With home prices rising in most areas of the country for the past six to eight years, many people naturally worry about the next housing market downturn. Why? Well, many of these same people can vividly recall the turmoil they went through a decade ago when a large portion of the people in this country (and many other countries) lost their homes, jobs, savings and retirement accounts.
While I think there are some who may be a little jealous that they missed their opportunity to buy low, I’m sure many people are simply cautious to jump in after all the destruction they witnessed after the last housing bubble. History tells us that current trends can't continue on forever, but is the only possible outcome another major economic collapse?
In this article, I’ll explain why I believe the housing market won't experience a collapse in 2019. In comparing our current market with where we were at a decade ago, you'll see how significantly different the two are.
So to make things a little easier to follow, I’ve broken...
The Atlanta residential real estate market continues to remain hot as fire; with those in the market to sell their home reaping the reward. We saw a flurry of activity in March, with substantial jumps in the number of closed sales, selling prices and list prices. Despite a year over year increase in new listings hitting the market, the lack of available inventory of homes for sale continues to play a significant role in pushing home prices upward.
Interest rates have actually gone down in the past month or so, bucking the expectations of many in the mortgage industry. This, combined with an unemployment rate that continues to fall, seems to be motivating more and more buyers to enter the market. The influx of home buyers flocking to the market has created a demand for homes that seems to outweigh the supply. It's only April, and it appears the frenzy will continue for at least a couple more months.
Atlanta Housing Market Tidbits
Highest price home sold: $6,400,000
Lowest price home sold: $8,000
Most total days on market: 1067
Largest home sold: 13,000 sq/ft
Total dollar volume sold: $2,176,773,122
Average estimated home value: $174,200
One year price forecast: $181,168
Metro Atlanta Housing Trends
The market data and housing statistics contained in this report come from FMLS and CoreLogic. Unless otherwise specified, the market trends in this report are based off of single family attached & detached properties listed on FMLS....
The Atlanta real estate market has already started to take off in 2017, led by a jump in list prices, which spiked 13.7% from the year prior. New listings are being priced higher because inventory is still down (-8% YOY), and demand from homebuyers remains strong. A recent drop in mortgage rates has only encouraged buyers looking to participate in the upcoming spring buying season. Sale prices continue to increase, days on market remain low, and more homes are selling than last year… all signs that Atlanta’s housing market is showing no signs of slowing down just yet.
Atlanta Housing Market Tidbits
Highest price home sold: $4,000,000
Lowest price home sold: $4,000
Most total days on market: 885
Largest home sold: 22,054 sq/ft
Total dollar volume sold: $1,167,109,504
Average estimated home value: $173,300
One year price forecast: $181,618
Metro Atlanta Housing Trends
The market data and housing statistics contained in this report come from FMLS and CoreLogic. Unless otherwise specified, the market trends in this report are based off of single family attached & detached properties listed on FMLS. MetroAtlantaHome.com has taken all reasonable steps to ensure the information in this report is current and accurate, it cannot however guarantee the accuracy of information or that it is current.
Average Sale Price Up 5.2% From Last Year
Just as we’ve seen in the past, the average sale price was down in January, compared to the month prior. The five percent month over month decrease may seem drastic, but it’s...
In general, Atlanta’s real estate market has remained pretty steady recently. Average sale prices continued their YOY increase, rising 6.9% from where they were last year, while the number of closed transactions also saw moderate gains. One exception was the average list price, which reversed its downward course in August, and has continued to climb higher ever since. However, this month’s market trends reflect housing sales prior to the election; so it will be interesting to see how the results impact the market in the coming months. We’ve already seen mortgage rates jump up, so that could put a damper on home sales during the slower winter months.
Atlanta Housing Market Tidbits:
Highest price home sold: $3,235,000
Lowest price home sold: $9,100
Most total days on market: 1,177
Largest home sold: 14,500 sq/ft
Total dollar volume sold: $1,695,188,388
Average estimated home value: $171,400
One year price forecast: $179,970
This month's newly redesigned market update report includes nearly all the essential housing market statistics I could get my hands on. In the article, I cover average sale prices, number of closed sales, active listing count, list prices, days on market and more. I've also included mortgage rates, distressed property sales and unemployment rates. Finally, I put together a brief housing market summary for each of my featured communities. Also, you'll find the information presented in the video is different from what's covered in the article, so make sure to watch it!
