The Latest on Metro Atlanta Home Values

  • The Case-Shiller Index reports that Metro Atlanta home values have increased 40% from the bottom of March 2012.  But values remain down 15% from the peak of July 2007.   Click here for the latest report.
  • As the chart shows, our home values are back on a more normal trend line after over-inflating and then over-correcting.  These are common market cycles that work themselves back to a normal trend over time.
  • The long-term trend for mortgage rates is higher.  The Mortgage Bankers Association and Freddie Mac predict 30-year mortgage rates to be over 5% in late 2014 and 2015.  We still have exceptional mortgage rates.  The average mortgage rates in the last 50 years was 8%.  Act now before rates move higher!

This is an excellent opportunity to make your move while prices remain below replacement costs and financing costs are historically low.  Contact us at info@petersenpartners.com to get started!

New Homes are Back!

  • New Homes are making a slow but sure comeback.  The problem is that many builders cannot build them fast enough!  Labor shortages are one of the most significant inhibitors.
  • At the peak of 2006, we were building over 60,000 new homes per year.  Then the numbers dropped to 5,000 during the recession.  Today, we are on pace to build around 18,000 new homes in 2014 and we expect to get to the 20,000 unit run rate by 2015.
  • New home prices are rising with strong demand and limited inventory.  Presales are once again becoming the majority of sales.  In this environment, you want to make sure you are protected with strong representation to help set up the right expectations and agreements with the builder.  Contact us to learn more about best practices for buying new homes.
  • There are some wonderful new home communities coming online with the latest innovations in smart building that may be great options for buyers.  Click here to view new home communities.

Greater Metro Atlanta Real Estate Update

  • Click here for a detailed market report for the Greater Metro Atlanta area.  BHHS Georgia Properties was Number 1 in both homes sold and buyers represented.  We have been ranked #1 for 5 years in a row!

  • Closings for Metro Atlanta in June were up 7.8% compared to last month and down 3.8% compared to the previous year.
  • The Metro Atlanta market is currently running 2.02% behind 2013 in closed transactions and 9.6% ahead in sales volume.
  • It seems surprising to most that the market is down in units sales compared to last year.  But there is more to that story…

  • Last year, we had a significant number of closings from large investors buying single family properties to put into their rental programs.  This year those large investors have slowed their purchases considerably.
  • Equity Depot recently announced that “notices of default” for foreclosures had shrunk to a 12 year low in Metro Atlanta.
  • The combination of fewer investor deals and fewer foreclosures reflect drastically smaller numbers in the $100,000 and below segment of the market.  Remember, those were unusual patterns.  If you factor out those transactions, the market is up 8.8% versus last year in units.
  • The largest buying segment for Metro Atlanta is Baby Boomers/ Gen X.  Thousands of these homeowners are moving to smarter living environments with less maintenance and others are moving toward homes that accommodate their health and lifestyles and they move into their senior years.  First Time Buyers have slowed due to increasing prices, student loan debt and challenges with employment.

  • Listed inventory was up 6% from last month and up 25.8% compared to last year.  Inventory is up 48% from the recent bottom on February 2013.  But the limited availability of highly desirable properties in select markets is still driving multiple offers and very quick sales.  Other areas have more normal conditions.  Remember, real estate is local and markets are different.

  • The overall “months of supply” is 4.3 months versus 4.2 last month.  Six months is considered a normal market.
  • But you can see that the numbers are very different depending on the price point and area.  Contact us at info@petersenpartners.com to learn more about your specific area.

Cost Versus Value: Top Home Upgrades Worth Investing In

costvvalueWhen homeowners decide to invest in remodeling, an important factor to consider should always be whether or not the project will be of value whenever it’s time to sell the house. For homeowners preparing to list in a competitive real estate market, determining where remodeling dollars will stretch the furthest and be the most rewarding in terms of recouping the cost is extremely important.

The Remodeling 2014 Cost vs. Value Report (www.costvsvalue.com) compares construction costs with resale values for 35 mid-range and upscale remodeling projects. The report is produced by Remodeling magazine publisher Hanley Wood, LLC in cooperation with the National Association of Realtors. The data used in the Cost vs. Value Report was collected with the help of REALTOR® Magazine in an online survey between August and October 2013. For the report, Realtors® provided their insights into local markets and buyer home preferences within those markets. The survey gathers information from 101 US real estate markets so it gives a good overview of remodeling trends across the entire US and creates an informative look at what home improvements offer the best resale bang for your buck in specific markets, like the Southeast. You can even narrow the analysis down to just the Atlanta market.

Increasing curb appeal is always a safe bet and the survey revealed exterior and replacement projects topped the list of upgrades that bring the highest returns. For the second year in a row, updating your home’s entry with a new steel door is the number one improvement where the cost nearly matches the resale value according to the Remodeling 2014 Cost vs. Value Report (www.costvsvalue.com).

Realtor Magazine summarizes the top 10 Mid-range Projects for the last year as:

1. Entry Door Replacement (steel)
Job Cost: $1,162
Resale Value: $1,122
Cost Recouped: 96.6%

2. Deck Addition (wood)
Job Cost: $9,539
Resale Value: $8,334
Cost Recouped: 87.4%

3. Attic Bedroom
Job Cost: $49,438
Resale Value: $41,656
Cost Recouped: 84.3%

4. Garage Door Replacement
Job Cost: $1,534
Resale Value: $1,283
Cost Recouped: 83.7%

5. Minor Kitchen Remodel
Job Cost: $18,856
Resale Value: $15,585
Cost Recouped: 82.7%

6. Window Replacement (wood)
Job Cost: $10,926
Resale Value: $8,662
Cost Recouped: 79.3%

7. Window Replacement (vinyl)
Job Cost: $9,978
Resale Value: $7,857
Cost Recouped: 78.7%

8. Siding Replacement (vinyl)
Job Cost: $11,475
Resale Value: $8,975
Cost Recouped: 78.2%

9. Basement Remodel
Job Cost: $62,834
Resale Value: $48,777
Cost Recouped: 77.6%

10. Deck Addition (composite)
Job Cost: $15,437
Resale Value: $11,476
Cost Recouped: 74.3%

The top 10 Upscale Projects include replacing siding, windows, roofing, and garage doors. Bathroom additions are at #10 while bathroom remodeling is tied with major kitchen remodeling at #8. Adding a grand entrance or deck also top the list. While these projects generally are more investment upfront than mid-scale remodeling projects, their return is 60% or higher. Keep in mind, that a 60%+ return on investment doesn’t include the instant curb appeal value a new roof, deck, doors or windows. Curb appeal has an inherent but unquantifiable value in that the more appealing your home’s first impression is for potential buyers, the more likely it is your home will sell quicker and at closer to your asking price. The value there is that you aren’t spending dollars maintain your home while it sits on the market or postponing plans for a new home elsewhere. Add that value to a 60%+ return and any of the top 10 projects become a good investment.

To find information from the 101 cities included in the survey and download free PDFs that include specific metro-area market data, visit www.costvsvalue.com. (Site registration is required.) You can also find a nice slide show of the report’s results when you visit HouseLogic.com.