New Home Sales Outpace Resales in Alpharetta | Retake on Alpharetta Housing Trends
categories: Alpharetta Real Estate, Local Market Conditions, Luxury Homes
Last week I wrote a post showing market data indicating that house prices continue to rise in Alpharetta; it is just that the volume of sales is down. This is true overall for the market.
However, one of the insightful readers of this blog, took me a little bit to task on differentiating between new home sales and resales. This is one of those cases where you can easier lie with statistics. While I believe that it is valid to look at the market as a whole (both new sales and resales), maybe it just makes a point that realtors want to tell but doesn’t make the whole point.
I try to be a "glass half full" kind of guy and I truly believe that we can - and have to some extent - talked ourselves into today’s recession and slump. When I fell a cold coming on, I tell myself I’m not going to get sick and most of the time I don’t.
Yes, there are some fundamental problems with the economy: credit availability, price of gas, value of the greenback…even climate change.
But there are some fundamental things right with our local Atlanta, and Alpharetta in particular, real estate markets: job creation, quality of schools, cost of living and overall quality of life. (Heck, even our underachieving NBA team not only made the playoffs, but took Boston to seven games.) Just yesterday, I showed homes in Johns Creek to a young couple who was relocating here from Los Angeles. They were so happy with the type of home and the type of neighborhood they could afford to live in here. They said that you just can’t compare.
So while I strive to be realistic in presenting the housing market data here, I also don’t want to lose focus on the big picture which is very positive in Alpharetta even while the immediate housing market is definitely a challenge. Maybe I fudged a little in the last post by looking at the composite market and not the resale and new construction sub-markets individually. Thank your, Mr. Robs, for point this out. Now, let’s take a deeper look at the data for Alpharetta and see how the story changes.
Resale Housing Sales Trends in Alpharetta and North Fulton
Resale only sales for the past five quarters show a about a 3% decline in sales price and a 40% decline in number of transactions. See Chart Below. My opinion based on this is that the ones that are selling are doing a pretty darn good job of holding their own as far as price goes. It’s the ones that are selling that concern me because they are a real drag on the market. For them to sell, they need to reduce their prices, very likely much more than 3%.
New Construction Sales Trends in Alpharetta and North Fulton
Now let’s look at new construction only sales in Alpharetta and North Fulton since January 1, 2007 (the past five quarters). Wow! The data shows a 36% increase in sales price, while it also shows 45% fewer sales. What gives? For one, the luxury market, and both these homes clearly fit that criterion, is doing much better than the rest of the market, but that is material for another blog post.
As you’re probably guessing, there were a few very large sales in Q1 2008. Two to be precise. A $6.3 million dollar new home finally sold in Windward after going under contract in August 2007.
The other large transaction was in Greystone, west of GA-400 off Hopewell Road. Originally listed a $2.8 million dollars, it sold in only 42 days on the market for $3.9 million, presumably after some major upgrades.
| Windward | Greystone |
 |
 |
| $6.3 million dollars |
$3.9 million dollars |
If you take these two sales out of the numbers, you get a more representative picture of the local housing market trends. New construction sales prices are up about 7.5% while number of sales is still half of what it was.
|
North Fulton Sales Trend: New Construction
Minus two largest New Construction Sales
|
||
| Quarter | Avg Sales Price |
# of Sales |
|
Q1 2007 |
$668,785 | 81 |
| Q2 2007 | $792,013 | 81 |
| Q3 2007 | $802,338 | 63 |
| Q4 2007 | $570,176 | 46 |
| Q1 2008 | $717,953 | 43 |
| Totals | $719,657 | 314 |
If you look at the whole market and remove the two very large sales, the whole housing market is down 2.5% from Q1, 2007 to Q1, 2008. The number of sales is, of course, still way off at 40%.
If you look at the numbers this way, which I think is more valid, instead of having a 3% increase we actually have a 2.5% decrease in home sale price in North Fulton.
|
North Fulton Sales Trend: All Resale and New Construction
Minus two largest New Construction Sales
|
||
| Quarter | Avg Sales Price |
# of Sales |
|
Q1 2007 |
$413,791 | 784 |
| Q2 2007 | $429,863 | 1,069 |
| Q3 2007 | $442,331 | 923 |
| Q4 2007 | $400,453 | 576 |
| Q1 2008 | $403,688 | 472 |
| Totals | $421,916 | 3,824 |
Thank you, Mr. Robs, for holding my feet to the fire and forcing me to do some sensitively analysis on the data. I am fond of saying that "skepticism is the chastity of the intellect." You’ve proven that here.
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Thanks, Kevin, for taking the time to drill down for the real story on the market stats. Every agent I know in North Atlanta has been saying the same thing, “Our market value is strong. The number of sales is what sucks.”
I’m running behind on my MLS Moments post for today — got involved in tweaking & creating some pages instead of posting. Look for a reference back to you later today.