Early Fall 2018 issue of The Beacham Insider

Atlanta $1-2 Million Market Surges While Overall Market Continues to be Static

Beacham Bucks the Trend with Record Summer Closings

 

Atlanta’s overall home sales continued to be flat this summer, while homes sales in the $1,000,000-$2,000,000 price range increased significantly.

Sales of all single-family detached homes remained unchanged this summer compared to a year ago. Sales of attached homes (condos and townhomes), which have buoyed the market for much of the year, declined just 1%. Attached homes have remained attractive to first-time home buyers and down-sizing Baby Boomers seeking lower prices, low maintenance and value.

Since last summer, closings for both attached and detached homes have remained in line with the previous year. The reason? A lack of move-in inventory (homes that are not in need of renovation) and an increase in mortgage rates.

Conversely, home buyers in the $1 million to $2 million range propelled sales to a new record this summer, including a 50% increase in June alone.

Even in the high-end market, buyers prized value and homes in tip-top condition and with functional floor plans. Those home buyers willing to renovate were scarce.

Housing affordability continued to be a hot topic in the news, and home prices rose at a robust pace this summer – 7% for single-family detached and a whopping 10% for condos and townhomes. However, historical data suggests the cost of buying a home may be LESS than it was a decade ago (see the page 1 sidebar). Some well-paid consumer advisors have warned potential home buyers to rent instead of buy, describing the market as “overinflated.” The increase in home prices is short-lived. In reality, the average home sales price increase in the Atlanta MLS is just 1.8% per year over for the past 11 years. Certainly not an “overinflated” market.

What does the future hold for Atlanta real estate? If affordable new home construction ramps up, the local real estate market would benefit because new construction keeps resale prices in check. New construction also provides the new home supply the area so desperately needs. All segments of the Atlanta real estate market would also benefit from more home buyers who are willing to renovate. Demand for housing continues to outpace supply by a wide margin, but demand is more heavily concentrated on “move-in ready” homes at the expense of great investment opportunities.

What Others are Saying About the Housing Market

“We believe there is room for continued growth in the new home market in the coming years. Household formations have been increasing and in many regions the aging housing stock may not satisfy the lifestyles of today’s buyers. In addition, existing home values have increased, providing potential move-up and empty nester customers with more equity that they can put toward a new home purchase. We believe these two groups, along with the growing number of Millennials starting to buy homes, are all sources of potential new demand in the coming years.” – Robert I. Toll, Executive Chairman, Toll Brothers (largest luxury homebuilder in the U.S.), 8/21

“Homeownership has bottomed out, but is likely to go more or less sideways for the foreseeable future. Easing credit standards and a strong job market will support homeownership, but higher mortgage rates and the change in tax law weigh on it.” – Economist Mark Zandi of Moody’s Analytics, WSJ 7/27

“Since the word ‘bubble’ is on the minds of many consumers, it is worth laying out why today’s conditions are fundamentally different compared to a decade ago. Back then, lending standards were non-existent, with subprime loans everywhere. By contrast, the lending standards today are still stringent, as evidenced by the higher than normal credit scores of those who are able to obtain a mortgage. That is why mortgage default and foreclosure rates are at historic lows. On the supply side, there was overbuilding with 2.1 million housing starts during the bubble years. Today, we are just scratching 1.3 million. Though no one can know the future, the likelihood of a nationwide home price collapse is near nil for the foreseeable future.” – Lawrence Yun, Chief Economist for the National Association of REALTORS, Forbes 8/2

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Another record selling summer season!

The number of $1 million-plus listing for sale that expired seemed to reach historic numbers this summer. At Beacham however, we’ve retained and sold more listings than at any time in our history despite a down overall market. Why? Many of the reasons for our success are contained in this newsletter, but there is much more to the story. If your home is off the market because it didn’t sell, contact us to find out why our listings are selling.

 

 

 

The early fall 2018 Beacham Insider also features:

  • Latest Changes to Your 2018 Property Tax Bills
  • Recent Updates from our Relocation Department
  • Beacham Gives Back Q3 Charity Initiatives
  • How Real Estate is Changing

 

Read full issue to see a more detailed summer housing market update.

 

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Beacham & Company, REALTORS is Atlanta’s top-selling luxury real estate office. The firm was founded in 2006 by Glennis Beacham, one of Atlanta’s most celebrated real estate agents. The firm has 100 agents who average $7 million in sales per agent, more than any other Atlanta real estate firm.

Summer 2018 issue of The Beacham Insider released

The Summer 2018 issue of The Beacham Insider is redesigned with an emphasis on white space, color, and quick takeaways that will you quickly capture the pulse of the market. Much emphasis is also placed on explaining the abnormalities in the market, which areas are hot, and what to expect in Atlanta real estate the rest of the year.

