Category Archives: national real estate

How Much Income Do You Need to Buy in Atlanta?

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.

Cities 30-Year Fixed Mortgage Rate % Change from 4Q13 Median Home Price % Change from 4Q13 Monthly Payment (PITI) Salary Needed
Cleveland 4.50% 0.06 $102,100 -9.49 $695.07 $29,788.67
Pittsburgh 4.36% 0.04 $120,000 -6.69 $704.15 $30,177.78
St. Louis 4.40% -0.01 $120,500 -7.52 $729.76 $31,275.49
Cincinnati 4.53% 0.08 $121,700 -5.44 $743.17 $31,850.18
Detroit 4.59% 0.10 $110,750 -9.72 $752.51 $32,250.30
Atlanta 4.44% -0.03 $141,900 -0.35 $797.61 $34,183.44
Tampa 4.54% 0.04 $145,000 1.83 $850.21 $36,437.56
Phoenix 4.48% 0.07 $194,300 0.83 $963.87 $41,308.74
Orlando 4.47% -0.01 $178,000 7.36 $1,009.03 $43,243.95
San Antonio 4.62% 0.13 $169,300 -1.40 $1,038.47 $44,506.00
Minneapolis 4.52% 0.02 $188,200 -4.52 $1,067.09 $45,732.39
Dallas 4.48% 0.02 $174,800 0.52 $1,113.20 $47,708.77
Houston 4.49% 0.02 $184,600 1.26 $1,144.19 $49,036.60
Philadelphia 4.52% 0.09 $201,800 -5.83 $1,179.41 $50,546.25
Chicago 4.52% 0.02 $176,900 -5.45 $1,233.56 $52,866.88
Baltimore 4.44% 0.07 $224,500 -7.12 $1,238.50 $53,078.51
Sacramento 4.55% 0.02 $255.800 2.17 $1,355.99 $58,113.87
Miami 4.53% 0.06 $259,000 1.61 $1,393.80 $59,734.23
Denver 4.53% 0.04 $288,400 3.26 $1,397.49 $59,892.46
Portland 4.57% 0.06 $271,900 1.64 $1,407.18 $60,307.71
Seattle 4.59% 0.07 $339,900 -1.31 $1,723.19 $73,851.06
Washington D.C. 4.45% 0.07 $358,900 -2.47 $1,831.75 $78,503.56
Boston 4.47% 0.06 $363,200 -2.18 $1,862.47 $79,820.01
Los Angeles 4.52% 0.06 $406,200 -3.99 $2,005.85 $85,964.88
New York City 4.53% 0.05 $388,900 0.67 $2,095.07 $89,788.69
San Diego 4.56% 0.03 $483,000 1.30 $2,299.13 $98,534.22
San Francisco 4.39% 0.00 $679,800 -0.38 $3,199.69 $137,129.55

Will New Loan Limits Affect Atlanta’s Real Estate Market?

     Government officials are reviewing reducing loan limits for conforming mortgages, a change which could affect Atlanta.  From a report from NAR;

In early September, the Federal Housing Finance Agency (FHFA), the entity that oversees Freddie Mac and Fannie Mae, gave notice that it would revise the conforming loans limits in an attempt to stimulate the private sector, specifically the private mortgage securitization (PLS) market. Though any reduction in the loan limits is expected to be relatively modest, it could have more far reaching impacts at the local level and for the affected borrowers.

Each year, the FHFA adjusts the national conforming loan limit which defines the space within which Fannie Mae and Freddie Mac can finance mortgage. The national limit is $417,000, but that varies by county and can increase to $625,500 in high cost markets. The FHA’s limits, which range from $261,050 to $725,750, are based off of the conforming limit so the FHFA’s actions would impact FHA borrowers as well.

NAR Research estimates that if the national conforming limit were lowered to $400,000, roughly 145,000 total conforming mortgages and 49,000 conforming purchase mortgages would have been impacted in 2012 [1]. If the FHA limits were also revised, the impact would be larger by roughly 15,000 and 7,000 borrowers, respectively. The total number was inflated due to the refinance boom in 2012. However, strong price growth in 2013 has likely pushed more home buyers toward the conforming limits. Most estimates have the impacted volume at roughly 2-5% nationally.


