Metro Atlanta Real Estate Market Outlook -Update August 2015

As I reminisce about my six years in undergraduate school, I still to this day remember my Economics professor. Not only because he made quite the fashion statement with his stained white tees and worn out Wranglers…but, because he taught me everything I know about supply and demand. As a college kid, I figured the extent to which I would use this knowledge would go as far as that last question on my ECON 102 final exam. At that time, I was actually hoping that was the case. But, to my amazement, those two semesters of filing that notebook with endless charts and graphs, curves and arrows really did pay off in the end. Go figure. 

So, with that said…I present to you the most current Metro Atlanta Real Estate market statistics (according to the most current Case Shiller Index Report). I hope you like charts. 

Oh, and we’ll get back to supply and demand in just a bit.

1.  Homes Sold

•    25,000 Homes Sold In 2006. 60,000 Homes Sold In 2010. We are right at 90k as of 8/15. 

2.  Total Closings

•  July Closings Down 12.3% Compared To June Closings. July Closings Up 3.3% Compared To Last Year.
•  80% of Transactions in $100K-$500K Price Range

3.  Inventory

• Residential Detached Inventory Up 53% From Bottom Of Feb. 2013
• Residential Detached Inventory Up 2.7% From Last Month, Up 1.9% Compared To Last Year
•   Metro Atlanta “Months Of Inventory” Is 3.9 Months (6 months is considered a “normal” market). ASP Is $286,000 in July. ASP Was $285,000 Last Month. Statistically Flat From Last Month. Up 5.9% From Last July.

4.  Average Sales Price

•   Annual ASP Up 51% From Bottom Of 2011. Up about 15k from last year (around 6%).
•  Jan 2010 Through May 2015 (Reported July 28, 2015). Home Values Up 49% From Recent Bottom of March 2012.

5.  Home Values

• Peak For Values Was July 2007. Recent Bottom Was March 2012. Current Home Values Moving Back To Normal Trend Line.
• Home Values up 49% from recent bottom of March 2012. 

6.  Mortgage Rates

•   Mortgage rates are below U.S. average of 8%  (based on 36 year span). But, are increasing. Which, will affect home affordability.

So, back to this thing called "supply and demand". Well, when you have a large supply of something (such as home inventory, prices for that something often decline. Conversely, if supply (such as home inventory) is limited, prices for those houses often increase.

Now you got those facts straight....what the heck does supply and demand tell you about a real estate market? Well, I'm glad you asked. 

When there are more homes for sale out there (supply) than buyers (demand), it becomes a buyer's market. There are more people looking to sell houses than there are people looking to purchase houses. In this kind of market, sellers may have to accept a lower price than they want for their home. This market is ideal for buyers because they may be able to get a better deal. 

A seller's market is just the opposite. When there are more buyers (demand) than homes for sale (supply). People may have more money to spend on real estate, so sellers will often be presented with multiple offers (bidding wars) which will ultimately drive up the selling price. Therefore, buyers will have to spend more money. You can imagine that this is what sellers hope for because they will get more money for thier home. 

Now, the statement that you, as a Metro Atlanta home buyer or seller has been waiting for since you clicked on this blog article. As of today, what kind of market is it in Metro Atlanta? Well, after analyzing the information provided in the August 2015 Case Shiller Report, I can confidently say that it is a seller's market for homes $500k and below because the inventory is lower than the average (a 6 month's supply). But, as you can see, inventory is rising, so it could easily become a buyer's market as soon as you can say "let's just wait to see what happens before we list."

Want to find out what your home is valued for in today's market? Click here to receive a FREE home valuation report sent straight to your email!

Emily Benner
Real Estate Expert
PalmerHouse Properties
678.458.2284
emilysells@gmail.com
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6 Best Home Improvements to Help Sell Your Home

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When it comes to selling your home, there are easy and inexpensive ways to make improvements that will help it sell fast!

According to experts, a homeowner should commit to spending around 1 to 2 percent of the home's value for home improvement costs. That means, for a $200,000 home, a seller would spend between $2,000 to $4,000 on pre-sale upgrades.

So, what are the most effective improvements to make pre-sale? Well, I'm glad you asked. 

