The “Jewel of the South,” as many have called Atlanta, refuses to be denied.  With an influx in population due to steady job growth, Atlanta earns the #10 spot in a recent Forbes Magazine article. 

This just in case you were about to jump off the cliff after listening to the national real estate update on the news.  You really have to filter the news when anything is reported as a national statistic or trend.  You wouldn’t listen and believe a weatherman if he told you it was going to be sunny over the entire United States tomorrow, would you?  How is that any different from the real estate market?

Certainly be thankful you are in a growing city like Atlanta, where there will always be demand for housing.  What is down, won’t be down long.

Boy, its easy to get discouraged watching the national news or reading a national paper covering this housing market.  However, we’re still proclaiming the bottom here at least for our home base of metro Atlanta. 

New construction has been hit hard.  Nationally we’ve seen homebuilders dropping like flies with decreased confidence in the market.  Housing starts for new construction single family homes are a good indicator for the housing market, and after reading a recent Atlanta Business Chronicle article, believe it or not I am encouranged.  While the national picture is a little less than desirable with national housing starts slumping again in October to the lowest level since 1959 when the United States Commerce Department started tracking the starts, the silver lining is that October housing construction starts in the South are actually up 1.5% over last month.  Don’t get me wrong, there’s still way too much new construction inventory and lot inventory has crested for quite some time, but it’s saying something that new construction is showing signs of life.  New government programs and falling lending rates will do nothing but help.

While we certainly have vast improvements to make in this market, buying into the national coverage will only frustrate and confuse.  I equate it to a weatherman telling you that it’s going to be sunny over the entire United States tomorrow.  You just can’t paint with a broad brush like that.  Make sure you stay opportunistic, think like a buyer, and stop denying this market as anything short of an unbelievable time to buy your first home, your second home, your first rental property, etc.

No matter your political views, the resolution of the election means good things for our economic condition.  The whole financial world, including the real estate market, can finally take a deep breathe and stop saying, “Let’s wait till after the election.”  That day has come, and I think everyone is looking for some stability.  I believe either candidate would have provided this stability, but the most important thing is action and quickly.  The President is no savior.  In fact, it’s the advisors that President elect Obama appoints that we should probably be taking a closer look at when he announces them. 

The election elated some and dissappointed others, but no one can discount the fact that there is energy after the election.  Perhaps that’s all we needed.  As mentioned here before, I feel like the Atlanta real estate market is already feeling the bottom and well positioned to recover.  I feel confident in proclaiming that it can only get better from here.  Gas prices have come back to earth.  Interest rates are caving.  In fact, now they are back under 6%.  Inventory is coming down, and prices are stabilizing.  If you can’t see the neon “Buy Now” sign, then you might want to schedule an appointment with your optometrist.

President elect Obama’s policies will build on plans already set in motion to improve our industry.  The bailout is helping to get more money moving in and out of the real estate market with increased liquidity amongst lending institutions.  The Fed has cut the rate helping make money less expensive to borrow.  This will help us attract more buyers in the form of lower borrowing and mortgage rates as the dust continues to settle, and the bailout will help generate increased competition in the market from lenders.  We still need further protection from mounting foreclosures in the real estate market, and I expect we’ll see more money moving in that direction in the form of loans and guarantees to the larger institutional lenders.  It’s not just the banks that need help though.  What about the homeowners left holding the bag forced to file for bankruptcy due to adjusting adjustable rate mortgages and risky creative financing during the boom years?  It would be real easy to say, “Sorry,” and continue the tsunami of foreclosures.  We will see more programs designed to help homeowners refinance on the cheap to avoid foreclosure and save their homes.  The new President has to address the lender and consumer side of the ball if he wants to fix this housing situation, and I think he will out of neccessity. 

 So, no matter your political views, we all need to take advantage of this new energy, and take advantage of our opportunities because it doesn’t take incredibly long for a valley to be a peak.  This economy will be back.  This housing market will be back.  As always, we will be here finding deals for buyers and securing the best for our sellers, no matter the market and no matter the President.

Simple Math:

Amazingly Low Rates + Depressed Home Values + Vast Inventory

= First Time Homebuyer Heaven

If you are a first time homebuyer sitting on the sidelines, your amazing opportunity window may be shortening as the home market is poised to rebound.  For months we have been proclaiming the dubious position that first time homebuyers are finding themselves in.  We have been fortunate to work with more than a handful of first time homebuyers this year, and I’m always blown away at what is out there waiting for them. 

Great Mortgage Interest Rates!  I heard my dad and my father-in-law for the last few years tell me about how high rates were “back in the day” of the 1970’s and 1980’s.  10-12% interest rates were not only common, they were pretty darn good.  We have really been spoiled here recently.  In fact, rates dipped below 6% again this morning, and they appear to be going lower according to our friends at Countrywide Home Loans.  If you are floating in the short term, waiting for interest rates to drop further, I encourage you to lock those rates.  With the volatility we are seeing in all the financial markets, anything could happen.  You may lose a little on your rate by locking, but you could also look like a hero on these sudden spikes we’ve seen in the last couple of weeks.  Adjustable rate mortgages may be tempting, but with rates this low and if you can afford to do so, lock your rate for 30 years and forget about it.  You’ll be glad you did.

