Archive for the 'Local Market Conditions' Category
Alpharetta Real Estate Sells for $100k More on Average than Roswell and East Cobb Real Estate
categories: Alpharetta Real Estate, Local Market Conditions, Roswell Real Estate
My fellow Realtor, Kathy Drewien, in Marietta does a great job of compiling market statistics in her area. She does it the old-fashioned way: with hard work and expertise. She recently did a comparison of East Cobb, Roswell and Alpharetta. The analysis was done by zip code, so the Alpharetta numbers include Milton and Johns Creek real estate, but none the less the numbers are intriguing.
Her analysis shows that on average Alpharetta real estate sells for about $100,000 more than East Cobb (Roswell and Marietta addresses) and Roswell (Fulton County addresses). Click Here for all the numbers from Kathy.
Posted by Kevin Warmath | Currently 2 Comments »
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 |
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| $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.
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North Fulton Sales Trend: New Construction
Minus two largest New Construction Sales
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| Quarter | Avg Sales Price |
# of Sales |
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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.
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North Fulton Sales Trend: All Resale and New Construction
Minus two largest New Construction Sales
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| Quarter | Avg Sales Price |
# of Sales |
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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.
Posted by Kevin Warmath | Currently 1 Comment »
Sales Price Up, Number of Sales Down | Real Estate Market Trend Remains the Same in North Fulton and Alpharetta
categories: Alpharetta Real Estate, Local Market Conditions, Sellers
I received a phone call from a local newspaper yesterday asking for some real estate market analysis. It seems that word has gotten out that I like to crunch the numbers.
Someone had forwarded the reporter a link to an article on CNN Money that listed Atlanta (and mentioned Alpharetta) as one of the six best places to buy a home based on prices expected to rise the most - or decrease the least - in the next 12 months.
How seriously should you take a list like this when Detroit (Farmington Hills) is on the list with you? Isn’t the housing market in Detroit a train wreck? Maybe the wreck has already happened and now they are just cleaning up. After all, Ford did announce today a $100M of net income in Q1, a $382M increase over Q1 last year.
The CNN Money analysis was done by looking at the Metropolitan Home Price Index published by OHFEO and the "fundamental housing value," a measure also called the price-rent ratio which is derived by taking the price of a home and dividing it by the discounted value of the future stream of rent payments you could get for that house. This is an investment based valuation method that says anything over 1 is overpriced (as an investment) and anything under 1 is underpriced. CNN selected metro areas with high momentum and low price.
In selecting Atlanta, CNN singled out Alpharetta as a "typical affluent suburb" and pegged the average sales price at $359,950. I could take exception with CNN that Alpharetta is typical, but that is an entirely different post ;-> Here I want to focus on the average sales price for Alpharetta, which is what the local reporter was looking for, too.
Average Sales Price in Alpharetta for Q1 2008
The average sales price in Alpharetta for Q1 2008 was $384,612. This includes all resale and new construction single family residences. The average for Q1 2007 was $372,895.
The change represents a 3% increase in sales price, but doesn’t tell the whole story. The real story is that in Q1 2008 only 237 homes sold in Alpharetta versus 402 in Q1 2007. That is $63M less sales volume than a year ago.
If you look at North Fulton as a whole, which includes the four cities of Alpharetta, Roswell, Johns Creek and Milton, the numbers show the same pattern on a different scale. [Note: it is a little difficult to separate sales in the City of Alpharetta from North Fulton as a whole because there are homes in Milton that have an Alpharetta postal address and homes in Johns Creek that have a Duluth/Alpharetta/Rowsell postal address, but I did my best based on high school districts.]
In Q1 this year, the average sales price in North Fulton was $423,503 vs. $413,791 a year ago. However, again, that represents far fewer transactions: 474 in Q1 2008 vs 784 in Q1 2007. To most sellers, that is the definition of a buyer’s market regardless of average sales price.