1. KITCHEN

The most cost-effective kitchen improvement is to repaint or restain the cabinets. Also, adding new matching hardware to cabinets and drawers will add a huge amount of kitchen curb appeal. If you have the money, replace any unmatched appliances. 

2. BATHROOMS

Replacing those old, worn out toilet seats can be the first step to making the home more appealing and clean. Also, if the grout is cracking or dirty, replace that as well. If you can't afford new cabinets, painting them, as well as installing updated knobs will make the bathroom look 100 times better. Also, if you can afford to put in new flooring, please go with tile. Laminate and carpet in the bathroom will only lead to future issues. New shower heads and shelving for added storage are also added perks!

3. INTERIOR PAINT/DOORS

A new layer of neutral colored paint can transform a home. Also, it makes everything seem new and clean. New crown molding is great eye candy, especially if it is painted the same color as the walls, which will make the walls appear taller. Replacing the interior doors and doorknobs is a great way to improve the look of the home. Getting rid of the cheap plywood doors and going with something heavier and and solid will bring that wow factor. 

4. FLOORING

Installing new flooring, inexpensive carpet or economy hardwoods, will make any home look better. Also, it will give the buyers a load-off, knowing that they will not have to do it themselves. 

5. LIGHT FIXTURES AND CEILING FANS

Getting rid of those outdated brass fans and lighting fixtures, and replacing them with less expensive brushed nickel or bronze fixtures from Home Depot or Lowes (which I believe has a better selection). Track lighting or recessed lighting is also a good choice, especially in the kitchen. This is the first thing I did when I purchased my home and it updated it incredibly!

6. LANDSCAPING AND EXTERIOR 

The oustside curb appeal can mean everything. I've had clients who wouldn't even get out of the car when they disliked the outside look of a home. A few low-cost ideas are to pull out weeds, mow the lawn, and cut back overgrown trees or shrubs. Other home improvements include adding fresh mulch, planting a couple of rose bushes in your front flower garden, or lining the entryway with a colorful assortment of flowers in pots. And, as any Georgian can attest to, pressure washing any clay stains/mildew on the side of the home or driveway can make for better curb appeal as well.

According to Renovation's Cost vs Value study, these are the renovations that will give you the biggest bang for your buck - as well as projects that generate the lowest return.

Renovations that bring the greatest percentage return on investment:

• Entry door replacement: 96.6 percent
• Deck addition (wood): 87.4 percent
• Attic bedroom: 84.3 percent
• Garage door replacement: 83.7 percent
• Minor kitchen remodel: 82.7 percent

Renovations that yield the smallest return:

• Home office remodel: 48.9 percent
• Sunroom addition: 51.7 percent
• Bathroom addition: 60.1 percent
• Backup power generation: 67.5 percent
• Master suite addition: 67.5 percent

These are just some ideas I've learned that have worked over the years. If you are interested in inside staging for your home, please look forward to my post tomorrow that will give you DIY ideas on how to stage your home and sell it fast!

Emily Benner

REAL Estate Expert

PalmerHouse Properties

678.458.2284

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Top 5 Biggest Home Inspection Mistakes

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You found the house of your dreams. The sellers accepted your offer. Now what?! Well, the majority of homebuyers will turn to a home inspector to determine whether or not this home is, in fact, so dreamy. In most contracts, the buyers will have a certain amount of time (usually 3-7 days) to bring a home inspector into the property and negotiate the contract based on their findings. The home inspection is one of the most important steps you can take to make sure your new home is, not only a safe place for your family, but also a sound investment.  

Of course, the home inspection process can be quite stressful for buyers and sellers alike. But, as a buyer, if you do your research and hire an inspector that knows his stuff - and, read this article on the five biggest mistakes buyers make during the home inspection process - you can ultimately avoid buying a money pit.  

Mistake #1: Not having new construction inspected

The house is brand spanking new. What in the world could be wrong with it? Why would you even think of spending $400 bucks to have an Inspector inspect it? Well, because new construction may be new….but, nothing is perfect. 

