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Atlanta Housing Market Update 2022

 

Atlanta Housing Market At A Glance

 

It’s no secret that the Atlanta housing market has been on fire for the last two years. The cause? Historically low mortgage rates and the coronavirus. People tried to flee largely populated areas to get to the less dense suburbs. Current homeowners didn’t want to sell their current property, and new construction was down due to a lack of labor, all leading to a shortage of homes, new and existing. So what does the rest of 2022 have in store for the housing market?

Home Sales Are Slowing

Two significant factors are slowing home sales right now: rising interest rates and more homes are coming to market. It looks like the seller’s market is turning more to a buyer’s, or at least becoming a more stable, normal real estate market.

Kam Williams recently stated this in Atlanta Magazine:

The days of having a listing come on at 5 o’clock, and having to see it by 5:05, and having 40 offers on one property—we’re not having that anymore,” she says. “Now buyers are a bit relieved. If they see something, they don’t have to run out in the next two seconds

Read The Full Article Here

This leads us to our next question that has a lot of people concerned –

Are We Headed For A Crash?

Many people are worried about another crash like that of ’08. In fact, Google trends show that more people are searching the term “housing crash” and similar terms more than at any time since ’07.
If you listen to the news, it’s all gloom and doom, but the market data doesn’t support it. Some experts predict a housing market correction.

The housing crash of ’08 was due to banks’ loose lending standards and an overabundance of homes. Banks aren’t giving out the risky loans they did years ago, and foreclosures still remain low. Housing inventory still remains critically low overall. However, metro Atlanta’s housing inventory rose to its highest level since September 2020. This gives more proof things are turning in favor of buyers.

Again, what we are seeing is a return to a normal market.

 

What’s Making The Market Turn?

Rising interest rates are a real problem for some would-be buyers. Prices of homes are still extremely high. The median price for a home in Atlanta is over $400,000, the price alone is driving out a lot of young and first-time homebuyers, and rising interest rates only exasperate the problem. For instance, a 2% rate increase from a fixed rate of 3.5% to 5.5% on a $300,000 home would mean an increase in monthly payments of over $350.00. So, in theory, this will affect buyers on the lower end, having less inventory and competing with other buyers wanting the same property.

What’s Ahead For The Rest Of 2022?

We wish we had a crystal ball, but we don’t, so all we can do is follow the market data.

Housing inventory remains extremely low. Many would-be sellers don’t want to sell because of rising interest rates and lose the low 3.5% rate they have now. However, people will become used to the higher interest rates and continue to buy. If you need to move because of a job transfer, it’s out of necessity, not luxury.

Rising interest rates will definitely slow new home construction. The data is already showing fewer permits being pulled for new home construction.

Our take:

We think things will continue to slow, especially if interest rates continue to rise. Rising interest rates are the only hedge the Fed has against inflation.  Inventory remains extremely low, which will keep prices high, but we will see a small correction in prices as we are already seeing sellers having to lower their asking prices in some areas.

As a reminder, if you have a home that you have inherited, are a tired landlord, have a house that is ugly or pretty – we would love the opportunity to make you an offer on it, just get in touch with us!

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How Is AI Changing Real Estate?

Whether you like it or not, AI (Artificial Intelligence) is changing our entire world. We use AI for everything from interacting with our cell phones to where our cars can drive themselves. So is Artificial Intelligence going to change the shape of the real estate industry? Yes, and in fact, it already has. So what is to come?

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AI Is Disrupting The Real Estate Industry

Almost everyone has heard of Zillow. So how have they changed things up with AI? Zestimates. Zestimates are an algorithm calculated value of your home. The algo uses data from public information, submitted data from users and takes into account things like current market conditions, location and home facts. Is it 100% correct – no, but it can be a good place to start gauging your properties value.

Check out what Adrian Fisher has to say about AI and Real Estate:

In the future, agents will no longer need to accompany clients to show a home, and clients can tour a property at their leisure. Agent-less showings will become more popular as AI-powered robots will be able to show clients around properties anytime and answer questions they may have.

