Tuesday, May 3, 2011

What's Happening in Atlanta Housing Market (1st Quarter 2011 Results)

Good news.  The 1st quarter 2011 Atlanta area market sales statistics reveal that 7061 single family detached homes were sold representing an increase in sales of 2% over the 1st quarter 2010.  What's great about a 2% increase you might ask.  It's an INCREASE, I say.  More significantly, this increase is comparing to last years sales when there was a government incentive in place.  Last year's government incentive (tax rebate) inflated sales, and this year, we exceeded those inflated sales without any government incentives.  Good news indeed.

We saw a couple of interesting trends: sales volume increased primarily in homes priced below $200,000 where 1st time home buyers and smart investors focused on distressed properties, and a sharp increase in sales of homes priced from $750,000-999,000.  There was even a hefty increase in sales of homes over $1 million.  Foreclosures represented 21.3% of total sales in 2011 1st quarter as opposed to 28.5% of total sales in the 1st quarter of 2010, but short sales sharply increased to 24.9% of total sales in 1st quarter this year compared to only 9% of 1st quarter last year.  This is partly due to the banks working out better solutions to foreclosure, which is a good thing.  Overall, distressed properties (short sales+foreclosures) represented 46.2% of all sales in the Metro Atlanta area in the first quarter this year, the majority of which were in the price range below $200,000. 

Overall the median sales price for our area dropped 13.7% from $157,000 to $135,000 this first quarter.  This is not to be confused with average sale price.  Median just means that it is the midway mark.  So more lower priced houses sold this last quarter.   This doesn't necessarily mean that prices have continued to decline, it just means that more volume of lower priced homes sold.  Every neighborhood area is so different, and some declined in value while others maintained or slightly increased in value.

The average seller took a discount of 17.5% lower than their original asking price in order to sell and the median days on the market were 132.  Ouch.   Remember when I talked earlier about the price range of $750,000-999,000 increased in sales??  Well, guess what?  They sharply decreased in days on the market from 531 to 258 days on market (1st quarter 2010 compared to same period in 2011).  I know you must be thinking - OMG.. it takes almost a year to sell a house in this price range instead of almost 2 years.. yikes!

Most sellers had to reduce the price of their house (many times) in order to finally sell.  That turns out to be a terrible strategy because when a price reduction was required to interest a buyer, the median sales show that sellers took a price hit of 26%, but if the seller priced the house right and sold without a price reduction, they were able to get 96.9% of their asking price and sold in only 32 days!  10.8% of the time, sellers even got 100%+ of their asking price.  This happens mostly in distressed sales, where bargain shoppers bidded against below market foreclosures and short sales, but also can happen in the regular market if the house is a great house, in great condition and priced to compete with distressed properties. 

The bottom line is this:  for every 100 listings in the 1st quarter 2011, 58 did not sell and 42 homes sold.  29 of those 42 sales had to reduce and reduce their price in order to sell and only got 73.9% of their original asking price and it took 188 days to sell.  13 out of the 42 sales were priced correctly and sold for 96.9% of their asking price without having to reduce the price and sold in 32 days.  If you would like to know how the market did in your own neighborhood, contact me for a free analysis.

In my opinion, the market is getting better, I am seeing my sales as much more active and I am working with more buyers compared to same period last year.  I think we've seen the bottom of prices and buyers now want to take advantage of this amazing market and especially take advantage of crazy low mortgage rates.  There are still homeowners who are in trouble, but homeowners and banks are working out short sales as alternatives to foreclosures.  The most interesting thing is that, as a buyer, you may end up paying a lot less than the asking price for a home, or you may end up paying at or close to the asking price.  It's up to you (with guidance from a good realtor) to determine what is a good deal for you.

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