We expect the spring ’16 Atlanta area real estate market to continue the strong seller’s market of the last few years. Things turned on a dime – literally – in the last quarter of 2012. A bottom was reached and the first two quarters of 2013 saw a meteoric jump in activity, prices and a seismic power shift to sellers. This caught many buyers flatfooted while sellers rejoiced and exploited their sudden success. Buyers on the other hand, are stubbornly realizing that their window has closed – for now at least. Successful buyers are the ones that acknowledge this market and buy with value in mind. It’s not unlike a game of musical chairs, many butts and very few seats.
So what are we forecasting for the first half of the Atlanta real estate market in 2016? The likely answer lies in looking at key data points from the last three years. The focus is on four areas; Alpharetta, Marietta, Roswell and Sandy Springs. The data is broad and all inclusive; not specific by micro market. That said, trends are generally similar so we are comfortable looking at this strategically. More specific housing market data for 15 Atlanta markets and over 100 zips is also available.
Measurement of several statistics that compare demand levels relative to supply levels. Proprietary Altos Research methodology. Above 30 demand is robust to indicate “Sellers Market”. Below 30 indicates weak demand or “Buyers” opportunity markets. This provides a single, at-a-glance answer to, “How’s the Market?” Provides real time visibility to supply and demand trends in a market. This stat is useful when examining trends over a time series to indicate if a market is weakening, mixed, or strengthening over time. Also indicates seasonal fluctuations in real time. The move to a seller’s market during late ’12 into ’13 is clear in all markets. We see the strongest seller markets during the summer, buyers gaining ground during the slower winter months. The peaks over the last three years are clear; expectations are for this pattern to continue into 2016.
The sales price at which half of all sales are above and half are the sales are below. When you have outliers in the underlying data, using the median is often more reflective of the “true” trend. Again, many variables when looking at unfiltered area data but prices have been recovering from the bottom found during the crash. There are many influences here – new homes, REO and distressed sales as well as the unique price points and characteristics of each submarket. Ebbs, flows, peaks and valleys…seasonal fluctuations as expected. In short, it is accurate to say that prices in these areas are up; it is not reasonable to say they are up X% based upon this chart. This is the fundamental flaw with Case-Shiller and other reports; the data is too varied. In this case we are more accurate than Case-Shiller as we’re down to city but the best look comes from an appraisal level analysis.
Total active inventory includes those properties that were active at the end of the time period. Much has been said about the “lack of inventory” holding back the market, these charts don’t necessarily agree. All areas dropped as the market shifted in early ’13 and all peaked in the summer of ’14. However when comparing “then” to “now” we see just slight decreases in Alpharetta and Marietta, generally the same inventory in Roswell and a slight increase in Sandy Springs. Seasonal swings are clearly there and expected. We see that the quality listings, those priced and presented right, tend to attract a lot of action (seller’s market) and those tend to fly off the market. We hear “I can’t find a house” but that isn’t always the problem. We find them but the problem is accepting that another buyer is going acknowledge the current market and pay more.
This metric group covers 3 different metrics related to the average time a listing is on market prior to settlement: days to contract, days contract to settle, and days to settle. Wild seasonal swings across all cities, not entirely unexpected. Slow markets in the fall and winter give way to hot markets in the spring and summer. Note that even at the highs, the medians in these markets are 110 days or less with lows in the 45 range. Another indicator of how sellers with desirable homes are getting attention. Also another indicator for buyers as they decide whether or not to pull the trigger.
The median sold price to last list price ratio for homes sold in a given period. This represents the middle ratio of the gross sales price to the final list price (at time of contract) across the series. Altos Research did not have this stat available, this is off MarketTrends and Sandy Springs was not available. The similar tracts here show that homes through ’15 are selling for just over 97.5% of list price. This demonstrates strength in these markets as successful buyers are paying very close to list. For buyers expecting to buy homes 15% – 20% off list, it’s probably not going to happen easily and most likely will be with homes that have been on the market an extended time due to some issue(s).
So looking back three years shows consistent trends that should play out in the spring. Key takeaways:
- Sellers will likely remain in control. The grip may loosen a bit but not to the point where buyers call the shots
- Prices will bump in the spring and early summer, sellers will probably enjoy the seasonal spike
- The appealing, well priced and well presented homes will sell quickly for close to or at list; a few will go over
- As usual, prepared buyers with a definition of success will find and purchase homes
- Bargain hunters will continue the rough sledding; the “good” homes will not be on their menu
These projections are based upon the assumption that current conditions will be more or less in place through the first part of 2016. The huge variable is the Fed and a rate increase. We don’t expect they will raise anything until after the holidays and then only after a review of the holiday spending and other indicators. This economy remains stagnant and perhaps this is the “new norm”; that’s for others to mull over.
Georgia Real Estate Companies List:
|Webb Properties||http://firstname.lastname@example.org||(229) 883-6502||1820 Dawson Rd
Albany, GA 31707
|Bikel Frenelle Realty||http://email@example.com||(706) 845-8211||134 Bull St
Lagrange, GA 30240
|Mallory Realty Co Inc||http://firstname.lastname@example.org||(706) 884-3336||300 W Broome St Ste 104
Lagrange, GA 30240
|One Source Affiliates||http://email@example.com||(678) 705-7877||1534 Ralph David Abernathy Blvd SW
Atlanta, GA 30310
|EW Capital Management, LLC||http://firstname.lastname@example.org||(404) 343-2794||6393 Bankers Walk
Riverdale, GA 30274
|Bradstreet Proper||http://bradstreetproper.com/||Jayne@BradstreetProper.com||(706) 705-0516||4800 Armour Rd
Columbus, GA 31904
|Mark Spain Real Estate||http://www.markspain.com/||Homes@MarkSpain.com||(470) 228-0992||12600 Deerfield Pkwy
Alpharetta, GA 30004
|Atlanta Fine Homes Sotheby’s International Realty||http://email@example.com||(404) 237-5000||3290 Northside Parkway
Atlanta, GA 30327
|Best Atlanta Properties||http://firstname.lastname@example.org||(404) 797-1157||939 Virginia Cir NE
Atlanta, GA 30306
|Pippin Lynn - Coldwell Banker||https://email@example.com||(404) 791-3575||5591 Chamblee Dunwoody Rd
Bldg 1300, Ste 100
Dunwoody, GA 30338