What is the Truth About the Current Atlanta Real Estate Market?

The best statement about real estate is “Don’t wait to buy real estate. Buy real estate and wait.” by T. Harv Eker. Understanding the current market allows Buyers to maximize their ability to evaluate properties, receiving the highest value in their home search, and, Sellers to position their property to maximize money in their pocket while minimizing time on market.  

Real estate is a supply driven market. When supply is less than 6 months, (currently 3.7 months), it is a seller’s market, a market condition that started in 2012. With fewer listings on the market, median prices rise, and sellers get a higher percentage of their asking price.

The number of sales, or, demand has increased this year after 2 flat years while the supply remained low. All these are indications of an improving market. Distressed properties are a negligible portion of overall sales, further reducing their negative affect on market prices. Those changes caused improvements on measurements that were already strong. The medians of sales price, sales price to list price(S/L) ratio, and days on market (DOM) were greatly improved.

How does this information affect Sellers? Sellers tend to want to find their replacement home before selling their current one. In the proper condition, and priced correctly, Sellers can sell their property in a matter of days rather than months. Despite the temptation for sellers to price higher than market value, a realistic initial listing price that is in line with buyer expectations (“in the market”) offers the best likelihood of sales at, or, above the original listing price in very few days on market.

A great strategy for sellers is maximize the selling price and minimize market time by choosing an initial listing price that represents a high value compared to competing listings. Price reductions and multiple listing periods sharply reduce sale price to list price (S/L) ratio (7.6 percentage points lower on median price) and, increase the total days on the market significantly (5.3 times longer).

What are the consequences of listing the property above market price? Property is likely to fail to sell. 37.4% of listings failed to sell in 4Q 2015, due to overpricing and 37.2% of sellers required multiple listing period, most selling at a median of -9.4 percentage points lower than original list price and for a median of +4.9 months longer, or, 10.8 times longer than a correctly priced listing).

How does this information affect Buyers? The supply/demand relationship remains strongly in the seller’s advantage. As long as this continues, fast action and realistic offers are necessary for buyers of desirable properties. For buyers who are interested in the few distressed properties on the market, expect to pay more than list price, with multiple competing offers usually favoring an “all cash” offer over any financing, and a real speedy closing for that “As Is” property.

The good news is that with interest rates remaining so low, when the right property is found, this is still a good time to be in the market. Median Prices for real estate in Atlanta are finally above their 2007 high and, even though sales are flat, which is normal, prices are expected to go even higher.

Atlanta tends to be the last into a real estate decline, and, the first out. This is because Georgia has very low energy costs, a mild climate, healthy incentives to draw corporations and businesses here, the busiest airport in the world, the third largest place for the film industry, and affordable housing. It’s great to be a participant in such a vital real estate economy.

Should you desire more detailed information on the residential, luxury, condo, or commercial market, get a free account at http://www.atlantarealtyexperts.net/ or email me.