Is there a housing bubble in ATL? (Atlanta: for sale, real estate)

[k374]

I was looking at some of the appreciation charts on Zillow for homes and it seems that prices have simply skyrocketed in ATL even past the 2007 bubble peak. Can someone who knows the local market comment on this?

I'm specifically looking at one example at 2451 Kings Ct NE, Atlanta 30345 currently on sale asking $345,000

Per the chart this home peaked out in Oct 2007 at $345,000 and then dipped all the way down to $247,000 in December 2012 and now it's back up to $350,000 and projected to rise to $380k by July 2015? That's about $40,000 over the peak of the last bubble.

Is the ATL economy doing so fantastically well to support this kind of price appreciation?

2451 Kings Ct NE, Atlanta, GA 30345 is For Sale - Zillow

Seems like a nice home but the school ratings seem less than desirable and the location seems on the eastern edge.

[ATLTJL]

Try not to think of Atlanta as a housing market.

Rather, it's multiple micro-markets.

So while some areas are still struggling to approach their 2007 highs, others have surpassed them.

For this specific example, I am pretty surprised to see the rise that sharp in this area, but the local market conditions must support it.

[10 feet tall]

Yes, there is a housing bubble in Atlanta. And yes, I believe there will be another drop in values in the near future. It won't be a crash to the degree we saw in the late 2000's but there will be a correction.

[George Chong]

I wouldn't put any stock in Zillow's "calculations". The algorithm cannot take into account different school districts and other nuances of the property.

[LovelySummer]

This. Is also is wildly inaccurate in terms of square footage, number of bedrooms, etc. I would call a realtor and ask for a comparable analysis for the home of interest and go from there.

Originally Posted by George Chong

I wouldn't put any stock in Zillow's "calculations". The algorithm cannot take into account different school districts and other nuances of the property.

[berkeleylake]

How many people would have said there was a housing bubble (here or anywhere) in 2005? Not many.

I think we could be headed for more price adjustments in the short term (cooling of the housing market). Things could also bottom out again, it is hard to say.

[ATLTJL]

How many people would have said there was a housing bubble (here or anywhere) in 2005? Not many.

Not to Monday morning quarterback, but I would and did.

When people said, "You can't lose buying!" I would say you most certainly can and I bet some people will.

Of course, if you're willing to hold onto something for a very long time, real estate tends to be a great investment. But even then, it's a bit of a crap shoot. Some places never recover, or take so long you're in the ground before it happens.

[ATLJR]

Traditionally housing prices have stayed steady with inflation until the late 90s with financial regulation and easier availability of credit. Many people did in fact predict that there was a housing bubble, as anyone could see a chart of home prices over the preceding decades compared to inflation and see the gigantic rise in the late 90s.

To answer OP's question, yes, many people believe there is another housing bubble. I'll quote an article by Lynn Effinger of the HousingWire:

... much of the rise in home prices is also due to the participation of large and even smaller investors who have entered or are now entering the new REO-to-rental or long-existing single-family rental market.

Many of these hedge funds or individual investors paid higher than listing prices in order to secure these properties. By doing so, believing that purchasing homes above list price but below replacement cost would be a wise investment, available homes went to investors, not owner-occupants.

This practice, in addition to the government’s continuing efforts to modify loans and stall the foreclosure process has contributed to over-inflated home “values.”

[bu2]

Originally Posted by berkeleylake

How many people would have said there was a housing bubble (here or anywhere) in 2005? Not many.

I think we could be headed for more price adjustments in the short term (cooling of the housing market). Things could also bottom out again, it is hard to say.

Actually a number were warning of it and had been for some time.

There's no bubble now. Overall prices are still well below 2008 peaks.

[bu2]

The biggest reason people were predicting a bubble was that prices had gotten out of line with incomes. There was a lot of discussion of that.