Important info for home buyers in the Greater Atlanta area

The grizzled crusty veterans feel it and the questions are starting...is the Atlanta real estate market shifting? Has the move away from historic inventory shortages and home buyer frustration finally started? That argument can be made...and while the data lags by several weeks, the radar of many experienced agents is lit. The feeling in the field can't always be immediately confirmed but we're beginning to see the data evidence. It'll take a few more months as markets always tend to "feel" before the "proof"; that's just a challenge of the business. One thing that's not debated, the mortgage rate increases (with more promised) have been an ice bucket challenge to the market.

But first -it bears repeating that "the Atlanta market" is not a monolith; it…

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April breaks over Georgia and the pencil necked geeks hike up their socks and tape up their glasses. It's time to answer the nagging question…did freddy blassy wrestlerhousing inventory in Atlanta increase during the first quarter of 2022? Well that answer is more than a yes/no binary option, context is needed and that’s best done by looking back a bit. The first quarter of any year around Atlanta tends to set up the second one. Traditionally, the months of May and June see the most new listings as the school cycle hits – graduating families sell and rising families buy. This year however, rocketing mortgage rates and other economic challenges may change that.

The charts below focus on key indicators; number of listings, number of sales, days on market and sale to list…

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There’s risk in everything. If we defer to the stats most people wouldn’t drive, fly, invest, gamble, play sports or do pretty much anything beyond sit in einstein definition of insanitythe basement wearing a mask, gloves and bicycle helmet waiting for instruction. Most folks look to mitigate risk but it’s a part of daily life. It’s also part of buying a home; successful home buyers embrace risk. "Measured risk” is a good way to summarize how buyers need to think right now as conventional tactics are simply not effective in this market (4/22).

Measured Risk

Measured risk is just that, it's not being reckless or stupid. It's understanding the current market and the influences at play. What are the trends, inventory, mortgage rates, forecasts? What are the winning buyers doing;…

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Want a sobering fun fact? A 1% mortgage rate increase cuts home buyer affordability between 10%-11%. In January, Timmy had a very nicetimmy and lassie $450K home in his sights but was annoyed with the price and having to compete with other buyers. He lost it. He then found two more solid fits at $465K and $445K, liked them and felt his offers were right on target. Losing both, he decided to wait for the "spring" market because he knows that prices will come down as inventory increases. While waiting, his mortgage rate went from 3.35% to 4.72%; a whiplash rise of 1.37% and one that forced Timmy's budget to decrease between $65K-$75K. Timmy waits; chin in hand with Lassie who is beyond pissed with him for blowing several good opportunities. "Surely the spring market will…

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climbing a rock wallIt’s hard to find a housing market not presently on fire, Atlanta is no different. Compared to a decade ago and the worst housing crisis ever, this market turn around improvement is among the tops in the country. The 2022 market could not be more different than the 2010-12 market...over 100K homes were on the market during the darkest days. The Atlanta real estate market explosion is due in large part to its broad appeal, size and vast selection of properties. The “Atlanta Real Estate market” is a misnomer; the area is akin to spilled glass of milk. With no natural boundaries, it sprawls over 8 to 16 counties depending on who sources the information. Each area is its own micro market but all contribute to the overall "Atlanta housing market".

The…

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Much of the nation spent the last two years holed up, staring at the TV waiting for instructions from Anthony Fauci. Meanwhile, the Atlanta real 60 Billion Housing Grab by Wall Street - Info graph New York Times Magazineestate market exploded and subtle fundamental changes began to appear. Zillow crashed in spectacular fashion, other iBuyers dabbled grew their presence a bit more and institutional investors decided they really love homes. Atlanta has always been an investor darling, but over the last couple of years, activity has exponentially increased. "They" know something...Wall Street is far ahead of the real estate curve and what they anticipate seems to be coming into focus. They're on a massive buying spree and tightening the chokehold; the impact on home buyers, especially in the Atlanta market, is brutal. Their…

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Coming off the frenzied Atlanta 2021 real estate market, it's hard to imagine things could get tougher for home buyers, but they are. Many factors are at play/still in play so it's not all real estate related, but buyers don't really care what's causing their consternation; the fact is that right now (late Feb '22), buyers are stumbling and bumbling wondering how to get offers selected. It's a beauty contest and the most appealing offers are getting selected.

The average mortgage rate is a good 1% higher than twelve months ago, with an expected 3-5 Fed rate bumps over '22. Home buyers are rushing to buy ahead of additional rate and/or rent increases, some will be trapped on the hamster wheel of renting. Inventory is even lower than last year and no…

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So what happens if the appraisal is below contract price? The early '22 market is already showing it'll be as tight or tighter than the '20 & '21 markets, buyers are tossing off all constraints to "win" the beauty contest of buying a home. Appraisals below contract price will continue to be a challenge in 2022. Consider, appraisals this year will be using data from the already insane market of 2021 and many will still fall below contract. Remember, the buyer’s loan is based upon the lower of the contract price or appraisal. The appraisal contingency protects the lender – and indirectly the buyer – to ensure the home can be sold for at least the loan value. Buyers that waive or modify the appraisal contingency need to have cash on hand to make up any…

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The discussions surrounding the question of “what’s a home worth” will never end, because there is no standard answer. Sure the reflex text book answer is “what a buyer is willing to pay” but that’s hardly the complete picture. A home has a number of “values” and most are not tied to the buyers in the market. There is a best answer of course, it also happens to be the simplest one. Spoiler alert...it’s not what it sells for. This short clip provides a common sense overview, below that we get more into the weeds.

Purchase Price

The purchase price is the amount the buyer agrees to pay the seller; this tends to support the “it’s worth what a buyer will pay” idea. Does it? Consider:

  • The costs of selling – commissions, repairs, closing costs,…

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Buying a lake home presents additional challenges a normal home doesn't; in Georgia those challenges can be formidable. Two major players influence lake homes in Georgia; the US Army Corps of Engineers and Georgia Power. The Corps of Engineers regulates and manages multiple lakes across Georgia, flood control is a significant responsibility of theirs. Georgia Power is the largest non-governmental provider of recreational facilities in Georgia. Power generation is their key role and one that they do exceptionally well. In North Georgia, the Tennessee Valley Authority has influence over the lakes close to the Tennessee border, using them for power generation and flood control. All have a role when it comes to buying a lake home in Georgia.

Value of lake…

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