North Fulton Voices

If you are like most of my clients, then you are probably asking these same questions.  I thought it might make sense to share the dialogue between a client of mine that might help answer these questions.  Dialogue below.

Client:  Do you think the house prices will continue to drop?  Should we consider renting, and buy next spring?

Brenda:  I have been in real estate in Atlanta for 5 years and during the past 5 years have seen our average appreciation to be between 4% - 6% depending on the area. Right after the bank issues that occurred in the banking industry (July/August), we began to see a leveling off. During the 4th quarter of 2007 we began to see a decline, although still not significant compared to other US markets. In the first quarter of 2008 we saw prices, on average to be 6.6% below the same quarter of 2007. We are seeing a climb back upward, but it is hard to know if that is just because of the time of year or if we will continue to see the market recover. Some are already beginning to say the recovery has started, others say it has not. I will not have Q2 numbers until mid July to know the trends for sure, but even if I do, it can only give me a snapshot of the rear view mirror vs. a prediction of the future.

I can tell you that our team is swamped! It has really exploded for us in the last two to three weeks. This time of year is always busy, but we are really seeing alot of activity. Our Keller Williams office, of about 250 agents, has also just had two of its strongest months if that is any indication. Regarding waiting until next spring, I would have a hard time advising you to do that based on what I am seeing. I think now is the absolute best it has been in our market to buy in some time. It is always possible it will go lower, but I also think it may just level off and then recover as well. But if I could predict it for certain, I would be a very rich person!

I have been working with clients all week that are also relocating and want to live in Forsyth County. They thought they would have a lot of flexiblity to negotiate price, especially on new construction. However, just today they said to me that it is harder than they thought it would be to get sellers to negotiate their prices down. But, from my perspective, it is still the most flexibility I have seen over the past 5 years to negotiate prices. Depending on where you choose to live may also impact your negotiation. There seems to be more flexibility on price out in Forsyth County then there is in Dunwoody/Sandy Springs.

Below is a chart that might give you a little better visual on what we have seen in our market since 2000. As you can see we are currently on par with the same trend line we saw in 2004. Prices are currently holding at levels between 2004 and 2005:

Let me know if you have any other questions.

Client:  I am working hard to be educated. Another family from here is relocating to the area and they feel that the housing prices will drop more and they plan on renting. I was trying to locate more factual information so I can make an educated decision. I appreciate all of your help.

Brenda:  You are smart to try and gather factual information. I think it is very hard to do right now as the media has really run a bit wild with all of this. You can literally find two articles in the paper some days that say two totally different things about the market. The media also tends to paint the housing market with a very broad brush. The national statistics often do not apply at the local level.

I am pasting an article below that I think was one of the most factual and balanced articles that I had seen in a long time. It was in CNN Money and outlined the Top Ten Cities that would likely recover the quickest from the housing market challenges and why. Atlanta was ranked as #4.

I am not sure what your relocating friends are basing their information on, I can only tell you what I see happening and I work in this every single day and have for the past 5 years. I cannot say with absolute certaintly that we have hit the bottom, but I can say with certaintly that this is a great time to buy. Waiting may gain you a few more bucks, but I really do not see it being anything dramatic in the Atlanta market. And, in fact, I think waiting is more of a risk. If you wait for prices to go lower, but interest rates or inflation rise, then you waited for nothing. Instead, you have just spent more money on rent and storage costs…something you cannot recuperate.

Those who seem to know what they are talking about when it comes to our specific local market will consistently say that Atlanta did not see the extremely high appreciation rates that other cities experienced and as a result, Atlanta will also not see the lows. As a result, if we drop any further in our average prices, it would likely still be in the lower single digits. Even if we were to drop another 3%, on a $500K home, that is $15K. My sense is you could likely negotiate that 3%, and probably more, off the current price of the home now and not incur the additional rental and storage costs…not to mention the hassles of renting. It is pretty difficult to time the stock market and the housing market is the same.

The other thing that you see in many of the articles is they compare how much the prices have dropped from the same month/quarter of 2007 to 2008. I think 2007 prices are long gone and it doesn’t make sense to continue to compare to them. What does make sense is to look at if the 2008 numbers are following the natural trend lines that we see in Real Estate month to month as you can see visually in the graph below.

