Or maybe the question should be; “What’s keeping you from making that buying decision?”

There are a lot of buyers “in the market” right now but they tend to have a hesitancy to pull the trigger. Part of it is overall market confidence, or lack of. Are things getting better or will they get worse? Of those buyers searching for real estate I can tell you our team is working with some cash buyers or heavy cash down buyers who don’t have anything compelling them to get off the fence.

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Interest Rates

Rates may be one reason. If we look at what rates have done seasonally over the past few years it seems like they consistently rise after May.

Granted, the overall trajectory has been downward but we can’t expect rates to stay this low for much longer. Will we see a big jump up, I seriously doubt it. But, depending on what type and size of loan you’re getting, this may make a big difference in your payment. The thing is, rates have been so incredibly low that our experience is rates alone won’t get a buyer to jump; they need to know they are getting a deal as well.

Affordability Is Here Now, Next Year, Maybe Not So Much?

Home prices have come down a long way as you well know. You’re reading this right now and agreeing with me but saying, how do we know it won’t keep getting better? Take a look at this Housing Affordability Index chart. What sticks out at me is not just the enormous change in affordability over the past 4 years but it’s bottom that has been defined over the past year. I’ve been saying for a while now that although there are deals out there, they are not those deep bargain basement deals from 2009 and 2010. Still, some question if market value right now is a good deal and will prices get worse or improve. So what is the incentive beyond rates and affordability to purchase a home right now when you can just wait for the right home to hit the market?

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Competition

Inventory for single-family homes, townhomes and condos in Forsyth County are down to 6.5 months. This is the peak listing time of year and inventory is down 39% from one year ago. As those home, or should I say those “right” homes, hit the market, everyone looking for a home is going to jump on them. For example, I just listed a 5 bedroom home with a finished basement and 3-car garage for $275k and received 4 offers in 3 days. Doesn’t sound like a buyers market. But this home is in perfect shape and priced well. Not all homes are getting multiple offers though, just those “right” homes. You know, the kind you’re looking for.

Still don’t agree with me? Still don’t think that low inventory, low rates and affordable homes aren’t enough to get buyers off the fence? Then tell me, what do you think it will take to see jump back into the market in earnest.

The average sales price to list price ratio for Lake Home sales so far this year.

On the last day of each month I post a “Big Number” or interesting figure related to real estate in our area.

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Forsyth County School District has an average graduation rate score of 86.27% - far above the state average of 67.4%. Also higher than Fulton County at 70.05%. Forsyth County School superintendent Buster Evans stated he was pleased, “that our percentage of completion is at an even higher level above the state average than under the old rate. I think it is also significant that Forsyth is the largest district by size represented with a completion rate above 80 percent.”

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North Fulton Isn’t Fulton…

North Fulton is, of course, in Fulton County but the schools in NF do far better than the county as a whole. This is due to many factors such as parental involvement, financial demographics and high quality teachers. That said, Lambert even outperformed the schools in North Fulton, where Milton High School came in at the top of this list with a graduation rate of 96.48%. A testament to the quality of education that Forsyth County Schools offer.

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Here is the combined list of the graduation rates for Forsyth and North Fulton:

Wieland is well known in Atlanta and has been building homes here for over 20 years. Another Wieland community that has been selling well is Braeburn, in Crabapple. The product Wieland builds is solid, with nice details. That’s why I was surprised to hear complaints about the homes he is building in Vickery.

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Some in the community have taken issue with the architectural integrity of Wieland’s product in Vickery. Vickery is a very special community and the homes that have been built there are very different from the typical boxes that many builders construct in our area. If the homes being built are not in keeping with the community it can certainly be detrimental to overall values. They have set up a Preserve Vickery fb page and Preserve Vickery blog you can check out.

Here are examples of what John Wieland is building now:

Yes, these are different from some of the homes in the community, such as the picture at the top of this post. But they aren’t drastically different from other homes in the community. Are they as nice, that’s debatable, I would probably prefer one of the stone cottages; but I’m not sure they stray from the architectural guidelines.

It’s a sensitive issue and there are probably more than a few opinions out there. What do you think?

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The number of Lake Homes on Lake Lanier that have sold this year. These are all lake homes with private boat docks.

On the last day of each month I post a “Big Number” or interesting figure related to real estate in our area.

It’s not happening yet but this year will tell us if we will still see declines over the coming few years or if next year will show the bottom in sales prices behind us. Right now we have more than a few clients who are in a position to buy but are hesitant to make that choice. I understand how that can be a hard question to answer, nobody has a crystal ball. But there are changes happening right now, right around us, that indicate the change is upon us.