We are often asked, why is inventory so low? Marci Rosell, formally chief economist for CNBC and now chief economist for Leading Real Estate Companies of the World, points to demographics.

The continued slowdown in Atlanta home sales along with the unabated year-over-year surge in average home sales prices are the biggest takeaways in the recently-released summer issue of The Beacham Insider. However, the market results from the first part of 2018 bely a complicated story about the factors and facets of the Atlanta real estate market right now.

A persistent lack of housing inventory priced less than $750,000 (higher in some areas like Buckhead)along with a surplus above that threshold continues to play havoc with the market and create vastly different scenarios for buyers and sellers. The reason for this divergence has a lot to do with population demographics. Marci Rosell, formally chief economist for CNBC and now chief economist for Leading Real Estate Companies of the World of which Beacham & Company is a member,  says to think of America’s population as a “barbell” with Baby Boomers on one side and Millennials on the other (withGen X the tiny handle in-between). Nearly 7 out of 10 homes in U.S. are bought or sold by either a Millennial or Baby Boomer. Millennials and Boomers are, in many cases, pursuing the same type of housing (albeit for different reasons) which is extending an unprecedented housing inventory shortage – and making the inventory of larger more expensive homes rise. Until more Millennials age into the market for homes affluent Boomers want to sell, inventory of $2 million-plus homes will continue to rise.

 

“The data shows that a (luxury) property either sells very quickly out of the gate for a high percentage of its asking price, or it lingers on the market and sells at a much later date for a much lesser percentage of the original listing price.”

-Wall Street Journal article describing the “off the top”nature of the luxury real estate market / May 3, 2018

 

Marci Rosell, formally chief economist for CNBC and now chief economist for Leading Real Estate Companies of the World of which Beacham & Company is a member, says to think of America’s population as a “barbell” with Baby Boomers on one side and Millennials on the other (with Gen X the tiny handle inbetween). Millennials and Boomers are, in many cases, pursuing the same type of housing (albeit for different reasons) which is extending an unprecedented housing inventory shortage.

 

Number of years it would take to sell every home in Atlanta priced more than $3 million at the current rate of sale if no new listings were added.

TAKEAWAY: The luxury market “barbell” is unbalanced to the Baby Boomer side and that is likely to continue to be the case for the immediate future. 

 

 

The percent of single family housing inventory as a percentage of U.S. population – an all-time low.

TAKEAWAY: Without more new construction and renovation/ regentrification, this number isn’t likely to materially improve in the near term.

 

What do local experts predict for Atlanta real estate in the second half of 2018 and beyond? Read the Insider to find out.

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Beacham & Company, REALTORS is Atlanta’s top-selling luxury real estate office. The firm was founded in 2006 by Glennis Beacham, one of Atlanta’s most celebrated real estate agents. The firm has 100 agents who average $7 million in sales per agent, more than any other Atlanta real estate firm.

The Beacham Insider – Spring 2018

The Spring 2018 issue explores the paradoxical nature of the Atlanta real estate market entering 2018; on the one hand, some homes come on the market and sell quickly while others linger, even expire from the MLS as 2,000 listings did on Jan. 1. This phenomenon has been described as a market where buyers are “buying off the top,” and we explore why in this issue. We also discuss the factors that come into play in multiple offer situations which become more common this time of year. We also have a contest to pick the winning city for Amazon’s HQ2 from among the 20 finalists. Entries that pick the correct city will be entered to win a drawing for a $500 gift card to Buckhead Life Restaurant Group.

Click here to read the spring 2018 issue of the Beacham Insider!

The Beacham Insider – October 2017

The fall market began before fall even started this year for Beacham & Company, REALTORS. The number of sales and dollar volume sold by the fi rm’s agents was up 25%in September, making it the best September ever in the history of the 11-year-old company and keeping it on track for another record sales year. Like the broader market, Beacham was boosted by sales in Buckhead and Cobb County, where the East Cobb and Smyrna areas remain as hot as they have all year long. The sales picture for the entire Atlanta market in September was not as rosy, however. The number of attached and detached single-family home sales in the five-county metro (Cobb, DeKalb, Forsyth, Fulton, and Gwinnett) was down 6.8% in September from the previous year, while closed dollar volume was down 1.8%. Areas that have been strong but weakened in September include Ashford Park, Dunwoody, and North Fulton County.

Click here to read more in the October 2017 issue of The Beacham Insider.

