February Real Estate Report: Home Inventory Low, Prices Expected to Rise

It is my hope that you and your loved ones are having a wonderful beginning to the new year! 2013 will bring some exciting new trends for real estate in the Greater Metro Atlanta area. If you are considering your options or know others who may benefit from this information, please contact us. We would be honored to help.

Real estate is heavily impacted by the laws of supply & demand plus a few other factors like mortgage rates and the economy. The “for sale” inventory across most markets remains very low. Desirable properties priced at market values are selling very quickly – often with multiple offers.

• For the Greater Metro Atlanta area, inventory levels are down 40% from 2011 and 57% from 2010.
• The available “months of supply” is around 4 months. Six months of supply is considered a normal market.
• The pace of short sales and foreclosures coming on the market has slowed considerably. In 2010, over 60% of sales were distressed properties. That is now down to 38% of all sales. We do expect banks to move more aggressively in 2013 but this will not have a significant impact in most local markets.
• New Homes are making a slow but sure comeback. In 2013, we expect to see new home starts reach an annualized run-rate of 12,000 – which is more than double the previous year. But new homes cannot grow very fast due to constraints in desirable lots, rising material costs and labor shortages.
• Home values are expected to rise slowly in 2013 due to the low inventory and strong buyer demand.
• Mortgage rates remain incredibly low – but this will change significantly in a few years.
• The most active buyer segments are baby boomers, 1sttime home buyers and investors.
• There is an early spring market starting to bloom for real estate in the Greater Metro Atlanta area. Demand is very strong and desirable properties with good values are selling quickly – often with multiple offers. Buyers are realizing that the market is recovering and moving to take advantage of the opportunities.

This is an unprecedented opportunity to buy the home of your dreams while prices and financing are historically low. But these conditions will not last as the real estate market continues to recover.

For more information feel free to call Hank Bailey at (678) 252-9257, email to hankbailey@prudentialgeorgia.com or follow @PrudentialGARE on twitter. 

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