An in-depth look at the area housing market, sales trends and outlooks provided by John Heath and Your Result's Team realty...
The first thing to understand in the housing market is that real estate and housing trends must be looked at on a very local level. Despite the national media’s attempt to report on the state of the housing market, there is no national housing market. The value of real estate in general and for the purposes of this article, single family detached housing specifically, is driven by the very basic economic principals of supply and demand. In this article we will look at values and trends in the Forsyth, Dawson and North Fulton real estate markets. Please understand home values and trends can be as localized as a specific neighborhood or school district and can vary greatly across price ranges. The following analysis is provided based on information reported by FirstMLS, the primary listing service used by Brokers in our market.
First, the Good: Inventory levels remained fairly consistent over 2007 with current levels up only about 3% over this time last year. While sales in 2007 where down about 13% from 2006’s record levels, there were still nearly 7,000 homes sold in the North Fulton, Forsyth and Dawson markets leaving us with a very healthy 9 month supply of homes at year end. New home starts have slowed and local banks have significantly tightened their lending policies in regard to residential development and construction for the time being in response to current market conditions.
Now, the Bad: The number of listings currently on the market in North Fulton (2198), Forsyth (2646) and Dawson (483) is still significantly higher than it was at this time in 2006. While sales in the first quarter of 2007 were actually up over that same period in 2006, sales over the last 6 months have declined by nearly 27% over this time last year resulting in a current overall (MOI) months of inventory of 10.7 in North Fulton, 12.9 in Forsyth and nearly 20 in Dawson County. Homes priced under $300,000 currently make up nearly 50% of overall sales, but only 36% of listings, while homes priced over $500,000 currently comprise only 20% of sales and 30% of the overall listing inventory in the Forsyth and North Fulton markets.
Will it get Ugly in our market before it gets better? If anyone could predict this with 100% certainty they would be very wealthy, however here are a few facts to consider and an educated guess based on the same.
Over the last few years Georgia has consistently ranked in the top 10 nationally in foreclosure rates and there is no doubt that defaults in the subprime market coupled with slower home sales is going to result in continued high levels of foreclosures. Higher foreclosure rates result in downward pressure on home prices and tighter lending requirements. Unfortunately with this being a Presidential election year, our “unbiased” national media are not likely to let up on their doom and gloom economic projections until after November further weakening consumer confidence.
Fortunately, as reported in other articles in this publication, the federal government is taking steps to help existing homeowners lower their mortgage payments, hold on to their homes and to stimulate home purchases by making it possible for buyers to obtain more favorable, federally secured financing.
Georgia continues to be a highly desired place to live and thanks to a lower than average costs of doing business we will continue to see job growth from both expansions and corporate relocations. Projections are for Georgia’s population to grow by nearly 2% in 2008 with forecast from the Robinson College of Business at Georgia State predicting job growth of around 80,000 throughout the state with nearly 50,000 of these jobs based in metro Atlanta. This increasing supply of potential buyers coupled with favorable interest rates and a continued slow down in new home starts should result in a significant reduction of available listings over the year.
We currently believe there is pent up demand from buyers waiting on the sidelines due to apprehensions about the overall economy. As more and more of these buyers enter the market we will begin to see a shift from a buyer’s market to a seller’s market as builders and developers scramble to catch up. Initially this shift will be seen in the under $300,000 price range where inventory levels are already lower. However, as lower priced homes are purchased those sellers will be free to move up into larger, more expensive homes and the cycle will continue although at a slower pace due to the larger spread between existing supply and demand in these higher price points. The net is, if you don’t have to sell right now you may want to wait until the existing inventory levels are reduced.
On the other hand if you are in a position to buy a home, now is the time. Interest rates are very favorable and if you hire a professional Realtor to assist you with your search and the negotiation process, you should be able to start out with some positive equity built into the deal. If you need to both sell and buy right now, homes priced correctly and marketed properly are still selling in an average of 90-100 days and typically at @ 95% of list price. So by pricing correctly on the sale and negotiating properly on the buy you should be able to experience a net gain in equity on the combined deal and still make your move within a reasonable time period.
If you want to learn more about what is going on in and around your neighborhood, please visit www.NorthGaHomeSales.com to view more specific data online or call 770-886-5950 to schedule a Free in depth analysis of your home.
