Mortgage rates for 30 year fixed rose above 4% this week for the first time since November of 2014. Although they just now broke the 4% barrier they have been climbing the last 2 weeks. The 30 year fixed rate averaged 4.04%, up from 3.87% 2 weeks ago. The reason is that employment data is looking strong which is driving up U.S. Treasury yields. There have been rumblings that we’d see the fed increase it’s rates. This is part of the cause since the Fed has said it’s watching employment numbers carefully.
This quote is from housingwire.com
“Mortgage rates rocketed higher following a stronger than expected monthly employment report. The good news on the job front further solidifies the notion that the Federal Reserve will likely begin raising interest rates soon, perhaps in the third quarter of this year,” analysts with Bankrate said about the report.
“The job market is one area the Fed has specifically pointed to as needing to show further improvement before they’d be comfortable raising short-term interest rates, and further improvement is what we have seen,” continued Bankrate
So if you’re considering buying now or later, keep a close eye on these rates.
Here at HomesinAtlanta we like to keep you up to date on the Atlanta real estate market. So this week we’re focusing on the 3rd quarter condo market and it’s been hot. This first graph shows sales are up vs 2013 and 2012.
And while year over year sales are above last year they have been declining recently, mostly due to a lack of inventory, not a lack of demand.
Breaking it down by price point now. Condos above $750k are still in a buyers market. Condos under $100k look to be soft too but that’s just because the under $100k market supply has dried up.
Lets take a look at supply vs demand. This graph shows how many units are coming on the market vs units coming on the market. This slide shows that once we hit 6 months of supply we’re in a buyers market. But we’re nowhere close to that. We’re closer to a 3 month supply, a definite sellers market.
Check out the long view! In September 2014 40% more units were sold than September 2009 but we have nearly 70% fewer units for sale.
Condo sales in Atlanta continue to be strong. HomesinAtlanta expects a small slowdown during the Winter months but we’ll be back to current levels by early Spring. We’ll stay a seller’s market for the near future due to a decent buyer demand combined with a lack of inventory. Got any questions or would like to know more? Just drop us a question here.
Here at homesinatlanta we’ve been telling you about increasing urbanization (or more simply people are moving to the city). Now a new study from North Carolina State has a prediction of what the South will look like by 2060 due to this trend. Here in the South we’ve tended to be spread out because our cities are younger and mostly developed during the hey day of the automobile and cheap energy prices. One of the interesting things from the study will be the rise of ‘Charlanta’. As you can see from this map there will be a stretch of urbanization from Birmingham through Atlanta to Charlotte and Raleigh. Urbanization during this time in the South will increase 100 to almost 200% depending on the model. People are continuing to move to the sunbelt and those people are choosing cities or the close in suburbs. Our leaders need to be planning infrastructure, resource planning etc. Let’s hope they will.
CityLab has a great write up about this here.
According to a new report from Bloomberg apartments across the U.S. are shrinking. In fact newer construction apartments are being built at their smallest size since 2002. In Atlanta, average apartment size has shrunk 7%. Why is that? Three factors, really. One is that rents have been increasing so smaller apartments are more affordable. Another is increasing urbanization, People are wanting to live closer in to urban centers and those apartments will necessarily be smaller since there is limited space in the city. Last is changing tastes and attitudes. More people today (not just renters) are happy with a lifestyle that means smaller individual space as long as available amenities nearby are good. This includes parks, bars and restaurants and public transportation. We don’t usually cover apartments here at homesinatlanta but this is part of a trend we’re seeing in houses also. For the full report from Bloomberg click here.
Here’s a great new post from Diana Olick at CNBC. It’s about how taller buildings are now being built between smaller buildings due to a lack of available real estate. It looks pretty ugly to us (to each his own, though) and it got us thinking about Atlanta. Atlanta has it’s own issues when it comes to development, particularly since our city grew after the use of automobiles were common. But the last two decades growth in the city has been measured and mostly sane. We haven’t seen some of the craziness associated with values in places like New York or San Francisco. We’ve had some problems for sure. Remember the early 2,000’s when people were tearing down those little ranches in Brookhaven and building giant McMansions which almost blocked out the sun for the remaining ranches? It looks like our biggest problem in Atlanta right now may be overbuilding in apartments. But check out the article by Ms Olick. Fortunately we’re not seeing this kind of growth (at least right now!).
We’ve been discussing walkability for some time here at homesinatlanta. Atlanta has been the poster child for years when it came to sprawl and neighborhoods designed for driving and not walking. But over the last ten years we’ve seen a sea change in walkable developments. It’s the buzz word around all of Atlanta. And now new research shows how that has changed Atlanta. We’re now ranked the 8th most walkable city. This sutdy looks at how many neighborhood mix living/working/shopping all in a walkable distance. It’s not just Atlanta that is developing walkable areas. Acworth and Marietta have both developed great city centers which are walkable. Here’s a link to the full study that you can read.
We were doing some analysis of the numbers from the first quarter of this year. We’re coming to the close of the second quarter but those numbers won’t be out for another month. One of the things that stood out was the increase in median price this year vs last year. Some areas, like southeast Atlanta showed increase of over 40% while others showed between 10% and 20% increases. It’s important to take these numbers into perspective. It doesn’t mean each house went up 40% in value. It actually means the average price increased. So in southeast Atlanta one year ago there were probably a good mix of inexpensive foreclosed houses on the market. Those houses are gone now and so the mix of houses for sale include many more non-distress sales. What this really shows is the housing market in Atlanta continues to heal. The crazy price declines and high foreclosure rates are over. We now have a fairly stable seller’s market right now. Whew! Ain’t it great?!
1Q 2014 Median Sales Price Change
HSH Mortgage recently released a study checking how much income you’d need to buy the average priced house in 27 different cities. It’s no surprise that Atlanta was the 6th cheapest city. Cleveland was the cheapest and San Francisco (no surprise) was the most expensive. In Atlanta you need to earn just over $34,000 per year in order to qualify. That’s a pretty sweet perk of living in Atlanta that our home values are still relatively cheap. If you’d like to check out the full report or just see where other cities rank here is the chart. You can also read the full report from HSH by clicking here.
|New York City
We’re blessed in many ways living in Atlanta and one of the most important is affordable housing. More and more we’re seeing the increased demand in urban areas pushing up prices beyond the reach of the middle class. But in Atlanta we’re still very affordable. For comparison
In Atlanta the median income is $55,000 and that income would qualify you for nearly 3 out of 4 houses currently on the market. That’s much cheaper than San Francisco or Denver. In fact it puts us at the most affordable range. It’s one more reason real estate is still a great value in Atlanta. I got this info from the always great ‘Trulia Trends’ and if you want to read the full article you can check it out here.