“Will our home ever be worth what it was before?” It’s probably the second most frequently asked questions I get. The first being, “When is this real estate market going to turn around?”
First, while it is a challenging market here in North Atlanta, we haven’t suffered the decline that some other markets around the country have. Certainly new construction is almost non-existent and that is a good thing for recovery. The biggest impact on home sellers right now are the number of foreclosures and short-sale properties. These are the deals that everyone is chasing and make up approximately 40% of all sales in Metro Atlanta.
But, back to the question of regaining the “value” you once had in your home. Think about this - we’ve had 10 recessions since World War II. Back then a home cost about $10,000. The longest recession lasted 16 months, during the Carter administration. That was when we experienced 18% interest rates, but people still bought homes. In fact, the government had a stimulus package then as well.
You see, an unavoidable by-product of any stimulus plan the government puts forth will be inflation. It will happen because they government won’t, and shouldn’t, let the alternative happen which is deflation or a depression. Pumping billions of dollars into the economy will cause this. So, cost of goods goes up.
In the coming year the programs being put into place will help slow the onslaught of foreclosures. As foreclosures are removed and costs increase, home values will rise. History has proven this and it is indisputable. This, coupled with the fact that 150,000 people move into the Metro Atlanta Area each year will help ensure that 2-3 years from now, here in Alpharetta, Cumming, Roswell, Milton our homes will be worth at least what they where 2-3 years ago.
So, for those people considering buying a home but not sure where real estate values are headed, consider this:
1. Interest rates are hovering around 5%.
2. Prices in Metro Atlanta are down on average about 20%
3. 3 years from now a lot of people will wish they had purchased a home 3 years ago.
Tags: Economy, Real Estate Market, Recovery
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