We have experienced positive trends again in the Atlanta market. Inflation is beginning to raise it's ugly head. So if you are thinking of buying, moving up or investing in real estate, or have clients thinking, don't think do!!!!
The positive trends that were experienced in October continued in a big way for November. The year-to-year percentage change for all single family closings was another double digit consecutive percentage increase. It was also the greatest year-to-year percentage increase on record.
Our housing industry had been down for 13 consecutive quarters, but it is a very good bet that 4th quarter 2009 will have a year-to-tear increase for all single family closings. Not just up, but a double digit percentage increase.
There were 4,377 closings for all single family in November and this was against a very weak 2008 result. However, after lags are reported November 2009 will exceed November 2007.
There were 3,630 closings in November 2009 for single family detached. This is an increase of 32.9% over November 2008 and the greatest year-to-year percent increase since April 1996's 41.6%. If there are a lot of lags, this could be the largest percent increase since records have been kept (January 1995).
There were 747 closings in November for single family attached. This is a huge 85.8% increase over November 2008 and the largest year-to-year percent increase since records have been kept. The previous greatest year-to-year percent increase for single family attached was November 2005 at 53.2%.
The average sale prices for all single family remained weak in November, which helped stimulate the increase in demand. The November average closed price was $189,306 and the lowest reported monthly average since April 2009's $182,369. However, with demand increasing and inventories continuing to decline I expect inflation to kick in and in the not too distant future.
The average closed price for single family attached in November 2009 was $147,347. This is down 8.5% from November 2008 and the 24th consecutive year-to-year monthly average price decline. I am continuing to predict low prices for single family attached into 2010, because of the large inventory of condominium foreclosures the FDIC needs to dispose of.
I don't know what is in worse shape, the Atlanta condominium market or the North Georgia mountain vacant developed lot inventory. I think deals will abound for both of these markets into and through 2010.
Single family detached inventory has dropped again and is now down to 36,263 actives at the end of November. The last time it was this low was February 2006. At the end of December we will be back to 2005 levels.
The months-supply for single family detached finally dropped below ten months at the end of November. After peaking at 14 months July-August 2008 we have finally dropped below 10 months for the first time since April 2007. We still have a way to go before reaching a "normal" 6.5-7.5 months supply.
There have been a lot of good numbers and trends to report the last few months. What is even more encouraging is that the trends are increasing at an increasing rate or accelerating. However, I believe the next 2-3 quarters will be positive, but there are still too many potential negatives to think positive any farther out.
The threat of inflation kicking in is looking more like a reality by the end of 2010, and the commercial & A&D foreclosures will restrict lending throughout 2010.
Steve Palm
Smart Numbers 2009 Smart Numbers
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