Residential Real Estate

Metro Atlanta area, national home market are tight

Bruce Ailion

SPECIAL

By Janet Jones Kendall – Contributing Writer

Jun 22, 2018

It’s a good time to sell a home in Atlanta right now, according to area real estate agents.

“I experience, and hear locally, multiple offers are common [and] offers above list remain common, especially for a correctly priced home,” said Bruce Ailion of Re/Max Town and Country’s The Ailion Team. “Many experienced agents find we compete against offers where the buyer has not seen the property or offers where the buyer has waived all contingencies.”

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However, that means it may be a more stressful time to be looking for a home to purchase.

“Both here and around the country, there is some sentiment in the agent community that now is worse for them than 2007,” Ailion said. “Then, you could not find a buyer to buy. Today, you cannot find a house for a buyer to buy.”

That phenomenon is because, though the numbers are showing a slight uptick in recent weeks, the Atlanta housing market has 11 percent fewer listings for buyers than this time last year, according to Bill Murray, president of the Atlanta Realtors Association, and senior vice president and managing broker for Berkshire Hathaway HomeServices Georgia Properties.

“Fewer listings are a direct result of...supply of inventory,” Murray said. “Healthy economic conditions are creating considerable demand for purchasing a home, but not all buyers are finding affordable choices from the homes that are available. Low inventory and rising prices, coupled with rising interest rates, send a strong signal to buyers that you need to react to the market and buy now,” he added. “If buyers do not take advantage of the current market, they may be forced to buy less house as a result of the rapid rising median and average sale price along with the increasing mortgage interest rate.”

In fact, in 2018, the median sale price has risen 13 percent, Murray said, and the average sale price has risen 12 percent. This means realtors have to stay closer to their clients, both the buyers and the sellers, he added.

“Buyers need to be pre-approved on mortgages, so they can react to new listings. Sellers need to have their home ready to sell,” Murray explained. “Agents are receiving more multiple offers on listings in the current market, and clients are relying on their realtors more than ever to navigate through this rapid market. In 2018, the average cumulative days on market has dropped over 20 percent, so if you snooze, you lose.”

Because inventory is low, the market causes, “a great deal of stress on both sides of the transaction,” according to Cynthia Baer, a Keller Williams Realty top producer.

“For sellers, they still need to price their home right for the market, its condition and location, in order to create interest in offers. They must be strategic in their pricing and prep the home to look its very best before going on market. If they miss the mark, they receive a much lower sales price,” she explained. “If a home is priced right, it is typically going under contract within 10 days of listing, and at full list price or above.”

Meanwhile, buyers are feeling fatigued, too. “Many have lost out on multiple properties as they’ve run up against multiple offers for the right home. When a good listing comes on the market, they must stop whatever they are doing and check it out immediately,” Baer said. “For the really hot ones, we are lined up waiting for one agent and client to come out, and have hopeful buyers lined up behind us. It makes for an anxiety-driven process.”

That anxiety extends to the seller as well, Baer explained.

“Receiving multiple offers can be more painful than one would imagine. It’s important to choose the right one that is likely to make it to closing, netting the most amount of money with the least amount of hassle,” she said. “Sometimes that winner is obvious, but often, we’re struggling to guess how it will all play out. There are many pitfalls between going under contract and closing, and if you choose the wrong contract, the seller can end up in a worse position than where they started.”

May housing market figures for the metro area show a 2.7 months’ supply of inventory, Murray said, the highest for 2018 so far.

The market has become more competitive, according to Ailion. “We can count on continued increases in interest rates at a faster pace than would have been projected in 2017,” he said. “Unit sales in 2018 will likely be lower than in 2017, although dollar volume will likely be higher.”

Current inventory may have increased, but listings are down 11 percent from last year, Ailion said, for several reasons. The increase in new home construction has not kept pace with the growth in household formation and inventory loss due to fire and destruction, he added. Also, he said, “New construction has focused on the higher price ranges until just recently. Many sellers, hearing how difficult it is to buy a home and how much has to be paid, have elected to stay off the market.”

Anyone looking to buy or sell a home in this type of market needs an experienced agent, Baer advised. “A savvy agent will help guide you through these treacherous waters to being the chosen one,” she said. “Listen to their advice, but never do anything you aren’t comfortable with doing, no matter how desperate you may be feeling.”