Inventories are also at their highest right now so you have the best selection to choose from. As we get past the summer months, selections will be a bit more limited. I have an entire book of about 30 charts that I get updated every quarter regarding how the market is doing. I’d be happy to review them with you guys when you are in Atlanta next….the file is too big and complicated to just send via email. If you find any other information that you would like me to take a look at, I am happy to do so.

Client:  Thank you so much for the article. My sense is that with the continued growth that Atlanta experiences the housing market cannot bottom out like other areas. We tend to do the research and want to buy in an area that tends to have good resale. I try to take the media with a grain of salt.

Driving by the large patch of red earth on Old Milton Parkway west of GA400 you might be tempted to think to yourself – great… another strip mall or big box retailer - just what Alpharetta needs! However, just like me, you might be surprised to find out that what is being built there is only partly retail and is just what Alpharetta needs!

I have recently visited the Stanbury Residences model center, located across the street from where the new 87-acre mixed use community called Prospect Park will be developed. Scheduled to open in 2009 and 2010, this community will be a world-class luxury destination that will put Alpharetta, Georgia on the map for many of the world’s elite. All zoning approvals have been obtained from the city so we will soon see the patch of red clay turn into an upscale community that will include the Stanbury Manor, an ultra luxury five star hotel with amenities such as a 16000 sq. ft destination spa and wellness center, a glass conservatory that seats 140 imported from London, a cuisine gallery that will bring epicurean tastes from all over the world (similar to the food hall at Harrod’s in London), and even a heli-pad. The homeowners of the nearby 2 / 3 bedroom & penthouse private residences, which start at $1.5 million, will have access to all hotel amenities and on-call services from hotel staff which will move between the residences and the hotel via underground tunnels. No mixed-use community of this caliber would be complete without the high-end designer retail, office, and gourmet dining establishments that have previously been associated with a Buckhead locale. Green space with gardens and an exclusive dog-walk area, an 18-theater AMC movie complex with cocktail seating and a Whole Foods slated to be larger than their Duluth location will round out Prospect Park’s indulgent amenities.

There is no doubt that Stanbury Collection/Prospect Park development team has conducted extensive research to determine that Alpharetta can support such an exclusive and luxurious addition to the community and I can only agree that this is a good thing for North Fulton.

Well, we are in full swing of the spring market! This past year has been a roller coaster ride. Sellers are gearing up for an exciting and busy selling season and the reality is that when the seller has the ability, they will price their home properly! One hopes this will get the attention of the buyers!

One method I feel that will help move homes this season, is the FHA Programs, especially the Nehemiah Program which is proving to be one of the most trusted names in Downpayment Assistance programs. I understand that this is one of the few true 100% program that can be offered to buyers at this time.

I recently took a class offered by one of the top lenders in the Atlanta area, Wells Fargo. It was very informative and after listening with an open mind, it changed my thought process. I feel it could be one of the major answers for getting listings out of the “longer days on the market”crisis that we are experiencing in most areas.

One of the biggest problems that I deal with when working with clients needing downpayment assistance, is that other realtors are not that educated on this Nehemiah Program and have never learned how to explain this to sellers at the initial listing meeting. If sellers are better prepared at the initial listing presentation that this program could achieve a higher and quicker sale by publicizing and marketing this program on their listings, then I think we would see more homes selling faster and at higher prices. In some areas, mls statistics are showing on an average, that homes list/sell percentages are much larger on standard conventional loans than what it would be on the Nehemiah Program.

I recently visited and viewed the websites for Nehemiah and discovered it offers so much in marketing for us realtors and consumers. I would strongly encourage more realtors that are selling within the FHA pricing limits to check this program out. It might be the one of the major pathways to a better market for all!

Relocating to a new city or moving to a new area can be a bit overwhelming as you try to learn your way around in unfamilar territory. Recently I found a very helpul website that can at least get you started: WalkScore. Just type in your new address and click on “Go”. Walk Score shows you a map of what’s nearby and calculates a Walk Score for any property. In just seconds you will find the location and distances of nearby ammenties, from dry cleaners and restaurants, to grocery stores and fitness centers.