While the estimate of the national impact may appear relatively small, the change could have a significant effect at the local level. As depicted in the map below, the impact goes beyond the high priced markets on the coasts and would affect some smaller communities in the Midwest and South. Furthermore, several of the markets in the top 25 most impacted are in formerly distressed areas (e.g. Atlanta, Sacramento, Riverside-San Bernadine, Oakland, Tampa, and Phoenix). These are areas where FICO scores declined in recent years as a result of the economic and housing downturn and where investors have played an important role in their recovery. As prices rise and rent growth flattens, investors will pull back and it is not clear that the PLS industry is currently ready to provide financing for the nascent volume of home buyers needed to fill the void. Some private mortgage insurers recently announced willingness to underwrite mortgages with FICOs between 620 and 680. It will be particularly interesting and instructive to see how lenders respond to this change. But requirements at jumbo lenders and PLS remain significantly higher with minimum FICO scores above 720, down payments of 20% or more, and cash reserves of nine months or more. Fannie Mae and Freddie Mac as well as the FHA have new programs to help borrowers in these distressed areas, but they are less potent if reduced limits disqualify borrowers.

Beyond the distressed areas, borrowers pushed into the non-conforming space or from FHA to convention-conforming market may not have the same access to credit due to higher FICO, down payment, and reserve requirements. Since mortgage rates are already at parity or better in the jumbo space and part of the conforming-conventional, if a borrower had sufficient credit quality, the down payment, and the reserve requirements they likely would have already migrated to the private sector. Similarly, the FHA has been underpriced by the private MIs at the middle and upper price echelons since the fall of 2012. Lowering the limits could create a binding equity or credit constraint for the remaining borrowers in this space.

Finally, it isn’t clear that lowering the limits will stimulate the PLS market. There are still a number of issues hindering the PLS market including representation and warrants risk, the unfinished QRM rule, concerns about the implementation and ramifications of the qualified mortgage (QM) rule, secondary market reform and lingering negative investor sentiment. Nor is it clear that bank portfolios will expand to sustain these borrowers. The FHFA might accomplish its goal of expanding the private sector’s market share, but this feat would be accomplished by reducing the total number of borrowers, not by pushing borrowers into the private space.

Though well intended, a reduction in loan limits could crowd out many otherwise qualified and sustainable borrowers. There may be a time when the PLS sector is ready, but it isn’t clear that PLS issuers are ready to take up the baton of borrowers impacted by lowering the limits.

[1] Based on analysis of 2012 HMDA dataset

So You Think Your Apartment is Small? Take a look at This !

Sure we know NYC real estate is expensive but these SRO’s take the cake!  Don’t worry though it’s got ‘robust sunlight’ and the neighborhood has ‘vivacity’.  From the NY Daily News, ”

But in one Harlem building, the captives in a 100-square-foot apartment pay $1,275 a month — and there is no free grub.

The owners of a building at 14 Convent Ave. are now hyping the micro mini skirt of apartments — units that are a tough sell, unless you’re a real estate broker, of course.

The Douglas Elliman firm boasts on its website that the apartments — which are barely big enough to accommodate a bed, let alone a nightstand — sport “robust sunlight” and “generous” cabinet space.

Get ’em before they’re gone !

Despite higher rates Home Prices still increasing

We’ve been seeing interest rates increase pretty steadily the last few months.  This tends to depress demand and home prices.  But we’re still seeing price increases.  July’s numbers again show a gain of 12% over the same time a year ago.   From Diana Olick at CNBC,

‘Despite rising interest rates, home prices continue to surge higher. The latest read shows values, including distressed properties, up 12.4 percent in July, year over year, according to a monthly CoreLogic report. That’s higher than both May and June’s annual increases.

This is the 17th consecutive month of annual gains for home values nationally. Prices were up 1.8 percent month over month, according to the report.’

So what does the future hold?  Demand is still steady whil inventory is still low.  Here at homesinatlanta we expect to see more price increases (but modest ones)  and those increases will continue to slow both from higher rates and due to seasonality of the home buying season.

Sales are Up, Prices are Up, Inventory is Up. Wait, what ?

grah     In the last few months home prices continued to appreciate which helped home sales to increase but at the same time prices increased.  You’d think that more inventory would slow down prices but demand is so strong and inventory still so low that prices still shot up.

According to the National Association of Realtors existing home sales rose 4.2% for a rate of over 5 million homes per year.  This is almost 13% higher than we were just one year ago.  This is the highest level in over 3 years and shows the housing market is continuing it’s recovery.  Need more proof?  We’re now looking at 15 months in a row of price increases.  Wow!

Sales have been down but not for lack of demand but for lack of inventory.   More homes are now coming to market helping to bring a least a little sanity to the market.  Here in Atlanta we’ve been seeing inventory at a 2 to 3 months supply.  Great for sellers but it leads to a crazy stressful market where emotion can take over.  It looks like we may be moving more to a 3 to 4 month supply which makes for a healthier market.

But what about those investors?  They’re actually slowing their purchases due to higher prices in some areas.   The number of homes investors bought shrunk from 22% in April to 20% in May but that hasn’t seemed to slow the market at all as owner/occupants easily filled that gap.  It’s a trend we’ll continue to see through 2013.  First time home buyers are still strong, buying over a third of all homes sold.

