Atlanta continues to be one of the hottest real estate markets to rebound since the recession continuing through third quarter 2016. But, before we analyze the numbers, sellers must realize the following:
For the purposes of this article, my statistics for the third quarter are about the numbered areas below.
A Seller’s Market occurs when the number of properties available for sale divided by average monthly sales is used to calculate how long it would take to sell the current inventory if no other properties were listed. When that number equals 6 months or less, a Seller’s Market exists. Although the number of sales has increased only slightly, inventory is way down from 2008 high.
The below chart shows the difference between peak market of Atlanta houses versus today’s market. How great for Sellers and how fascinating!
So, where are the opportunities? The chart below depicts the percentage of distressed sales (foreclosure plus short sales) by area. As you can see chart above for areas), many of the best school systems and areas are void of distressed sales.
What price point should I buy and where? If you are renovating a home, never go above 20% of the median price point of an area with a totally renovated home, and, never expect a renovated home to be worth more than a brand new home in a new neighborhood. Look at the numbers by area.
In what areas are median sales prices increasing? Although all areas that are being analyzed went up in median sales price (except one-area 224 Northwest Forsyth county and 2 others negligible), the median change overall was 5.8% up over last year same quarter. Although area 71 seems to jump up, realize that it is a terribly small area (Vinings of Cobb county inside the perimeter with only 21 sales in 3rd quarter with a median sales price of $495,000- small market desirable because of having Chattahoochee River as Boundary).
Median Sales Prices shown monthly, by year, illustrates the degree to which prices are changing now compared to other recent years. The median sales price in 2016 was higher in each month than in the same month of any of the previous years. The history of Median Sales Price over history is below:
So what does this statistical information mean?
Importance to Non-Distressed Property Sellers
Sellers are now tempted to take advantage of the stronger market to list their property at higher prices while the current supply/demand condition gives them an edge. There is virtually no downward pressure from distressed properties on selling prices for any properties priced above $100,000 as inventory remains historically low, making this a better time to sell than in many periods in recent years, especially at prices below $500,000. At prices above $500,0000, sellers need to be careful not to push too high compared to comparable properties or to prices like comparable sales last year, as evidence of buyer price resistance has become very noticeable in price ranges above $500,000. Despite the temptation for sellers to price higher in light of an improving market, setting realistic initial listing prices that are in line with buyer expectations (“in the market”) offers the best strategy with the likelihood of sales at or above the original listing price in very few days on market when price reductions are not required
Importance to Non-Distressed Property Buyers
The lack of supply with the high demand relationship remains in the seller’s advantage. As long as it continues, fast action and realistic offers will be necessary for buyers of desirable properties, especially at price ranges below $500K. For buyers who are interested mainly in the few remaining distressed properties, the supply has dropped to a point where competition among buyers for that supply is very strong and making realistic offers is a must for desirable houses quite often selling above Listing Price. Quick action with serious offers are required when high-value properties are found (50.0% of 3Q 2016 sales), since low median days on Market (DOM) and high sales price to list price S/L ratios usually result, often with multiple offers. The good news is that interest rates have remained incredibly low, so if the right property is found, this is still a good time to be in the market
How have median sales prices changed? The median increase in Metro Atlanta over last year was 5.8% wih median sales price going from $233,000 to $$246,000 in 3rd quarter this year versus last. The days on market (DOM) is 31 days if priced correctly which is down by 18.4 % over same quarter last year. So, now is the time to buy a house, renovate it properly, and cash in!