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Santa Comes Early in Atlanta Housing Statistics for October 2009

Posted by Terry Burger on Tuesday, November 24th, 2009 at 8:41am.

Pre-Holiday Cheer for Atlanta Housing Market

There is reason for some pre-holiday cheer in the Atlanta Housing Market! Numbers just released for October show the strongest year to year percentage increase in closings since May of 2006. According to Marietta, GA based Smart Numbers, there were 4,532 closings in October for all single family. After reported "lag closings" the increase should be at least 15% from October 2008.

While the average price single family detached homes ($201,038) was up from September 2009, prices declined 6.9% from October 2008. If the average price home holds at $200,000 in November, and I believe it will due to the surge of activity related to the then expiring tax credit, then it will be the first year over year price increase in 20 months. 

Inventory is falling and as of the end of October, only 37,103 single family detached listings were on the market. The last time it was this low was February 2006. Inventories should continue to fall again due to the winter where new inventory diminishes and tax credits will cause more people to buy this winter. If inventory continues to fall, it will be more in sync with demand, which could continue lead to further month over month price increases we've seen for the past several months.

That said, the winter season could be busy. Traditionally, January and February are the softest months for closings in Metro Atlanta but with up to $9,800 in tax credits offered from the Fed and State of Georgia, it could be busy. 

What does this mean for you? 

For Buyers:

• While you may have missed the bottom that I believe occured in February 2009, interest rates are still hovering at or below 5% and should remain there for the next few months. Prices are still 7-10% lower than last year. Don't make the mistake of waiting for another opportunity. It may not get better than this.
• TAX CREDITS! TAX CREDITS! TAX CREDITS! Up to $8,000 in federal credits and $1,800 in State of Georgia credits. That's real money to use. On a $200,000 home, your tax credits are paying 2/3 of your principal and interest payment the first year.
• Decreasing inventory may make it harder to find real deals. But market value is still low compared to the 2006 peak. Find a nice house and don't over pay. The days of 50 to 60 cents on the dollar are over in all but the most expensive price ranges. If you plan to live in the home at least 5 years, you should make money.
• If you're in the market over $400,000 or in"2nd ring Atlanta counties", deals are still in abundant supply.

For Sellers:

• Prices are still down, and unless inventory continues to drop AND demand exceeds supply, they will continue to stay down. Don't look for any huge price up ticks in the near future.
• There is a new $6,500 tax credit that could help offset some losses. The trick is that you need to have lived in your home for at least 5 years and you need to buy another primary residence to take advantage of the credit. Combine that with the $1,800 State of Georgia tax and you've got some help for the hit you would take.
• In most areas, the higher end homes are bargains. In Cobb County for example, homes priced over $500,000 are struggling with huge gluts of inventory. While you may take a hit on your own home sale, you should more than make up for it on the other side. If you find a motivated seller with some equity, you can really get a deal.
• NEW homes in the affordable price range are almost gone. Many have glaring weaknesses to overcome. Perhaps the lot is bad, or the house has mold, etc. That being said, if you're searching in the $500,000+ range, there are still great deals to be had depending on the region. 
• The newest danger to your future home's value will be short sales. As more people become unemployed they will begin working with their bank on an exit strategy if they are unable to keep their home. The best exit strategy for the seller and bank is a short sale.
• Foreclosures are still your competition. Remember, as a seller, you're in a pricing war and a beauty contest.

As always, give me a call if you have any questions. We pride ourselves on serving the internet community as well as our existing clients and their referrals. If you know someone who could use the expert service you see on this blog, please call me at 678-388-1020.

Happy Thanksgiving! 

Terry Burger, RE/MAX Unlimited & Founder of CallAtlantaHome.com 

 

 

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