Since the Great Depression the longest recession we’ve seen has lasted only 2 years.  How long will this current downsing last?  Worse case scenerio I’m guessing 2 years.   It’s the media’ job to scare us so we’ll watch the news more.  Scary headlines increase their viewership and paper sales which in turn increases their advertising rates.  Seriously, guys- come on.  Assuming this downturn will last as long as the great depression’s we can safely say we’re halfway through it.  Are we still going to see forclosures come on the market?  Yes.  Has it, so far, negatively affected the real estate values?  No.  When you hear/see blanket statements from the media like “values are down” you can believe me when I say that is wrong.  Atlanta has appreciated 4.8% since this time last year.  What is down are sales.  I think you’d agree with me when I say I’d rather sales be down than values.  Time magazine actually ran an article 3 weeks ago that stated Atlanta was one of 3 cities in America where real estate is actually UP!

Most people stay in their homes 4-7 years.  If you are a buyer who is waiting to see if better deals will come,  jump off the fence and get shopping.  We can expect this downturn to only last 1 more year before demand starts rising again.  (Mortgages will once again become attractive to Wall Street Investors thus allowing more buyers different types of financing which will equal a bigger buyer pool).  Now’s the time to get serious about looking for a home.  Chances are you’re going to be living in your new home for at least 4 years.  By waiting any longer your chances of missing a “deal” increase.   Rates are low, there are fewer buyers, many sellers are very motivated to sell their homes.  What an awesome time to be a buyer!

This email will hopefully answer a lot of the questions you may have about what’s really going on in the Atlanta real estate market!

The most important point I hope you take from this email is that real estate is VERY local.  The news/media’s attempt to make blanket statements about the state of the real estate market is like them trying to forecast the weather as being 90 degrees for the whole country.  Every area is different.  What California, Florida and Arizona (to name a few) are experiencing in negative appreciation is not being felt here in Atlanta.  Business 2.0 along with Moody’s Economy.com has named Atlanta as one of 10 cities that are bucking the national housing trend.  They are forecasting that Atlanta will be returning to normal appreciation levels by the beginning of 2008.  Here’s what we’re seeing:

The Atlanta real estate market entered a “correction” phase in the 4th quarter of 2006.  Interest rates rose slightly during this time which affected the borrowing power of some buyers.  The most severely impacted market were new homes priced below $200,000.

There IS good news!  Houses are still selling at increased prices compared to previous years, indicating a sound overall market- however, increased days on market, lower sales price to list price ratio and a higher percentage of transactions requiring a price reduction indicate that pricing at the current market is the key- meaning Aaron and I are only going back 6 months when researching a home’s value- to selling in the  least amount of time at the best price.  We monitor the market on a weekly basis now-sometimes even daily-so we can keep ourselves and our sellers/buyers up to date on our fluctuating conditions.  In addition to using the newest comparable sales to determine a truer value of our listings we’re also advising our sellers who have vacant homes to hire a Staging Company.  This is a growing trend, especially in-town.  A vacant home just about HAS to be staged like a model home to sell quickly now.  Our average days on market for a staged listings is only 16 days as compared to unstaged listings taking up to 52 days to sell.

The biggest concern is the high number of homes on the market.  This poses the greatest problem in the new construction market who’s inventory is up 53%.  New construction prices have increased greater than resale’s, making the latter more attractive this year and causing the new homes to sit.  Until both new construction and resale home inventories return to more normal rates sellers putting their homes on the market will have to be very realistic with what they list at.  If Seller’s overprice their homes it will typically take 3 X longer to sell.  This results in higher carrying costs, the inconvenience of keeping their home in “show” condition every day and delays in finding their new home.  The days of overpricing and waiting for a buyer to make an offer are gone for now.

More good news!  Although it’s taking longer to sell a home the difference are quite small.  The price points that have experienced the least changes are homes under $200,000 and above $500,000.

Here’s some great news!  The average sales price of an Atlanta home has risen 4.3% over this time last year.  Many of the California, Florida and Arizona markets are experiencing negative appreciation.  Not us- we’re still holding strong!

In most price points sales are down an average of 9.5% compared to 2006.  The hardest hit price point has been new homes below $200,000.  However, there is a huge price point still seeing an increase in # of sales- that would be the $500,000+ market where sales are up 7.7%. 

The price range of $300,000-499,000  has experienced the highest # of sales in all in town markets except for Buckhead, as well as Alpharetta, Roswell and Mableton.  If I were a builder or investor I’d keep an eye on this price point since this is where the most activity is happening.

There are fewer buyers now due to the tightened restrictions on credit scores and down payments.  Home ownership is once again becoming a privilege.  But with an entire buyer market wiped out where are those “buyers” going?  Well, that brings me to more good news!

The renter pool is growing and causing a supply and demand market shift.  For the past few years rents have stayed very steady, with many landlords losing money each month.  This was because so many renters were able to buy…and did so.  There are going to be more renters renewing leases and more coming into the market.  If you’re currently renting look for your monthly rent payment to start rising upon your lease expiration.  Bad news for renters- great news for investors.  BUY A RENTAL HOME NOW!  Build your portfolio while prices are low and demand is high.  We can help you with that.  Contact us if you’re interested in more information.

