Atlanta has seen a large increase in potential home buyers hitting the streets looking to buy a home at bargain prices. The problem many people are having however is there is simply too little inventory to choose from.
A good indication of the challenge potential home buyers are running into is the year-over-year inventory reduction Gwinnett County has seen. In August 2012, 952 new listings came on the market while in 2011, 1217 homes came to market which is -21.8 percent decrease in year-over-year inventory. What this means is that home buyers who are anxious to find a new home and potentially grab a bargain are finding it hard to locate the right home for them and they are seeing those "deals" are no longer there.
A few factors come into play when we look at why the inventory is so low. One is that banks are not releasing a number of already foreclosed homes to the market and that pending foreclosures have slowed down to an extent. This does not mean that there will not be a continued foreclosure inventory to deal with. You need to remember, Georgia and Gwinnett County have some of the highest foreclosure rates in the country. We will see more inventory hit the market and the feeling is once we are through the November elections the number of properties hitting the market will increase significantly.
Two, the number of current homeowners who would actually like to buy a home is high but these homeowners (roughly 23 percent of all homeowners) are underwater and cannot afford to sell right now. This places these potential sellers on the sidelines until the market improves further.
Three, investors are grabbing as much available inventory that they can right now. Cash is king and investors nationwide and from countries all over the globe are coming to Atlanta to buy cheap homes. Just last week, I know of at least three groups of international investors were out in Atlanta on foreclosure tours loaded into buses previewing properties and buying lots of inventory.
The good news in this is that prices have actually risen over the past year by a huge percentage. The average sales price in August 2011 in Gwinnett County was $131,953 and in 2012 $150,677 which is a 14 percent increase in price. However, this is not an across the board increase. The higher price point homes ($300,000 and above) are still seeing very small price increases.
Can potential sellers in today's market benefit from the low inventory available to buyers? Absolutely. Low inventory is a supply issue and when supply is down then prices go up. Think about all the price increases we have seen in gas prices. The inventory has been cut back and what we see on the streets is a increase in gas prices. Same thing applies to real estate and other products we buy.
If you are on the fence about selling your home, touch base with a full time real estate agent and ask them to provide to you a Competitive Market Analysis of your homes value and see if you can afford to sell in today's market. I would be honored to provide this for you but if not me, find someone you can rely on to tell you the truth about pricing.
Finally, if you are in a position that finds yourself under water and you are having trouble making your payments, please know you do have options. Check out Prevent Atlanta Foreclosures website for more information on pre-foreclosure sales which can be a big benefit to you and your credit score.