Homebuyers are notorious for making the mistake of not having new construction inspected. Most assume that it must be in good shape in order to pass all local ordinances and codes. Well, unfortunately that is sometimes not the case. One inspector I have used in the past once found over 300 mistakes in a new construction home. Thank goodness the buyer still had an option to walk away.  If not, he would’ve been investing in a nightmare.

So, what am I trying to get across here? Please don't assume your builder- or the contractors – built everything right just because the home passed code. An inspector is your last line of defense against structural defects that could make your home a poor investment.

Mistake No. 2: Choosing the wrong inspector

You know that friend of your friend’s that just got his inspection license and is going to cut you a deal? Well, even I like to save a buck or two – but, when it comes to such a huge investment as purchasing a home, you need a trustworthy professional. You want to choose someone who knows what they are doing and have good reviews to back up their work.  

As a real estate agent myself, I hate to say this – but, don’t just go with your Realtor’s preferred inspector. That could start to become a conflict of interest. I recommend doing your own research. The three most well-known associations are the American Society of Home Inspectors (ASHI) , the National Association of Home Inspectors (NAHI) and the International Association of Certified Home Inspectors (InterNACHI).

Check out these resources when choosing the right inspector. Make sure to ask about licensing, professional affiliations and credentials, and whether or not the inspector carries errors and omissions insurance.

Mistake No. 3: Not being there for the inspection

As an agent, I have had clients that choose to shadow the inspector during the whole inspection. I don’t recommend this, because, I mean – give the man some room to do his job. But, what I do recommend, is that you meet your inspector at the property when he is finished with the inspection. This way, instead of trying to make sense of the written report you get from the inspector - you have a chance to see the issues he discovered first hand. 

From experience, I can tell you that those written reports can either make a small issue look huge, or a huge issue look small. So, make sure you are able to understand the issue clearly by seeing it with your own two eyes.

Mistake No. 4: Not taking the inspector's recommendations seriously

It is the job of the buyer’s agent to negotiate and come up with a resolution when it comes to addressing the issues found in a home inspection report. But, sometimes, some issues are swept under the rug during negotiations. In this case, buyers don't follow up on items discovered in the inspection before they close on the property.  All issues, big or small, should be taken into consideration before investing in the property.

I don’t know what was in the water, but, three of the homes I sold last year needed new roofs. We brought a certified roofing expert in who was able to get the insurance company to pay for a total roof replacement before closing. If the inspector hadn’t caught these roof issues during the inspection, then, the new owners would’ve had to come out of pocket big time.

On that note, I also recommend bringing in different experts to address specific issues found by the inspector (plumber, electrician, roofer, etc). Many of these contractors will give you a FREE inspection/estimate – sometimes all you have to do is ask. The golden rule here: it’s better to be safe than sorry.

Mistake No. 5: Expecting your inspector to have a crystal ball

There are some extremely knowledgeable and skilled inspectors out there. But, unless he has ties with Nostradamus, he can’t see the future.  Sure, an inspector can look at an aging air conditioning unit and tell you the average number of years a unit typically lasts. But, he can’t tell you an exact date when it will bite the dust.  The same goes for any other potential future issue the home may have. You know that 15 year old gas water heater that should’ve only lasted 10 years? Well, it may be all luck now, but expect to have to replace it in the new future.

So, even though a good inspector can give you an idea of what may need to be replaced, he can’t know for sure.  Make sure you take that into consideration when negotiating repairs. I’ve seen a seller replace a whole furnace unit before closing. It can happen.

 Like I tell my kids, a worry-free life is a happy life. So, eliminate some of those future worries and take care of the situation before investing.

In Conclusion: 

I know the whole house-buying process can be stressful. But, if you do it right, it can actually be fun. As I tell my clients, take advantage of those due diligence days (# of days after you’re under contract that you have to determine whether or not you want to walk away or negotiate). Bring in a trustworthy, knowledgeable home inspector and make sure to listen to him. Remember, according to the ASHI itself “…the home inspector has no vested interest in the buying process - their income is not connected to the transaction. You are paying them for an inspection, that's it. They should always be neutral.”

So, don’t stress out too much during the inspection process. Consider it a learning experience and make the best of it!

Emily Benner

REAL Estate Expert

PalmerHouse Properties

678.458.2284

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