Cincinnati Reds go for Coke

Coke is Seeing Red

No, I am not talking about the financial stability of the beverage giant, but the new five year deal that the company has signed with the Cincinnati Reds to have the exclusive beverage rights at the Great American Ball Park. This entitlement, which was previously held by Pepsi Co., will give Coke the exclusive rights to sell soft drinks, juices, water and energy drinks at the ballpark.

Coca-Cola Sign in Downtown Atlanta

Red Strings Attached

Along with being able to serve those drinks Coca-Cola also receives pass-through rights for restaurants and retail partners to give away vouchers to Reds games, is planning on starting a recycling campaign at the Great American Ball Park as well as having a signature Coke ribbon on top of the new scoreboard and a full suite at the stadium.
While no price-points were released, rumors have it that it was a low seven-figure per year deal.

Marketing Opportunities Galore

I think this is another great opportunity for the Atlanta based Coca-Cola Company to market itself, especially in the Northern part of the United States, which historically preferred Pepsi. Also, I think that “Reds” and the red Coke bottle put together will bring some obvious marketing potential for print, radio and T.V. ads. As far as economics go, this is first and foremost a double win for Coke against its biggest rival. First, Coke gained a stadium. Second, Pepsi lost one. Having exclusive rights at any arena creates brand presence, and widely televised events, such as Major League Baseball games, will give Coke a ton of “free” and subliminal advertising, not to mention the marketing and sale increase possibilities that accompany such commitments. Will this significantly increase the value of Coke’s stock (NYSE: KO)? Will it bring in billions of revenue? Probably not, but it will most likely look positive for the investors and hopefully bring in enough revenue to break even, but even if no economic changes take place, it gets more people drinking Coke, and what company would complain about that?

Atlanta – All in!

Press Your Luck in Underground Atlanta

There may be some major changes coming to downtown Atlanta. Developer Dean O’Leary brought a proposal to the Georgia Lottery Board for a casino to be built in Underground Atlanta. Mr. O’Leary, who holds a 50 year lease on Underground Atlanta, and his partner John Aderhold brought an idea to completely overhaul Underground Atlanta and bring in upscale shoppes, restaurants and 5,000 video lottery terminals. Half of the proceeds, which are planned to be around $600 million, would go to the lottery, which sponsors the popular Georgia HOPE scholarship.

Underground Atlanta

We Are All Winners

The idea of having a casino in the Metro Atlanta area has been long coming, and many are excited about having another “tourist magnet” in the city. I think that if the motion passes, Atlanta will see a quite noticeable increase in revenue. Tourism is a major, major part of the state economy bringing in billions for the state, and with the recently opened Georgia Aquarium, as well as historic tourist attractions such as important Civil rights locations, the Coca-Cola museum, High museum of Art, Stone Mountain Park, Zoo Atlanta, and numerous others, I say bring it on! My major sway is that this will bring money from surrounding states to Georgia, money that will stay here helping our economy. Obvious to benefit include the hospitality and the restaurant businesses, but the impact does not stop there. The Georgia Lottery sponsors, among other educational grants and scholarships, the Georgia HOPE scholarship,  appropriating more than $4.6 billion dollars to over 1.1 million recipients since its inception.

Underground, We Have A Problem

The proposed casino does face some challenges, as any $600 million dollar project would, first and foremost being that, quite simply, nothing like this has been built in Georgia before. State law prohibits Las Vegas style gambling, so you won’t find card blackjack or poker tables at the new casino, but you will be able to try your luck at the allowed gambling, video lottery terminals. Another dilemma is in getting people on board with the idea. Some mention that this might bring crime to the area, as well as people playing irresponsibly and possibly into a personal bankruptcy. I don’t think that neither of those will take place, as I am sure that Dover Downs, the company that will manage the casino is going to implement state of the art security, and the extra security guards will quite possibly make the area safer and deter crime, not the other way around. Also, there are policing methods, just like in any casino, that prevent people from loosing too much. Simple microeconomics will tell us that this is something the developers and organizers have thought about, and they know that people will have those concerns and they will have to go above and beyond to prove that this is a completely safe facility.