The Beacham Insider – July 2017

The summer issue of The Beacham Insider re-caps the record performance of Atlanta’s real estate market in the first half of 2017. This insightful issue digs deep into trends in the market such as the divergence in housing inventory above and below $800,000. We discuss the reasons why as well as predict how the market will fare in the coming months and years. We also examine performance of the market inside and outside the I-285 perimeter, a new take on the trajectory of interest rates, and the comparison of cost to own vs. rent in Atlanta.

Click here to read more in the July 2017 issue of The Beacham Insider.

The Beacham Insider – March 2017

In this issue of The Beacham Insider we recap the Atlanta real estate market in 2016 and look ahead to 2017. The Atlanta real estate market is more complicated than ever and explaining it requires more than just a word or two. The Insider shows how housing inventory, age demographics, population growth, home prices, changing buyer criteria and new construction are combining to determine which homes sell and which don’t. We also take a close look at the Buckhead market and drill down to specific price ranges to reveal subtle nuances that help buyers and potential sellers better understand the prospects of a quick or extended sale process.

Click here to read more in the March 2017 issue of The Beacham Insider.

2016 was the year of the ‘value buyer’; builders expected to be big winners in ’17

Last year (2016) was the best year for Atlanta residential real estate hom
e sales and prices ever, beating the previous marks set for both in 2015. However, the pace of growth moderated as the year progressed with election hysteria, a slowing economy, and insufficient inventory below $1 million putting pressure on market performance.

One clear trend emerged: home buyers sought out homes and areas where home prices still represent a value relative to traditionally
celebrated neighborhoods. The number of home sales in the five county metro was up 6% from May to December but sales among The Beacham Bellwethers which track the areas of Atlanta with the highest average sales prices (see page 4) declined 2%. Average home sales prices grew at the same pace (3%) for both categories.

Single family detached and townhome construction sales gained steam in 2016 and many builders appeared to be riding high in the saddle as 2017 began. Builders who can deliver product at a price buyers can/will pay in locations they want will be the big winners in 2017 and in the foreseeable future. The Atlanta housing market is starved for new condominium deliveries as evidenced by the increase in condo sales in 2016 – which was nearly double the increase for single family detached home sales on a percentage basis (+11% to +6%).

Seasonally adjusted housing inventory began increasing again late last fall but the increase is a “drop in the bucket” compared to the inventory needed to bring most of the market into a normal balance (six months of inventory supply). Currently, there is just a three months’ supply of housing inventory.

While there were more $3 million plus sales in Atlanta last year than any other year in the city’s history, the market conditions are not necessarily favorable. Inventory of ultra-luxury properties is at recent historic highs. For instance, the months’ supply of inventory in North Fulton for $3 million-plus homes is nearly eight years. In many areas of Buckhead, the months’ supply is more than three years. Until age demographics work back in seller’s favor, this part of the market is expected to heavily rely on price discounting.

Read more about the state of the Atlanta housing market in the current issue of The Beacham Insider.

The Beacham Insider – May 2016

BI-5-2016The May 2016 issue of The Beacham Insider looks at the differences between Atlanta’s most affluent neighborhoods and the broader market. Demographic factors influencing home sales are given consideration including an analysis of Baby Boomers, Generation X and Millennials. Housing inventory is front and center once again and we paint a stark picture of how critical the inventory shortage is. We also look at a measure of international home buying interest and how Atlanta stacks up. Finally, we give you the top five highest appreciating neighborhoods in Atlanta over the last 10 years.

Click here to read more in the May 2016 issue of The Beacham Insider.

The Beacham Insider – January/February 2016

insider2016In the January/February 2016 issue of The Beacham Insider, we re-cap the record year of 2015 in Atlanta real estate and look ahead to 2016. The greatest challenge to continued growth is a lack of adequate housing inventory. The months’ supply of inventory sank to a two-year, near all-time low last month. We also look at how changing demographics are having a ripple effect on the entire market and what can be done to ensure to best meet changing buyer demands. In addition, we ponder the upcoming presidential election and look to see how the terms of presidents have affected home prices over the last 40 years.

Click here to read more in the January/February 2016 issue of The Beacham Insider.

The Beacham Insider – Fall 2015

The fall issue of The Beacham Insider recaps the best spring/summer market for Atlanta real estate since 2011 and looks ahead to an autumn with the most favorable market conditions in more than a decade. We provide eight reasons why fall is a terrific time to list a home and hear from National Association of Realtors’ chief economist Lawrence Yun on whether home prices will continue to climb. We also look at the impact of the recent Consumer Finance Protection Bureau (CFPB) changes to mortgage lending and what buyers need to do to prevent closing delays under the new rules. The robust state of luxury real estate market is documented, as are the mammoth gains by Beacham & Company in website traffic, social media reach and market share growth.

Click here to read more in the Fall 2015 issue of The Beacham Insider.