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....
If you're not familiar with the term, you may be wondering what an arm’s length has to do with the sale of a home? Well, this is the United States, and we do use feet to measure distance, so… Maybe the arms sounded like logical choice when the phrase was first coined; who knows?
I’m not sure where the term originated, but it’s become a means of describing how close (relationship, not distance) the parties of a transaction are to each other. These days, whether or not the sale of residential property is an arm’s length transaction must be disclosed, and it may even impact the terms of the sale. It may also be referred to as arm’s length negotiation, depending on who you’re talking to.
Definition Of An Arm’s Length Transaction
When it comes to buying and selling real estate, an arm’s length transaction is one where the parties involved in the contract have no relationship to each other that would otherwise influence their decisions during the purchase/sale of a property. A “relationship” can include: family members by blood, family by marriage, business associates, beneficiaries, or even parties that share a common business interest with each other.
In an arm’s length transaction, all parties are considered to have equivalent bargaining positions, a clear mind, and equal knowledge of the property being sold. Without the presence of a pre-existing relationship or undue duress, it’s determined that buyers and sellers will act in their own best interest. This also means, pressure or coercion...
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
Unless you’re a real estate agent, you may not have heard of the MLS (pertaining to real estate, not soccer), much less know what it stands for. Even if you do, you probably don't know there are two different Multiple Listing Services (MLS) serving Metro Atlanta; FMLS and GAMLS. However, if you’re in the market to purchase or sell real estate, it’s worth learning just a little bit about them to become a more educated home buyer or seller.
For consumers, understanding the characteristics of each MLS can help you determine the website(s) you should use to search properties, and may even play a role in which REALTOR® you decide to hire. In this article, I’m going to cover some differences & similarities between the two MLS providers and discuss what consumers may want to consider when searching homes for sale online.
FMLS vs GAMLS Comparison & User Tips
CLICK HERE to search FMLS & GAMLS listings all on one...
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...
Thomas owned a home in Sandy Springs, he bought it in the mid 90s and had taken great care of it. Thinking he’d be there for another 20 years, Thomas updated the kitchen & bathrooms, and did some landscaping. However, a couple months later, Thomas found out his job would be taking him out of state. He needed to sell his beloved home, and luckily, his friend Jane is a REALTOR®. She assures him it’s a seller’s market, and it couldn’t be a better time to list his home for sale.
After spending weeks preparing his home to sell, they finally put it on the market. Within three days they received seven solid offers, and one of them was $10,000 over list price! Thomas decided to accept the offer that was $10K over asking, and just like that, his home was under contract. However, a week into it, Thomas began to get an unsettling feeling. They hadn’t heard a word from the buyer since going under contract. No inspection, no appraisal, nothing.
Suddenly, on day nine of their ten day due diligence, the buyer’s agent sends over a termination form… without any explanation. What just happened? Unfortunately, this same scenario plays out more than you might think!
A Product Of The Market
Don’t get me wrong, for the most part, bidding wars are great news for sellers. In a market where buyers are plentiful and available homes for sale are not, the bidding war has become an all too common occurrence. In this market, sellers seem to be in total control when it comes to negotiating terms of the sale. Most sellers are using this leverage to their advantage; simply naming their price, then sitting back and...
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 worried...
Does this story sound familiar? Joesph and Suzette McKinney are heading out for their weekly dinner date. Before leaving, they decide they’d like to try something different this week. Having been to nearly all of the restaurants in their immediate area, they go online to search for the best Italian restaurants within 10 miles; looking for something that isn’t too pricey.
With just a few clicks, they find a place on a popular website that has a perfect five star rating and is at the top of the list. It looks like an easy decision, so they plug the address into their navigation and head that way. Two hours later, after finishing their less than appetizing meals, the couple heads home.
On the way, they can’t help but talk about their poor experience, and they both wonder how others thought the food and service were so great. They run another search from their smartphone to check out a different review site. The feedback on the second website paints a much different picture. These reviews mirror the McKinney’s experience. They’re immediately skeptical of all the positive reviews on the first site they visited.
Then they spot it… the “Ad” that appears in small text next to the restaurant name on the first site. This might explain the premium placement and all the great reviews! Unfortunately, this same scenario plays out with businesses in other industries as well… including real estate.
I know what you’re thinking. Why would a real estate agent give homeowners (potential clients) advice on how to sell a house without a REALTOR®? Isn’t it my job to convince them that selling with an agent will net them more money and a quicker sale? Shouldn’t I be warning them of all the pitfalls of going it alone, and telling horror stories of for sale by owner (FSBO) transactions gone wrong? After all, how do I make money if homeowners are doing it themselves? Great questions, so let me explain.
There Will Always Be FSBO Sellers
It’s a fact, some people just refuse to hire a real estate agent, and nothing I say will convince them otherwise. I’ve come to accept that, and I understand that it is just part of the business. Most of the time, these are folks looking to save the five to seven percent brokerage fee most agents in Georgia charge to facilitate the transaction. Others may not trust real estate agents… or maybe they’re just the do-it-yourself type.
