Atlanta Housing Market Update: Early 2011

[Mattie]

Developers are building again in Milton. I guess the huge inventory of older homes for sale will not diminish anytime soon.

We've been here for 6 years. I think we would have to sell for about $150,000 under what we paid right now, should we want to downsize a bit.

[testa50]

Definitely buying a home as an investment is usually a poor decision. But buying a home you actually want to live in when prices are at rock bottom is probably a solid one.

[K-SawDude]

Originally Posted by tigers84

Dont forget: When mortgage rates (inevitably) start rising, housing prices must the fall in order to maintain affordability.

Not necessarily. The relationship seems to be more complicated than that:


How Interest Rates Impact Real Estate Values - YouTube

And more discussion here:

Bogleheads :: View topic - Do real estate prices fall when interest rates go up?

It seems as if the mortgage interest deduction in the U.S. neutralizes the effect of mortgage rate increases on housing prices. And in a market saturated with affordable houses, it would seem like rising mortgage rates might not have a huge impact anyway. Interesting stuff there.

IMO, buying a house should not be an investment decision. Buy one for the lifestyle you desire. If renting allows you a lifestyle you enjoy, dont buy.

The days of making money by merely living in your home are over. If you break even (esp after sales commissions and upkeep costs) upon selling, count your lucky stars. Best to look at it like a car - mostly a depreciating and cash sucking (from your wallet) albatross. But as we know, sometimes people just want that nice ride/nice home, no matter what.

Agree here, for the most part. It's better to look at home purchases as a lifestyle choice and NOT as an investment. But I'm not persuaded that houses are a depreciating asset. The finiteness of land alone is enough to make houses different than cars. I don't think we'll ever see the sort of bubble appreciation of the last decade again, but I bet we'll see low and slow appreciation over time--maybe at the rate of inflation or just below it.

[tigers84]

Originally Posted by testa50

Definitely buying a home as an investment is usually a poor decision. But buying a home you actually want to live in when prices are at rock bottom is probably a solid one.

Wait. Housing prices are AT rock bottom, NOW? There is still LOTS of debate about that. How do YOU know it is so?!

[testa50]

Originally Posted by tigers84

Wait. Housing prices are AT rock bottom, NOW? There is still LOTS of debate about that. How do YOU know it is so?!

Obviously no one knows it is so for sure. What I do know is that they are low in comparison to historical price/income ratios, which is what actually matters to a first time home buyer.

Should I DM my posts to you before posting them so you can pre-nitpick them for me?

[K-SawDude]

Another tidbit with some positive-ish news for Atlanta here: 4 more years of foreclosure | Bankrate.com

According to the report, the lag time to close problem properties has lengthened in all 20 of the nation's largest metropolitan housing markets with the lone exception of Miami. And at 49 months, Atlanta is the fastest in the field; the ratings company estimates it's going to take 59 months in Seattle, 71 months in Boston and 130 months in New York. That's nearly 11 years of inventory in New York alone!

I'm wondering if this is why Atlanta seems to be overcorrecting so much in terms of housing values: perhaps ATL is getting hit harder by more foreclosures earlier since it's moving through foreclosure inventory relatively quickly. If so, this is a very good sign, since it means we really may be near a bottom now as foreclosures have less and less of a drag on property values in ATL neighborhoods.

On the other hand, 49 months is still a long time! That means there are some recent foreclosures that may take over 4 years to clear the system. Yikes! (But that's nowhere near as bad as New York at 11 years....)

[lastminutemom]

I think that even without foreclosures you are going to find, in the next couple of years, that there are people who simply can't wait for prices to rebound and they have to sale -- often at prices far below the market use to bear. I think that might mean that we haven't quite hit bottom yet. Remember while recent buyers might be underwater, people who have owned their homes for 15 + years probably aren't. (Presuming that they haven't used their house like a bank for its equity.)

It isn't just about relocation either. We have friends who had three elderly neighbors die within 6 months and each of the estates just want/need to be rid of the houses. They are priced very low.

[K-SawDude]

Well, this is crappy news:

America's Emptiest Cities, 2011 - Yahoo! Real Estate (http://realestate.yahoo.com/promo/americas-emptiest-cities-2011.html - broken link)

5. Atlanta, Georgia
Rental vacancy rate: 11.8%
Homeowner vacancy rate: 5.4%

Atlanta’s homeowner vacancy rate is the fourth highest among other major U.S. cities, standing at 5.4 percent. The rate has been rising since early 2010, when it stood at just 2 percent. Rental vacancies have been much worse for Atlanta — in 2010, the rental vacancy rate never dipped below 13 percent and was as high as 14.9 percent at the beginning of the year.

I thought I'd read somewhere that our rental vacancy rate was much better than this. (Or maybe that's just intown?)

[mike7586]

Originally Posted by K-SawDude

Well, this is crappy news:

America's Emptiest Cities, 2011 - Yahoo! Real Estate (http://realestate.yahoo.com/promo/americas-emptiest-cities-2011.html - broken link)
I thought I'd read somewhere that our rental vacancy rate was much better than this. (Or maybe that's just intown?)

Is this data for the metro area or the city?

[K-SawDude]

Originally Posted by mike7586

Is this data for the metro area or the city?

I'm thinking entire metro, but I'm not totally sure. Great question. If anyone finds more data on this, please post it.