In the future, consumers may prefer to do business with bots instead of real people. According to Salesforce, 69% of consumers prefer chatbots for quick communication with brands.

Zenplace, for example, is a company that offers consumers an AI-driven home tour experience. The startup developed a bot that comes with a tablet attached to a pole on wheels. It streams a live feed of a real estate agent who conducts the tour and steers the robot. This simulated robot increases the number of showings that realtors can hold within a day.

AI will enable buyers to view homes on their own, give feedback, and allow the agent to help clients decide why it may be a suitable property. Robots won’t take over, as a human touch will still be necessary. Instead, this technology will be helpful to agents that cover a lot of territory and have a busy showing schedule.

Read Adrian’s Full Article Here

So it looks like agents may be a thing of the past, or at least headed that way. In fact studies show that most home buyers now start their new home search online before even contacting an agent.

Do You Really Need A Real Estate Agent Now?

Things are really changing, and changing fast. In our opinion, sellers and buyers are tired of paying out so much cash for what most agents do, just list and put a property on the MLS (Multiple Listing Service).

Here is what G. Brian Davis from Bigger Pockets has to say about it:

Consider these questions: Does everyone need a real estate agent? Are the services that agents provide worth $10,000? How long are sellers going to continue spending that kind of money to list and sell a property?

Not much longer.

Services like Owners.com in the United States and Your Online Property Agent in the U.K. have started offering flat-fee services in the $400-1,000 range depending on how much extra attention and services you want. All services include an MLS listing, buyer funds verification and background check, property showings calendar and offer negotiation support. Premium services include local agent support, professionally written descriptions, sales contracts, and similar bells and whistles.

So what do sellers give up by using these services? The biggest difference is they would have to show the property themselves. But who can sell the house better than the people who live there?

Expect to see these online brokerages increasingly put the pressure on real estate agents.

Read Brian’s Full Article Here

So it really appears that the pressure is on agents, especially the ones that under perform. We all know somebody that has had some sort of horror story with a realtor.

Are Agents Going To Become Obsolete?

In our honest opinion, not any time in the near future. Agents do still provide a valuable service (well, at least some of them). There are sellers that don’t have a clue as to how to sell a home or even know where to begin.

Monica Nickelsburg makes this important point:

Real estate companies such as Zillow, Redfin, Opendoor, Compass, and others are investing heavily in the burgeoning “iBuyer” market that lets people quickly buy and sell homes online. Those transactions still require a real estate agent.

Read Monica’s Full Article Here

Summing It Up

So that’s just a little about how AI is changing the real estate industry. There are many more things that are coming and are on the horizon. One thing for sure, not as many people are going to have to rely as heavily on real estate agents as they use to.

If you have a house anywhere in Chamblee or the surrounding areas that you want to sell – give us a call! You don’t need an agent to sell to us. Just give us a call at (770) 756-8680 or check out our website to complete a brief form and we will contact you soon.

How Is AI Changing Real Estate? Read More »

Is The Atlanta Housing Market Slowing

Today’s Pulse On Atlanta’s Housing Market

For a few years now housing prices have been steadily climbing higher, especially in the Metro Atlanta area. If your house was immaculate or at least in decent condition, it would sell. Chances are you would have multiple offers on your property. But things look like they are changing.

First things first, if you have a property anywhere in the Metro Atlanta area, we would like the opportunity to make you an offer for it just the way it is. No hassles and a fast easy sale. You can contact us at (770) 756-8680 or visit this page and complete a short form and we will contact you shortly.

Okay – now on to why you are here – to learn what’s happening in today’s real estate market.

Bidding Wars Are Down

It looks like the days of putting a property on the market and the price getting run up by multiple offers are becoming a thing of the past for sellers. Don’t believe us? Check out this from Redfin’s Blog about bidding wars by Dana Olsen:

Just 10.4 percent of offers written by Redfin agents on behalf of their homebuying customers faced a bidding war in August, down from more than 42 percent a year earlier. That overtakes last month’s 11.4 percent bidding-war rate as the lowest on record since at least 2011.

