Waiting For the Right Time to Buy? | Understanding the Current Real Estate Pricing Enviornment in Alpharetta
categories: Alpharetta Real Estate, Local Market Conditions
ALPHARETTA - You know who you are…stalking the market…waiting until the perfect time to buy. Good for you. You want to buy, but you’re in no hurry. You’re waiting for the market to hit bottom, waiting for that “deal of a lifetime”, or possibly waiting for your current house to sell, in which case your a victim of the waiting game as well.
Waiting is okay. Sometimes it’s the best strategy; but in the meantime, it’s a good idea to keep an eye on the price and sales trends so the market doesn’t pass you by.
To that end, this week a client, a “waiter”, innocently asked me to describe the current pricing environment in Alpharetta. At first I was just going to respond with what my gut told me and with my own anecdotal evidence. Then I thought, naw, let’s let the data do the talking.
First, the overall Atlanta metro market has a few remarkable findings: Fewer listings closed in August that in any year since 2000. See that lime-green dot below all the other lines in the chart below?
Second, sales prices have retreated to 2004 levels. While you might say that that is not that remarkable, it is interesting to see where current prices line up historically, particularly compared to other markets outside Georgia that have lost a lot more value.
The graph below shows what you would expect in a growing housing market: 3%-5% growth each year like rings on a tree. Then, for 2008, the growth ring shrinks back to the 2004 level.
Enough about the Atlanta real estate market as a whole, or hole for that matter ;-> I could find enough bad stuff to write about it to depress you for a year. As we constantly preach, though, real estate markets are local, so the question is: Do sales trends look differently if instead of looking at Atlanta as a whole we focus only on North Fulton and the Alpharetta area?
The answer is that you don’t see a drop back to 2004 levels in North Fulton, although you do see some price leveling. What you also see is a big drop off in number of units sold: 16% down over last year; 43% down from August 2006. That’s right: about half as many homes sold in North Fulton in August 2008 as August 2006. Don’t believe me? See the graph below.
Notice, also, in the graph above that while average sale price has leveled off, average list price has not. This is another testament to the survey results recently released by Zillow: Every House’s Value has Dropped Except Mine . Sixty-two percent of people think their house either increased or stayed the same in value when, in fact, 77% of homes across the country decreased in value. Look at that graph above…look similar?
If you compare east and west of GA-400 in North Fulton, the east side has seen some price retreat back to almost 2005 levels similar to the metro-Atlanta trend; the west side, however, has been carrying the freight.
West of GA-400, Average Sales Price has continued to increase and has now surpassed $500,000 on average, according to First MLS, although my analysis shows the west side of 400 as still slightly below $500,000. Either way, that’s amazing in this market. My gut would not have told me that. My head has a hard time believing the numbers, too. The numbers are in the graph below, which also shows the increase in days on market that is expected in this market. Remember, days on market is only for homes that actually sold. It does not take into account all the homes that were withdrawn or expired without selling.
Lastly, please allow me to address the argument I often hear that west of GA-400 it is all the million-dollar new homes that are driving the prices up. Take a look at the graph below. It brakes down sales by new construction versus resale. It if glaringly apparent from that graph that the driving factor behind the average sales price is resales. The “all sales” line and the “resales” line very closely parallel each other and when there is a dip in resales it is mirrored with a dip in the avergage sales price for all properties.
By the way, just note that average sales price for new construction is all over the board. That has a lot to do with there being smaller numbers of transactions so the averages are more sensitive to large dollar sales.
USAGE NOTE: Scroll the chart with the slider (the part with handles on the chart at the bottom).
Adjust the visible area by dragging the slider’s handles.
Move the mouse over the graph to see the guides and data-point labels.
Right-click and select Full Screen or click on the icon in the lower right corner.
Thanks for hanging in there for the length of this post and for waiting for a couple of weeks since my last post. You’d think in a down market that I’d have more time on my hands, but strangely I’m very busy. Market analysis type posts take a lot longer to do and, frankly, I’ve been procrastinating doing it because we hear so much bad statistical analysis in the news that I could barely bring myself to look at our local numbers.
Also, I hope that you enjoyed the new graphs that I incorporated into this post. Click and hover and try to interoperate with them…they do fun things, particularly the last one. Let me know if you like them because I took a lot of time to build them and integrate them into wordpress, the software I use for this blog.
Finally, if you decide to get off the fence, call me, will ya? ;-> That fence looks uncomfortable.
Fantastic graphs! The best I have seen on a real estate blog, ever. Also, great work on detailing how all real estate is very local and stats for a city as large as Atlanta really do nothing to give a specific area of town any market knowledge. The Alpharetta market shoppers have a great resource in your blog! Excellent stuff here.
Kevin-
Excellent graph work- clear, user friendly, compelling information. Kudos - again.
Katherine