Remax 2009 Real Estate Predictions for 2009 - Alpharetta and Cumming Real Estate Markets

By
Real Estate Agent with Keller Williams Realty

We say good buy (pun intended) to 2008 and look forward to 2009 these are my thoughts on the market in North Atlanta, specifically the real estate market in Alpharetta, Cumming and Suwanee Ga.

No doubt that 2008 was a tough year compared to 2007 - the credit markets changed considerably, the economy stumbled at the end of the year, $4 a gallon for gas and the stock market losing 1/3 of its value all made consumers less confident and less wealthy.  All of that hurt the real estate market.  A couple of items people do not mention are interest rates were above 6% for a good part of the year and every election people wait to see who is elected - that uncertainty affects the how people feel about moving.  Most people need to feel confident in their jobs in order to buy a new home, particularly if purchasing a more expensive home.  Additionally, most people that bought homes in the last 5 years have interest rates below 6%, so not only do they get a larger mortgage but their interest rate increases.  All that lead to the sales levels of 2008.

While 2008 was nothing like 2005-2007, I do not think we will get back to the 2005 levels for many years.  Remember, in 2005 close to 40% of all homes purchased were second homes.  2008 sales levels were similar to 2004s - and once everything is totaled will be in the top 10 years for real estate, even with the issues noted in the first paragraph.  In 2009, this is what I see taking place:

1.  The interest rates decreasing to 4.5% (30 year fixed rate) will bring many people into the market.  The interest rate is a huge factor in determining the affordability of a home.  I have seen an increased interest in Buyers.  Buyers that have been sitting on the fence for the past year are looking again.

2.  The supply of homes in Alpharetta and Cumming is decreasing.  Builders have stopped building, the builders that had great deals seemed to have gone out of business or sold their excess inventory and prices in general have declined.  In some price ranges now the days on market are around 6 months - 5-6 months supply is a good level.  The price ranges where supply is down is below $250K, but as that market tightens, and they are able to make a decent return on their home, they step up and purchase more expensive homes.  They cycle starts all over again.

3.  In 2008, NAR reported that close to 40% of the homes sold were foreclosures and short sales.  Right now with interest rates at 4.5%, this is the treasury department allowing those people that used the ARM/Interest only mortgages to get out of those mortgages and into a great fixed rate.  There is a lot of refi business taking place right now and that will help the real estate market in 2009 because people rarely lose a home they refinanced in the same year.  I see this strengthening the market towards the end of 2009.

4.  In 2009 I think you will see the average sales price of a home decreasing.  Be careful how that data is used.  If the average sales price of homes in an area decrease 10% from one year to the next, that does not mean if you own a home worth $250,000 one year that your home is worth $225,000 a year later.  It means the mix of more expensive homes to less expensive homes is changing.  In Alpharetta and Cumming, that means less million dollar plus homes are selling so that average and median sales price goes down.  Again, if less million dollar plus homes are selling, you would expect the average sales price to go down, and that will happen.  I think the 250K and below market will strengthen as well as the 500K and below.  I think the million plus will still struggle because until the economy strengthens this part of the market will struggle.

5.  Volume wise in 2009, based on what I am reading I think it will be slightly better than 2008.  I think we will still have record setting foreclosures in the first 3 quarters of the year and I see the Alpharetta, Cumming and Suwanee markets absorbing them. 

6.  I think we will see the bottom of the real estate market in the first half of the year.

I expect 2009 will be a better year than 2008 and I think the Alpharetta, Cumming and Suwanee markets will be stronger than the rest of the Nation as well as stronger than the Atlanta market.  In Cumming in particular, with no significant new inventory coming into the market the inventory levels will continue to drop.  In fact from 10/07 to 10/08 the inventory in Forsyth county decreased by 10%.  That will help prices in 2009.  In looking forward to 2009 I am optimistic look forward to 2009.  If you need to sell a home you should be fine as long as you remember this - you will be engaged in a price war and a beauty contest.  If you price your home correctly and it is in excellent showing shape it will sell.  If you are buying in 2009 - you are buying at a great time.  Call me at 770 722-7010 if you, or anyone you know, is looking to buy or sale a home.  I will provide them excellent service.

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