Whatever the case, I believe they should all have access to the proper resources that will give them the best chance of successfully selling their home. If they’re unsuccessful in doing it on their own, hopefully they’ll remember me when they do decide to hire a real estate agent. Anyway, let’s get started with the for sale by owner guide!
Step 1 - Do Your Homework!
Once you’ve made the decision...
4 Tips For Handling A Low Offer
So, you’ve gotten an offer on your home – just what every person selling their property dreams will happen! But the offer is low, way too low. Don’t worry, lowball offers happen all the time, and if you keep the following four tips in mind, you can overcome the initial frustration a lowball offer creates. Keep in mind, the goal is to negotiate a price and terms that work for you… and that the buyer will agree to. You can always just say no, but these tips will help you and the buyer get to YES!
Don’t Let Your Emotions Get In The Way
After all, this isn’t personal, it’s business. It doesn’t matter if the offer is low and the terms are ridiculous and the closing date is too far away. An offer means someone wants to buy your home. Everything is negotiable, so don’t feel insulted or sad or panicked. It can be tough, but remember to remain calm and move forward. This is where having an experienced real estate agent is most beneficial.
Your agent isn't emotionally attached to the home like you are, so they're in a much better position to approach negotiations with a level head. If necessary, take some time to let your emotions settle before responding to the offer. Once you've had some time to cool down and think about it, the offer may not seem as bad as it did initially.
Consider All The Terms Of The Offer
Though price is the number one element both buyers and sellers look at, the other terms of the offer deserve to be given just as much consideration. You might want to accept a lower offer if the closing date is within your time frame,...
Preparing Your Home For The Market
Before your house goes onto the market, there are a number of things you can do to ensure smooth sailing later on. First impressions are important, so preparing your home adequately is vital. Most of these things are pretty easy to do and will really help you maximize the value of your home. Watch the video below and then keep reading to learn nine ways you can prepare your home for sale.
#1. Get A Pre-listing Home Inspection
To save time after you receive an offer, a pre-sale home inspection is the way to go. For a very reasonable fee, a certified home inspector can alert you to possible issues that could cause a problem down the road so that you can address them now. Keep in mind, you may be required to disclose the inspection to potential buyers. If you’re confident in the condition of your home, a pre-listing inspection is a great way to assure potential buyers that your home is in great shape, which can lead to higher offers.
#2. Make Minor Repairs
Have you been putting off some basic maintenance items? Did the pre-listing inspection reveal some more manageable problems that are...
Winning In A Multiple Offer Situation
Congratulations! After all of your hard work, your house has finally received an offer. In a hot real estate market such as Atlanta, there’s a real possibility that you might receive multiple offers. In that case, there are a few things that you should keep in mind when choosing the best offer for your home.
Rely On The Knowledge & Experience Of Your REALTOR®
Luckily, you have an experienced real estate agent on your side to help navigate a multiple offer situation. However, you should still have a general understanding of how the process works. In multiple offer situations, your agent may advise you to pick one offer to begin negotiating, or, call for a highest and best period where a deadline is given to all buyers to submit their highest and best offer. When it comes time to negotiate an individual offer, you essentially have three options: accept, reject, or make a counter offer.
Mentally Prepare For Offers In Advance
Before you ever receive the first offer, you should have your limits and baselines in mind. Determine in advance what is most important to you when selling your home. If price is number one, then be prepared to be flexible on your closing date or the length of your due diligence. If you absolutely must be closed by a certain time, then perhaps you could be flexible when it comes to price or terms. Setting your limits ahead of time will make it easier to agree to a strong offer or reject a low offer and move on.
Keep All Factors In Mind
Yes, price is the number one factor most sellers focus on. But remember, there are numerous other things to keep...
Zillow Partnership Brings Exclusive Agent Presence
Zillow is currently the undisputed leader in domestic real estate search traffic, so it made perfect sense for Better Homes and Gardens Real Estate Metro Brokers to sign an exclusive partnership agreement for all company listings. The deal was finalized last month and was designed to give Metro Brokers' agents sole agent presence on their listings, making the listing agent the go-to resource for property information.
Partnership Benefits For Home Buyers
The partnership provides Zillow users with a better experience when inquiring about a Metro Brokers listing on both the mobile, and the desktop versions of the site. When calling or submitting an email inquiry, users are now put in direct contact with the actual Metro Brokers listing agent, not a handful of rookie agents paying for exposure. Buyers will appreciate getting the information they need about a property without being hounded by multiple agents, all of which are only concerned about picking up new business.
Removing the advertising agents from our listings reduces the on-page clutter and eliminates the confusion of who to turn to for additional listing information. After all, who knows more about a home for sale? The listing agent who is working directly with the seller, or the agents paying Zillow big bucks to appear next to random listings in hopes of picking up business? By eliminating all but the actual listing agent, we’ve provided a direct route for home buyers to get the best information on all BHGRE Metro Brokers listings.
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, unemployment, and other...