2007 Real Estate Market Review for Alpharetta and Atlanta
categories: Alpharetta Real Estate, Local Market Conditions, Roswell Real Estate, Stuff I like to talk about
Hello, 2008…we’re back! And we have the Atlanta and Alpharetta housing data with us!
We had a great year in 2007, doubling our business from 2006; and we are looking forward to an even better 2008. Why then does everyone seem so bleak about the real estate market in Atlanta and Alpharetta?
In fact, last week, the Atlanta Journal Constitution ran an article entitled "Drop in Housing Prices Hits Metro Atlanta." What they reported was that Atlanta had a .07% drop in home values from October 2006 to October 2007. When housing prices are down 5%, 10%, 15% or more in some cities, is a less than one percent drop in Atlanta really news?
So, I went to the real estate sales data and crunched it seven ways to Sunday for both the Atlanta Metro Area and for Alpharetta and the surrounding cities of Roswell and Milton. The Bottom Line for Atlanta and Alpharetta is - and this is consistent with what I’ve posted here before - that the number of sales is down, the average sales prices is up and the average days on market is longer.
But first, some historical perspective on Atlanta and Alpharetta…
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Atlanta Metro Residential Real Estate Sales History |
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| # of Sales | Avg. Sales Price | Days on Mkt | Sales Volume | |
| 2002 | 47,826 | 225,022 | 98.0 | $10.76B |
| 2003 | 51,743 | 231,846 | 104.9 | $12.00B |
| 2004 | 57,726 | 240,312 | 103.6 | $13.87B |
| 2005 | 65,803 | 255,168 | 102.4 | $16.79B |
| 2006 | 68,256 | 260,723 | 100.2 | $17.80B |
| 2007 | 55,650 | 266,874 | 115.0 | $14.85B |
2006 was the BEST YEAR in Atlanta Real Estate…EVER. Almost $18 Billion of real estate transacted in Atlanta in 2006. Almost $15 Billion transacted in 2007. Yes, that is down from 2006, but still the THIRD BEST year in Atlanta Real Estate history. Is that something to get upset with if you are a buyer?
Next, let’s look at the real estate market data for North Fulton and the Alpharetta / Roswell over the last six years.
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Alpharetta / Roswell Metro Residential Real Estate Sales History |
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| # of Sales | Avg. Sales Price | Days on Mkt | Sales Volume | |
| 2002 | 4,224 | 318,503 | 99.7 | $1.35B |
| 2003 | 4,416 | 337,164 | 102.7 | $1.49B |
| 2004 | 4,317 | 362,225 | 94.4 | $1.56B |
| 2005 | 4,364 | 386,398 | 84.9 | $1.69B |
| 2006 | 3,896 | 409,473 | 80.3 | $1.60B |
| 2007 | 3,266 | 425,490 | 100.9 | $1.39B |
Alpharetta and Roswell’s real estate market actually peaked before Metro Atlanta’s, with 2005 being this highest gross volume year on record. If you maintain that there is a slide in the Alpharetta market - and that it is attributable to the sub-prime falling out or other national factors - you can’t say that it started in the Summer of 2007. The housing trends in Alpharetta started down as early as late 2005, although I’d have to do an analysis of month to month data to pinpoint it more closely.
If the 2007 housing market wasn’t so bad, why did it feel so horrible?
On the one hand you have realtors trying to give the market a positive spin and on the other hand you have media outlets trying to sell death and destruction in the housing sector. Who’s right? If 2007 was indeed the third highest sales year in Atlanta history, why were sellers complaining so much about a horrible housing market?
Simply put, the answer is because over 1,000 homes fewer homes sold in Alpharetta and Roswell last year compared to previous peak years. That means there are 1,000 disgruntled sellers out there complaining about the housing market at the water cooler, at the bus stop and at the check-out line.
For those sellers who have been able to sell, it has taken on average 20 days longer than just last year. In 2006, while not as many people sold as in 2005, at least it was a relatively quick sales process. Now sellers have to endure longer in a slower market.
The good news is that prices are still going up. This is a pretty amazing phenomenon, actually. It means that the better houses (the ones in the 3,266 that were good enough to sell in 2007) are still selling at a decent price. The less good houses are either stagnating on the market without reducing their price enough to sell or are expiring or being withdrawn without sale. It would be an interesting experiment to see what the average sales price would be if we sold the other 1,000 homes in the Alpharetta area. What price would they sell at as a whole to "clear" the market of the excess inventory and where would that leave the average? The lesson in this is that people with "good houses" are actually benefiting from a slower market: they are able to sell at the higher average sales price while the less desirable homes (or over priced homes) languish.
All the while, new listings continue to come onto the market. In fact, as the graph to the right shows, more new listings came onto to the market at the end of 2007 than compared to the end of 2006. The red line for 2007 is significantly above the blue line for 2006 listings and the aqua line (2007 sales) didn’t have its typical end of year up tick, although, anecdotally, we were very busy.
Couple that with fewer sales at the end of 2007 and you have a lot of inventory on the market. As of the end of November, 2007, the latest data available, there are 7.3 months of resale inventory in the Alpharetta / Roswell market across all price ranges. (There is some significant variance depending on the price range, with a lot more inventory at the high end, of course.) Compare that to November, 2006, when there was 4.8 months of resale inventory on the market. Hello, buyers…it is time to step forward!
Even with all this seemly negative news regarding the housing market in Alpharetta, I’m still bullish on 2008. You might think that I’m one of those, unrealistic, always optimistic people. To know me is to know better.
But what I do know is that Alpharetta, and particularly Milton, has a housing product that is unique and still in demand. People want to live here: the schools are good, there are lots of corporate offices here and the quality of life is very high. You get a lot of house, space and privacy for the money, as I’m sure some of my relocating clients will attest. Plus, I believe that we offer professional services that people value and appreciate.
I don’t have an insightful predictions are even resolutions for 2008. I only know what I know and that is that business continues to grow - the reception to this blog has been great - and we will sell more houses in 2008 than in any previous year.
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Thanks for posting this data. One thing all of these types of stats fail to take into account is that because of new construction and growth overall from previous years there are more homes total available in 2007 than there were in 2006 and prior. So if for example, there were 2000 homes built each year in a city for the last 10 years, the stats are going to be skewed slightly as the number of homes sold may go up, but as a percentage of the total homes, it may not really have gone up.
Also, as someone who lives in South Florida, a languishing market for several years after several years of explosive growth, I’ve found the stats of expired listings a more interesting way to view the trends in the market. Expired listings show me how many people have given up on selling because they can’t get the price they wanted and would rather stay, or those who are switching to a different realtor because the one they used was unable to move their house within their listing period. When you see that number grow, you can really know you’re in a downward market.
Thanks again and looking forward to your future posts!
It’s all about perspective Kevin. The media could easily say that 2007 was the third best year ever for Atlanta area real estate, but they don’t.
You have done a great job of informing home buyers and sellers in your market what is really going on. They’ll be thankful for it.