 
Overall I think this is a great opportunity for Georgia to add to its tourism industry, and will bring in a much needed economic boost to Atlanta.

2008 – Vinings Condos and Townhomes

Vinings at a Glance

The Smyrna Vinings area is one of the most desired addresses in the Metro Atlanta area. New upscale restaurants and shopping as well as immediate access to I-75 and I-285 make this a preferred area for families as well as first time homebuyers. Since buying land in the Vinings area might not be as affordable as compared to some of the lots further West of town many people decide to move into condos and townhomes. In fact, one is able to purchase a condo for about $100,000, while the most expensive condo on the market at the time of this post is listed at 2.5 million.

2008 Vinings Listings

Now how did the sales of condos in the Vinings area stack up in 2008? Well in order to figure out this information I pulled the statistics for FMLS area 71, which includes the Vinings area. There were 610 Residential-Attached homes listed for the year of 2008, with the average price of $330,502. The highest amount of listings came in the month of January with 76. Now I don’t know if that is due to a lot of people deciding to start of the year by selling their house or because a lot of people had their listing contracts expire in January and just decided to re-list. The total value of all condos listed in 2008 is just over $200,000,000.

Going Once, Going Twice, Sold!

After talking about how many condos and townhomes were listed the next natural step is to see what happened in the sales department. The average sales price was $270,791, which is almost $60,000 less than the average listing price. I think that this can be partially explained if we compare the total amount of homes listed and total amount of homes sold, which are 610 and 153 respectively, or just about 25%. Not many sales means that the sellers are willing to take a loss in order to move their property, having to compete not only with condos and townhomes in the Vinings area but also properties in the Atlanta area. This is however great news for buyers, more choices and a bigger chance to get the deal of a lifetime. Another reason this area might be appealing to buyers is the fact that you can be in Cobb County – meaning Cobb County taxes, while having an Atlanta address.

 

2008 Vinings Average List and Sales Price

 

 

Take a Number and Have a Seat

If you do have your condo or townhome listed in FMLS area 71 how long should you expect to wait until you get it sold? Introductory, let me explain how the statistics works. What we do is look at every house that closed during that time and then look at how many days that house was on the market. So for example if in the month of May the average Days on market (DOM) was 91, this means that the most homes sold in may were listed in February. Back to how long it would take you to sell your home, if you end up falling right into the mean of the average days on the market you would have to wait 101.2 days to close on the contract. The shortest sales time came in November, just 40 days, but I do not take this information to be “accurate” since only 2 homes sold during the month. A more reasonable answer would be 73 during the month of October while the longest was 191 days in September .

 

Average Days on the Market for Vinings in 2008

 

 

As I have stated in the “Who is Writing This?” section and in my previous post lease note that these figures come from FMLS, meaning they were calculated and entered in my humans and hence are prone to mistakes and errors, just like my calculations.

Cobb County 2008 Year End Review

 

And They’re Off!

     What better way to kick off the site than to see where the market has gone during the year? Now there are a lot of news out there about how the real estate market has done nothing but gone South, and how every day it is getting worse and worse with no end in sight. This might sell newspapers and make great TV headlines, but let us look at the actual data and see what we come up with. I am not saying that everything is rosy and great, a lot of people are really suffering, but there might be numbers that come as a surprise and a glimpse of hope for some, and push to action for others.

     I will start of by comparing the sales in Cobb County, GA for the years of 2007 and 2008. Now these numbers include ONLY single family detached homes, meaning the sales of condos, townhouses, commercial and land are not included. I will however post those figures at a later date. Also please note, all of my figures come from the First Multiple Listing Service (FMLS) and although they are believed to be accurate, just like everything done by humans (including calculations I make) they are subject to errors.

