Tag Archives: atlanta real estate

The South, Urbanization and ‘Charlanta’

 

imageHere 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.

 

Progress? Or is Real Estate flipping you the Finger?

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!).

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

Renting vs Buying in Atlanta, which is Cheaper?

Atlanta home values have been increasing the last two years.  It’s always important to watch how home prices relate to rents as some people can get priced out of buying.  But here in Atlanta our median home price of $130,000 still shows if you buy you can pay less per month than renting.  Good news for renters too as renting in Atlanta is about 10% cheaper than other large cities.  This information comes form our friends at CNNMoney and the details are below;

Atlanta

rent buy atlanta
  • % saved buying: 52%
  • Median home price : $130,000
  • Median rent: $1,350

Home prices in the Atlanta metro area have remained cheap as bargain seekers look to the city’s far-flung suburbs for the best deals.

That’s helped to keep the median price of homes in the Deep South’s biggest city very affordable, at a median of $130,000, according to Trulia.

Rents are reasonable too, about 10% below the national median.

But with the cost of buying a home so low and mortgage rates still such a great deal, the buy-versus-rent calculation works out much more favorably for buyers.

http://money.cnn.com/gallery/real_estate/2014/03/03/buy-vs-rent/10.html

Atlanta Still is one of the Most Affordable Cities

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

Trulia_MiddleClassReport_Infographic

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.

Peoplestown Real Estate Market Update – Homes Sold in 2013 vs 2012

In 2012 there were 47 homes sold in Peoplestown. In 2013 that increased to 52. 2012’s avg price was $91,000, a number heavily influenced by the fact 17 of those sales were for under $50,000. In 2013 the average sale price here increased to $102,000 and only 11 sales were under $50,000. In 2012 homes in Peoplestown sat on the market an average of 190 days but this past year that number dropped to only 83 days. Pretty significant improvement across the board.  The most surprising number here is that more homes sold in 2013 vs 2012.  That is a pleasantly surprising number since there were fewer homes on the market in 2013.  Click on the links to see specifics about each year.

2012 Peoplestown Sales – PDF

2013 Peoplestown Sales – PDF

So if you’re thinking of buying or selling a home in Southeast Atlanta, whether it’s Peolestown, Grant Park, Cabbagetown, Summerhill or wherever give us a call today!  You need a local expert.

 

Bam! Just Like that Mortgage Rates are Back Down

Mortgage rates dropped to levels not seen since June this week.  The government re-start and a weak jobs report means the Fed will keep pumping money into the economy and this should keep interest rates low.  Fear of rising interest rates pushed people into buying mode in the Spring but then as they inched up we saw demand slow in August and September.  The shutdown hurt demand as well as buyers decided to take a wait-and-see approach.  Now with the dust settled for the moment in Washington and lower rates coming we’re already seeing business pick up.

The rate on a 30-year fixed rate mortgage averaged 4.13 percent this week, down from last week’s 4.28 percent and the 15-year fixed mortgage rate averaged 3.24 percent, down from 3.33 percent last week.

Thinking if buying or selling?  Then you need to be talking to your agent to find out what your best strategy should be in this quickly changing market.  Give us a call or shoot us an email and we’ll be happy to help you out.

If you’d like more info on rates then check out this article from USA Today.

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

A Little More Info on Atlanta’s Walkability

leinberger          We read Chris Leinberger’s and the ARC’s report on where development is happening in Atlanta now.  Leinberger has studied Atlanta’s real estate market for years.  We wrote about the study recently here.   One of the surprising facts is how much development  is happening in what Leinberger rates as ‘walkable’ neighborhoods.  His study showed that 60% of all development since 2008 had taken place in walkable neighborhoods.  We found this really surprising.  We’ve written extensively how a new urbanism is causing people to move to more urban areas and how those same people were willing to pay significant premiums to live in these neighborhoods.

But we dug further into the study and it’s even more surprising.  When we look at the neighborhoods that were considered walkable, they are only a small portion of the Atlanta area.  In fact if you add up all the area that these walkable neighborhoods include they only add up to about 1% of all the area of Atlanta!  That’s an amazing statistic and it has huge implications for our city and for you.  If you’re thinking of buying you need to be considering walkable of future walkable areas.  It could have a tremendous impact on future value.

While it’s not perfect this site, Walkscore , is a good way to rate neighborhoods that you’re not familiar with.  And stay tuned as we’re still researching this report and we’ll have more on it.  Need more info?  Give us a call today or shoot us an email. We’d love to help.

Intown is where it’s at in Atlanta!

BeltLine1        A new study from Georgia Tech and the Atlanta Regional Commission shows that Atlantans (and transplants) are continuing to choose to live in more walkable and denser neighborhoods.  An article about the study is here at the always great Atlantic Cities site.

From the study;     “Since 2009, 60 percent of new office, retail and rental properties in Atlanta have been built in what Christopher Leinberger calls “walkable urban places” – those neighborhoods already blessed by high Walk Scores or on their way there. That new construction has taken place on less than 1 percent of the metropolitan Atlanta region’s land mass, suggesting a shift in real estate patterns from expansion at the city’s edges to denser development within its existing borders.”

We’ve been talking awhile about home buyer’s desires to live in more walkable neighborhoods.  This shows again that intown Atlanta real estate is a great buy and a great place to invest.  And if you’re thinking of buying or selling in Atlanta you need a good agent to guide you.  Give us a call and we’ll be ready to help.