Category Archives: Economy

Home Values Compared to the Peak of 2006-2007

by The KCM Crew

Home Values Compared to the Peak of 2006-2007

There is no doubt that the housing market has recovered from the meltdown that occurred just a few short years ago. However, in some states home values still have not returned to the prices we saw in 2006 and 2007.

Here is a breakdown showing where current prices are in each state as compared to peak prices.

Housing-Prices

HPI Price Since Peak

HPI-Price-Since-Peak

Advertisements

Economic Forecast from the Georgia 2014 Real Estate Summit

I recently attended the 2014 Real Estate Summit at The Atlanta History Center.

There were several well-respected speakers from across the real estate industry, as well as Hans Gant, who heads up Economic Development for the Metro Atlanta Chamber of Commerce, and Rajeev Dhawan, Director and Professor,  Economic Forecasting Center, Georgia State University.

The panel was moderated by Ed Baker – Publisher of The Atlanta Business Chronicle.

Here are a few of the highlights from each of the speakers:

Hans Gant Senior Vice President of Economic Development, Metro Atlanta Chamber of Commerce

Hans Gant
Senior Vice President of Economic Development, Metro Atlanta Chamber of Commerce

Hans Gant – EVP of The Atlanta Chamber of Commerce

  • From 2008-2010, Metro Atlanta lost over 200,000 jobs.
  • In 2011, we started to rebound, adding 36,000 net new jobs that year.
  • We added 44,000 new jobs in 2012, and 50,000 in 2013.
  • Companies currently relocating divisions to Metro Atlanta include Pulte, Ernst & Young, GM, AT & T, Caterpillar, and Baxter Pharmaceuticals.
  • He sited “Education” as the number one concern of companies considering relocation to Metro Atlanta, with “Traffic” coming in as a strong second.
  • Gant let us know that there is a strong effort to attract the 2019/2020 Super Bowl to Atlanta!
David Boehmig, President / Atlanta Fine Homes Sotheby’s International Realty

David Boehmig, President / Atlanta Fine Homes Sotheby’s International Realty

David Boehmig – President / Atlanta Fine Homes Sotheby’s International Realty

  • In 2013, there was an increase in the average sales price of homes of 25% across Metro Atlanta.
  • His prediction is that there will be a modest increase in average sales price in 2014.
David Haddow, Commercial Real Estate Broker

David Haddow, Commercial Real Estate Broker

David Haddow – Commercial Real Estate Broker

  • He called 2013 our “Watershed Year”, the dividing line between the prolonged downturn and the recovery.
  • The condo market in town has made a remarkable come back, with only 306 units currently available.
  • The average sales price is $370 per square foot!
  • There was also a tremendous increase in apartment building.
  • His prediction is demand will not keep up with the number of units under construction and proposed for 2014 – 2015.
Scott Murphy – President / DS Murphy & Associates Appraisers

Scott Murphy – President / DS Murphy & Associates Appraisers

Scott Murphy – President / DS Murphy & Associates Appraisers

  • In 2013, there was a huge increase in demand, but limited inventory.
  • The first half of the year was a big challenge for appraisers as they lacked the sold data to support increasing demand and values.
David Ellis – Greater Atlanta Home Builders Association

David Ellis – Greater Atlanta Home Builders Association

David Ellis – Greater Atlanta Home Builders Association

  • In 2013, there was a 46% increase in new home sales!
  • However, he went on to put this number in perspective by reminding us that in 2006, there were over 60,000 new homes built in Metro Atlanta.  In 2013, there were 14,500.
  • His prediction for 2014 is that 18,000 – 20,000 new homes will be sold in Metro Atlanta.
  • 84% of these will be North of I-20.
  • He cautioned that the rising cost of materials and availability of labor will be two very important factors in the home building industry this year.
Rajeev Dhawan – Chief Economist / Georgia State University

Rajeev Dhawan – Chief Economist / Georgia State University

Rajeev Dhawan – Chief Economist / Georgia State University

Overall, the message was that we have strong signs of recovery in the real estate market.

Several of the speakers reminded the audience that real estate is a local business, and we cannot apply broad range statistics to our local  neighborhoods.

For an accurate analysis of the data in your own neighborhood, call or email me for a personal consultation.

Who says now is a great time to buy a house?

Wall St. Journal & Forbes: “It’s time to buy a home”

We believe very strongly that now is the time to buy a home. Some will say we are just saying this to create real estate transactions and commissions. Because of that, today we will quote what those outside the real estate profession are saying to the people who look to them for financial advice.