Atlanta Housing Market Tidbits
- Highest price home sold: $7,200,000
- Lowest price home sold: $10,500
- Most total days on market: 1,030
- Largest home sold: 14,755 sq/ft
- Total dollar volume sold: $1,231,351,939
- Average estimated home value: $169,600
- One-year price forecast: $178,400
Video Summary - Length: 06:25 - The median sale price in Metro Atlanta increased 7.7% year over year,...
Overall, Atlanta’s real estate market continues to show mostly positive signs as we head into the fall and winter months. High buyer demand and limited inventory of homes for sale has continued to push sale prices higher. The number of pending sales has continued to climb, bringing the number of closed sales up with it. We’re still adding more new listings than we did last year, but with more and more homes selling, the available inventory is down compared to last year.
Mortgage rates remained low throughout the entire summer, helping fuel buyer demand. Despite some occasional fluctuations, the national average for conventional loans hovered around 3.4% from June through most of August. We have seen mortgage rates climb this month, but they still haven’t surpassed 3.6%. It’s hard to say where rates will go from here, but I anticipate some volatility due to the upcoming presidential election and the economic uncertainty it creates.
Metro Atlanta Real Estate Trends
The following market trends come from FMLS single family attached and detached listing activity. This month’s market report includes active, pending and sold data through August 31st, 2016.
Closed Transactions Up 2.3% Year Over Year
Last month, the overall number of closed sales in Atlanta increased 2.3%, to 7,381. This includes 6,226 detached homes (up 0.8% YOY), 657 townhomes (up 13.7% YOY), and 497 condos (up 9% YOY). After a sharp decline in July, the number of closed transactions in August remained consistent with historical trends for this time of year. However,...
As we approach the end of the summer, the Atlanta real estate market continues to favor sellers. Sale prices have continued to increase, days on market is at a record low, and the active inventory of homes for sale is still relatively low. More sellers are looking to cash in on the increase in their home’s value, and the increase in new listings has yet to overtake the demand from buyers. If demand continues to outweigh supply, the seller’s market will likely persist.
Oddly enough, pending home sales remain abnormally high, despite the lack of inventory for sale. Normally, the abundance of pending sales would result in a much higher number of closed sales, but that wasn't the case. Although the number of closed sales has rebounded from drops in previous months, they’re still not where they should be based on pending sale data. I believe the pressure on buyers to win bidding wars, along with the unrealistic time frames negotiated in many contracts, have caused countless deals to fall apart; hurting both buyers and sellers.
Metro Atlanta Housing Trends
Despite skyrocketing pending sales, Atlanta home buyers continue to struggle finding available properties to buy. There’s no shortage of properties under contract, but it’s obvious that many of these pending sales are failing to close. Demand from buyers appears to have increased, but the availability of homes for sale has not. This imbalance has kept home prices on the rise, shrinking the affordability factor for many of today’s buyers. Pressure from investors and the declining inventory of REO/distressed properties has left a void in the entry-level price range.
Properties are going under contract quicker than they have in years, yet the days to closing is only down slightly. Speaking with my lender partners, it’s apparent that the current volume of real estate transactions has exceeded the capacity of many mortgage processing and underwriting departments. In addition to financing hurdles, multiple offer situations are still putting undue pressure on today’s buyers.
Home Sales Remain Down
As it has the past couple months, the number of homes sold in Atlanta remains considerably lower than last year’s numbers. At 6,109 sold listings, home sales in May 2016 were 17.7% lower than they were last year, even though they were up 17.3% compared to a month prior. Despite the red hot market and under contract signs everywhere, sales volume still does not reflect the flurry of activity.
Monthly Closed Transactions In Metro Atlanta
The big story this month has to be the massive drop in closed sales during the month of April. Not only was this uncharacteristic for this time of year, but definitely unexpected given the massive jump in pending sales the past three months. There is obviously something going on that is preventing all these under contract properties from making it to the closing table.
