Quantum Leap, Gary Keller's newest (soon to be book) seminar focuses on life and adjusting your life and your business. Keller's comments during Keller William's Family Reunion might as well been entitled, Counter Balance - Balancing Life & Real Estate. The basic premise is that life is cyclical and even more so is Real Estate.
With that being said, it's no surprise that our market is riding the roller coaster back down on prices. Had we all been watching the affordability numbers and compared them to home prices we'd have seen the huge gap here. In addition, when you have mortgage people messing with the formula, you can't expect no repercussions.
In Metro Atlanta, we dodged the first bullet. We've always had a buyer's market and still do. Homes are affordable and there are more of them then the incoming buyers. We could have continued to chug up the little slop that is our market. However, when you start messing with formula, sometimes you create things that might be a bit out of control.
Tuesday, 7400 Foreclosures hit the court house steps in Metro Atlanta. Although, this includes 13 different counties it's still far too many. Our prices are falling, not as a result of the market's cyclical trend, but due to the number of foreclosures. Many appraisers claim that foreclosures are making up the majority of comparables for their appraisals.
New Trends
I've noticed, ever so slightly, that non-foreclosure resales are starting to make a comeback. This trend was evident before the foreclosure boom, but died a bit during some of the mortgage meltdown. Now it's back. Buyers are starting to gravitate the "known" in a resale as opposed to the "unknown" in a foreclosure. Buyers are still offerring ridiculous offers to sellers that are not in a dire situation, but are starting to be more realistic.
With foreclosures, you get a bumpy process, less than stellar information about the home, and of course the only thing you can be sure of is what you find out on your own. Whereas with Resales, in most cases you'll get a disclosure and often a responsive listing agent to help the process along. It'll just feel smoother. Of course, you'll have the peace of mind that no one put concrete in the pipes!
Going forward, I think this year will be excellent for sales, but not necessarily for sellers, unless they are moving up. So I typed all of that to bring it all back to this point:
The market is cyclical, but in Atlanta, we've always been a buyers market. It will take us a will to get back to our natural equilibrium but we are making progress, every so slowly in the non REO department.
