Sellers are in control of the housing market in the majority of North Atlanta. This due to a combination of factors but it’s evident that the needle has moved to their side. Many buyers are finding this to be true the hard way; by losing a home or homes they found appealing. To be clear, this does not appear to be a ridiculous run like that which preceded the crash – at least as of now. This seems to be a combination of factors coming together that are likely to make the spring – summer season interesting.
There is always an increase in activity during the spring / early summer, particularly in areas with highly desirable schools like East Cobb, Alpharetta, Roswell, Johns Creek and Milton. It’s rather predictable; by late March the traffic begins in earnest. This will run through end of May and end of school, when everyone in Atlanta leaves for Florida and other beach areas. The month of June tends to be active again up until around mid July. After that, thoughts go back to preparing for school and the fall pattern begins.
The buyer’s market is over. Easing mortgage standards, increasing rents, limited inventory and the Fed stating that there is “consideration” of a rate increase has increased buyer activity. Competition – and a sense of urgency to secure low rates – is working to the advantage of sellers. Like musical chairs, buyers now find themselves competing with many others for the quality listings. Operative word is quality – some listings (esp bank owned homes) remain overpriced even for hungry buyers. Caution is word of the day.
This spring, there are additional factors at work in the market. Some impact only buyers, some only sellers but many impact both. A quick synopsis and suggested advantage…
Low mortgage rates are almost certain to increase. This has been a topic of conversation for several years and despite this administration essentially mortgaging the future to artificially hold them down, low rates alone did not stimulate the market. Reports of an improving economy and job market – both very questionable – have led the Fed to mention “consideration” of a rate adjustment for the first time in six years. This caught the attention of everyone as this is the first time it’s been been even broadly mentioned by the Fed. NO ADVANTAGE
Relaxed lending standards have been introduced. It’s clear that years of the Feds artificially holding down mortgage rates failed to stimulate housing. The latest move is to lower the bar for buyers, the idea here is to simply increase the volume of potential buyers. The logic behind again opening up mortgages to possibly unqualified/high risk buyers can be debated until the cows come home, it matters not because it’s done. NO ADVANTAGE
Market Action Index – Below 30 favors buyers, above 30 sellers
Inventory is increasing a bit but quality inventory remains limited. In short, reasonable sellers with accurately priced homes in good shape are seeing strong interest from buyers. This is especially true in highly desirable areas, particularly with excellent schools like those noted above. It’s common for these homes to be under contact within just a couple of weeks very close to list if not at list. ADVANTAGE SELLERS
More buyers are out, many that have been fencing sitting for months or even years. Talk of relaxed mortgage qualifications and the expected rate increases seem to have motivated those buyers that have been idle. Why they’ve been sitting idle is often a mystery, most common reason seems to be they’re looking for the “perfect house / perfect deal”. The realization that this is not always possible seems to be setting in. ADVANTAGE SELLERS
Atlanta – including the suburbs – was a buffet for institutional investors as they gorged on foreclosures during the crash. Atlanta was at the top of the heap as the market crashed and everyone with an appetite for bargains came in, many of the big players left with hundreds to thousands of homes. Wall Street is involved with this of course and this is business with expected returns – and that means rising rents. Renters continue to see increases, many that chose to rent or were forced to, are back in the buying mode. ADVANTAGE SELLERS
Many potential sellers that might consider listing, can’t or won’t. Despite the media spin, many sellers remain unable to financial execute a move due to lack of equity, lack of available cash for moving expenses or personal financial concerns about their employment and/or other financial commitments. Others refinanced at rates in the 3% range, they are less motivated to incur the expenses of a move and absorb a higher rate. Still others renovated, expanded or otherwise modified their homes and while they may find eager buyers, don’t want the hassle of becoming a buyer themselves. ADVANTAGE SELLERS
Here two examples of local markets showing the median days to settle. This is the median time frame in days from list date to close date including the time between contract and settlement. Seasonal fluctuations are always present, also impacting this is the mortgage process – the amount of scrutiny and oversight has lengthened that process.
Alpharetta – Roswell – Marietta
Sandy Springs – Dunwoody
Across the board, the amount of time that a QUALITY listing spends on the market is down. This is broad, variations exist with different price points and with the smaller micro markets in each of the larger ones noted. Naturally we can drill down to have a look and get a feel for any micro market.
The takeaway here – and echoed by the busy agents and buyers themselves – is that the buffet that was open for home buyers has closed down. The current environment is highly competitive and the quality listings will attract other buyers. Success in this market is based upon preparation, focus and decisiveness; know what you want and when you find it go and get it. Appraising and working with buyers in the Atlanta area since 1994 provides our buyers tremendous advantages; the devil is in the data as well as the details…learn how we can keep you out of trouble.