When asked for some good news on the Atlanta housing market, Dan Forsman replied, “The good news is that all recessions end.” Luckily for us the President of Atlanta’s largest brokerage went on to share a bit more stating, “We are finding the bottom; we are seeing activity.”
Forsman believes that if this recession was going to continue we’d see the continued fall of average sales price and inactivity. But in his opinion we are starting to see slight increases in the median sales price in the higher price points. In addition to that he states that Atlanta homes for sale are seeing a lot of multiple offers. Any resale seller in this market has to compete with the foreclosure and the short sale.
Can you say Coca Cola, Novelis, State Farm, First Data and NCR? These are all companies that have had significant in-moves into the Atlanta market. Sears was rumored to be putting 6,200 jobs here in Atlanta. Forsman says, “I don’t believe that is going to happen, but you never know.”
Last weekend was national opens house weekend and Prudential Georgia had more than 500 open houses. If that isn’t impressive in itself, Forsman says, “We averaged a little better than four units of traffic per open house and they all registered. Traffic was good, people are buying property and making moves.”
Forsman and the team at Prudential Georgia has noticed that in spite of the hesitancy of appraisals, Suntrust has a new loan product. It is a 97% loan-to-value and is available for home buyers with a $52,000 income qualifiying ratio. Forsman comments, “Lenders are needing to drive their income machine again. New loan products will drive a lot of activity.”
Atlanta’s Fountain of Youth
Despite the recent heat wave, investors are still hot for Atlanta. Last week Forsman met with an investor looking at buying up to 10,000 properties in the Atlanta market. Why? He explains, “This investor sees Atlanta as the number one market positioned for a bounce. We did not have the big run ups despite the fact that we got hit hard when the market crashed.” What will create the bounce is that Atlanta is the #2 market in the country within the age group 25 – 39 and the #5 market for under 20 years of age. We are going to be providing a HUGE pent up demand for first time buyers for a long time to come.
Room to Grow
Market wide Atlanta has realized 30,000 sales so far this year. Forsman comments, “At the peak of the market we were running 40,000 – 45,000. We are at a run rate of 90%, there is a lot of room to grow. All we need is a little employment and we will be in a sellers market.”
Predictions for Future Housing Markets
Here are Dan Forsman’s predictions for the future:
- In two years Atlanta will be in a seller’s market with a housing shortage.
- We will be a really healthy market in the under $250,000 price range.
Recovery for Atlanta New Homes
Atlanta has 18 to 20 months of shadow inventory, such as foreclosures to sell through. The builder groups are quite a bit different today than they were five years ago. They may still control a lot of dirt, but it will take a while for the big builders to get their funding in order. To be successful, home builders will need access to unique capital from non traditional sources, access to repriced lots and they need to be experts at building at the right prices points at the various zipcodes where there is demand for the right product type. Forsman’s examples of builders doing it well include The Providence Group, Patrick Malloy, Edward Andrews Homes and the new Reynolds property on the southside of town.
We’d love to hear your thoughts. Please comment.
Visit Atlanta Real Estate Forum often for the most recent Atlanta real estate news.