The national bidding war rate reached a high of 59 percent in March 2018, then started to drop as homebuyers reached their limit with sky-high housing prices and rising mortgage rates in the middle of last year. As the housing market has cooled slightly, so has competition to purchase homes.

Continue Reading – 10% of Redfin Offers Faced Bidding Wars in August, a New 8-Year Low

We suggest you visit that page and look at the graph that shows the National trend and you will see it hit a peek of around 60% in 2017 nationally and is now down around 10%.

Recession Fears

If you watch any news at all you know that we are in the midst of a trade war with China. While we believe this hurts the Chinese more than us, yet it still reeks havoc on the Stock Market. Add to that every other country in the world has a slowing economic market. All of this makes buyers think twice about purchasing a property, especially if they think there is a down turn about to happen. Everybody remembers the housing bubble of ’08, it’s fresh in their minds. Also there was an inverted yield curve in the month of August, which is usually a good indicator of a recession looming.

Lisa Chamoff wrote about this in a recent post on Forbes:

Homebuyer confidence is dropping, and more than half of current house hunters plan to put their home search on hold until the economy recovers, according to survey data released this week by Realtor.com.

The survey this month by Toluna Research found that more than 36 percent of 755 active home buyers expect the U.S. to go through a recession next year. This is up by about 6 percent when shoppers were asked the same question this past March.

Continue Reading – More Than A Third Of Home Buyers Think A Recession Is Coming

Atlanta’s Housing Market

So where does Atlanta’s housing market fall in all of this. Inside the perimeter we are seeing some change. We have seen properties listed longer as well as sellers having to slash their asking price.

Michael E. Kanell had this to say about it in the AJC earlier this year:

Yet the number of homes sold during the month was 8.9 percent below that of March 2018 as fewer buyers and sellers found common ground. Home sales volume has been declining for several months in metro Atlanta, including a 7.4 percent drop in February.

Read The Full Article Here

Over the years we have always seen inside the perimeter to be effected first, then spread to the surrounding counties.

So Are We Headed For Another Housing Crisis?

In all actuality, we don’t think so. There were two major factors that really had an effect on the crash of ’07-’08.

  • First, there were a lot of homes available. Builders were going crazy putting up new subdivisions everywhere throughout the Metro Atlanta area. The supply far outweighed the demand.
  • Second, Banks and Mortgage companies were making very risky loans and basically lending money to people that couldn’t afford to make the payments. Since the crash though lending standards have tightened up, to a degree.

In Conclusion

So what’s the take away from this? We do think there will be a correction coming, no market keeps going up for ever. At some time there has to be some sort of correction and prices will probably drop a bit. If the China trade war continues or there is some other global economic catastrophe, it may be a little more severe. However, we aren’t trying to paint an all “Doom and Gloom” scenario!

Bottom line, if you have a house that you are thinking of selling, now is the time to do it. This is especially true if you have a house that is a “handy-man special” that needs some repairs or needs major work and you can’t afford to make the repairs and need to sell as is.

Even if you house is ready to list with an agent – it’s still a good time to sell. Better now than later and have to wait until after any correction because you never know how long that will take.

Here’s a short video that goes over a few of the points we covered and will expand more on these thoughts:

Is The Atlanta Housing Market Slowing Read More »

Check Out Our New URL Shortener!

We are proud to announce that we have our very own URL shortener! We know that some of our URL’s are really long, and remembering our web address to one of our pages can be really hard. We wanted to make it easier for you to find us and make it easier to contact us to sell a property.

So here it is – SellNow.cc

So now instead of having to remember this long URL https://www.mandichpropertygroup.com/cobb-county/marietta for a house that you are looking for information about selling in Marietta, now you can just use sellnow.cc/marietta – That’s a whole lot easier!

We have also included our social media sites as well. So if you want to check us out on Twitter, simply go to sellnow.cc/twitter.

We have also created a Google Spreadsheet for quick reference with all of our most popular links. We are continually adding to it, so check it out when you get a chance. You can access it at sellnow.cc/shortlinks and we have included it as well.