Other than closed sales being way down, all other market trends indicate we are in one of the strongest seller’s markets we’ve seen in nearly a decade. However, I think this seller’s market is so strong that, it’s actually preventing homes from selling. In a blog post I wrote a couple weeks ago, I explain how bidding wars can actually hurt home sellers.
Market Update Video
Closed Transactions Down 24.6%
In a market where seemingly every property goes under contract in days, it’s hard to believe that closed sales are down nearly 25% from where they were last year. We saw signs in March that closed sales were declining (down 3.6% YOY), but the huge drop in April was...
About two weeks ago, a guy called me out of the blue and asks if I can help him find a short sale or foreclosure to buy in the Atlanta area. He explains to me that he is looking to get a great deal on a home and that he is also very handy, so he can do most of the renovations himself. My initial reaction was to tell him that he missed the boat by a couple years… that ship done set sail! But I thought to myself, distressed properties are still out there, we’ll just have to jump on them quickly and make a very strong offers if we’re going to be successful.
So I started searching, and… my gut was right, there wasn’t much out there. After about twenty minutes of scouring the MLS, I decided I wanted to dive a little deeper into the numbers for my monthly market update. So, I put together the video below and wrote the following article with some additional insight on the Atlanta real estate market using FMLS data through March 2016.
New Listings - Distressed Properties
It’s been a few years since foreclosures and short sales dominated the market, so I was...
Recently, a family in Brookhaven found their dream home. A four-bedroom, craftsman style house, listed at $599,000. Wanting to make sure they got it, the buyers submitted an offer: $20,000 over the listing price, no contingencies, and a letter detailing how their family would benefit from the sale of the home. The home buyers eventually beat out the nine other offers, and they closed on their new home for right around $620,000.
Common Place In Today’s Market
This dramatic bidding war is increasingly common nowadays in many U.S. cities – in fact, 84% of offers in Oakland became involved in a bidding war. Seattle and San Francisco, 77%. Los Angeles, 74% of offers, and 69% of offers in Denver. In Austin, 59% of offers faced a bidding war, and it’s not just entry-level homes, high-end properties are experiencing it too!
Is This The New Norm?
A far cry from the traditional days of home buying, bidding wars are becoming the new norm. And this trend isn’t likely to shift anytime soon – with the spring and summer markets approaching, more buyers will be flooding the market, which means an increase in competition vying for the available homes for sale.
In Metro Atlanta, a historically high percentage homes priced from $200 - $400k are receiving multiple offers, while an increasing share of properties priced between $400 - $600k also faced competition.
Caused By Low Inventory?
According to Trulia, the overall inventory of homes for sale throughout the US is down 38.6% from this time four years ago, with the most severe shortages...
Median Home Prices In Metro Atlanta Up 12.9% YOY
Sale prices for Metro Atlanta residential properties in November were up nearly 13% compared to November 2013. This massive jump in prices is a continuance of the price appreciation trend that started in late 2012. Despite a winter “cool down” in prices from the 5-year high experienced this past June, median sale prices have remained constant the past three months and appear poised to increase again in 2015.
Market Signals From November
November’s numbers show positive signs for metrics such as: closed sales, new pending sales, median & average sold prices, price per sq/ft and foreclosure inventory. We have experienced a trend of increasing inventory and days on market, which could mean the supply of homes for sale will continue to grow. The increase in supply in conjunction with a dropping sale price to original list price ratio may mean less of a seller’s market as we move into 2015.
Positive Outlook Moving Forward
With mortgage rates remaining low, strong stock market gains and dropping unemployment numbers, all signs point to a strengthening real estate market and overall economy moving forward.
Average Price Per Sq/Ft & Avg Sale Price Comparison
How To Benefit From Market Timing
So you've probably heard the phrase "It's all about timing" right? Well, I think that phrase definitely applies to the real estate market. While not as pronounced as say the stock market, the housing market also has its ups and downs. These ups and downs occur not only over long periods of time, but are also seen throughout any given year, especially during changing seasons.
Knowing what market indicators to look for can help you identify the general direction the market is heading and capitalize on it; whether you're buying, or selling a property.
