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Eugene James with Metrostudy is this week’s guest on the award-winning Atlanta Real Estate Forum Radio show. Metrostudy analyzes housing markets throughout the country and keeps a pulse on each real estate market to provide statistics on current conditions. Eugene, regional director of the Atlanta Metrostudy office, shares what the company saw in the Atlanta real estate market in 2013.
At the end of the third quarter of 2013, things were still rocking and rolling for the Atlanta housing market. Home starts were up almost 70 percent over the same time last year; however, even with starts that high, there are not enough houses to meet buyer demand. Inventory on available homes is low, and it has caused some consumers to panic as they are not able to find the home of their dreams as quickly as they expected.
Eugene speculates that one of the biggest reasons for a lack of inventory in the resale market is because a large part of the consumer population doesn’t realize how much equity has returned to their homes, so they haven’t attempted to sell it. While there are still homeowners upside-down in their home equity, there are not as many as this time last year.
In the new home market, it is important for buyers to realize that most construction stopped in Atlanta for a period of six to seven years. As the job market has grown by roughly 50,000 to 60,000 net new jobs over the last two years, people are regaining confidence to go out and look for houses. However, there are not that many available inventory homes since construction was halted for so long.
But, of the nearly 60,000 net new jobs that have been created, the construction sector saw the biggest increase in jobs. This is a positive sign that construction is up and builders are working to build new homes to keep up with demand.
James also discusses a new buzz word that has been repeated in the media lately, the pause in the housing market. He explains that in Atlanta, builders have not created new home sites, or developments, in years, so the building that has been taking place has been in the best locations that can be found, known as “A” locations. However, builders have mostly exhausted the available home sites in those locations, so they are beginning to slowly venture into the “B” and “C” locations. For example, Cherokee County, which is considered a “B” location, has been a new hot-spot in metro Atlanta for development. New home starts are up between 90 and 95 percent in the third quarter, which proves that builders are beginning to test the waters to make sure that demand is there for homes in these locations.
A second major factor that has contributed to this so-called housing pause is that builders were forced to increase their prices on a monthly basis as they ran low on available home sites. Each month, home prices would increase by $5,000 to $10,000, which resulted in slowing the demand for homes. However, Metrostudy believes that some builders may have overshot the mark and increased the home prices too much and too soon.
Analysts believe that with 2014 will come a more normalized housing market, meaning that home starts will continue to increase until they level out with consumer demand. 2013 was a great year for the Atlanta housing market as starts were higher than in previous years, and 2014 is expected to have an even larger number of starts. Overall, it is still an outstanding time to purchase a new home in Atlanta!
For more information on the current state of the Atlanta housing market, listen to the full podcast. To learn more about Metrostudy, contact Eugene James at 404-790-9001 or visit www.Metrostudy.com.
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This week’s Deal of the Day is from the 2014 International Builders’ Show which, for the first time, has joined with the Kitchen and Bath Industry Show to give attendees more industry knowledge than ever. Held in Las Vegas in February, this fabulous show includes education sessions on a variety of topics, a gigantic show floor full of exhibitors and new products and several special events. For more information on the show, to see the full line up of events or to register, visit www.BuilderShow.com.
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