We hope that you and your loved ones are having a wonderful beginning to the new year! 2013 has brought some exciting new trends for real estate in the Greater Metro Atlanta area. If you are considering your options or know others who may benefit from this information, please contact us. We would be honored to help.
Real estate is heavily impacted by the laws of supply & demand plus a few other factors like mortgage rates and the economy. The “for sale” inventory across most markets remains very low. Desirable properties priced at market values are selling very quickly – often with multiple offers.
- For the Greater Metro Atlanta area, inventory levels are down 37% from 2012 and 57% from 2011.
- The available “months of supply” is around 4 months. Six months of supply is considered a normal market.
- The pace of short sales and foreclosures coming on the market has slowed considerably. In 2010, over 60% of sales were distressed properties. That is now down to 37% of all sales. Resales are becoming the larger mix of sales.
- New Homes are making a slow but sure comeback. There are some wonderful new home communities coming online with the latest innovations in smart buildings that may be great options for buyers. Click here to view new home communities.
- Home values are expected to rise in 2013 – especially in the lower price points driven by the very low levels of inventory and strong buyer demand
- Mortgage rates remain incredibly low – but this will change significantly in a few years. Last week, the Fed stated that they may move away from their program of buying mortgage-backed securities sooner than previously stated. That caused stocks to fall and mortgage rates to rise. FHA also announced higher fees for mortgage insurance to help that agency deal with mounting losses. The simple fact is that mortgage rates are being held down artificially and the mortgage system must be restructured to be able to operate normally. That means higher rates and higher costs for financing are coming in the future.
This is an unprecedented opportunity to buy the home of your dreams while prices and financing are historically low. But these conditions will not last as the real estate market continues to recover.
A Tale of Two Markets – Buyer’s Market + Seller’s Market!
The past 3-4 years have clearly been a “buyer’s market” in most areas and price ranges across Metro Atlanta. Buyers had the advantage of an over-supply of properties to select and their agents were able to negotiate favorable prices and terms. But that is changing for 2013. Many markets and price points are transitioning to a seller’s market. This is primarily due to very low inventory and robust demand. In general, homes under $500,000 are seeing more of a seller’s market and homes above $500,000 remain in more of a buyer’s market. See the chart above which shows the months of inventory based upon the current trends for demand in those price points. This chart reflects the 10-county area of Metro Atlanta. Six months of supply is considered a normal market. The “for sale” inventory of properties under $500,000 is below the normal levels of supply and properties in the higher price points remain plentiful relative to the buyer demand. Of course, local markets can differ from the general trends.
One of the main drivers in the lower price points has been investors. First time buyers and inventors have been very active in homes under $200,000. The inventory in this segment is very low for desirable properties. As you can see from the chart, the luxury market still has plenty of available inventory and buyers can still get more favorable pricing and terms. But this is beginning to change as well. History tells us that prices do not rise immediately as the supply becomes more scarce. Prices under $200,000 are moving faster because the inventory has been very low for an extended period and demand is very strong. Prices in the $300,000 to $500,000 segment have not risen as fast because the under-supply is a more recent trend. Some areas of the luxury market will take longer to adjust.
If you are a move-up buyer, you may be able to sell in a seller’s market and still buy in a buyer’s market. That is the best of both worlds! If you are a seller in the higher price points, you may not get the outcome you desire on the selling end. BUT remember, that you still have a great opportunity on the buying end to purchase a great property while prices are lower and financing remains incredibly low. If you wait too long, those prices and mortgage rates will be higher and may more than offset the higher selling price of your current home.
If you or someone you know would like to learn more about the trends in your local area, we would be happy to provide detailed statistics that can help make better decisions. We have access to many resources including proprietary sources of information that are not available to the public. Call us today at 678-439-6699 or visit us online at www.PetersenPartners.com