The
Atlanta real
estate market is still moving
forward, but we must actually assess what is taking place.
Many of us have noticed that some of the real estate news is
turning positive in many markets. Slight increases in
Atlanta home
sales and prices seem to have everyone in a more cheerful mood, but
until we get at least 6 months of solid back to back
improvements...only then can we quote a trend that we have turned the
corner. I personally question recent increases in home sales.
Now the media wants a positive spin on everything, so the
news stories we hear are colored with 'rose color glasses.'
We must keep in mind that
Atlanta homes
sales today are not the same as a few years ago, because they do not
generate the same amount of worth.
An
example is
that when a home owner sold a home years ago to downsize, or
trade up... there were full commissions and equity for the principals
on both sides of the deal, and that is no longer the case. Today we are
dealing with very high percentages of bank owned properties and short
sales. Many Bank owned REOs are only paying a flat fee on the
listing side. Short sales on the other hand are paying for
the most part whatever the bank wants. Also, unlike a private
party sale between a buyer and seller - a
bank property sale does not generate another sale.
One property is sold, and the story ends there. It
is quite different than a sale involving two or more parties -
in that instance several other deals are created.
If we are going to discuss our market and their health, more real
estate professionals are going to have to understand the economics that
drives them. Numbers of sales does not necessarily mean that
things are back to normal. A recent sale here in the
Atlanta real
estate market shows that homes
are selling quickly, but they are selling for 250K less than they were
a few years ago. So it isn't good news if you are selling and
taking a 150K hit in real equity. In short less money is
being created for less parties, and that means there is less to go
around and spread the real wealth. My idea of wealth creation
is not paying off TARP money via a foreclosure or distressed sale.
;)
;)
Sooner or later, the loss of the "move-up" market will get some understanding.
Sooner or later.