Category Archives: State of the Real Estate Market

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

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The Truth About NAR’s Home Sales Numbers

As I always say, there really is no such thing as a national real estate market. This article from the KCM blog helps to explain the recent report from NAR on a national level.  However, what is important to be familiar with is what is going on locally.   For current, accurate data for your own neighborhood, I am always happy to hear from you.  Send me an email at  rhonda@atlantafinehomes.com unnamedThe National Association of Realtors (NAR) released their latest Existing Homes Sales Report recently. The year-over-year comparison of overall sales did not paint a pretty picture. NAR itself called the sales numbers “subdued”. Other media sources used stronger terminology. There is no doubt that home sales were lower this February (4.60 million) than last February (4.95 million). However, a closer look at the report gives us some evidence as to why that is. Last year, of the 4.95M homes sold, 25% were distressed properties (foreclosures and short sales). This February, only 16% of sales were made up of distressed properties.

WHY IS THIS IMPORTANT?

Well, if we do the math, we can see that the annualized number of non-distressed properties sold which was revealed in the latest report (3,864,000) was actually greater than the annualized number of non-distressed properties sold that was reported last year (3,712,500).

As we sell-off the ‘shadow inventory’ of distressed properties, there will be less homes from which a potential buyer can choose. That will impact sales. As proof of this point, we can look at the months’ supply of housing inventory available for purchase.

In a normal market, a six month supply would be optimum. However, we haven’t reached a six month supply once in over 18 months. This shortage of inventory is the main reason sales are down.

THE GOOD NEWS

As prices continue to rise, more and more homeowners will be freed from the shackles of negative or limited equity. This combined with an improving economy will allow homeowners to again feel confident that they can sell their homes and move on with their future plans.

We are already starting to see increases in listings coming onto the market (unsold inventory is 5.3 percent above a year ago). Once housing inventory reaches normal levels (a 6 months’ supply) we will again see home sales begin to increase.

30 Day Rezoning Moratorium in Milton

Milton horse

Milton has imposed a rezoning moratorium because the sheer volume of developer applications is swamping Milton’s Community Development Department, which makes many residents fear the city could lose its pastoral nature.

Council members voted Monday night to stop accepting applications for 30 days on rezonings in the following classifications:
•Community Unit Plan (CUP),
•Neighborhood Unit Plan (NUP),
•Transitional Zone (TR),
•Single-family dwelling (R-2 and R-2A)

“The important thing to realize in all this is that we, as a city council, remain committed to protecting our city from unchecked development,” said Mayor Joe Lockwood. “Instead, we’re actively taking steps to build a proper balance of property rights and community desires.”

Community Development Director Kathy Field said the city’s AG-1 zoning classification allows one home per acre. Developers can build at that density on any property zoned AG-1.

“There are stringent setback requirements in the AG-1 classification,” she said.

Sometimes a 1-acre lot might have topographical or stream problems that mean a home can’t be built on the lot under those requirements. AG-1 allows for a variance of up to 10 percent of the house lots. So in a 50-acre property, up to 5 of those lots could be granted a variance.

If a property has more than 10 percent of its lots with problems, developers have nowhere to go except the CUP classification, which allows up to 100 percent of the setbacks to be given variances.

“There is a concern in the community that’s allowing too much flexibility on the setback requirements,” Field said. The community feels developers and owners of land should have to follow the original setback requirements of AG-1.

“We’ve been inundated with a lot of CUPs, asking for changes to setbacks,” she said.

Field said the perception with the CUPs and other rezonings Milton is ending up with increased density. Developers say they are building the same number of lots at the same density, she said, adding that they are just better lots.

The council in granting the moratorium is letting the Community Development Department to take a step back and look at rezoning ordinances to “see if the zoning is really answering the needs of the community in terms of all the development that is going on.”

Field said the time will be spend making sure the rights of landowners in terms of their development rights are protected as well.

Only a 30-day moratorium is allowed as an emergency. But the city will spend the next 30 days advertising for a longer moratorium that could last several months.

“I think this is being driven by the consideration that there’s an awful lot of development going on in all of those subdivisions that have been previously left vacated because of the economic downturn. Those lots are being built up and new subdivision are coming in as well,” she said.

“The community is concerned about losing viewsheds, losing the pastoral look of the city of Milton. I think the council has heard that, and this is part of that response,” Field said.

Source: Alpharetta/Milton Patch

2014 Housing Market Predictions

Crystal ball

Making predictions in what is still a somewhat volatile housing market can be tricky. That being said, we are going to give you what we believe will be the five biggest headlines for housing in 2014.

Home Sales Will Surge

Many housing pundits are calling for home sales to do slightly better in 2014 than they did in 2013. To the contrary, we strongly believe that home sales will skyrocket with increases of 10-15% in 2014.

Supply Will Struggle to Keep Up with Demand

With a dramatic increase in demand, it will be up to real estate professionals and builders to make sure there is the necessary inventory to satisfy this demand. This will be a challenge for much of the year.

Interest Rates Will Increase Significantly

Most experts are calling for an increase in mortgage interest rates in 2014. However, we believe the increase will be more dramatic than is being projected. We believe rates will be closer to 6% than 5% by year’s end.

Consumers Will Demand More from Real Estate Professionals

Home search will become a given to the real estate consumer in 2014. In order to differentiate themselves from other agents, real estate professionals will need to bring strong, meaningful content to the table in all their offerings

Go Mobile or Go Home

Any content strategy the industry contemplates must have a mobile component. All information will be accessed 24/7 in every conceivable environment. The professionals who understand and act on this will dominate 2014.

SOURCE: KCM NEWS

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.