General Real Estate Trends Over The Years
Despite the bubbles and down markets over the years, the housing market has generally provided a consistent increase in home values across the board, with some areas of the country getting "hotter" at times than others. Until the country experienced one of the largest real estate crashes of all time in 2008, many people assumed the value of their home would continue to increase indefinitely.
Unfortunately, risky lending practices, overbuilding, extreme speculation, and an economic recession put an end to the streak of gains, but home prices have come back strong in most areas of the country since early 2013!
Keeping Up To Date With Current Trends
As a real estate professional that works with home buyers and sellers, I'm constantly keeping an eye on MLS listings and local market trends. Obviously there are tons of other factors that contribute to changes in the market, including: the condition of the overall economy, interest rates,...
Metro Atlanta Market Trends
Real estate trends throughout Metro Atlanta showed mostly positive signs up through the end of May. Final numbers show new listings were down 1.3% from a month earlier, but up 11.2% compared to May of 2013.
Closed sales jumped 28.2% from April 2014 and were up 3.9% compared to May 2013. New pending sales were at 7,350 which is about 2% less than the year prior, yet it is still much higher than the five year average of 6,010 new pending sales in the month of May. The median sold price also jumped 12.1% to $200,700 in May.
Notice the price jump in the graph below which shows huge price increases during the spring and summer of 2013 which also seem to be following the same trend this year. With the peak home buying season in full force, just how much higher will home prices climb this year?
Median Sale Price With # Closed Transactions - 24 Mo Prior
City Of Atlanta Real Estate Market Update
Metro Atlanta Housing Trends
The Atlanta real estate market has kicked into full gear once again this year. Although the active listing inventory in the Metro Atlanta area has topped 40,000 homes for sale for the first time in over a year, the market is still prime for anyone looking to sell a home. Historically speaking, listing inventory is still way down, and buyer demand continues to increase.
For those buyers looking to score a deal, those days may be over. If you're in the market to buy a home and want to find a deal, try searching bank owned properties, foreclosures, and short sales to find potentially under priced distressed properties. There aren't near as many of these types of properties as there used to be, but there are still some out there for sale. If you're lucky, you can find the right property and get an offer in quickly to make sure you get it before anyone else does.
New Listings, Closed Sales, New Pendings & Median Sale Price
In April 2014 there were 10,050 new listings on the market, a 18.5% increase from the previous year. Closed transactions were at 4,360 representing a 1.6% increase over April 2013. New pending sales were up 14.5% to 7,500 for the month of April. The five year average for pending sales in the month of April is 6,500. The median sold price was also up 7.8% year over year to $184,900. The five year median sold price was just over $149,000.
Active Listings, Days To Contract, And List vs Sale Price
Total active listings were at 23,200 which is well below the five year average of 33,100. The median days to contract in April was at 27 days, much less...
The Negative Impact Of Foreclosures
As most of us saw during the recent post-bubble housing market, foreclosures can negatively impact home prices in a huge way. Although the period from 2008-2012 was extreme, the general impact a distressed property has on a neighborhood can mean bad news for surrounding homeowners, especially those looking to sell.
Unfortunately, foreclosures can lower appraisal values, cause other distressed property sales, and generally tend to be an eyesore for the neighborhood. In this article, I'll discuss the many ways foreclosures impact your home's value and what you can do to minimize the damage.
One Distressed Property Leads To Another
Once one property in a neighborhood forecloses, it's possible others may soon follow. As fellow struggling homeowners see a neighbor walk away from an underwater property, they know their home's value is probably headed down with it. This can cause a chain reaction that spreads throughout a neighborhood. The results can be multiple unkempt properties being advertised as distressed property sales, which in turn, bring the appearance of the neighborhood and property values down even further.
Buyer Perception Of A Foreclosure Riddled Neighborhood
The presence of multiple bank owned properties in a neighborhood is typically a red flag for buyers. Your traditional buyer (an owner occupant) probably isn't looking for a home surrounded by vacant properties with overgrown lawns. In addition, vacant properties are a magnet for squatters and thieves... not exactly what your typical family has in mind for...