downtown Partnership sponsors the series. The Downtown Partnership was formed to develop and encourage programs that make the Chattanooga down town area attractive and fun for business and for the public.

This Friday Nightfall brings the NimNims and the headliner band, Nation Beat.

Recent reports are being viewed as pointing to a general housing recovery, or at least to reaching the bottom. The most recent is the RPX monthly survey.

This seems to be some economic spin, most recently reflected in this morning's JUMP in Consumer Confidence. Last month we had a surprising increase. This morning we had a shocking increase.

This rise in Consumer Confidence must be balanced with the home price decline, increasing unemployment, and the growing list of bank closures.

From last week's RPX report, several news accounts reported that the housing market is showing signs of stabilizing from its freefall in 2008. The report gives a composite index of home prices from 25 larger MSA's. The report gave this summary, "The Composite declined only 0.3 percent on a month-over-month basis in both February and March 2009, which compares favorably to the 1.2 percent and 0.9 percent declines in February and March 2008."  

(RPX stands for Radar Logic monthly report the Residential Property Index^TM (RPX^TM).)

(MSA stands for Metropolitan Statistical Area. It is based on census data and is used, among other purposes, as the basis for establishing lending parameters such as maximum loan amounts and median income for some mortgage programs.)

This report shows that 13 of the 25 larger MSA's all had price increases from February to March 2009. Most looked at this as partially a result of seasonal changes, but it was considered to be a positive sign. 

The report data though still shows  consistent declines in Year over Year results. Each of the 25 MSA's showed price declines from March 2008 to March 2009. Additional concerns seem real that the growing unemployment figures will point to even more foreclosures causing increased inventories and price pressure. 

Today additional information came out from the Case Schiller index. The index reports a "staggering 32.2%" decline since the housing market began its fall. The most recent quarter showed "a 19.1% decline compared to the first quarter of 2008, marking the steepest fall ever in the 21-year history of the index."

 

 

 

 

 

 

 

 

 

 

 

 

 

This chart is from the Case-Shiller HPI showing percentage declines. Projections seem to indicate continued national declines with pressures from foreclosures and continuing loss of qualified buyers from unemployment and tightened requirements for all lending programs.

Chattanooga has not been immune to price declines. With the median price dropping over 8%.

It is hard for me to believe this. Treasury Secretary Geithner testified today before a congressional panel that the administration is considering creating another federal agency in order to protect consumers from certain financial and mortgage products.

I don't even hardly know what to say about this.

Where were the existing federal agencies when the mortgage meltdown was developing? How will another agency do better?

Why does anyone think that the problem was a lack of federal agencies?

Surely someone from FHFA, HUD, FHA, Treasury, Federal Reserve, VA, Rural Development, FDIC, or the FTC can be found. 

Maybe he was just brainstorming with Congress.

Maybe someone will give a comment that shows how this makes sense. How the problem was a lack of federal agencies.

Come tonight to enjoy readings from some of Chattanooga's local writers. Rock Point Books is holding the second Poetic Voices tonight from 6 to 8.

Sheduled writers are:

Bruce Majors a finalist for an Indie Excellence Award in the 2007 book awards competition

E. Smith Gilbert has published extensively in the United States and Great Britain.

Ray Zimmerman his poem Glen Falls Trail took second place in the Tennessee Writers Alliance poetry contest, and the reading was part of an awards ceremony. He edits the literary newsletter, Feed Your Brain. He is a former president of the Chattanooga Writers Guild.

After these scheduled readers, the microphone will be open to anyone willing to share their writing.

Rock Point Books is located at 401 Broad Street. It is a great sponsor of reading in Chattanooga, offering public readings, children reading, book clubs, book signings.

On May 30 Tim Hollis will be present for a book signing of his See Rock City . He covers the history of some of the great spots in this local site, as well as the story behind the "See Rock City" marketing campaign.

 

 

The Who-Fest is this weekend. Saturday and Sunday, Memorial Day Weekend, at Renaissance Park. 10am to 6pm. It is an art and music festival sponsored by the Winder Binder Gallery of Folk Art. The festival is "a two day celebration of Folk, Outsider and Self Taught Art."

Over 70 artists have registered booths. Various music acts will perform beginning at 11am on both Saturday and Sunday.

Winder Binder Gallery sponsors many art event in Chattanooga. These events are just part of the reason Chattanooga has become recognized as one of the top cities for the arts.