So, while the exposure given Alpharetta by CNN Money is nice to get, I’m not sure that their methodology, as with most "Best of Lists", is anything but hogwash. Yes, we have price momentum. Yes, real estate is priced more affordably to begin with in Atlanta and Alpharetta. But CNN’s methodology doesn’t take into account the inventory that is not selling in this market and the effect that it will eventually have on the overall market. Maybe sellers will just withdraw and wait until price recover. Maybe they can’t wait and will reduce their price to sell. Only time will tell.
CNN Money’s point in the whole story is that Alpharetta is a good place to buy because it has good potential for appreciation. While I couldn’t agree more, because there are some many fundamental growth factors in favor of Alpharetta, the short term prognosis is dicier. Alpharetta real estate prices are increasing; that is, we have positive price momentum which is what CNN Money was measuring. However, you can only take advantage of that momentum if you are able to sell. There were 310 fewer sellers realizing any gains this quarter and a year ago.
Now, on a slightly different slant, if you want to live in one of the skinniest counties in America (Marin County, CA was the skinniest), CNN Money has that coverage for you, too. They actually compared counties based on the body mass of their residents. But what if you have a county with just a bunch of mammoth-sized but lean residents, wouldn’t that skew the rankings? Anyway, you won’t find anywhere in Georgia on that list, that much you can bank on.
Posted by Kevin Warmath | Currently 5 Comments »
Market Indicator: Bowen Homes Sells 12 in 14 days
categories: Buyers, Forsyth, Local Market Conditions
With so much doom and gloom in the real estate market, I thought that I’d share some market news that I got from none other source than my barber. Hey, barbers know what is going on around town.
Bowen Family Homes has sold 12 new homes in their Stonehaven subdivision in South Forsyth in the last two weeks.
The neighborhood will ultimately have about 500 homes in the $200’s and has a 10-acre recreation area. There are currently about 300 homes built.
I suspect that a lot of these buyers are first time buyers taking advantage of low interest rates and not having to sell a home before they buy.
Just wanted to let you know that it is not all doom and gloom in the Alpharetta (and Cumming) real estate market.
Now, if you need the best haircut in Alpharetta, go to Gino and Jacksons at Hwy 9 and Windward Parkway next to La Parrilla.
Posted by Kevin Warmath | Currently No Comments »
Milton Real Estate Review for 2007
categories: Alpharetta Real Estate, Local Market Conditions, Milton Real Estate
I was flattered with a call from the Milton Herald the other day. They were doing some research on local housing and wanted some input for agents with feet on the street experience. Apparently they can Google "Alpharetta Real Estate", too, and they found me! I appreciate the call and wanted to share with my readership the input I gave the Herald.
They asked me a few questions regarding the Milton Real Estate market specifically. (Please see my post from earlier today for a broader analysis of Atlanta and Alpharetta/Roswell Real Estate).
It is difficult to isolate just the Milton sales data in the information available to realtors, primarily because Milton is a new city, so historical analysis based on City Name is not possible. What I was able to do was select only sales data from Fulton County and the 30004 ZIP code. Admittedly, that includes some of Alpharetta, but I excluded the parts of Cherokee and Forsyth Counties that are in 30004.
1. Are homes selling like they previously were and what kind of numbers are we talking about?
Similar to Alpharetta as a whole, there have been fewer sales in Milton in the last couple of years, but the average sales price continues to increase. In Milton, particularly, I attribute some of the price appreciate to the high end new construction. Even though it is not selling as quickly as builders would like, every time a $900,000 house sells it definitely pulls up an average that is about half that.
