Aloha All:

I have spent the month of November and December in Atlanta, Georgia visiting my parents who are both still living at home and they are both approaching 90 years old. I wanted to make a Christmas visit before it became a moot point to do so.

While living here for the past two months I have had time to meet many people by attending different denomination Church Services (I like to think if I visit them all, I have it covered), visit local Real Estate Offices, and meet their agents and trade stories. I had also taken the opportunity to ask many questions about living in Georgia through my trips to Walmart, Costco and many other local businesses. I even had plenty of experiences at my favorite local bar called “Bench Warmers” to watch a rousing assortment of Pro Football games on satellite TV. At the time of this writing my Pittsburgh Steelers have succumbed to the over-powering San Francisco 49ers and sadly, my favorite team’s Season is now over. Although this article may seem to be personal in nature I think you will find my experiences similar to yours.

Georgia is a wonderful place filled with beauty, real Southern Hospitality that we at home call “Aloha” and is a very low cost-of-living state compared to our home in Hawaii.

 
 Cost of Regular Gas

Oh yea, it was kind of a shock to see gasoline prices like this at Costco in Georgia. I do not think I have seen this kind of price in many, many years.

The minimum wage of a bartender at “Bench Warmers” is $2.13 per hour. No, this is not a typo. When I asked “Amy” who often had my Black & Tan waiting for me before I was able to mount my bar stool upon arrival what she made per hour and she told me, I nearly fell off my bar stool. A quick trip on the internet provided me with more answers. The minimum wage in Georgia is $5.13 per hour. The owners at “Bench Warmers” have to kick in the difference between $2.13 per hour up to $5.13 per hour if the employees make less than $3.00 in tips per hour. Wow! Does anyone know what the minimum wage is in California these days? The answer is $10.24 per hour effective January 1st, 2012. Anybody know what the minimum wage in Hawaii is? The answer is $7.25 per hour with no adjustment slated for year 2012.

If the minimum wage is so low in Georgia it has to be low cost-of-living state, right? Well, yes, but it is all relative and that is what this article is really about.

It is interesting to see articles in the local newspapers here such as from the Atlanta Journal Constitution.

Georgia's Utilities

• Consultant: Rate hike too steep
• Cut Ga. Power request in half, PSC told.
• Company blames new environmental rules for increase starting in 2015.
• Date: December 6, 2011
• A utility consultant says Georgia Power wants to charge customers too much when the company starts buying significantly more electricity from other places.
• Philip Hayet, president of Hayet Power Systems Consulting, said the amount that Georgia Power wants to charge customers starting in 2015 should be cut in half.
• "We have a severe economic situation going on," Hayet told the Georgia Public Service Commission.

Energy Assistance

• Money to help pay for heat dries up
• Budget cuts filter down to state level.
• For first quarter of fiscal 2012, Georgia's amount drops by $36 million.
• Date: December 2, 2011
• Hundreds of elderly and poor metro Atlantans who want help paying energy bills are being told that federal money for the program already has run out for now, just as winter arrives.
• Officials cite higher demand and reduced funding for the Low Income Home Energy Assistance Program, which last year helped more than 207,000 Georgians pay energy bills.
• Georgia received $18.9 million for the first quarter of fiscal 2012, down from $54.9 million in the period last year.

Nuclear Power

• Vogtle sees rising costs
• Officials: Construction $42 million over budget but customers in clear.
• Delays may push project back five months.
• Date: November 22, 2011 Publication: Atlanta Journal-Constitution,
• Construction costs for Georgia Power's planned expansion project at Plant Vogtle are $42 million over budget, and delays in getting federal approval to build the two reactors may push back the construction schedule roughly five months, company executives said Monday.
• The rise in construction costs are related to, among other things, a change in what labor may cost over the long term for the project, said Pete Ivey, vice president of nuclear development.

Interesting what they have to say about “Georgia Power” when you are from Hawaii and you are paying the nation's highest electricity rates with more rate hikes yet to come under the guise of “Green or Clean Energy.” Gee, I wonder if the folks in Georgia have the same concerns with water?  

• City's water troubles stretch across region
• Date: October 6, 2011 Publication: Atlanta Journal-Constitution,
• The issue: Atlanta's aging sewer system needs $1.52 billion in fixes.
• What's at stake: 1.2 million people across metro Atlanta face higher bills.
• What's next: A vote on a 1-cent sales tax that could keep bills from increasing.
• A March vote on an Atlanta sales tax to raise $480 million for sewer upgrades could influence how much tens of thousands of people outside the city pay for water.

And...

• Atlanta steeped in high water rates
• Date: September 23, 2011
• Publication: Atlanta Journal-Constitution, The (GA) Page Number: B1 Word Count: 764
• It's no secret to many homeowners in the city of Atlanta that they are floating in high water and sewer bills.
• Some say they're drowning in the money they sink into city coffers.
• The issue came up during a recent City Council committee meeting where officials discussed a voter referendum set for February. The referendum would extend a penny-per-dollar sales tax to pay for ongoing work to repair Atlanta's century-old sewer system.

Gee, this all sounds a whole lot like Honolulu does it not? I guess we all share the same concerns.

This home in Atlanta Area Sold in year 2008 for $285,000
If it was For Sale today its correct For Sale Price would be $150,000.

This is a 47% loss.

If you think that is bad, wait... the current market in the Atlanta Area has approximately 46% of its For Sale inventory in Foreclosure or Short Sale Status and it is only to get worse…

• One county scrambles to reduce valuations
• Foreclosure-swamped Gwinnett lacks resources for precise appraisals.
• Date: December 20, 2011 Publication: Atlanta Journal-Constitution,
• A month after Chris Ring bought his four-bedroom home near Suwanee for the bargain price of $176,000, he was surprised when he opened his tax bill from the county.
• That bill totaled $3,760.48, and it was based on an appraisal that was several months old -- and more than $100,000 above what Ring paid for the home.
• Ring filed an appeal, joining the ranks of thousands of residents in Gwinnett County, where a record number of foreclosures and sagging home values.

