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Metrostudy Atlanta regional director and Atlanta Real Estate Forum Radio Hall of Fame member Eugene James returns in-studio to Atlanta Real Estate Forum Radio in this week’s “All About Real Estate” show.
James, who has been a regular on the show for the past two or three years, puts the story behind the data in this witty and informative discussion with our host Todd Schnick and co-host Bryan Nonni.
James provides some insight into what is taking place in the metro Atlanta real estate market based on research conducted by Metrostudy, which “counts houses,” says James. Metrostudy is a national market intelligence company that specializes in monitoring the residential new construction industry. Metrostudy analyzes, interprets and shares its findings with many of the country’s top builders, developers, lenders and investors.
On jobs as an indicator of housing:
James starts his discussion with a report on jobs since housing is so greatly impacted by employment conditions. There’s been positive movement in job creation nationwide. James reports 240,000 jobs are being created a month right now, which is driving down the unemployment rate, helping American consumers feel good about their jobs and the economy as a whole, and giving them the confidence to “go out and buy stuff like houses.” In fact, last month was an all-time record high for the number of people employed in Atlanta. Atlanta’s low unemployment figures are driving more homes to be sold in both the new construction and resale markets.
On metro Atlanta’s shrunken housing supply:
Next, James discusses the new and resale inventories in metro Atlanta. Atlanta is experiencing a low supply of resale homes right now, which is good news for the homebuilding and construction industry, because more and more buyers are choosing new homes over resale. The competition for buyers on resale homes is greater than it has been in recent years; James reports bidding wars occurring in what he now calls a seller’s market in the area. In a seller’s market, prices rise, and James says that prices are going up in metro Atlanta compared to this time last year. Metro Atlanta is currently below normal in supply, with approximately four months of inventory of homes (six to seven months is normal), but James explains that the area may not revert back to “normal” levels and may instead see a “new normal” in supply due to recession-era purchasing activity. During the recession, investors purchased much of the inventory for use as rentals and are not planning to sell those anytime soon. With investor-owned rental properties making up such a large portion of owned homes, the supply of homes in the area may not return to the high levels experienced before the recession.
On the come-back of condos:
James, who has been watching the Atlanta market for years, provides some historical perspective on the condo market, which has essentially been at a standstill for the past seven years or so. No new construction of condos occurred during the recession, but four or five have come out of the ground in the past year. While these new developments are not the large, 100-plus unit developments of the pre-recession-era, the fact that they are popping up shows that builders now have the confidence to return to condo market production. Schnick noted the recent surge of conversations about condos and James added that some condo buildings originally put up for sale of individual units were turned into apartment rental units during the recession, and he predicts that some of those buildings will go back to non-rentals/primarily owner-occupied and/or individually-owned condo buildings.
On national trends:
Atlanta mirrors national trends in terms of new construction, with low supply and construction happening as quickly as possible, with “builders going as fast as they can” and construction up 23 percent, says James. He adds that many of the finished, ready lots in “primary” or “A” locations, those that are the most sought-after, are running very low, so new construction is occurring in exurban areas and in small, intown spaces where undeveloped land is scarce. Also, older homes on larger home sites are being replaced by multiple, smaller dwellings.
On the next six months and beyond:
James says that the job market looks promising and he expects housing to follow in a positive, upward trend. He predicts that prices will go up (noting that prices are indeed already going up in Atlanta); he only hopes that prices do not increase so quickly that buyers get priced out of homeownership.
Learn more about research and analysis of residential real estate development and new-home construction at www.MetroStudy.com or reach James directly at 404-510-1080.
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Atlanta Real Estate Forum Radio’s “All About Real Estate” segment airs on Fridays and highlights the movers and shakers in the Atlanta real estate industry – the home builders, developers, Realtors and suppliers working to provide the American dream for Atlantans. For more information on how you can be featured as a guest, contact 770-383-3360 or via the contact form on this site.
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