Thanks, and if you have a house that you need to sell anywhere in the Atlanta area, we would love the opportunity to make you an all cash offer on your property. You can call us at 770-756-8680.

Check Out Our New URL Shortener! Read More »

Are We Headed For Another Housing Bubble?

Everyone over the age of 30 remembers the housing bubble of ’07. If you had a home for sale during ’07 to ’09 there was a good chance that you were having to sell your house way below what you paid for it. This caused a lot of stress on homeowners that had to move because of job relocations or for whatever reason they had to move. Some homeowners were forced into being what is known as “accidental landlords” to either keep from losing so much money, or just not being able to find a buyer. Now there are a lot of reports that indicate that we may be headed for another bubble 🙁

Is The Housing Market Going To Crash Again?

There were a few factors that caused the housing crash of ’07 – ’09. One of the major factors that caused the problem was subprime mortgages. In short that is a mortgage given to someone that really can’t afford the note. Many of these loans were interest only, meaning they only made the interest payments and paid nothing towards the principal. You would think that most people in their right mind would know that this is a bad idea!

Here is a great explanation of what happened:

The financial crisis was primarily caused by deregulation in the financial industry. That permitted banks to engage in hedge fund trading with derivatives. Banks then demanded more mortgages to support the profitable sale of these derivatives. They created interest-only loans that became affordable to subprime borrowers.

In 2004, the Federal Reserve raised the fed funds rate just as the interest rates on these new mortgages reset.

Housing prices started falling as supply outpaced demand. That trapped homeowners who couldn’t afford the payments, but couldn’t sell their house. When the values of the derivatives crumbled, banks stopped lending to each other. That created the financial crisis that led to the Great Recession.

Read The Full Article “What Caused the 2008 Global Financial Crisis?” Here

That’s a great explanation from the Balance, far better than we could explain 🙂 . One thing to note that we aren’t really seeing now is that supply isn’t out pacing demand, so that is a little of good news.

So the subprime mortgage industry really kicked things off. Too many people had properties that they couldn’t afford and couldn’t sell their house.  Now here is some disturbing news from Curbed:

Financial Times reports that subprime mortgage bond issuance doubled in the first quarter of 2018 compared to a year ago, going from $666 million to $1.3 billion. Furthermore, it quotes a financial analyst predicting that issuance for the year will hit $10 billion, which is more than double the $4.1 billion issued last year. For context, the value of American subprime mortgages was estimated at $1.3 trillion in March 2007.

Read The Full Article “Subprime mortgage bonds are making a comeback” Here

That even makes us sweat a little. Further into that article they state that there are some new companies that have jumped into the market and have rebranded theses subprime mortgages as “noprime”.

Now on to current property values. This plays a big part of the equation. Prices have been steadily rising for at least 6 years now in most markets, to the point where a lot of properties are over valued. Check out these comparisons from American Banker:

CoreLogic found in comparing 380 metro areas that in January 2000, 6% were overvalued while 87% were at value. But by November 2006, 67% were overvalued and 32% were at value.

At the bottom of the market in March 2011, 7% were overvalued, 42% were at value and 52% were undervalued.

As of December 2017, there was a more even distribution among the three groups: 33% overvalued, 35% at value and 32% undervalued.

Read The Full Article “Housing bubble or not, the real estate market is in trouble” Here

Another disturbing trend. Notice that 33% of properties are overvalued as of last December compared to 67% in November of ’06 at the start of the crash.

Lastly, check out this video from Faye Bishop:

Summing It Up

So when will we have another crash? No one really knows. It does look like if things continue on the current track that one could definitely be in the cards. The only thing that is a saving grace right now we think is that builders have not started building houses like they were 12 – 15 years ago, keeping the supply in check.

So the point of all of this is that if you need to sell your house that is in need of major repairs or updates and you know that putting your property on the market will take some time to get a buyer, you should consider selling now. If you are wondering how to sell a property quickly, you can visit our website for a free, no obligation offer on your property – or call us at 770 756-8680.

Are We Headed For Another Housing Bubble? Read More »

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