It’s already January 8th and I’m finding a moment to reflect on what trends I saw in the Atlanta real estate market last year and what (in my humble personal opinion) will be happening in 2013 with our housing industry and more specifically in my market areas of expertise – Vinings, Buckhead and Smyrna.
As each area of Atlanta seems to have a different feel and velocity, I’ll approach the areas separately. I’ll provide the statistics to back up my opinions on another date as I post them frequently and they only tell one part of the story. I like to say what I see from a grass roots perspective. I know real estate management and even many other bloggers like to paint a rosy picture to get people to “buy” houses, I tend to be much more pragmatic and look at things with an analytical eye, as a homeowner and a mother as to what my clients are feeling and needing.
I’ve said this all year, but I believe even more so now. Inventory is low and if you want to sell it is a good time.
I do feel pricing in the Vinings real estate market is still above what many are expecting and I think quite a bit of the inventory will continue to sit unless its adjusted back to about 2000 levels. We were at 1998 levels, so this is good news.
Unfortunately, we still have many people pricing at 2005-2007 levels and it just isn’t going to work. Yes, Vinings has great county services, much lower tax levels, it’s a charming Village to live in etc., but pricing can’t be higher than its neighbor across the river in zip code 30327.
For the Vinings area, I have investors and builders engaged again. And although they don’t have spec home interest, there is a pent-up demand for new homes specifically for empty nesters wanting to get rid of the Buckhead taxes and their $3M and up homes. Families come to Vinings once they are in private school, but since private schools are eating up alot of their incomes, they tend to look for the more reasonably priced homes, or by Vinings standards, almost starter homes in the $500,000 and $600,000 ranges.
Back in the peak, many families with children in Atlanta’s private schools were buying the newer construction homes for $1.5M, but I’ve seen several families that were over extended go into foreclosure and I think recent purchasers have been much more prudent. (I have clients still waiting for the newer construction foreclosures, but I think that bus left the station.)
There will continue to be deals like in any market, but very rare and far between – and we are are seeing those get bid up when they come on low priced. I just recently found a fabulous deal and it never hit the market, and that’s what I predict will continue to happen with deals as they become increasingly rare.
I’m thrilled to say that the higher tier is finally coming back. I believe this demand is fueled primarily by bargain hunters and we won’t see the volume of $3M and up transactions that we used to.
There is definitely a building trend going on in Buckhead as older homes are not moving. People that are willing to spend the mulitple millions of dollars want something with high ceilings, open floor plan, basements for kids or storing stuff. I’d say almost 90% of the high end transactions are homes that show like “new” even if they aren’t new. They have to be in A+ condition to command the big bucks.
The properties with land, meaning over 2 acres, are tough to find as well. There is definitely a group of people in the under $2M category that are looking for something with land and will pay the higher taxes to have that lifestyle….but there just isn’t any inventory.
One of the ways I gage “demand” is the number of emails that circulate around my firm for people with buyers who can’t find anything that’s in the system. It used to be about once every couple of weeks we’d get a “buyer needs” email stating they’d looked at everything on the market and if you have anything that you haven’t listed yet to let them know. Now it seems like we receive one of these emails daily.
I also gauge the views online on my listings to see what to expect in showings and there was a sharp spike at the beginning of the year, so I know what’s coming around the corner – showings. Which leads to sales.
The price point that’s hot for Smyrna is lower than it historically was. Builders bought foreclosed lots at a deep discount and are putting up new homes in the $300,000 price point, so selling things over $500,000 is tough. When people start getting to the half million dollar price point they seem to have graduated to inside the perimeter. The exception to that rule are those that need more space or really want newer homes with higher ceilings. They’ll still pay over $500,000 to live in 30080.
I wish I could convince more empty nesters to consider the small step to OTP. They are very particular and choosy in their neighborhoods as they are afraid their Buckhead friends won’t visit them. So only a few neighborhoods remain acceptable to them.
I think we need more upscale neighborhoods just outside of the Perimeter and I propose it goes in the Vinings Heights neighborhood where all the ranches are as its SO close and there is still land there. Unfortunately, those ranches keep getting fluffed up and are becoming too expensive to tear down. Time will tell there as that neighborhood is such a great location to stay as depressed as its been. I think more young people would do well to tear those down, or continue to “fluff” to get the great lots just on the perimeter.
I see the lower inventory levels bringing prices up slightly, but I don’t think buyers will jump up in their price point as much as sellers are thinking. If you want to sell it will be easy if priced correctly. If you want to buy, you may have to pay a little more than people did a year ago, but we are still at good low levels. Interest rates are still so incredibly low you have to take advantage of them if you’ve been sitting on the sidelines.
Let me know if I can help! Things are hopping in Atlanta and I’m so glad to be busy, and you never know, I may have a buyer in my back pocket just waiting for your house!
Prudential Georgia – Buckhead Office