Home Values are Down!   The Median YTD September 2008 sales price was down 10.3% versus the same period in 2007.  Foreclosures represented over 23% of the overall sales in the 3rd Quarter.  As mentioned before, you can’t always consider a foreclosure a good “deal”, but you sure have to look at them in this market.  It’s an equity cash grab if you find the right one.  Sellers received 93% of their list price in the 3rd Quarter, which is 3.5% worse than the same time last year.  The sellers are finally starting to accept the market, which is even further good news for the homebuyer. 

Inventory is Still High!  There is a 12.3 month home supply in the market right now, which is 20% higher than the same time last year.  However, it’s important to note that the home supply has dropped each of the last two months as this market attempts to correct itself.  A 6 month supply of homes is a good balanced market to give you a point of reference.

Other great benefits in this market for first time homebuyers include the fact that 75% of all home sales included seller paid closing costs!  FHA loans are available with 3% down, which can be in the form of a gift.  The other good news is that we are entering the winter months when home sales typically slow down, making an offer even more attractive for a seller. 

If you are considering buying a home for the first time or for the fiftieth time, there truly could be no better time than right now.  We have received high praise from our clients for our consultative approach, making the homebuying process a simple and enjoyable experience.   We would love to help you.

All statistics are cited from Chartmaster, 3rd Quarter 2008 Metro Atlanta Profile: Single Family Detached Residences.

The Peters Company believes in the power of information, and we are constantly updating our clients with news and views on all things real estate through a variety of media including electronic and print.  If you’d like to be added to the mailing list via email and/or regular mail, simply contact us at andy@thepeterscompany.com.  We would love to keep you posted!

My business card reads Realtor, not Psychic.  Nobody knows when the turnaround will occur in the real estate market for sure.  It’s been said that you don’t know when you’ve reached the bottom until things start to go back up again.  On a national level, I’ve heard “experts” say the end of the first quarter.  I’ve heard middle of the year.  Economists at the National Association of Home Builders semi annual forecast conference suggested that home prices will hit bottom in the middle of next year as a result of increasingly affordable prices, new home incentives, fewer housing starts, declining interest rates and pent-up demand (Wall Steet Journal, June Fletcher 10/29/08).  We really are blessed in Atlanta.  Recent data from ChartMaster is positive suggesting a turnaround is ocurring right now in metro Atlanta.

Home inventory in the metro area appears to have reached a bottom.  The months supply of homes has come down every month since July of 2008 after a steady climb at the beginning of the year.  Do you see the bottom?

The rate of decline in number of homes sold vs. the same quarter one year earlier accelerated during early 2007.  However, the rate of decline from the previous year reversed after the first quarter of this year.  Do you see the bottom?

All we can do is deal with the hands we are dealt.  Make lemonade out of lemons.  Make mole hills out of mountains.  Put on our big boy drawers…Whatever cliche you want to use.  The good news is that it can’t get much worse.  The election will most likely bring some stability to our economy, no matter who is elected.  Rates will go up a little further in the very short term and then fall in the long term once the dust settles in my opinion.  The government is trying to spur on refinances of troubled mortgages, which should help stave off a percentage of the foreclosures rushing through the market.  In the meantime, be opportunistic if you are a buyer or investor, and if you are a seller, play the percentages and think like a buyer.

As always if we can help you in any way, it would be our pleasure.

When a home goes on the market that is overpriced, the market rejects it and it fails.  A failed listing can come as a withdrawal from the market or an expired listing.  Either one is not good if your goal is to sell your house.  Most of the time a “re-list” is accompanied by a price reduction, more time on the market, and further frustration. 

Here are the ChartMaster statistics showing failed listings in Metro Atlanta over the last three years:

3rd Quarter 2006 - 47.8% of listings failed

3rd Quarter 2007 - 62.5% of listings failed

3rd Quarter 2008 - 66.9% of listings failed

With the trend going up, it’s a black eye for our industry.  It shows that more and more people are pricing their homes too high.  Maybe its caused by denial.  Maybe its caused by greed.  Maybe its caused by real estate agents who don’t know the statistics.  I think it’s a little of all three.  We all need a good dose of reality.  As mentioned before, you can’t play to the possibilities in this market.  You have to play the percentages.  Selling homes in this market is not difficult, although it’s more difficult than before.  People are still buying homes, but you have to be well priced to attract buyers and you have to be “best dressed.” 