So what does this mean for you?  We’re going to see tight inventory levels for the foreseeable future.   At the same time mortgage interest rates are moving up sharply.  (more on that later this week).   Both of those factors can mean buying a home for you is getting more expensive.   We’ve been telling you for  a year now, the time to move is now.  You haven’t missed the boat yet but barring some significant change that boa may sail soon.  If you’re thinking of buying or selling give us a call today.

Home Prices Increase the Most in Seven Years

Home prices continue to climb as this article from Reuters explains;

Single-family home prices rose more than expected in February, posting their best annual rise since May 2006 in a fresh sign the housing recovery remains on track, a closely watched survey showed on Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas gained 1.2 percent on a seasonally adjusted basis compared to January, topping forecasts for 0.9 percent.

“Despite some recent mixed economic reports for March, housing continues to be one of the brighter spots in the economy,” David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said in a statement.

Prices in the 20 cities gained 9.3 percent year-over-year, also beating expectations for 9 percent and the biggest increase since May 2006.

On a non-adjusted basis, prices rose 0.3 percent.

Adjusted prices have been rising since last February, the first year of gains since before the housing market’s collapse. The sector started to turn the corner in 2012, helped by tighter inventories and improved sales.

Higher prices are here and they’re moving higher.  Better not wait to buy!

Baby Boomers Moving to Urban Centers

We’ve been seeing a trend for awhile now as Baby Boomers become empty nesters.  They’re looking to sell their current larger homes and down size.  In the past this often meant a move to sunny Florida or perhaps Arizona.  But today more and more baby boomers are looking to move to the city.  Part of this trend is just that older people are healthier and more active than previous generations.  So 20 years ago at 65 a person might want to lie in the Barcalounger and hit the 4:30 early bird special for dinner, today’s seniors are walking more and socializing more.  Urban living gives them plenty to do and more opportunities to get around without driving.  Diana Olick with CNBC has a great article discussing this in greater detail.  If you’re a Baby Boomer considering a move into Atlanta give us a call or shoot us an email today.



This Market is Changing and Changing Fast

stock-photo-19763756-bar-graph   Things are moving fast in real estate these days.  And the new factors are changing the way homes are being marketed and sold.    For instance, the available inventory is really drying up.  One of the reasons is that big investment firms are buying up single family homes and renting them out.  This has been done for years but it has really accelerated recently.  When will that slow down?  Not until rental vacancy rates start climbing.  This could happen fairly soon  (like in the next two to three years) because there has also been an explosion in apartment construction.  As the economy improves more of those renters will become owners.  But for the near time this demand for rentals will continue to push prices up.

Prices are also continuing to climb because houses are still so cheap.   Today’s house prices are incredibly low compared to income and the money needed to borrow is incredibly cheap as well.  The problem for most buyers recently has been an inability to get a loan but banks are loosening their restrictions and more people are able to get loans.  Again, this is not going to change anytime soon.

So here’s your near future housing market.  Very, very little inventory to choose from.  Many buyers chasing fewer homes.  Prices increasing.  This is the time you need to be talking to your trusted real estate adviser to find out what your best move is to take advantage of this market.


‘Someone Say House Party?’

for-sale-sign.jpgBank of America has come out with a revised edition of their forecast for real estate this year.  In a report titled ‘Someone Say House Party?’ the BofA economists now predict home prices to increase 8% this year even after prices increased over 7% last year.   Several factors are causing this.  Lending standards are easing.  Pent up demand is finally hitting the market as more households (that were renting) are formed.  Another factor is psychology.  So many people hold back when prices are down because ‘no one is buying’.  (hint, that’s a great time to buy).  But once these same buyers see prices increase and interest rates tick up they tend to feel pressure to move into the market.  You haven’t missed the boat yet.  Prices and rates are still super low.  But you’re running out of time.  Give us a call today.

Metrostudy Expects a Sharp Rise in Home Prices this Year

images Here at the HomesInAtlanta blog we follow Metrostudy closely.  They have some of the best and most up to date analysis available for the real estate market.  Now they’ve come out with a new prediction.  They’re expecting new home prices to increase almost 10% this year and another 6% in 2014.  We’ve been seeing prices inch up and expect more but Metrostudy is predicting a more robust market than most.  We tend to agree.  When the market falls prices tend to trail and so lower prices take a while to work into the market.  It’s the same with an increasing market.  People tend to price their homes a little low in this type of market and it takes a while to see the increases.  Well we’re seeing them now.  The lack of supply available for sale has really pushed up the prices of prime lots and builders will pass along that increase to the buyers.  Tell us you’re not still sitting on the fence….waiting on that bottom.  Because, brother, it has come and gone.  And while interest rates tracked down this week, don’t expect that to continue.  You need to be moving quickly and have a good strategy and a good agent.  Call us today to get the advice you need.