ALG brokers and agents are looking forward to working through the Real Estate Opportunities that 2009 has to offer. The media has provided the public with varying economic forecasting while we are encouraged to see what the new Obama administration will bring!

Swanton Davis, Gene Chambless and David Chalmers have been specializing and closely working within the residential land sector at ALG. The following is their popular thought on the anticipated Residential Land Trends for 2009 for our valued clients:

"We see real opportunities for well capitalized entities in the residential land market by acquiring REO (real estate owned) land parcels from banks. We are seeing steep discounts and investor expectations of lot cost compared to 2008 which range from 40% to 65% of the previous borrower's loan amount. There are only a handful of banks making land loans today and equity requirements will be roughly 50% of the buyer's contract price.

Most of our buyers are private investors looking for discounted opportunities who believe they may have to hold a property for three to five years. The banks understand this model, but struggle explaining why they should accept such an offer to shareholders when the offer appears to be clearly a "discounted steal" for the investor. We believe that we will also see a slight permit increase from the builders in 2009 and a recovery should occur in mid to late 2010. For all practical purposes, the residential land market was "flat" in 2008 with only a handful of deals consummated. This was due to the lack of buyer and builder confidence in the market coupled with "seller shock" when told what price a property would garner in a sale. Moreover, most of the metro area banks are struggling with current property valuations as it relates to their previous loan appraisals. This has hindered most from selling.

We expect to see an increase in REO inventory over the first three quarters of 2009 as the larger National Banks release their REO inventory to the market. We expect most activity in 2009 to be from the Investor Market, domestic and foreign, focused on Bank REO's and a "new" trickle of permits from builder groups."