More buyers than ever are streaming into the market in search of a home before, as many have expressed, “all the bargains are gone.” Some sellers are responding. The monthly current volume of single family homes available for sale has increased by 6-thosusand homes since January 2013. Just over 18 thousand single family homes are for sale in the Metro Atlanta area. Yet that’s just a fraction of the homes that were for sale before the market crash in 2008, when standing inventory was at a peak of nearly 58 thousand single family homes for sale.
With a current total nearly 9,000 buyers in our Buyers-In-Waiting data base, and with 2,583 tagged as “high quality buyer inquiries,” there’s no shortage of buyers who are thinking about, or actively searching for the right home. With a lack of homes for sale in many key price categories, and since there are fewer foreclosures and short sales on the market, the pendulum has swung from a strong buyer’s market to a mixed market where sellers have leverage in some price categories.
As a result, some believe, there will be fewer opportunities for buyers in all categories if most potential sellers continue to remain on the sidelines. However, the opposite may actually be closer to market reality in 2014.
Early trends point to the gradual return to the pre-2005 so-called “normal” market, as homes in many segments of Metro Atlanta, and particularly in Cobb County beginning to recover lost value. And as prices rise relative to the modest improvements in the overall economy, a return to the normal market seems more likely.
In a normal market, interest rates for home loans hover at around 7 per cent, which is 55 per cent higher than the current interest rate paid on a 30 year fixed rate home loan. As of this writing the average rate is 4.57%, up 1.22% from the 52 week low of 3.35%. In other words, interest rates have risen overall 25 percent in the previous 12 months. Once the Federal Reserve Bank begins to back off “quantitative easing,” by reducing the amount of money it spends each month to help keep interest rates artificially low, all interest rates including home mortgage rates will start to climb.
It will not all happen at once, but with home values continuing a shaky but upward trend in Metro Atlanta, and with buyers struggling to find homes at good prices before rates start to peak, many sellers who were unsure about whether to sell now, or wait, will enter the market now to beat the trend toward tougher lending criteria and higher interest rates. Even with higher inventory, especially for first-time buyers and move-up buyers in the $200 thousand to $400 thousand dollar price categories, ready-to-buy “now buyers” whose purchase power could be cut in half with the rising interest rates, should be anxious to compete for the best homes marketed at fair market value prices. That means the potential for more competition among buyers; and more competition means more offers. More offers means sellers using the best marketing strategists to sell their homes could benefit from both multiple offers and faster sales.
Appealing homes priced competitively and in good condition priced in the first-time buyer categories, usually under $150 thousand dollars in, for example, the Hillgrove, Sprayberry or North Cobb high school districts, when they can be found at all, have sold very quickly with multiple offers. Even with an uptick in inventory that trend will continue. Similarly, if your home appeals in price and quality to move-up buyers in the over $200 thousand dollar categories, nearly twice as many homes sold in 2013 as did in 2012 because of increased buyer competition. With the rise in home values coupled with the rise in mortgage interest rates, downsizers needing to sell at top market value and also wanting to buy at the right price now will find navigating those waters a bit more tricky. As prices rise along with interest rates they’ll net more from the sale of their home but may have fewer choices when competing for a good quality home in the lower price categories.
How do you know if it’s the right time for you to enter the home selling market in 2014? IF you have to sell, then you have little choice. For those who would like to sell but aren’t sure, bring in a top professional to perform an In-Home Equity Diagnostic Analysis. Find out not only what your home will sell for, but what is left in your pocket after the sale. That is the bottom line, and an agent with a full service team, top research tools and lots of multi-year market experience can give you the information you need to make the most money from the sale of your home.
For the readers of this blog, you can call me direct at 770-672-8732 and ask for a free and confidential In-Home Equity Diagnostic Analysis to help you understand more fully what your home is worth and how you may be able to get top dollar in today’s market to leverage your purchase of a new home while prices still hover below the market highs despite rising interest rates. And also ask about how to determine the best strategy for finding the still available “great deals” that may be hidden from the average home shopper. To prepare for your in-home evaluation you should also ask for a Special Report titled: 27 Valuable Tips You Should Know To Get Your Home Sold Fast and For Top Dollar.
About the author: Ira Miskin is Market Area President for Optimus Real Estate Brokers. His new book titled, The Ultimate Now Holds Barred Guide to Selling Your Atlanta Home at Your Price in Your Time Frame, is scheduled for release in the spring of 2014. Ira is available for private consultation by appointment by calling 770-672-7832.
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