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30004 Residential Real Estate Sales History |
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| # of Sales | Avg. List Price | Avg. Sales Price | Days on Market | |
| 2004 | 1,427 | 381,149 | 368,541 | 63.82 |
| 2005 | 1,886 | 408,666 | 399,830 | 59.50 |
| 2006 | 1,641 | 441,415 | 415,729 | 59.47 |
| 2007 | 1,428 | 472,663 | 449,060 | 74.00 |
2. Are prices for homes sold in Milton staying steady, growing or slipping?
Average sales price is definitely growing and will continue to grow. Don’t let all the market slowdown talk confuse you into thinking that home prices are falling. Sellers may not be able to get what they want and there are stories of huge price reductions, but ON AVERAGE, prices are still growing. Now here is the caveat: that is for homes that are selling! There are a lot of homes that are not selling. There were 1,347 homes that expired from the market without selling last year - and these were just the ones listed with a realtor.
Many of these homes did not sell because they were either too expensive or not in good enough condition for the price. So even while the average sale price was $450,000, there are a lot of homes that people would like to sell that are significantly below the market…otherwise, they would have sold. To me that is why the $450,000 average is a little misleading: There is this unseen weight on the market of unsold homes that is below "the average market." That also helps explain why most people think their house is worth more than it actually is.
Anecdotally, an expired seller in Crooked Creek told me the other day that she wasn’t going to sell her house because it was already "way underpriced" and hadn’t sold. The only logic I can apply to her situation is that all those buyers who wanted to pay her undervalued price must not have known about her home; otherwise they should have flocked to it. The market doesn’t lie: Her house was likely still overpriced. And it is sales like this, when they do happen, that will have downward pressure on the average sales price. Of course, the seller’s retort is always: "I’m going to wait until the market improves." As if it is the market’s fault ;->
3. How long are houses staying on the market and what is the trend?
Homes are definitely taking longer to sell, by about two weeks compared to last year. However, at 74 days on average, that is still a reasonable amount of time to get it sold. Over all the trend is fewer homes selling for more money is a slightly longer period of time.
4. What are the contributing factors to the changes in the Milton real estate market?
In one word: Florida. What I mean by that is that Atlanta / Alpharetta / Milton are still areas that attract a lot of relocations from other markets. These other "feeder" markets are depressed and the people who want to move here can’t sell their home where they are. We personally have at least 20 clients in Florida who would like to move to the Alpharetta / Milton area but can’t get their home sold in Florida. The same is true to a lesser extent in some other markets like California and the mid-Atlantic area, but nothing like Florida. If we could break the Florida log jam, it would do amazing things to the Alpharetta real estate market, no doubt.
Other than the general national real estate malaise, our real estate market has good fundamentals. The cost of housing is relatively low, property taxes are also relatively low even considering the recent reassessments and the sales tax proposals in the state legislature. Job growth continues in the GA-400 corridor and our schools remain excellent. If you don’t already live in Alpharetta / Milton / Roswell or Johns Creek, now is a good time to buy into the market because I believe that growth will continue in this area and this momentary housing storm will pass us mostly unscathed.
Posted by Kevin Warmath | Currently 3 Comments »
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.
Posted by Kevin Warmath | Currently 2 Comments »
Alpharetta’s Real Estate Market Soft at the Bottom, Mediocre in the Middle and Ripe at the Top
categories: Alpharetta Real Estate, Local Market Conditions, Luxury Homes, New Construction
It used to be that Realtors had the bulk of information necessary to be effective when buying or selling real estate. This information included tax data, recent sales data, even lists of homes available for sale. Remember the old MLS books Realtors might let you borrow over the weekend to see what was on the market?
Realtors used to keep as much of that information close to the vest because they believed that information was power, or at least a competitive advantage in earning a living, if not an outright anti-competitive tactic to preserve an industry. The Internet pried all that information loose even as certain MLS’s tried in vein to keep it out of the public eye.
Today, information about real estate is everywhere and easy to get online. In fact, there is too much real estate information for any carbon-based being to consume. I can’t consume it all and I doubt you can either. Granted, I’m a slow reader, but if real estate is my full time job and I can’t wade my way through, how is it even slightly possible for a non-real estate professional to consume it when you have a full time job doing something else?
