Penelope - talk to other lenders before you halt the buying process.
My latest advisory letter from Steve Palm states - for a broad "metro Atlanta" market - the word "decline" 14 times. If he put the bottom line up front then you would read this:
"Oil prices have been falling and the government is doing their best to stabilize our financial markets. In order for a housing uptick to occur in 2009 oil has to fall and stay down and the financial markets must have the ability to finance home mortgages."
That being said, here is Steve Palm's September 21 letter in it's entirety...
One more thing - to NonRealtor and anyone else who thinks that they can make blanket statements about microeconomic trends in my territory, we are listening and we will call you on your BS forecasting over the coming years...
From: Steve Palm at Smart Numbers PO Box 636 Marietta, GA 30061-0636
"There were 4,308 closings for all single family in August. This is a 33% decline from August 2007 and the 18th consecutive year-to-year monthly decline.
There were 3,737 closings for single family detached or a year-to-year decline of 31.1%. This was the 18th consecutive year-to-year decline and the 25th out of the last 26th for single family detached. After lags are reported the percentage decline will be at least 20% or the 12th consecutive decline of 20% or more.
The year-to-year decline for condos & townhomes was 43.3%, as 572 units closed in August versus 1,009 for the same year ago period. For the first eight months of 2008, condos & townhomes have closed 31.6% less units versus the first eight months of 2007.
The first year-to-year decline for all single family during our downturn occurred in September 2006. Closings were also down October-December 2006 versus October-December 2005, so there is a good chance we may start experiencing yearly period declines for three straight years for the rest of 2008.
Decreasing demand results in declining prices and for the 9th consecutive period the average price for all single family declined from the same year ago period. The average price in August for all single family was $233,394 versus $259,316 for August 2007 or a decline of 10%. This was also the 7th consecutive monthly period with a year-to-year average price decline of 9% or more.
The average sale price for single family detached was $241,761 for August or a decline of 10.8% for the same year ago period.
The average sale price for condos & townhomes in August was $178,747 or an 8.7% decline from August 2007. The year-to-date average closing price for condos & townhomes is $180,752, which is lower than the average closing prices for the years 2002-2007. Condos & townhomes have not had an average sale price under $170,000 since October 2001, but if demand remains weak there is a good chance the average price may drop under $170,000 before the end of the year.
There were almost 1,000 less withdrawn listings for all single family in August versus August 2007. The reason for the large reduction is that there were a lot more listings on the market last summer that were â€œtestingâ€ the market, but with prices declining, owners are less inclined to try and sell their home this year. In this market, if a home is for sale there is a good chance the owner has to sell.
There were 7,563 expired listings for all single family in August. This was only 224 more expired listings than August 2007 and the smallest year-to-year percentage increase since April 05-06. This may be a sign that a bottom may be near.
The following chart summarizes our months-supply of homes.
Months Supply 08/31/2006 08/31/2007 08/31/2008 % Change 06'
New - Single Family Detached 10.0 13.8 15.1 51.0%
New - Condos & Townhomes 8.4 13.7 19.6 133.3%
Resale - Single Family Detached 7.4 10.8 13.7 85.1%
Resale - Condos & Townhomes 9.5 11.4 14.0 47.4%
Oil prices have been falling and the government is doing their best to stabilize our financial markets. In order for a housing uptick to occur in 2009 oil has to fall and stay down and the financial markets must have the ability to finance home mortgages.
OK NonRealtor, keep calling it like ya see it and I'll just say check yourself before you wreck yourself.
As many data sources look at areas as opposed to the smaller markets within, Atlanta is considered a declining market overall. That said, it's ridiculous to paint the area with one stroke as it's geographically huge and there are markets doing better than others. It's imperative that the agent, appraiser and loan rep convey the detailed picture to the underwriters as they typically don't have anything more than the internet data.
