We are providing this monthly real estate advisor report to keep you informed about the latest trends and issues in the real estate market. 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!
For the Greater Metro Atlanta area, the “for sale” inventory is down to levels not seen since the early 1990s. The availability of quality properties with reasonable value has turned many local areas into a seller’s market.
The available “months of supply” is 3.6 months based upon closed sales and 2.8 months based on pending sales. Six months of supply is considered a normal market.
The fallout rates of pendings versus closings are higher than normal. Closed units are down for the past four months compared to the same month last year.
The pace of short sales and foreclosures coming on the market has slowed considerably. In 2010, over 60% of sales were distressed properties but that is now down to 37%. Resales are the larger mix of sales.
New Homes are making a slow but sure comeback. New home closings are up 55% from last quarter. There are some wonderful new home communities coming online with the latest innovations in smart building that may be great options for buyers.
Click here to view new home communities.
The
Case-Shiller Index reports that Metro Atlanta home values have increased 19% in the last 12 months. But values remain down 28% from the peak of July 2007.
Click here for the latest Case-Shiller report.
Home values will continue to rise in 2013 – especially in the lower price points driven by the very low levels of inventory and strong buyer demand.
Appraisals can be a problem. In areas, where prices are rising the appraiser may not be considering the latest comps or may not be able to use some comps that were done as private transactions. We can help provide information to the appraiser in the formats they require. This gives us the best chance to get the highest appraised value for loan approvals.
Click Here for a detailed set of slides that show the National Market, the Metro Atlanta Market, The New Homes Market and how our company is performing. There is a reason we are ranked #1 in Metro Atlanta.
This is an unprecedented opportunity to buy the home of your dreams while prices and financing are historically low. But these conditions will not last as the real estate market continues to recover.
New Homes Are Back!
Metro Atlanta was a national leader for New Homes prior to the real estate bust. At the peak in 2006, we had over 60,000 new home starts. That dropped to 3,000 by 2008.
New Home closings are up 55% since last quarter and builders are making a slow but sure comeback. The question is – how fast can this go? Here are some of the factors we are watching.
Financing: Very few builders could not get financing in recent years. Some were successful in getting non-traditional lenders. But now the banks are beginning to make loans again.
Permits and Approvals: It is more difficult and more costly to get the permits and approvals to get started. Cutbacks in local governing organizations have slowed the process.
Labor Availability: Many of the skilled laborers left the business. Builders are slowly building back the skilled labor resources to create more inventory.
Material Costs: The cost of concrete, lumber and other materials is rising. Those suppliers cut back their inventories and supply chains. It will take a while to build back up the system.
Weather: The recent heavy rains have slowed development and construction. If we get a prolonged period of good weather this spring and summer, their building speed will improve.
Demand: The buyer demand for new homes is very strong. The current inventory is flying off the shelves in desirable areas.
The simple fact is that New Homes cannot grow fast enough to balance our low inventory in the short-term. BUT that will change in the next three to five years. We expect to see New Homes sales to return to almost half the market sales in that timeframe.
There are some wonderful new home communities coming online with the latest innovations in smart building that may be great options for buyers.
Click here to view new home communities.
For resale sellers, that means your future competition may be a bright shiny new home. The good news is that home values are rising. The bad news is that your new home competition may be offering some compelling attributes that buyers prefer. New Homes are typically more energy efficient and include the latest features and amenities. Many resale properties will need repairs and may have aging windows and doors, HVAC systems or roofs. For many potential sellers, the window of opportunity to sell is now!
Another factor to consider is mortgage rates. The current mortgage rates are the lowest in our lifetimes. But these conditions are artificial and will not last. If you wait too long, the next home may cost you thousands of dollars in higher mortgage payments.
Click here for charts on future mortgage rates and the impact on home affordability.
Please contact us to learn more about New Home Communities In Your Area.
Get To Know BERKSHIRE HATHAWAY
Now that our company is part of the Berkshire Hathaway family of companies, we thought it might be helpful to get to know more about our new organization.
Click here for more info.
According to the Forbes Global 2000 list, Berkshire Hathaway is the 8th largest public company in the world. The company is led by Chairman and CEO, Warren Buffett who is often referred to as “the Oracle of Omaha” for his keen insight on business matters.
The Berkshire Hathaway approach is to acquire companies with great brands, great products and strong leadership, then grow and build value over long periods of time.
Berkshire Hathaway owns and operates approximately 100 companies and employs approximately 300,000 people. Company holdings include major brands like GEICO, Fruit of the Loom, Dairy Queen, Benjamin Moore, Helzberg Diamonds, NetJets, Heinz, MidAmerican Energy and Shaw Industries which is located in Dalton, Georgia.
Berkshire Hathaway has major stock positions in companies like Wells Fargo (8.7%), American Express (13.7%) and IBM (6%). Berkshire Hathaway is the largest single stockholder of Coca-Cola with holdings estimated at 8.9%.
Barron’s Magazine and Fortune Magazine have ranked Berkshire Hathaway as one of the most respected companies in the world. A Harris Interactive poll cited Berkshire Hathaway as the “most admired” company in the world.
Berkshire Hathaway was recently ranked #4 in market capitalization for U.S. companies with $251 billion in market value by the Online Investor.
In the last 48 years, Berkshire Hathaway has returned an average annual growth in book value of 19.7% to investors versus 9.4% for the S&P 500 (including dividends) for the same period. From 2000 to 2010, Berkshire Hathaway stock produced a total return of 76% versus a negative 11.3% for the S&P 500.
Being part of such a large and successful organization gives us many advantages. We are able to purchase solutions in larger scale that gives us a cost advantage. The ability to share “best practices” and resources across the enterprise will allow us to innovate at a faster pace.
We look forward to leveraging the Power of Berkshire Hathaway to deliver even more advantages for our clients and customers. Contact us to learn more.
Events Happening in June 2013
The month of June is packed with important events. Here are some of the noteworthy days coming up in May:
May 27 – Memorial Day. Even though Memorial Day is past, we honor those who fought and died for our country. We remember that freedom is not free!
June 9 – Super Sunday Open House. Prudential Georgia Realty will be hosting a SuperSunday Open House event. There will be some of the finest real estate in our area on display. Just visit PrudentialGA.com to see all the properties available.
June 14 – Flag Day. In the United States, Flag Day is celebrated on June 14 to commemorate the adoption of the flag of the United States, which happened that day by resolution of the Second Continental Congress in 1777. Fly those flags high and proud!
June 16 – Father’s Day. Father's Day was inaugurated in the United States in the early 20th century to complement Mother's Day. Before they ask, Children’s Day appears to be the other 363 days of the year!
June 21 – First Day Of Summer. The summer solstice where the sun reaches its highest point happens on June 21st. This is considered the beginning of summer.
Spring Is In Full Bloom And Summer Is Just Around The Corner.
If You Know Someone Who Can Benefit From Our Real Estate Expertise, We Would Love To Help.
Better Information Leads To Better Decisions!
Lake Sidney Lanier Homes is the most comprehensive online source for information on Lake Lanier homes for sale and Lake Lanier area real estate. View the latest Lake Lanier home listings, foreclosures, lots, land, sales trends and real estate topics on Lake Lanier. Arthur Prescott is an Accredited Buyer's Representative and Certified Residential Specialist with over a decade of Lake Lanier real estate experience. If you would like to schedule a free buyer or seller consultation, please feel free to contact us directly at 678-513-2014 or email us at APrescott@PrudentialGeorgia.com.
