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.
Our favorite closing attorney, Kati Heller, is always giving us great info and advice about the pitfalls to avoid in a real estate transaction. Today she focused on tenants and I’ll just share it here since she says it better than I can;
We are seeing more and more properties being sold with tenants either occupying the property or leaving just before the closing. Here are some things to provide for in your contract to avoid surprises at closing.
If there is a security deposit being held by the Seller, be sure the contract stipulates whether the deposit will be transferred at closing. If the tenant is remaining in the property after the closing, the Purchaser will be responsible for refunding that money. If there is a lender involved, the lender will need to know about this in advance to get it approved by their underwriting department.
If the rent needs to be prorated then there should be a contract stipulation stating what the proration will be based upon. The closing attorney will need to know in advance what the terms of the lease are and if the current month’s rent has been paid. If there is a lender involved, the lender will need to know about this in advance to get it approved by their underwriting department.
It is a good idea to get the Seller and the Tenant to sign an estoppel affidavit listing the terms of the lease. It is common that there is not a written lease after extended tenancies. The Purchaser needs to be certain what the terms of the lease are so that they are aware of their rights and responsibilities.
The Purchaser will need to be aware that they should purchase a Homeowner’s Insurance Policy that provides protection as a Landlord.
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
Oh, you bet it is….how do you know where that new fence will go? Is there a sewer line running under your new house? These and plenty of other potential problems can be headed off or at least discovered prior to causing you a problem. Here’s a great article about surveys from the always great Kati Heller at McManamy, McLeod and Heller telling you all the reasons you need one;
A survey of the property marks the corners and sets out the boundary lines of the property. It also shows easements, utility pipes, fences, walls and other potential encroachments, which may affect the property or the dwelling. A survey will also show whether driveways are located completely within the boundary lines of the property. A survey will show whether the structures on the property encroach upon building lines or neighboring properties. Most lenders no longer require a survey to be purchased as a part of the loan transaction as their risk from matters disclosed by a survey are now covered under the Lenders Title Insurance Policy. Because Lenders no longer require a survey, many purchasers do not think they need a survey.
The reason that Lenders no longer require surveys is due to the fact that the lender’s title insurance policy now insures over survey risks to the Lender; therefore any problem a survey would have shown is covered in a lender’s policy. This is not true of the owner’s title insurance. The enhanced owner’s policy does provide some survey coverage but is subject to a deductible and a maximum loss limit of $25,000. With a survey, there are no limits on coverage.
Often, a purchaser may think that a title exam would reveal any problems and a survey is just redundant. This is not true. For example, a title exam may show the existence of a sewer easement, but it would not show that the easement runs directly through the house. Also, title examinations do not reveal fences, walls, and improvements that might sit on or over the property line or violations of building lines or encroachments onto neighboring property.
Generally, a purchaser buying property should always request a survey on the property being purchased. Knowing the property lines will assist a purchaser in making sure future improvements like fences are located on the purchaser’s property. If a survey is obtained as part of the purchase and later a next door neighbor puts up a fence on the purchaser’s property, then the Owner’s title policy would cover this because the property lines were conclusively established by the survey at closing.
It is to the buyer’s benefit to find out about problems before the property closes when it is still the seller’s problem rather than after closing when the seller no longer has an interest in the property.