By Hicks Malonson
It has been really difficult to avoid all of the press regarding real estate over the past couple of years. We hear the bad, the ugly and even occasionally, the good. Much of what we see is based on national statistics and trends and really does not mean much to us here. Read on and I will try and break out the news as it applies to our area and what it might mean for the future of what is most likely our largest single investment.
National sales statistics in September as reported by the National Association of Realtors® (NAR®) showed a strong recovery from August. The rise in September existing home sales marks the fifth monthly rise in the past six months. Comparing September 2009 to the same month in 2008 shows a 9.2% increase in the number of homes sold. The current level of sales activity is at the highest level since July of 2007. Sales of distressed properties continue to depress the price of the properties that are selling with the year to year median price falling 8.1% to $174,900. A survey of Realtors® indicates that 29% of sales are distressed properties. The net result of the increase in sales is a decrease in housing inventory. Using the nation wide inventory, there is a 7.8 month supply of homes based on the current sales pace. This is a decrease from a 9.3 month supply in August and a 15% drop from a year ago.
These are encouraging numbers from a national perspective. Here are a few more things to remember as we look forward:
Estimates show that 30% of all homes in the U.S. are owned free and clear of mortgage debt
- Based on current unemployment statistics, 90% of all Americans are employed
- The combination of home prices and mortgage rates makes owning a home more affordable than it has been in the last 30 years
What is happening in Cobb County??
Let me try to drill things down to Cobb County. Based on data from FMLS©, the average sales price for a single family detached home in 2007 was $279,000. This was pretty much the top of the market price wise. 2008 saw an average price of $255,500 which is an 8.42% decrease from the 2007 highs. Year to date for 2009, the average price in Cobb County is $227,200 and this is an 11% drop from 2008. Cobb has faired better than most of the metro area. Metro Atlanta prices are currently 39% below 2007 levels. The good news in all of this is that prices have been steadily increasing since February of this year. Many experts believe that this trend upward will continue and that February 2009 marks the bottom of the downward curve.
Another encouraging trend is the re-emergence of the first time home buyer. The first time buyer is essential to a stable housing market and the rapid increase in the cost of housing really moved buying a home beyond the reach of many first timers. The Atlanta market saw a dramatic decrease in first time buyers starting in 2003…one of the warning signs that was missed. First timers are driving the recent improvement in the number of homes sold. Estimates, both locally and around the country, show that approximately 40 to 50% of sales are to folks buying their first home. If you think of home buying as a food chain, the entry level is crucial to move everyone up the chain a notch!
All of this can be boiled down even farther to ZIP code, school district and even your neighborhood. Professional Realtors® understand the meaning that “all real estate is local” and I encourage you to arrange a consultation to answer any questions that you might have about the market and your home specifically. We can provide you with the information that helps in making informed decisions when you are buying or selling real estate.
About the Author
Hicks Malonson is an Associate Broker with Harry Norman, Realtors® in Marietta. A Marietta native and eleven year veteran in real estate, Hicks serves as a resource for his clients and friends by providing advice and information that can help preserve their home investment. To learn more call 770-315-9440 or visit http://hicks.malonson.harrynorman.com.