• Looking at the chart above, inventory levels in Forsyth County are down 36% in the past 24 months. That’s more than North Fulton (-26%) and East Cobb (-28%).
• In addition to data reflected in the chart above, homes sold in Forsyth County for February 2012 are up 4% over Feb 2011 and up 21% over Feb 2010.
• Lastly, as of this post date, there is less than 5 months of inventory across all price ranges in Forsyth County. In February of last year home inventory was over 15 months for Forsyth County.

Where Perception and Statistics Meet

This is the psychology of the market right now. Listed above are three cold, hard facts that all point to this NOT being a buyers market. But buyers are still operating in a buyers market and sellers know that selling isn’t a slam dunk right now. This is due to other economic factors affecting the home buyers and home sellers perceptions. Unemployment, shadow inventory, etc. All very real concerns.

What I mean when I mentioned above that changes are happening around us is news reports on larger economic factors are preventing many buyers from seeing that there are fewer homes to choose from. Fewer GOOD homes to choose from. And far fewer “great deals” available. More competition on foreclosures with multiple offers driving sales prices up.

There are two opposing realities right now. Stats show that it should be a sellers market (or equilibrium at least) and perceptions are that it’s a buyers market. Both very real. At some point in the near term, say the next 6 to 12 months, perceptions will change based on changing economics. A broader portion of the market will decide that now IS the time to buy. But when that happens they will face an even further reduced inventory and much higher competition for foreclosures and the best properties.

I know, it doesn’t seem to make sense, we should be able to find what we’re looking for, right? The problem is, inventory is thinning out. Homes that are in great condition and priced well are going quickly.

The descriptions of what we are looking for are brief but please take a look and if you think there is a match, contact me: info@thenorthgroup.com.

Client 1: Lake Lanier, Dock, Master on Main $350-$450k

Client 2: Empty Nesters looking for 2nd home. Cumming or Alpharetta. 3 bed/3 bath townhome or condo, maintenance free with an elevator. $375k and up.

Client 3: 4 bed / 2.5 bath in the Roswell / Marietta area, No Synthetic Stucco. Would like a basement, finished a plus. Nice sized backyard preferably with fence.  $300k - $400k

Client 4: Milton, Roswell, Alpharetta:  Full finished basement, open floor plan, walking neighborhood, 4 bed / 3 bath, 1995 or newer that has been renovated, nice outdoor space (doesn’t have to be large, just private). $350-$450k Windward community is great.

Client 5: $350-$450k Milton, Alpharetta,Cumming, full finished basement a plus, side load garage a must, 4/2.5 or more, no synthetic stucco.

Client 6: Up to $275k. Ranch or smaller home with master on main. Does not need a basement. Grove Park subdivision in Cumming would be perfect. Otherwise a walkable community like downtown Roswell, Crabapple or close to downtown Alpharetta. Updated or priced well if needing updates.

Months of inventory for Condos & Townhomes in Forsyth County. Six months of inventory is considered a balanced market, not a sellers or buyers market. This number will only go down further has we head into the spring / summer selling season.

On the last day of each month I post a “Big Number” or interesting figure related to real estate in our area.

On top of that, there are communities that have shown significant improvement. For instance, Laurel Springs, a gated golf course community in South Forsyth only has 12 homes currently listed. With 33 homes sold over the past year, that is less than 4.5 months of inventory. A sign that as inventory drops, nicer homes and communities with great amenities move fastest.

Another community that had seen construction stop during the downturn, Vickery Springs, has been experiencing quite a bit of change. New homes are being built and seem to be moving at a pretty good pace. More importantly though, for home owners, the average sales price has jumped from the mid $400’s last year to the low $500’s currently. There is only one home on the market right now in Vickery Springs. This is one of the very few locations that has seen an increase in sale price.

What are you seeing in your community?

Considering selling? Contact us to find out what activity and competition look like in your community - now may be the time to move and still be able to take advantage of existing deals.

Despite some good signs, downward pressure on sales prices are still troubling for Forsyth County home sellers. Comparing 2011 to 2010, average sales price is down 8% and median sales price is down 11%.

What are the good signs?

So far this year builders in Forsyth County have listed over 113 new construction homes. These are only the homes that were entered in the MLS, there are many more they have started that haven’t been entered into the MLS. It’s great news for the local economy and I’m glad to see jobs being created. But the additional inventory won’t help home owners trying to sell when there is even more inventory to compete with. On top of that some builders with too much inventory may run into credit line issues, you can read about that here.

Other good news includes unit sales increasing (16% for 2011 over 2010) and inventory decreasing, check out this inventory levels chart.

What’s It All Mean?

While we’re heading in the right direction with increasing sales and decreasing inventory I think new construction is a double-edged sword. Hurting re-sales but helping with jobs. I just hope they aren’t jumping the gun in Forsyth County.