What is a neighborhood? What is a market area? The traditional definitions remain but real estate is a constantly evolving thing. Alpharetta can be east or west of 400, can also include Milton or Johns Creek and be one of six high school districts. Marietta can be east or west of I-75, be East or West Cobb and be one of seven high school districts. Nationally, most data sources consider the “Atlanta” market to be comprised of 22 counties, from Gilmer County to Fayette County. Some consider it to be an amalgamation of Atlanta-Sandy Springs-Marietta. This is the reason that national data about real estate trends is all but useless. and why a home buyer or seller must focus only on the local micro market where the home in question is located.
The Atlanta market is like many others in that there is a city segment and a suburban segment. The suburban areas are heavily influenced by school districts and proximity to access routes. The intown areas tend to be most defined by geography and history. When areas like Druid Hills, Kirkwood or Virginia Highlands are mentioned, certain defined areas come to mind. When the suburban areas are mentioned, places like Marietta, Alpharetta or Cumming often have a school district added. “It’s Alpharetta but Johns Creek HS”; “It’s the East Cobb part of Marietta, in Walton HS” or “It’s in Cumming, in West Forsyth HS” are common to further clarify the area.
This clarification matters because buyers and sellers must focus on the competing area to ensure that unreliable data doesn’t muddy the conclusions. “What is the market like for 3-4BR homes in Marietta priced between 300-400K”? A reasonable request and one that demonstrates the variables when defining a neighborhood.
Taken as asked, the data for median sale price over the last year looks like this:
Here’s a look at homes that are in Marietta but in Sprayberry High School district. Median sale price is about 40K-50K less.
Here’s a look at homes that are in Marietta but in Walton High School district. Walton is highly desirable and here median sale price is 20K-30K higher than Marietta and a good 50K+- higher than Sprayberry high school.
The variation due to school district is clear and is also found in other districts falling under “Marietta”. This broad subset of high school district is just one discerning factor; an experienced agent (and appraiser) will boil it down further.
Inside Atlanta, there are variations as well. Grant Park and East Atlanta are in the same general area south and west of I-20. They share similar characteristics but one is in Fulton County and the other in Dekalb. Both are regarded as areas on the rise but Grant Park has better public recognition, is home to Grant Park and the Atlanta Zoo and features many historic and renovated homes. Yet both share the same “Atlanta” designation and “southeast” location.
Here’s a look at median sale prices in the Grant Park area for homes between 300K and 500K, a median sale price around 490K.
East Atlanta, just east of Grant Park and in the same general “area” shows a significantly different median sale price for the same criteria. At about 340K, this is significantly less than it’s neighbor.
The critical take away is that there is no one size fits all answer to the “how’s the market” question. The variables are many and start with properly identifying the competing market area to ensure that the data reviewed provides reliable information. Unfortunately most agents lack the skill and ability to properly analyze data, this results in their clients making uninformed decisions. It’s also a fundamental reason for the disconnect between agents and appraisers; agents must have at least a basic understanding of how an appraiser analyzes data and far too many don’t. These agents tend to lean on the talking points put out by trade groups and national organizations that consistently spin the data. The National Association of Realtors never waivered from the “great time to buy” mantra all through the crash years.
Every real estate market is “alive”; it is influenced by hyper local factors (schools, construction, demographics), regional factors (county/state management, local economy, infrastructure and highways) and national factors like interest rates,the economy, employment and consumer confidence. A skilled and knowledgeable agent must considers all of this and understand how to objectively research and identify trends. A home buyer or seller must demand this level of research from any agent, to do less can result in a financial disaster.