×

North Georgia Real Estate – March 2017

Home Values Continue To Rise

 
Home values are predicted to remain strong through 2017.
 
As recently reported by Core Logic, the year over year percent change in home prices across the United States averages at a 6.9% increase overall. Here in Georgia we have seen a positive 6.4% increase from the previous year.   Not only are prices going up, the percentage they are going up is accelerating.  The National Association of Realtors Pending Home Sales Report doesn’t show buyers slowing down either.  Last month’s index reading is the highest it has been since last April and the second highest it has been since May 2006.  That means, outside of last spring’s market, we would have to go all the way back to May 2006 to see the number of  houses selling / going under contract that we are seeing right now.
 

 

Now let’s go back to the issue of low inventory that we touched on last month.  These inventory lows are a strong driver raising housing prices as aggressively as they have been.  Bill Banfield, VP of Capital Markets at Quicken Home Loans, has stated “Low levels of home inventory persists as the main driver of home value growth.  There are plenty of interested buyers vying for a slim amount of homes for sale – pushing prices higher.  Home values are likely to move higher as the spring buying season approaches, unless the number of homes available increases.”

 

It’s important to put this information in context.  Low inventory continues to be a massive driver in pushing home prices up in North Georgia, however, low inventory is not an issue across all price bands.  Lower priced, entry level homes are rising in price somewhat greater than trade-up homes and significantly greater than premium luxury homes.  Be sure to download the attached local market reports for your town to see what happened in March.

 

 

You are probably seeing a lot of headlines in the media right now regarding housing affordability in America.   The housing affordability index, published by the National Association of Realtors, measures whether or not a typical family earned enough income to qualify for a mortgage on a medium -priced home.  Anything above 100 means  the family has more than enough to qualify.  The higher the score the easier it is.

 

Affordability today is the lowest it has been in the last 9 years.  The media isn’t wrong, we are at a low, but it is important to look at what happened over these past 9 years to really understand what the information means.   First to consider is interest rates.  They dropped like a rock and continue to be relatively low.  The second thing to consider, in 2008, the housing crash forced a significant number of distressed properties onto the market.  Not only were short sales and foreclosures being sold at significant discounts, those sales were driving home prices on traditional sales (not distressed) down as well.

 

Those major discounts in pricing over several years, combined with low interest rates, naturally made housing much more affordable.  In turn causing the home affordability index to skyrocket.  Trend that over the last 9 years and it’s easy to see where the confusion comes in.  Trend that further and look at the data for a much longer period and we can see that the affordability index is better than it was all through the 90’s and early 2000’s.

 

 

One last point to mention before we conclude our report for March.  With home price appreciation, time spent in the home, and shorter loan terms many homeowners are finding they have more equity in their homes now than they might have expected.  Home equity is the building block of a strong financial foundation!

 
Below you can download the detailed market report for March specific to your city/town.  If you do not see yours listed please contact us and we will be happy to provide one for you, if available.
 
As always, real estate is local and fluctuates home to home, neighborhood to neighborhood.  We are happy to meet with you for a personal assessment of your home or to help you find the best property to call home.  We look forward to hearing from you!
 

Alpharetta GA

Atlanta GA

Braselton GA

Buford GA

Commerce GA

Cumming GA

Dacula GA

Dawsonville GA

Duluth GA

Flowery Branch GA

Gainesville GA

Grayson GA

Hoschton GA

Jefferson GA

Lawrenceville GA

Loganville GA

Oakwood GA

Suwanee GA

Winder GA