7 Reasons That You Can't Find a Home to Buy

You can’t find a home and you’re not alone. The housing inventory shortage in Atlanta is genuine and the squeeze in the highly desirable micro markets is a tight one. The reasons vary and the impact is broad and not only affecting buyers, but sellers as well. There are inventory challenges to be sure and issues plaguing buyers and sellers. Like most other things in the world there is a “food chain” impact and it starts at the beginning of the food chain with entry level homebuyers and sellers.

Negative Equity – Treading Water
For many owners, negative equity issues remain. Many are paying the mortgage but are underwater. MarketWatch reports that 52% of owners have had to make major sacrifices over the last three years just to cover their essential bills. While they may be able to carry their home, selling it is not an option. Some will list above market and try, but often that idea blows up with a lack of interest or appraisal issues. As a result, these homes are “on the market” but priced at a point where no wise buyer or one that requires an appraisal is going to go. No equity, no go….

Why Would I List? – I Won
Some owners are sitting quite happily at 3%+- interest rates on their mortgages, why would they move? In many cases, it makes absolutely no sense because what they presently have will not be duplicated. Consider the cost of selling, cost of buying, increased rates, disruption of life and the various other unexpected hits involved in finding and setting up a new residence. Unless prompted by a “life” change, this type of owner is happy to sit on the side lines.

I Can Sell – But Can I Buy?
There are of course home sellers that have ample equity to sell their homes, but yet they refrain from placing the home on the market. The issue facing many of them is the same facing many buyers – will I find a home? In the past the hurdle was selling the home, now a few sellers have the opposite problem and see no point in jumping into a market where their next option doesn’t clearly present itself.

Distressed Homes – Banks Always Win
Washington and the banks couldn’t care less about distressed homeowners. Washington needs healthy banks and they will ensure that despite the theatrics about being outraged, they take care of them. Distressed inventory is significantly lower and the narrow window of “bargain shopping” that was present in past years is long gone. Lender owned or short sale homes are now priced at or in some cases above market because the banks never miss an opportunity to make money. There remains shadow inventory, but it’s now priced at or above market.

Many owners can't afford to sell, others don't want or need to. Bank homes are no longer bargains & entry level buyers are competing with institutional investors.

Entry Level Buyers - Fuggettaboutit
Entry level buyers are forced to compete with firms sitting on millions of dollars in cash and instructions to buy buy buy. At the courthouse or through the MLS, these homes are snatched quickly and often for more than they’re worth. How does a buyer often smothered by student loan debt, with limited credit history, and little job experience compete? The last several years have seen a significant amount of entry level inventory removed to become rental stock and that has adversely impacted the very foundation of a healthy market.

New Construction – Little Help, Big Expense
While there was a nice bump in new construction, much of it was due to builders picking up vacant lots from lenders. That source has dried up and with the rising costs of land; single family construction inventory has slowed. Interesting as well is that many studies show builders spending more time on multifamily - apartment construction…these studies conclude that the rentals will continue to strongly compete with ownership over the next decade.

Multigenerational Homes – All in One
The cycle is repeating itself; more and more homes have multigenerational occupants. Situations where grandparents live with kids and grandkids are becoming common place. Reasons vary but almost all surround economics; can’t afford independence, can’t qualify for a loan, need the combined incomes…Situations like this often lock owners into their homes even if they want to sell.

The market is far from settled, the annual cycles remain but the idea that real estate has recovered should be dismissed. As has been mentioned for years, the national housing statistics are worthless at the micro market level and not removing and “institutional” activity is simply misleading. As usual, the homebuyers that are finding homes in the Atlanta real estate market have a very clear definition of success and are ready to pounce with opportunity presents itself. HMT homebuyers understand this market as well as the dangers of overpaying and getting caught up in all the hype. Let s know how we can help you.

Hank Miller,SRA
Associate Broker & Certified Appraiser
Atlanta Communities Real Estate
678-428-8276 direct
hank@hmtatlanta.com
www.hmtatlanta.com