And...

• Foreclosure notices hit lowest in 3 years
• In area, many still work to stay in homes. Values linger in unstable mode.
• Date: December 13, 2011 Publication: Atlanta Journal-Constitution,
• Foreclosure notices in metro Atlanta this year fell to the lowest number in three years, but those in the housing business are uncertain whether the drop is a sign of a coming home value recovery or just a new symptom of sick market.
• Notices through December's filing period totaled 109,548 for the 13-county area in 2011. That was down 14 percent from the peak of 127,140 in 2010, according to Equity Depot, a Kennesaw real-estate analysis firm.

Here is the worst part:

The Negative Equity portion of Georgia’s Homes is growing which means there are more and more owners experiencing loss of equity and are approaching being “Under Water.” You might say the same is true for Hawaii although not to such a large extent as Georgia.

I had hoped to stop keeping track of Short Sales in Hawaii in my monthly reporting but with the rise in Negative Equity numbers in Hawaii and the “Shadow Inventory” of foreclosures yet to hit the market in Hawaii, now is not a good time to dispense with this reporting. Foreclosures and Short Sales in Hawaii will be on the rise in 2012.

For a complete copy of the Corelogic Third Quarter Negative Equity Report:
http://www.corelogic.com/#home-research

If you were thinking “Gee, I am sure glad we are not living in Georgia” think again. Look at the amount of home owners with less than 80% left on their homes in Hawaii. This number is growing as the market worsens.

Want to see what is happening for those who can afford to buy a home in a wealthy neighborhood? See my new November 2011 High End Neighborhoods Real Estate Report on my website at: http://www.hawaiirealestatestatistics.com/oahus-high-end-.asp

How Bad Is It On The Mainland?

I recently had the opportunity to meet some outstanding Real Estate Agents at Keller Williams in Stockbridge, Georgia and I was asked to provide a statistics class to the team of agents by the brokerage’s Broker in Charge, Ms. Debra Nardy. I cannot tell you how much fun it was! Debra had leis for everyone and played Hawaiian music prior to the presentation and I felt right at home.

The median For Sale Price in Henry County (remember, this is the Mainland!) is between $100,000 to $150,000 and there is less than three Months of Supply. All other price ranges above this amount approach approximately 20 Months of Supply! That is a whole lot of homes For Sale in the Atlanta area.

It turns out that these agents work and I really mean, they work hard for their clients. Considering that the For Sale Inventory has approximately 46% in Foreclosure and Short Sales, these agents have seen a lot of heartache displayed by their clients. Everyone here is stressed. Jobs are almost non-existent, and even if you can find a job opening at $5.13 per hour, it is often taken by another, newly moved here worker from New York, or any of the upper East Coast States where folks just want to get out of the big city, high cost-of-living expenses and head south to Atlanta. If it is not folks from out-of-state, it is previous or existing foreign nationals that are taking local jobs. There are ample Mexicans (which has forced Georgia to take some unusual new steps in passing laws regarding illegal aliens), there are Columbians, Thai, Chinese, Korean, Guamanians... everyone! I mean everyone. This place is a giant melting pot. I really have to hand it to my counterparts in Real Estate Sales here. A definite job requirement for these agents is a high degree of training, professionalism and a huge heart.

Things are tough here. Things are tough everywhere. Oh please, I do not want to hear the economy is getting better and the unemployed numbers are dropping because that is just plain not true. Georgia is a prime example with more homeowners headed into foreclosure, short sales and underwater mortgages, high unemployment and a huge loss of United States Government federal subsidies. The Washington D.C. Establishment just cannot keep handing out the dole to every taker.

Are things better in Hawaii? Not really. It is all relative. Hawaii is not the Mainland, but it is unique in several ways:

1. One of the highest cost-of-living states in the nation
2. Number 1 in taxes, both City & County and State taxes. No state residents pay more taxes than those of Hawaii and there is no end in sight.
3. The Democrat, union-controlled State and City & County governments are continually increasing taxes upon its residents, more than anywhere else in the United States.
4. Highest fuel and utility costs in the nation.
5. One of the highest home prices in the nation

Sure, it’s great to live in Hawaii. Maybe we can be living on the beaches like these folks soon:

Honolulu Homeless

I am being sarcastic, of course. I love Hawaii, its people, its culture and its values. It is the politicians I cannot stand who continually take away our livelihoods, raise our taxes, waste our tax dollars and are now forcing us all into Legalized Gambling for the Big Bucks they will all receive in campaign contributions.

This whole country is about “Change” folks, only it is not the “Change” some thought we were going to get during the Presidential Election of 2008. Real Change is coming for sure.

If we are lucky enough maybe we can all retire to Georgia like my folks to enjoy the low cost-of-living and Southern Hospitality.

I miss Hawaii, and I cannot wait to get home. I cannot wait to participate in the “Change” to come. Oh yes, I will be running for office next year in Honolulu. I hope I can count on your vote. I think it’s a sure way to raise my rate I get paid per hour!

Look for a complete Re-Cap of Oahu’s 2011 Sales results on my website sometime late January 2012!

I wish you all much Aloha!

Mike Gallagher, Mike Gallagher Real Estate, Inc. 808-384-9015, mikeg@hawaii.rr.com, www.hawaiirealestatestatistics.com, www.aroundhawaii.com.

 
Left to Right: My Brother Kevin, Dad, Mom and Me.