Now more than ever you need a realtor to sell homes, and you need that realtor to be realistic and proactive.  The Peters Company has built a reputation for selling homes in the least amount of time (30 day average days on market in 2008) for the most amount of money (96.6% of sales/list price in 2008).  How do we do this?  It takes the right statistics and the right reaction to those statistics along with a dedication to overservicing and overdelivering.  We tell all of our clients when they have chosen to do business with us that it’s always “us” against the market.  If we can beat the market, it’s a win for our clients and it’s a win for us.  Let us show you how we do it.

BusinessWeek published an article this week on the best and worst performing zip codes in the top 20 metropolitan areas.  As mentioned here before, we get caught up in the news and paint the real estate market with a broad brush because all we hear is bad news.  I thought this was a helpful article because it attempted to point out the good with the bad, something more of the media should aspire to do.  Lesley and I have lived in Alpharetta before, and I spent almost seven years working in the area.  It’s a great community, which has seen an influx of homeowners thanks to newer affordable luxury housing, a robust commercial market, and the rise, fall and leveling out of the technology sector so prevalent in the area. 

The only flaw I see in these statistics is that it’s built around the change in percentage of homesellers’ list prices.  We really don’t know how realistic these homesellers are or how motivated they may be. It’s quite easy to deny the downturn in the market and to take the “Well, my house hasn’t lost it’s value” approach.  Let’s face it.  We’ve all lost money.  Lesley and I have lost nearly $50,000 in equity since we purchased our home last year, and we purchased in one of the hottest zip codes in the state of Georgia.  With the correct information from a professional real estate agent team, homeowners get realistic home sale and market statistics, which should in turn be reflected in quicker home sales at a higher list/sale price.  Don’t leave the sale of your home up to chance.  Gary Keller, the founder of Keller Williams Realty, calls everyone from homeowners and agents to “get real and get right.”  The market will be back, but until then we have to be students studying the statistics and paying close attention to the many variables in the economy affecting the rise and fall such as interest rates, liquidity, employment, consumer confidence, gas prices, etc.  It’s a much more complicated climate to do business in these days, but that’s even more reason to seek the guidance of a Realtor.

Highlights from the article include:

Best-performing ZIP code: Alpharetta, Ga. 30022
Annual % change in asking prices: +12%
Median listing price: $464,664
Days on market: 84

Worst-performing ZIP code: Atlanta (Oakland City), Ga. 30310
Annual % change in asking prices: -49%
Median listing price: $66,426
Days on market: 99

*Editor’s note: The year-over-year percentage change compares the 90-day rolling average of median asking prices for existing single-family homes in the 12-month period ending July 11, 2008, to the same period a year earlier. Only ZIP codes with at least 50 active listings as of July 11 were selected.

Source: Altos Research

I chuckled today as I passed a new townhome community with homes available for sale.  There were streamers, banners, balloons, and a large sign that read, “Monster Sale!” with a cartoon-ish green monster.  It’s tough to sell homes right now.  I think homesellers are trying everything in desperation.  People are still buying homes though.  We are down a little bit this year, but we have completed 17 transactions.  Normally I’d be a little concerned about that considering we did 23 last year, but I’m pleased considering the buzz on the street, which is enough to make anybody in the market downtrodden.  The fact of the matter is that there is so much inventory out there for potential buyers that there’s a “Monster Sale!” every day. 

What is a “Monster Sale!”?  I might suggest that if you buy a home at today’s market value in this down market, you’re getting a “Monster!” deal.  You don’t have to get a home at 80% of list price for it to be a “Monster!” deal.  Most homesellers with guidance from a professional Realtor will price their home to reflect the market.  The market WILL turnaround in Atlanta, and home prices WILL go up.  I don’t think I’m going out on a limb there.  We are incredibly blessed here in the metro area with a diverse economy, a desirable business climate with better than average job prospects, and the world’s busiest airport.  We are in the middle of a ”blip” on the radar.  I honestly believe we will look back at these home prices, these sub 6% interest rates, this uneasiness in the wake of a new election asking ourselves,”Why in the heck didn’t I just buy that investment property?”  Or, how about, “Why in the world didn’t I move up and grab that depressed valued home in the neighborhood I’ve always wanted to move into?”  As I’ve mentioned before, we don’t know when we’ve reached the bottom until it starts to go back up.  However, we do know it’ll go back up.  “Monster Deals!” are everywhere.  You don’t have to look too far or too deep.  They are in every neighborhood and in every part of town. 

Use common sense.  Buy low and hold.  Sell high and roll!

-Andy

Are we reaching the bottom?  Everyone wants to know.  You typically don’t know you’ve reached a bottom until things are heading north again.  Well, the good news in DeKalb County is just that.  Year over year home sales in the month of July pushed into positive territory again, and in August pending sales were up 43% over last August. 

DeKalb County is home for us, and we could help make it home for you.  With great areas like Brookhaven, Decatur, Dunwoody, Stone Mountain, and up and comers like Chamblee and Doraville, DeKalb County is well positioned and a great place to call home.