That leads me to my premise, which is that today, a good realtor’s value is not in providing you with information, but rather in interpreting that data in a meaningful way. I get calls at least weekly from readers of this blog saying basically, "There is some much information about schools, traffic, new communities, recreation, housing prices, etc., that I don’t even know where to start. Can you please help me sort it all out."
Absolutely. THAT is my job: to sort it all out, make sense of all the data and help guide you in an important buying or selling decision.
Let’s get right to the data.
Would you believe that in this "horrible" real estate market that the average sales price for a home in Alpharetta / Roswell / Milton / Johns Creek is UP 4% over last year at this time? Amazing isn’t it.
That’s right. The average sales price through October, 2006, in Alpharetta and surrounding cities in North Fulton was $409,000. This year through October it is over $427,000.
But what about all the sellers in the market who say that there house is not selling? They do have a beef: There have been fewer homes to sell in the Alpharetta area year to date than last year. So far this year, 2,953 homes have sold versus 3,336 last year. That is an 11% drop.
Fewer sales X a higher average sales price = about the same amount of market volume, right?. That’s almost right. To date, $1.37 billion of residential real estate has transacted so far versus $1.62 billion last year. That is a drop of 8%.
The Alpharetta / Roswell real estate market is over a billion dollars. Where exactly is the 8% drop showing up?
If we dig a little deeper, the bottom end of the market is the part getting hit the hardest. Homes sold below $200k are off over 30%; fortunately, that is not that large of a part of the market. The number of sales between $200 and $500 is off by approximately 10%. The $300-$500k price range is the heart of the market and why it matches the overall numbers closely.
Above $500k, the market looks a bit different. Between $500k and $1MM, the number of homes sold is off about 6%. And get this: more Million Dollar Homes have sold in 2007 than 2006. In fact, the absorption rate (the common measure of supply and demand) for million dollar homes has decreased from 45+ in July to This 13% increase in the high end market has also likely masked some of the market pain at lower price points by making the averages sale price higher than it otherwise would have been.
The interesting thing about the new high end home sales, particularly on the west side of GA-400, is that while, yes, there have been more sales this year than last at the top of the market, there is also much more inventory in the high end as 2007 ends. Last year there were 70 $750-$999 homes on the market west of GA-400; this year there are 99, which is 3 months more inventory than last year. There are 129 homes over one million dollars versus 99 last year. That is a formula for hungry builders and great deals for buyers at this price point.
So what are the lessons?
Houses are still selling; fewer of them yes, but still at fair prices. Buyers still complain about the market, but I’d challenge them to really evaluate the condition and value of their home. Two of my favorites sayings are that "pigs get fat and hogs get slaughtered." Are you a pig or a hog in this market?
One of my other favorite saying is: "The market is always right." If you have your house on the market and it is not selling, that only means that there is a better value in the market someplace else regardless what your belief system tells you.
If you are a buyer, consider this: Atlanta, and Alpharetta in particular for reasons mentioned all over this blog, has huge upside potential for appreciation. Albert Niemi, former dean at the Terry School of Business at UGA, recently spoke at a Bank of North Georgia function and said:
- North Georgia (Greater Atlanta) is going to be one of the great growth engines in the U.S. economy.
- Atlanta is one of the cheapest places to do business in the country (and also has a relatively low cost of living and good climate - I added that part ;->).
- Atlanta is one of the four fastest growing cities in the U.S. (with Dallas, Phoenix and Las Vegas).
A blogging real estate colleague of mine in neighboring Cherokee County wrote last year that metro Atlanta is growing at about 100,000 new residents per year.
Atlanta’s and Alpharetta’s real estate market won’t be this "depressed" for long. You can buy million dollar houses for a fraction of appraised value and you can buy a $600,000 house in Alpharetta for what you’d pay hundreds of thousands more in other cities.
Regardless of whether you are a buyer or seller, though, remember: The market doesn’t lie.
