The First Multiple Listing Service and experts reported the following:

1)      4^th quarter positive trends continued in a big way through the end of the 2009.  While each month experienced an improvement in home sales compared to the year before, November 2009 was record breaking.  November home sales were 32.9% higher than those of November 2008.

2)      The average sales price in December remained weak at 14.9% lower than December 2008.  This is due in part to decreased values (January through May) and part to an increased rate of sales in entry level price points.

3)      The number of homes for sale (inventory) has dropped again.  With demand increasing and inventories continuing to decline, expect an opportunity for price stabilization and (dare I say it) a platform for early appreciation.

4)      The majority of metro Atlanta is no longer being considered a declining market in the eyes of appraisers.  As a result, more contracts are going to the closing table at the originally negotiated purchase price.

5)       The majority of new loans in 2009 were FHA.  To offset associated risk, the government has increased some of the costs involved in generating this type of mortgage but has left the minimum down payment at a mere 3.5%.

6)       There have been many good numbers and trends to report the last few months.  The rate of improvement is accelerating.  January through September 2010 should be positive for Metro Atlanta housing.

On November 23^rd, the First Multiple Listing Service reported the following:

1)      Pre-holiday cheer was reported – October had the strongest year-to-year increase in closings for all single family since May 2006!

2)      Inventory levels keep dropping.  As supply and demand reverse, home prices will begin to increase.  I believe that inventories at the end of December will be almost half of the all-time high of 60,000 in 2007.

3)      October was the 6^th month in a row with an increased number of written contracts compared to the same month last year.  November’s number of contracts is expected to continue this trend.

4)      The Atlanta Journal Constitution and TV news, as well as additional sources, are reporting public outrage at appraisers undervaluing properties.  Appraisers must present current market value and allow for market recovery.

5)      The average sales price for single family detached was $203,440 in September and $201,038 in October.  An increase in the average sales price is anticipated as we finish out the year.

6)      Housing seems to be on the upswing, but the overall economy remains very weak.  In order to have big upticks in housing, the economy needs to improve, especially the employment sector.

After 3 months of increased home sales, August and September resulted in decreased home sales compared to the same months in 2008.  We have had more homes go under contract the last few months versus 2008, so why the year-to-year decline the past couple of periods?

There were a lot of areas in Metro Atlanta affected by floods in September, but not enough to prevent hundreds of homes from closing.  A few major mortgage lenders have been taken over by the FED, but there are still dozens of other lenders to choose from.

I believe our number one nemesis, liquidity, is not only a problem, but is getting worse.  Not all homes that go under contract can close because of loans that cannot be secured.  A major contributor to this problem is the trend for appraisers to undervalue properties.  If lender liquidity could improve, this market could heat up fairly quickly, especially when combined with today’s historically low level of inventory. 

Housing is an important component for overall Atlanta economy and the 4^th quarter will be a critical indicator of 2010’s direction.

On September 22^nd the First Multiple Listing Service reported the following:

1)      Last month’s report predicted that August’s closed sales of single family homes would exceed those of August 2008 resulting in the second month in a row of increased sales.  Unfortunately, August’s closed sales for single family homes were down 12.4% from the same time last year.

2)      If lender liquidity could improve, this market could heat up fairly quickly – well, liquidity is still a major problem since only 4,449 single family homes closed in August out of the 8,778 under contract as the month began.

3)      September began with 36% more properties under contract than the same time last year, which should result in an increased rate of closed sales in October compared to the same time last year.

4)      The average sale price for single family detached was $203,041 in August, which is 16% higher than the February 2009 recession low.

5)      Our inventory levels just keep dropping.  The last time the inventory was lower than this was March 2006.

6)      I believe housing will continue to improve through the rest of the year, but it looks like it will be with a slow year to year percentage increase in closings.

Per an article by Lawrence Yun, chief economist of the National Association of Realtors, inventories are tightening as a result of pending home sales in July reaching their highest mark in two years.  Closed sales continuing on an upward path also contributes to the tightening of inventories.  There were 3.8 million properties for sale in June; 84% compared to the same time last year.

There are other indications that the economy is growing.  Business inventories have been exhausted resulting in durable goods orders rising for three straight months.  Exports have risen faster than imports and the stock market has made a nice return.

Although these are promising signs which forecast higher home sales and stabilizing prices in the year ahead, there are still some concerns.

Many homeowners are possibly waiting for conditions to improve before putting their home on the market.  Banks may be doing the same with their foreclosed properties.  Beyond the housing market, there are other economic factors that could hold back improvement.  A continuing long-term budget deficit (which can translate into higher mortgage rates), rising oil prices and heavy job losses all make foreclosures likely through the rest of the year.

Still, there is reason to be confident.  Prices are stabilizing due to home sales heading up and shrinking inventories.  Jobs will follow once these key conditions in housing lead the economy into growth mode.

August 20^th the First Multiple Listing Service reported the following:

1)      Last month’s report showed a decline of 12.3% for closed sales of single family detached homes.  But, after collecting lagging data, the decline is only 5.1%.

