How’s the Market?
Real estate professionals are asked this question more often than any other question.
The answer is… it depends.
Are you a buyer or a seller?
What market area are you considering buying or selling in?
Understanding the moving dynamics of the real estate market and how it impacts clients is what sets apart a Path & Post Real Estate strategic advisor from someone who simply has a real estate license.
A quick current analysis of whether the Market Action Index is favoring buyers or sellers in a specific city is an excellent way to know what to expect as a buyer or seller.
As we start 2020, looking in the Cobb, North Fulton, Cherokee, and Pickens Markets at the Market Action Index, it is interesting to see how the inventory relative to the rate of sales determines who has the advantage in each market:
Buyer vs Seller Market Analysis
Strongest Seller Market Advantage: Acworth, Kennesaw, and Woodstock
Seller Market Advantage: Ball Ground, Marietta, and Roswell
Balanced Market: Alpharetta, Canton
Buyer Market Advantage: Jasper, Waleska
Dive deeper into market statistics by checking out pathpost.com/reports. Sign up for ongoing updates if you want to stay on top of the market.
Depending on the specific area and price range, 30-50% of homes for sale have had a price reduction. Homes that haven’t sold yet and have been on the market for 100+ days, especially in the $500,000+ price point, have the most price reductions. This occurs due to inventory exceeding demand in most higher priced properties.
Looking at 2019 versus 2018 markets, we see a trend that continues to show steady sales, with a slight increase in the median days on the market, and continued appreciation based on median sales prices.
Median Sales Price Change
The entire metro Atlanta’s Multiple Listing Service area saw an average of 6.2% appreciation in 2019, whereas Cherokee and Pickens counties saw more than double that with a 13% in year over year median sales prices. Fulton County was close behind at 12%. Cobb’s median values were up 6% and Forsyth’s 2.7%.
Comparing our three largest market areas for NW Atlanta, this chart shows the trends with Fulton, Cobb and Cherokee
Forsyth County came in strong with a median sales price of $359,450. Cobb County was not too far behind with a median sales price of $330,523. Fulton and Cherokee median prices for 2019 were $324,950 and $307,895, respectively. Pickens County saw a median sales price of $251,000.
Sales Price to List Price Ratio
The % that homes sell for relative to their original listing prices is 97.5% across the entire MLS, with some areas closer to 96% and others closer to 98-99%, all based on the relative supply and demand. This means sellers are negotiating about 2.5% off the price, on average.
Supply vs Demand for Housing
Months of inventory is a good indicator of supply and demand. This metric is a calculation of how many months it would take to sell off all of the current number of homes for sale if no more homes came on the market. The lower the months of inventory, the stronger the market favors sellers, and the longer the months of inventory, the stronger the market favors buyers.
The entire MLS months of inventory is 2.6 months, with Cobb and Cherokee both have just under the average months of inventory, at 2.1 and 2.4 months. Forsyth’s inventory is holding steady with the MLS at 2.5 months, whereas Fulton has slightly more inventory at 3 months. Pickens County has 5.5 months of inventory. It is fairly typical for more rural areas, farther from the city, to have more inventory and take longer to sell.
How Many Showings Will it Take?
An interesting statistic that many people don’t consider is how many showings will a seller have before getting a binding contract? In our local market, it ranges from 8-11 showings, if a home is priced right based on the condition, features and location.
For homes with 12+ showings and no contract, it is an indication the market’s response doesn’t support the current list price versus other homes buyers are choosing, based on the home’s condition, features and location. In the case of adequate showings but no solid offers or a binding contract, an adjustment to the price or condition is warranted. An initial marketing price should always be evaluated against the market’s response and ever changing market conditions on a regular basis, with listing adjustments made to optimize the goal of achieving a sale.
For buyers, it means if they do their homework ahead of time, by viewing homes online, then driving by to review the area, they should look at 8-11 homes in person before finding “the one.” Today’s modern digital home shopper can view hundreds of homes online which helps them focus more on the ones in person that are likely to fit their goals. Buyers should only start viewing homes in person after getting pre-qualified for a home mortgage, to ensure they can actually buy what they are looking at, and they are prepared to act quickly in the case of multiple offers on a highly sought after home.
2020 Advice for Buyers and Sellers
Advice For Buyers:
With interest rates still at historic lows, and the wealth that homeowners have over renters, this is a great time to be a homeowner, and to consider investing in income producing rental properties as well.
Advice for Sellers:
With continued low inventory that doesn’t fulfill buyer demand, 2020 will be a good year for sellers.
The typical slowing of the market during the last four months of a presidential election year is expected to happen in 2020, especially at the price points in the $400,000+ range. The negative media advertising creates fear and a more cautious approach to making a significant financial investment.
With the first eight months stronger than the last four months due to it being a presidential election year, sellers should consider listing sooner in the year, especially in the higher price points.
What about getting easy instant offers like from Zillow, Opendoor, and Offerpad?
For some of our clients, who prefer less hassle and a quick sale, we recommend an instant offer from one of the national iBuyer companies. Typically, the seller trades off net profit to get an easy sale.
Our Path & Post Offers tool will get these national offers for a seller, in addition to offers from large local investors. We put all the offers into our Offer Analyzer to compare those easy offers versus going to market. Check out offers.pathpost.com for more details or reach out to us at email@example.com.