Posted by Kevin Warmath | Currently 6 Comments »
The Real Estate Glass is Half Full in Georgia and Alpharetta
categories: Alpharetta Real Estate, Johns Creek Real Estate, Local Market Conditions, Milton Real Estate, Roswell Real Estate
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Click on Map to Enlarge |
I’ve said on this blog before that you can lie with statistics - or at least mislead by not telling the whole story. I find this often with the current housing crisis.
The headline of the most recent Office of Federal Housing Enterprise Oversight (OFHEO) report, referenced on the front page of the USA Today today, reads: "House Price Weaken Further in Most Recent Quarter, First Quarterly Price Decline in U.S. since 1994." That sounds scary, doesn’t it?
While this is technically correct, if you looked at the report in more detail, you would probably not be so scared.
I’m not saying the housing market is a bowl of cherries, but it is certainly not all gloom and doom as most media outlets would have you believe. Frankly, I’m growing a bit weary of hearing about how bad the market is. I hear it from other agents, usually the ones who aren’t selling anything, and I hear it from frustrated sellers who can’t sell their homes because they are overpriced, and I hear it every day on the news.
Personally, I prefer to look at it this way: Atlanta is a growing metro area with steady job creation; Alpharetta and North Fulton have some of the best public and private schools around; people want to live in the South because of the weather, jobs and because it is cheaper to live here than other regions; people want to live in Alpharetta and the surrounding cities and they appreciate the informed, professional real estate services that we provide them. My business is up over last year. Can the market be that bad?
Housing Crisis Centered in Four States, Not Georgia
If you dig into the actual report, which no one ever does because it is 89 pages long, you’ll see that the housing crisis, in terms of negative appreciation, is isolated to California, Florida, Michigan and Nevada, with Massachusetts and Rhode Island, playing a small role. There are still twenty states that have experienced 5% or better appreciation from Q3 2006 through Q3 2007.
Yes, that is a drop from the double digit appreciation of 2004 and 2005, but do home owners expect the market to continue like that for ever? To me, it has sounded like some homeowners thought they were in some way entitled to double digit home appreciation and now when they are trying to sell they say, "Well, I’m not gong to give the house away." If I had a nickel every time I’ve heard that in the last six months ;->
If you zero in on the Southeast, home appreciation has been respectable in the last year given the overall economic climate: Tennessee 6%, North Carolina 6.5%, South Carolina and Mississippi 5.1%, Alabama 5.3%. Georgia is the low man on the totem pole at 3.5%.
Atlanta’s Housing Appreciation is Average for the Country
If you look at just Atlanta, it ranks 139th out of 287 metropolitan statistical areas. Atlanta has had 2.61% growth over the past year but a -.56% drop in the last quarter. Over the past 5 years, Atlanta real estate has appreciated 20.18%.
Looking at other cities in the U.S., seventeen of the twenty cities leading the the DEpreciation were in Florida and California. The other three were in Michigan. Surprise there! My reading of the OFHEO report is that while certainly appreciation has come down across the board, that this problem is mostly concentrated in a very few states.
Alpharetta Real Estate Continues to Appreciate
Even within Atlanta, there are pockets of variance in the real estate market. While the city as a whole may be relatively flat price wise, I wrote on this blog back in September that average sales prices have continued to increase in North Fulton (Alpharetta, Milton, Roswell and Johns Creek) on both sides of GA-400 by $30,000 over last year. People want to live in North Fulton, that is obvious - and we are here to help them accomplish that goal!
It is a great time to buy real estate in Alpharetta. Sellers who have remained on the market are truly motivated to sell. But buyers, don’t think that Alpharetta is a fire sale. Yes, it is a good time to buy. Yes, you can find a lot of house for the money. But good houses still sell quickly, so my advice to buyers is not to get too high on the hog.
I don’t know about you, but my glass is half full and I don’t subscribe to gloom and doom in Alpharetta. Looking at the details of the housing data tells the more complete story.
Posted by Kevin Warmath | Currently No Comments »
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