Thought I should provide some more insight into today’s Smyrna Vinings real estate market. We have not seen a better time in years to buy Smyrna Vinings homes than right now. With everything you see in the news these days, you may very well be shaking your head, ready to “switch the channel”.
I was able to attend the Atlanta Small Business Forum on Friday and economists Dr. Donald Sabbarese, PhD. and Dr. Roger Tutterow, PhD. were very insightful in covering the state of affairs regarding our local and national economy and also covered key aspects such as interest rates, Atlanta home prices and much more. I definitely want to touch on some of those points today.
We talk to a lot of home sellers and homebuyers here at SmyrnaVinings.com and certainly there are a lot of people that express issues about the economy, the financial crisis, gas prices, job security and on and on.
Here are some things to keep in mind:
1. The financial crisis that has occurred has clouded people’s perceptions of the economy. In reality, the economy is fundamentally sound. What we have seen is a financial crisis that created a lot of uncertainty, but an economy that has legs. As the financial issues get resolved and more liquidity returns to the marketplace, concerns will disappear quickly.
2. Roger Tutterow touched on consumer confidence and noted that consumer confidence in the Atlanta market is at its lowest point since the early 1980s when we had severe economic issues, high interest rates and high unemployment. And what he has isolated as one causal factor has been the rise in gas prices. As gas prices continued to increase, consumer confidence decreased. His point was simply that while gas prices have increased, in reality it represents such a small part of a family’s budget it really shouldn’t impact consumer confidence. However, when all we talk about is rising gas prices in the news, it creates a misguided perception about the state of our economy.
3. People have recently been talking about how our current state of affairs is similar to the Depression. Once again this appears to be a knee-jerk reaction and a misunderstanding of our current economy. The unemployment rate during the Depression exceeded 25% while our currently unemployment rate is around 6%. Another important point that Roger Tutterow pointed out was that the Fed is increasing liquidity to eliminate any sort of “run on the bank” that occurred during the Depression as the federal government tightened liquidity then.
4. People have to have a place to live. It’s basic, but it speaks volumes about Atlanta real estate and your decision to purchase a Smyrna Vinings home. Today there are 4.78 million people in the metro Atlanta area; it’s predicted there will be over 8 million by 2025.
5. Interest rates go up and interest rates go down, but you can always refinance when money is cheap. We are in a temporary situation in which it’s hard to find money for non-owner occupied properties and in which the public’s perception is that interest rates are high. Perception is not reality and interest rates, while volatile, are still at historically low levels. New loans are being closed daily; if you are a good borrower, loans are available.
6. Inflation is our friend. — Sounds crazy, but controlled inflation can be helpful in growing our economy. According to Lawrence Yun, chief economist for NAR, “Over the long term, home prices tend to rise with commodity prices. And with prices for commodities such as oil, copper, steel and cement commanding sky-high prices, sooner or later the increasing costs of raw materials will push home prices higher. Consider housing to be the ultimate commodity. And as the oversupply may be keeping home prices low for now even as the cost of raw materials rises, the long-term home price equilibrium will shift to reflect the price of production and the cost of land.”
7. The tax benefits of real estate are, indeed, too good to be true. But they are true. The annual tax benefits of owning your personal home are significant and the exclusion of any gain on your primary residence when you sell it is the single greatest tax benefit out there.
8. You have to think about real estate as an investment, whether purchasing as your primary residence or holding as a rental property. And there is no greater investor to heed advice from than Warren Buffet. Consider his statement “Be fearful when others are greedy, and be greedy when others are fearful.”
9. While you’ll never know when the market hits bottom until it has already happened and is rising again, most real estate experts project that the Atlanta real estate market has already hit bottom or is very close. This means right now presents one of the best opportunities for you to purchase a home and accumulate wealth. At the Atlanta Small Business Forum, Roger Tutterow felt that the Atlanta residential real estate market had hit bottom and you should expect to see significant improvement by the second and third quarter of 2009.
10. FORBES.com has ranked Atlanta as #9 on its list of cities most likely to see a rise in real estate values.
The basic rule of investing has never changed - buy low and sell high. Now is the time to buy. Period.
If our team can assist you with your real estate needs, don’t hesitate to contact us.
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