Amount of Homes Listed

     Just like most markets around the country Cobb County was not immune to the real estate economic downturn, but exactly what was the damage this year? The amount of new listings for the year of 2008 was 18,733, compare that to the amount of new listings for last year and we see that there was a 15% drop. In my opinion this is due to three reasons: first, the overall slowdown in the economy effects every type of business, including real estate, hence the market becomes stagnant as people are unwilling to make deals. This led me into my second point, a lot of people hear the news and want to just wait out on the sidelines while others are unwilling to take a loss on the home they bought at the peak of the market and are holding on to it hoping to capitalize when the market turns around. Now the third, and in my opinion the biggest reason we see this drop is due to the dramatic slowdown in the new homes built. Builders were popping up new communities like mushrooms after a rainstorm, at unsustainable levels, and now that the demand has fallen some went out of business and the new home market has cooled down. Fewer new communities equals fewer amount of new homes on the market.

My House Is Worth What?

     Now the next statistic is going to receive mixed feelings, depending on if you are a buyer or a seller. The average listing price of a home in Cobb County in 2007 was $329,480, and dropped to  $322,485 in 2008. Now the nearly $7,000 drop means that the home sellers are adjusting what they think the market value, what a interested and able buyer is willing to pay for that property, for their home is, but compare that to the average selling price, which dropped nearly $23,000, and we see that the sellers expectations are still not on the level of the buyers. This simply means that the buyers are looking for the best possible deal, and are being successful in finding them. In my opinion, that is a very smart move on the buyers part. The housing market is down, the rates are low, and with a good credit history and a decent down payment one can lock in a 30 year fixed rate mortgage at 4.5%! Some are still waiting to see if they can get an even better deal, but to me the trick is not to get too “greedy” and miss out. Is 2008 the absolute best time to buy a house in Cobb County? I don’t know, it is a possibility, but the questions I would ask is “Is 2008 a good time to buy?”, and the answer to that is undeniably yes!

Here is the graph comparing average sales prices. X-Axis is the month and Y-Axis is the price.

To Buy or Not to Buy

     Now onto some other figures for the year. The total amount of houses sold fell from 8,243 to 5,857, with the total value of houses sold for the year falling a little over $800,000,000 to $1,505,485,923. I think this is due to the same reasons as to why the amount of houses listed dropped: the overall economic slowdown and the amount of people riding out the storm. Also, a lot of people are scared of the uncertainty and are unwilling to make such a drastic change as moving into a new house, plus they think that they would loose money if they sold their house right now. To answer that dilemma I would quote the great investor Warren Buffet: “Be fearful when others are greedy, be greedy when others are fearful.”. The truth is that yes, one might sell their house for less than they hoped, or even less than what they paid for it, but you will gain it back on the buying end. The sellers are receiving $23,000 less for their house, but the buyers are getting a $23,000 discount. 

Days On The Market

     The last statistic I will look at is the total days on the market (DOM), which rose on average by 10 days. The shortest selling time for Cobb County in 2008 was during the month of July, with the average home being sold in 77 days. The sales for the month of July were also the highest for the year with 638 homes sold. I think the reason for July being high selling month has to do with school and summer vacations. A lot of people try to close and be moved into the new home before the new school year starts back up in August. 

 

Here are the total figures for the year-end comparisons:

Key:

• New – New homes listed 
• Avg LP – Average Listing Price
• Total LP – Total monetary value of all houses
• Pending – Total amount of homes that went under contract
• Sold – Total amount of houses that sold during the year
• Avg SP – Average Sales Price
• Total SP – Total monetary value of all houses sold
• AVG DOM – Average Days on the Market

As stated above, these are the figures just for Single Family Detached Homes; condos, townhomes, commercial, land, or any other type of real estate is not included. Also, all the figures are from FMLS and a subject to errors, as well as any errors I could have possibly made while making my calculations. And as always: the opinions here are that of my own and do not represent those of any of my affiliations. Also, this is just for “entertainment” purposes only as I do not hold any official certifications besides that of a REALTOR.