Coweta Real Estate
Jan. 2008
You mostly likely heard that 2007 was a bad year for real estate as national values spiraled downward by 5% or more. Toward the end of 2006 we began hearing rumblings about sub-prime finance issues, market slumps, and states such as Florida, Arizona, California, and Nevada and a few others suffering from double digit value correction.
Keep in mind that real estate is local and what transpires in other areas may or may not apply to Georgia or Coweta County. Did you hear that Utah's values increased by 12.7% over the last reported year or that Wenatchee Washington enjoyed a value increase of 15.7% in the last quarter? Have you heard that Florida had a 2.12% decline over the last reported year but over the last five years enjoyed an 85.92% gain and 378.13% since 1980? The five year gain for Georgia was 25.5% in case you are interested. (OFHEO data)
So, what did happen in our local market? Did Coweta single family homes increase or decrease in value?
During the 2007 sales year the number of available homes for sale increased monthly until reaching a market high in August 2007. By the end of the 2007 sales year the market endured a 10.2% increase in the number of available homes for sale when compared to 2006.
A review of pending sales (homes going under contract) quickly reveals the local market did suffer from the sub-prime market problems. Buyers with credit issues or limited funds for down payments quickly found mortgage sources were disappearing.
Locally the market peaked in April 2007 and the number of homes going under contract began to decline. Increasing available homes coupled with a decreasing number of buyers initiated a series of events that quickly fueled a buyer's market. A buyer's market is defined as having too many available homes and not enough qualified buyers. By the close of 2007 the number of homes under contract declined by 17.3% when compared to 2006. Keep in mind the available homes for sale increased by 10.2% while homes going under contract decreased by 17.3%. The market continues to tip more in the buyer's favor.
With fewer homes going under contract, fewer homes were reaching the closing table. There were slight glimmers of hope in January, May, and July (2007) as those months exceeded the sales levels for the same months in 2006. In August 2007 closed sales began a decline that continued to the end of the 2007 resulting in closed sales for 2007 being 13.8% below 2006 sales levels.
Locally home owners resisted the downward price and over 1700 homes in Coweta were removed from the market in 2007 as their listing periods expired without a sale. Some of the expired homes were returned to the market with changes be it price, broker, physical condition, or new expectations.
So is there any positive news?
- According to the latest OFHEO report the average home in Georgia increased in value by 3.54%.
- Inventory of available homes in Coweta began decreasing in November 2007 and continued the downward trend in December.
- The median home price declined by only .5% when comparing 2006 and 2007 sales
- The average sales price increased by 1.9% when comparing 2006 and 2007 sales.
These are positives in my view for our local market.
Excessive inventory translates to selection and concessions for buyers. Buyers in this market do not have to settle for less or pay over market prices due to the number of available homes. Now admittedly some buyers get emotionally attached to a home and do not negotiate fearful they might lose their dream home, but that is not the average buyer today.
Bill Hudson
Realtor Prudential Georgia Realty
Bill@NewnanAndPtc.com
404 229 1486 Cell
770 254 8333 Office
Prudential Georgia Realty
2525 Hwy 34 East
Comments(1)