 To summarize- we’re definitely in a buyer’s marker, however homes are still selling.  Some areas/price ranges are selling less than last year.  Some are selling more.  Expect to see  your current home appreciate this year anywhere from 1-4%.  Now’s not the time to test the market.  If you’re putting your home up for sale it must be priced competitively, show like a model home and have an aggressive marketing strategy.  Be prepared to reassess your market position every 2 weeks for the next 6-12 months.  Expect to pay some or all of the Buyer’s closing costs.

If you’re a buyer this is the perfect time to buy!  Rates are still very low, there’s a good bit of inventory and motivated sellers.  Expect to negotiate for some or all of your closing costs to be paid.  Have your financing in place before making an offer.  And have fun shopping!  Now’s not the time to wait.  Rates will continue to rise and many sellers who haven’t sold by mid November will pull their homes off the market OR not be as negotiable if they’re expected to move through the holidays.  NOW is the time to buy!

Atlanta’s economy is doing better than expected due to our high rate of job growth.  Young professionals flock here from surrounding states….we have Hartsfield Jackson International Airport (the busiest in the world….and several Fortune 500 companies call us home.   This is a great place to call home!

 Want detailed information about your home or neighborhood?  We have it!  Just let us know and we’ll get it to you! 

Last night Aaron and I decided to forgo cooking and order a pizza.  We called Papa Johns on Columbia and Memorial Drive in Decatur, the closest one to our house.  We also decided since we were already out and about we’d swing by and pick it up.  The entire experience went like this:

We called Papa Johns back to get their exact location and were greeted with, “Thank you for calling Papa Johns.  Can you hold?”  CLICK—  (Correct me if I’m wrong but when you ask someone a question shouldn’t you wait for their answer??
I wait for a minute or so then decide to be a bit more aggressive.  I hung up and called right back and was greeted with the same person and same statement/question.  I, feeling a little stressed now asked them to please wait- I JUST needed their address. 
Once we arrived we parked and Aaron got out to run in.  He came to a locked door.  After pulling a few times he found a doorbell and rang it.  And rang….and rang it.  All the while watching people behind the counter ignore him.  Finally, with the touch of a button they unlocked the door so their customer could finally come in.  The pizza was handed to Aaron- where he opened it to check that it was 1- correct and 2- our extra marinara was in the box.  All was well, until Aaron asked for extra garlic butter dipping sauce (yummy).  He requested it and was answered by silence.  He repeated his request and finally the man behind the counter, (who had yet to smile or greet him at all), said that there would be a .75 charge for the extra sauce.  Aaron said that was fine.  The employee then said it was too late, he had already rang him up and ran his credit card.

Why am I taking time out of my busy schedule to write about this?  Because I’m sick and tired of people not taking pride in their work.  I don’t care where you accept a position nor how much money you will make- please take pride in your work and the experience you are creating.  Smile and greet your customers when they walk through the door.  Be accomodating.  Thank them for their business.  Is this too much to ask?  If you make the decision to be employed don’t make my experience with your company a miserable one.  Espcially when I’m spending my hard-earned money with you.

Monica, a fabulous client of our’s just became our neighbor by buying in East Lake on Morgan Place!  She got a 3 bedroom/2 bath, NEW home for only $255,000. 

We also sold her home in Lithonia.  It took us only 3 weeks to find a buyer and get a FULL PRICE offer!  Congratulations to Monica!  I know she’s going to love her new home!

Guys- it’s tough out there right now if you’re trying to sell the average Atlanta condo. Especially if it’s under $250,000. There are fewer buyers right now due to tightened lending requirements. Banks are going out of business every week and the companies/people that actually fund the loans are very nervous. If you’ve got major credit issues chances are you cannot get a loan right now, whereas this time last year it might not have been a problem. Pair this problem with the 7,400 condos currently for sale (source: Atlanta Business Chronicle 8/2007) and you’re bound to have longer days on the market.

So, what to do if you need or want to sell your condo?

1. Make sure it shows like a model home- this can be achieved relatively cheaply by hiring a staging company. I’ve got one that will put a home manager in your home if it’s currently vacant. They’ll pay your HOA dues and utilities too!

2. Price your home realistically- Now is NOT the time to price high and plan to come down if you don’t get an offer. Your home is guaranteed to sit for 3 X’s longer if you start too high.

3. Interview and hire an aggressive Realtor- compare marketing plans, discuss strategy and ultimately go with the professional you feel comfortable with. Remember to ask them the following questions: how long, on average, does it take them to sell their condo listings?…. what is their average list price vs. sales price ratio and how does it compare to the average Atlanta agent?…. do they have a list of past clients willing to talk to you about their experience?…. can they provide you with a list of testimonials?… how many homes/condos did they sell last year?….

These are just a few questions you should make sure to ask the Realtor you’re interviewing. Now is not the time to take a chance. You need a proven marketing plan and numbers to back up their promises.

The market WILL bounce back but it will probably be the middle of 2008 before we see any positive changes.