Interest rates are low, inventory is on the decline and buyers are out in full force — signs that the housing market could be turning a corner.
“We are seeing slight improvement in prices and more significant improvement in the volume of sales,” said Realtor Becky Babcock, of Babcock & Associates Real Estate in Canton. “There is a lot of buyer activity because interest rates are low, and prices are low.”
Realtor Ursula Dahle, of Keller Williams Realty in Woodstock, shared a similar sentiment.
“I get a lot of statistics from across the country, and a lot of areas sound the same way — the market is improving everywhere,” she said. “I just heard the other day that the sales are up (nationwide) 9.5 percent.”
According to S&P Dow Jones Indices, home prices increased nationwide between June and July. Atlanta is still the weakest in comparison to the 20 cities followed, but, after nine consecutive months of double-digit annual declines in home prices, the state’s capital did improve slightly to a -9.9 percent annual rate.
“In general, it really seems to be turning around,” Dahle said. “We are very much so on our way up; it is climbing rapidly.”
While things are looking up for the housing market, is this once again a seller’s market? Dahle seems to think it is.
“The market is improving 100 percent, and we are in a seller’s market at this point,” she said. “A balanced inventory is six months of inventory at the current sales rate; anything above is a buyer’s market and anything below that is a seller’s market. The inventory is short.”
Dahle used Wyngate in Towne Lake as an example. She said the community has 850 homes with normally 30 on the market. To date, there are only seven.
Babcock said inventory levels are low throughout Cherokee County, making the market competitive, but she added that she did not think it was a seller’s market just yet.
Dana Possick, of Dalie Realty and Management in Woodstock, agreed.
“It’s not quite a seller’s market again because the banks are getting the competing bids,” Possick said. “For most homeowners, they are still underwater and not willing to reduce the price to get competing offers.”
Homes, however, seem to be selling at asking price or even above.
“People are starting to realize that they need to pay close to asking price; there are no more deals of $30,000 to $40,000 under asking price,” Dahle said.
“Sellers just don’t have to take that anymore,” Dahle said.
The market trends began to change when interest rates fell, motivating first time homebuyers to consider purchasing as an option.
The rate, at press time, was as low as 3.25 percent.
“Interest rates are great,” Dahle said. “I think people have pretty much realized that we have passed the bottom, and they want to buy prior to an increase in prices. They want to make sure that they still get that deal.”
Possick said with lower interest rates, sales are exploding.
“With a lower interest rate is going to be a stronger demand, which equates to more sales and price recovery,” he said. “We are nowhere near the peak of the market, but I am confident that the bottom has come and gone. It will take a long time before we get back to the peak.”
Babcock said a lot of first-time homebuyers also are seeing the financial advantage to purchasing over renting.
“Buying now will set them up for later years, especially if they do a 15-year loan; you could be 25 years old, buy a home and be debt-free on your mortgage by the age of 40. That sets you up really well for retirement,” she said. “I tell all buyers that you are always paying a mortgage whether it is someone else’s mortgage, or it is your mortgage.”
Babcock & Associates recently listed Lantern Walk, a starter home community in Ball Ground.
“We are expecting to sell at a really strong pace,” Babcock said. “A buyer who can pay $130,000 for a home is going to be looking at a mortgage payment, including taxes and insurance, of $900 or less a month, which is about what you pay for a two-bedroom apartment.”
New construction and short sales also appear to be on the rise, while the pace of the foreclosure market is slowing.
“We are definitely seeing an increase in the new home market; in fact, I just started marketing Bradshaw Glen subdivision in Woodstock. We just started a couple months ago, and we are already closing on the first house this month and the second house in November,” Babcock said. “We are going to start building two more because there is so much buyer traffic for new homes.”
Babcock said there also has been a boom in short sales, as the new tax laws approach.
“We are seeing a really strong trend toward people doing short sales because right now the tax laws are set to change as of January,” she said. “There are tax advantages for sellers to do a short sale and close on it this year.”
Foreclosures, however, appear few and far between, even though 300 to 400 are advertised each month in the county.
“Foreclosures are falling because banks are keeping the inventory,” Dahle said. “I know several investors in Cherokee County who are up at the courthouse on Super Tuesday and can’t find anything; there is nothing there to buy.”
Babcock said there are several myths circulating the real estate industry: Banks are holding foreclosures until after the election or after the tax laws change, or banks are selling the properties to large groups of investors.
Possick said the decline in the foreclosure inventory is pushing some buyers toward resale homes.
“There are bidding wars regularly on the foreclosures,” he said. “Banks used to price exactly what they wanted, but now they are pricing below market and creating a frenzy. They are getting buyers to create bidding wars and compete against themselves.”