The Atlanta Housing Market is showing the same signs of recovery as the rest of the country. However Atlanta is also a unique market as far as the inventory of unsold homes, which has been extensive for several years and has dramatically decreased over the last few months and it is causing a shortage of available homes on the market.
Atlanta Housing Market in 2013:
According to RealtyTrac, the Atlanta current housing inventory is down 41 percent over the past year. Lower supply and higher demand mean rising home prices. The median sale price has raised almost 30 percent from a year ago and it continues to rise, while the days on the market dropped 30 percent from a year ago (according to Trulia.com.) The biggest jump in prices has been this year and is steadily increasing month by month.
The banks are still holding inventory (Shadow Inventory) and they will slowly continue to release at a pace not to flood the market and cause setbacks in home values. Shadow inventory being defined as inventory of properties that have been foreclosed and our now being held by the lender in their REO (Real Estate Owned) department waiting to be put back in the market.
Even if more properties are available in the market, the demand has increased to levels of shifting the trend from a buyer’s to a seller’s market. Low inventory compared to demand, great mortgage interest rates and gains in the stock market are indicators of improved investors’ confidence.
Throughout history, the United States real estate market has been following predictable patterns. Most metropolitan areas in the US are in long-term uptrends. History shows that most house prices following uptrend prices will double in 15 to 20 years from previous levels.
Uptrend markets are generally the markets where there is a steady flow of people moving in and most of the people moving in do so because of available jobs. Atlanta is on the top 5 US cities showing uptrend movement.
Atlanta real estate is also seeing an increase of foreign investments and hedge funds investors. Hedge funds investors buy up bulk REO inventory, especially properties priced under $500,000. Most of the inventory that they purchase come from court auctions (foreclosures) and REO (properties that went back to the bank after foreclosure.)
Think Like a Real Estate Investor
During a recovery phase, prices of property will still be low, but rapidly increasing and therefore investors can sell their property at much higher prices in a short amount of time. Bottom line, esponential growth is very strong right now.
These present times, as painful as they are, will prove to be an epochal time of wealth building, if we position ourselves correctly.
These upcoming months, when the large numbers of properties will hit the market, will present unique opportunities to buy. And if you want to buy a home that will increase substantially in value, you need to think like an investor.
Real estate investing is like stock market investing – smart long-term investors don’t just grab stocks whose prices have plunged. They also look for stocks with strong fundamentals—good earnings, solid growth prospects—that have also dipped low enough to be great buys.
Several areas in Atlanta show a particular increase in demand and buyers’ interest, and therefore prime opportunities for investors: Ashford Park, Brookhaven, Buckhead, Chamblee, Decatur, Doraville, Dunwoody, Druid/Briar Hills, Roswell, Sandy Springs, Tucker/Northlake and Vinings.
The changes in real estate market over the last few years have also changed how an investor needs to consider a real estate strategy – toss out the concept of “fair market value” and focus on “economic value” based on “affordability.” The approach of “Buying low and sell high” should be changed to “Buying low and sell low.”
If you would like to network with other investor and keep current on the Atlanta Current Housing Market, please join Laura Al-Amery at the Atlanta Real Estate Club: Networking and Coaching.