I'm a certified appraiser as well as a broker and the assignments that I do and reviews I complete have to touch on the current and recent past trends; in most places the data shows declining values. As I write, it's more a correction that was needed but movement down is movement down. Compared to most areas, Atlanta is still ahead of the pack as we didn't have the crazy run up in prices.
You're not nuts for wanting to buy right now - this is a tremendous buyers market. That said, you must buy right and with confidence. Real estate remains a solid long term investment that will build your credit rating and allow you to increase your financial standing. Of course if you aren't smart about it it will ruin you.
I'd suggest calling other lenders to get different opinions. I've used Kevin Ramirez at Suntrust for years, he is a rock solid and stright shooting guy - call him and see what he says - 770-277-2341.
Good hunting -
Hank Miller, SRA, ABR
Associate Broker & Certified Appraiser
REMAX Greater Atlanta
Everyone should be circumspect.
Everyone should seek to buy value when they buy. Sellers should expect to get real, or they should reevaluate the use of their real estate assets.
The laws of supply and demand have yet to be repealed.
Win / win, or no deal.
"In answer to your second post regarding PMI, you'd actually have to put down 20% to avoid it. "
This post is incorrect. PMI is only for when the loan is greater than 80% of the home's appraised value. When the loan value becomes 78% of the home's value (unless considered high risk, which I believe it changes to 76% or 77%), the lender must automatically cancel PMI unless you're late on the payment, etc.
First and foremost, as far as if the Atlanta market will ever bounce back, most people say yes because, "you need to buy low and sell high." That's a great one-liner for people, but isn't sound advice. Because the nation is in a funk does not mean homes will make a comeback anytime soon or ever. Luckily, ATL is not a one-industry market such as Detroit, etc., and has a good mix of everything from financials to manufacturing which means Atlanta is much more stable as a home market and won't probably see double-digit single-month declines as some places have seen. HOWEVER, that's not to say that ATL will make money in 3-5 years because the truth is, no one knows. The bandwagons will start once the ATL and national media comes out with a, "Home prices have gained .1% YTD" and everyone will think an end has come and RE is the investment of the future once again. Be wary of blanket advice, because what goes down doesn't always come up. Lehman Bros., GM, Delta, and the state of Michigan are all good examples of lost causes whose glory days are long gone.
Good luck with your down-payment and be careful of homes with $200+ price per square foot...ATL isn't quite that kind of market yet.
In answer to your second post regarding PMI, you'd actually have to put down 20% to avoid it. Unless you are taking out two loans, one for 80% and one for 10%. In general, there are many factors that go into mortgage qualification. Today's market (as opposed to February) is even tighter and harder to find credit. Bank of America is a solid choice, but I agree with Hank that you should try to find a local lender. I work with Bragg Boyd and Kathy Vitali of Countrywide (Bank of America Mortgage), they are local and can sometimes offer better programs then the agent on the other end of a 1-800 number. You can call Bragg at 770-315-3644.
Hope this helps,
Keller Wiliams Realty Consultants
Hank's right! Usually the bank will use zip codes as the defining area of a declining market. I think that we are in a declining market. Sellers have to be aggressive and that means pricing it below the current market of the day.
A declining market is the best time to buy a home. Prices are falling and you'll never have an opportunity like this again..... until it happens again.
You won't sell your home in 6 months so you shouldn't worry too much as the Atlanta market should be nearing the bottom.
To answer your question, it appears the whole country is in a down market. , some areas worse than others. Atlanta is faring better than other areas of the country.
To answer your second question, I don't think you're nuts to buy now, if you are buying a place to live, or evan if you're looking for an investment to hold and rent. It would, however, be nuts to buy a house with the idea of flipping it. Prices are low, rates are low. Now is a great time to get a deal. You'll just need to hold onto it for a while.
July 07: 136.47
July 08: 125.23
July 08 is the most recent data they have.
So, from a bank's perspective, it's down about 10% over last year and probably accurately seen as a declining market.