Berkshire Hathaway HomeServices
Real Estate Advisor – January 2015
We are providing this monthly real estate advisor to keep you informed about the latest trends and issues in the real estate market. Remember that real estate is local and every market is different. Contact us to find out the specific details for your local area. If you know someone else who might be interested in receiving this report or who may benefit from our expertise, please let us know. Better information helps our clients make better real estate decisions!
Closings for Metro Atlanta in December were up 3.8% compared to last month and down 9.3% compared to the previous year. This reflects a more normal seasonal pattern.
- The Metro Atlanta market was 196 units ahead of 2013 closings which is essentially flat. If you exclude the heavy volumes of investors and REOs in 2013, the market above $200,000 was actually up 12.8%.
- The average sales price was $260,000 in December versus $248,000 in November. The average sale price for YTD 2014 was $250,000 which was up 42% from the bottom of 2011.
- Listed inventory was down 5.3% from last month and up 14.2% compared to last year. Inventory is up 32% from the recent bottom of February 2013. But the limited availability of highly desirable properties in select markets is still driving multiple offers and very quick sales. Remember, real estate is local and specific markets can be very different.
- Months of supply is 5.1 months versus 5.6 last month. Six months is considered normal.
- New Homes are making a comeback. The problem is that many builders cannot build them fast enough! Visit NewHomesServicesGA.com to view new home communities.
- Commercial real estate is also making a comeback in Metro Atlanta. Smart RE Data reports that land sales, industrial sales and office leases are improving. Our Commercial Real Estate Division specializes in these areas and would be happy to help you. Contact us for details.
Real Estate Outlook For 2015
The outlook for real estate closings in 2015 continues to be very positive. Here are some of the key drivers and predictions for the year.
- There are no unusual patterns like the abnormally high number of investors and REOs in 2013 when comparing year-to-year results. This makes the normal metrics more valid.
- We expect to see closed units up approximately 5-7% in 2015.
- The interior markets and key suburbs had very low desirable inventory in 2014. This resulted in many multiple offer scenarios and prices rising faster than the overall market. We expect to continue to see this pattern in 2015. There is still strong demand for homes in these areas and no significant new supply of inventory. New homes cannot build fast enough to offset this imbalance. This includes areas like Midtown, Buckhead, Dunwoody, Sandy Springs, East Cobb plus Fayetteville and Peachtree City.
- We expect to see the demand increase for the next tier of suburbs including areas like West Cobb, Roswell, Milton, Alpharetta, Forsyth County, Gwinnett County, Hall County, Henry County and Coweta. More new homes are coming online in these areas and that will help drive up values.
- Major corporate moves from companies like Porsche, NCR, State Farm and the big announcement from Mercedes will drive demand in some of these key areas.
- New loan options with lower down payments and more credit flexibility will increase purchases from First Time Buyers. That has historically been the largest buyer segment in Atlanta but has slowed in the last few years.
- Baby boomers will continue to drive the largest segment of closings. Moving to smarter living options and multi-generational are the popular trends.
- New homes will continue to grow from around 18,000 closing to 22,000 closings. The cost to build is higher and this will help lift the values for the whole market including resales.
- Mortgage rates will be increasing in 2015. The early part of the year will continue to see very low rates but this will not last. The Fed has announced the end of quantitative easing and the economy continues to gain momentum. Analysts, Freddie mac and the Mortgage Bankers Association all predict mortgage rates over 5% this year and growing back to the more normal 6-8% range in the next few years. This has a tremendous impact of buying power so the time to act is now!
The Power Of Pre-Qualification
The spring market will see many desirable homes get multiple offers and contracted quickly. Sellers will be evaluating their options to choose which bidder is selected to buy the property. They often want to limit their risks. A good example is the Financing Contingency. The Financing Contingency allows the buyer to specify a certain number of days to go through the process of loan approval. This is typically 21 days. The smart buyer will go ahead and get pre-approved for a mortgage before making the offer. This is different from pre-qualification which may still have significant risk that a mortgage will not be approved by the lender. Pre-Approval is a more detailed process and substantially reduces the risk to the seller. If you are considering buying a property this spring, we would be happy to introduce you to our HomeServices Lending Loan Officer. They can help you get pre-approved and show you all the loan products available.
Instant Home Value Estimates
Berkshire Hathaway HomeServices Georgia Properties offers an innovative new solution that allows consumers to enter an address to “click and see” local home value estimates. The estimates are free and do not require registration. Since introducing home values, our website traffic and listing views are up considerably. This is one of the unique ways we are providing more relevant local content to attract more potential buyers for our listings.
Contact Us For Additional Market Details Including Our Exclusive Report Used By Lenders To Value Homes For Mortgages.
The Best Mobile App For Real Estate!
Many consumers will be getting new mobile devices this holiday season. This is a great time to update your device with the latest version of our BHHS Georgia Properties Mobile App. Our Mobile App provides all the listings from our 8 local MLS services. We have the fastest updates, the most filtering options plus Sold Properties and the ability to Search Properties by Drives Times. Drive Time is now available on the iPhone as well. Contact us to learn more about these amazing mobile search tools.
TEXT "VOSS" TO 678.400.6100 TO DOWNLOAD MOBILE SEARCH APP WITH DRIVE TIMES!
We want to wish you and your family a Happy New Year. Spring will be here soon!