Is the housing recovery in Atlanta sustainable?
It is now news in the media that Atlanta housing is ‘recovering’. In some areas recovering means not dropping any further but in some parts, housing prices have risen. This is to the dismay of many, whether homeowners or investors looking for ‘a deal’. The market has been down so long that many of these deals are still good deals from a big picture perspective. Short sighted thinking can cloud this so be aware of the big picture. Then again, other than certain types of investors, most people will likely own their home for quite some time and when reminded of this, many still find the prices attractive.
And they are most certainly out there. Almost every home that is even a decent deal is getting bid up like there is no tomorrow. A lot of these houses are not really exceptional but fear of prices rising is a powerful motivator, indeed. Just recently we were told we were the ‘Lowest’ of 16 offers on a property. I had to giggle and think I have been complemented. :-D We were only 5k below list price on a 60k piece of property. I know my competition was largely owner occupants and they are more than welcome to pay more for the house. And realistically, if they pay 70-75 and live in it for 10 years, it’s a good deal for them. We get it.
What we don’t get though is can this uptick be sustained. There is a lot of factors that have a lot of Buyers still on the fence. Some tidbits…
1. Now public knowledge of housing appraisals and Fannie/Freddie possibly raising prices (especially on short sales) to artificially inflate the market.
2. Inventory has been held back by the banks is the story we keep hearing.
3. Large hedge funds and private equity firms are buying up houses at the auctions with the same kind of bidding frenzy being seen in the retail market.Paying 110-120-130% of market value has become commonplace.
4. Many private sellers are not willing to sell for today’s market value homes.
5. While ‘pretty houses’ are getting bidding wars that rival an auction for a freshly released iPhone model, beat up houses are getting marketed with like pricing and are just sitting with unrealistic counters being made by the Sellers.
6. Are banks really lending more when it comes to the number of closings?
7. With the job outlook not really having changed much, can any housing recovery sustain for any length of time?People do have to work to pay for their living spaces!
We do not claim to have any answers and if you ask the above to 10 people, you will get several answers for each question. They are worthy of discussion, especially for investors looking for double digit returns that were once so bountiful that you could fall out of your bed and get a deal.
What 2013 holds no one knows but one thing is for sure, it is going to be an interesting ride. Happy House Hunting!