The Wall Street Journal

Last week, in an article entitled It’s Time to Buy That House, the WSJ told their subscribers:

“It’s an excellent time to buy a house, either to live in for the long term or for investment income…Houses aren’t the magic wealth creators they were made out to be during the bubble. But when prices are low, loans are cheap and plump investment yields are scarce, buyers should jump.”

In an article two weeks ago, MarketWatch.com (the on-line blog for WSJ) told their readers:

“Now could be the best time in history to buy a home.”

Forbes.com

In a report to their subscribers, Capital Economics reported that:

“The previous declines in house prices and the more recent drop in mortgage rates to record lows have created an unusual situation in which the median monthly mortgage payment is more or less the same as the median rental payment.”

Why is this important? Last week, Forbes explained to their readers:

“If rents simply kept up with inflation at a 3.2% annual increase, a $1,500 rent payment would cost that renter nearly $900,000 over the next 30 years. The same $1,500 payment made to their mortgage would be only $540,000 (because the payments don’t increase with inflation).”

They went on to explain the advantages of homeownership during retirement:

“Even with a dismal 1% growth rate over 30 years, a $300,000 property would appreciate well over $100,000 giving the homeowner an additional nest egg for retirement…

At a time when retirement is becoming much more challenging, an extra $400,000 (or likely more) can make a major difference not to mention the impact of NOT having to pay a mortgage.  How much less would you have to save for retirement if you didn’t pay the mortgage?”

Bottom Line

When the iconic financial newspaper and the iconic financial magazine say that it now makes financial sense to purchase a house, perhaps it’s time to buy a home.

rhondaharan.atlantafinehomes.com

Source:  KCM

13,780 homes sold yesterday

To all those who have declared the real estate market dead, we want you to know that over 13,780 houses sold yesterday, 13,780 will sell today and 13,780 will sell tomorrow.

 

That is the average number of homes that sell each and every day in this country according to the National Association of Realtors’ (NAR) latest Existing Home Sales Report. NAR reported that sales had increased 7.7% over the month before and 18.6% over the year before. According to the report, annualized sales now stand at 5.03 million. Divide that number by 365 (days in a year) and we can see that, on average, well over 13,000 homes sell every day.

We realize that these numbers are below the record for homes sold in 2006. We also know that we may never see those numbers again (and that is probably a good thing). But to say that the current real estate market is dead or that houses are not selling is totally inaccurate. We have over 13,000 pieces of evidence to prove that.

More Households Pay Bills on Time and Live Within Their Means

Lenders today continue to battle the headwinds of high unemployment, a stalled economic recovery, and a backlog of bad mortgage loans from the heyday of the housing boom – all contributing to a marketplace stressed with high levels of delinquencies and complex resolutions.

While it will take some time to get out from under all these negatives, the underpinnings of a new age of creditworthy, financially savvy borrowers are beginning to take shape. The nonprofit credit counseling agency CredAbility says American consumers have been shoring up their household finances.

In the second quarter of 2011, the financial picture for U.S. households continued to improve as delinquency rates on mortgages, as well as past-due payments for rental housing and credit cards continued to drop, according to CredAbility.

The Atlanta-based credit counseling agency tracks the financial condition of the average U.S. household with the CredAbility Consumer Distress Index each quarter. For the April-to-June period, the national index registered a reading of 69.20 on a 100-point scale, up from 68.15 in the first quarter of 2011.

A score below 70 indicates a state of financial distress. CredAbility says while the nation remains in financial distress – coming in under the 70-point threshold for the 11th consecutive quarter – the average household continues to make progress and is close to moving out of financial distress.

The score has risen for three consecutive quarters. Since the index’s low point in the third quarter of 2009, the agency’s distress reading has increase by approximately five points.

CredAbility’s PR director Scott Scredon says the explanation behind the higher score during the second quarter rests on the fact that fewer mortgages and rental obligations are going unpaid and consumers generally are becoming better managers of their own credit.

“Many people have made the tough choices needed to live within their means. They are paying their bills on time and getting their expenses in line with their income,” added Mark Cole, EVP of CredAbility and author of the index.

“Unemployment and underemployment continue to cause hardships for millions of families and weigh heavily on the confidence of the nation,” Cole continued. “But a positive emerging trend is that families are handling their personal finances more wisely.”

CredAbility’s index also measures the financial distress level of all 50 states and the District of Columbia. Among individual states, Nevada had the lowest score at 61.6, followed by Michigan, Mississippi, Alabama and Georgia.

Twenty-eight states and the District of Columbia had scores higher than 70, with six states moving above the financial distress threshold during the second quarter – Maine, Washington, New Jersey, Delaware, Utah, and New Mexico.

To see where your state ranks on the distress level, check out CredAbility’s national map and its timeline of distress readings, going back to 1998, on the agency’s website.

Source:  DSNews.com