2)      It’s not official yet, but after lags are reported, single family detached will have a positive year-to-year increase in closings for July.  This is an encouraging step; however, consecutive year-to-year monthly increases are necessary before we can consider this our turnaround.

3)      Average closed prices are continuing to head back up.  The average sales price for detached single family homes in July was $218,840 or the 5^th consecutive month to month increase (and $43,000 above the February low of $175,790).  With inventories dropping, any decent rise in demand will quickly “correct” the prices back up.

4)      The inventory of single family detached was 41,898 at the end of July.  The last time inventory was this low was December, 2006.

5)      There were 8.778 pending sales for all single family at the end of July compared with 6,825 at the end of July 2008.

6)      I am predicting back to back positive year-to-year monthly closings, as I believe August will be positive too.  If lender liquidity could improve, this market could heat up fairly quick.

According to a published report by Larry Edelson, real estate prices in the US have hit the bottom and are recovering. Not everybody will agree with this statement, however, this forecast does not reflect property prices in every town. All the evidence tells us that real estate prices are a bargain, that we are at the bottom and over the next several years, there will be recovery in property prices.

Over a 40-year average, the inventory of new homes has fallen to levels that are described as previous recession lows. This does not mean that the inventories of new homes will not fall even lower, but, when inventories decrease, there is a decrease in supply of new homes, too, which is generally optimistic for prices.

Although the inventory of existing homes has not plummeted as low as some may expect, they have fallen to an area which should receive support. Also, existing home inventory data will probably lag the bottom of real estate prices because of short sales, foreclosures and other distressed sales happening in the current market.

For four months straight, the Pending Home Sales Index (a leading indicator and measure of home sales that will go under contract within two months) has increased. Also on the rise are existing home sales which have increased by 6.2% since the beginning of the year. Existing homes have risen almost 5% in median sales price in the same time.
The median home price in the US has decreased 21.3% since a peak of $262,600 in March of 2007. Based on Larry’s travels throughout Asia, property prices in the US correspond to some of the greatest deals on the planet. Interest rates are historically low and a benefit to the market in the US. However, one should not anticipate a rise in mortgage rates to slow down a revival in US property prices. Historically, the best real estate markets have taken place in combination with increasing mortgage rates, not decreasing rates.

Are you aware that the State of Georgia is not funding the Homestead Exemption Taxpayer Reassessment Relief Act?  What does this mean?  First and foremost, this does not affect the Homestead Exemption at the county level which represents the largest portion of the total exemption.  The 2009 tax bill (which is being sent out the next couple of months) will be $50 to $300 higher for people who currently take advantage of the Homestead Exemption.  If you look at last year’s property tax bill, the final credit figure prior to the grand total is deleted effective this year.

On June 20^th the First Multiple Listing Service reported the following: 

The number of single family closed sales was 4,009 in May 2009 compared to 3,785 in April 2009.  This is a decline of 24.7% since May 2008 and the 30^th year-to-year percentage decline out of the past 33 periods.

A key step to market recovery is an increase in the rate at which homes go under contract and - there’s great news!  As hoped for and anticipated, the number of contracts in May 2009 exceeded those of May 2008.  This is an important indicator that the rate of sales is on an upward trend.

Inventory levels dropped again.  As the rate of sales increases and inventory levels decrease, supply and demand will cause prices to stabilize and even rise!

There are a lot of positive signs pointing to an increase in the demand of housing.  First time homebuyers account for 40% of recent sales and Obama’s $8,000 First Time Homebuyer Tax Credit is partially responsible.  Hopefully rising interest rates and higher gas prices don’t put damper on this much needed turn around.

On April 21^st, the First Multiple Listing Service reported the following for Metro Atlanta: 

1)  The number of single family closed sales was 3,727 in March 2009 compared to 2,411 in Feb. 2009.  Although this is a decline of 25.1% from March 2008, the dramatic increase in the number of sales from Feb. 2009 to March 2009 is a slight indicator of our market moving towards recovery.
2)  The average sales price for single family homes was $179,744 in March 2009.  This is the highest monthly average sales price for homes in 2009.
3)  Home sellers acknowledge that an extended period of time to sell their home is a direct result of the depressed housing market.
4)  Compared to previous years, the number of single family homes on the market is at a reduced level.  Historically, these levels usually increase 10-20% between December and March.
5)  Liquidity in the markets is very important for 2009.  Resales are forecasted to have year-to-year monthly increases starting at the end of the 2^nd quarter with new construction following 2 quarters later (or at the end of the year).  How much we improve will depend on how effective our government will be in improving liquidity and the ability to lend within the real estate industry.  Attractive home prices, historically low interest rates and a 1^st time home buyer tax credit of $8000 will encourage an increase in the rate of home sales.

Considering the forecast of increased home sales this summer, perhaps you will want to put your home back on the market soon.  Please call me to arrange a brief appointment.