Stone Mt. was extremely depressed but has already seen a turn around. I would rate it as the nicest area that still has plenty of good values and should continue to rebound.
In town, I would rate the East Lake and West End areas as ripe for the next rebound since all the most desirable areas have already bounced back
You asked a great question and it gives me the opportunity to share some of this article content with Hank.
Our market is shifty. So, all an intelligent human being can do is interpret good data in order to insure that they don't make a mistake in betting on a "recovery." However you want to subjectively define that word.
So, we are shifty. And this WSJ writer David Crook pretty much nails what shifty looks like on a macro scale - the article is in the web reference and here are the highlights:
1. This recovery leaves a lot to be desired.
" ...the best you can say right now is housing has leveled out after a 13-year roller-coaster ride that has seen massive government and Federal Reserve efforts to spur demand. Is that a recovery?"
2. The new boom is a rehash of the old one.
"Even when there are impressive-looking percentage gains outside of the old boomtowns, there's usually a deeper story at work. Consider this sobering stat: In the battle-scarred city of Detroit, prices in July were up 33% over a year ago. Detroit!
Detroit's new median selling price? $13,556."
3. Big businesses are doing a lot of buying.
"The companies' early investors are pocketing their double-digit gains and are now liquidating their investment positions by selling shares in their companies to the public on the stock market."
4. Investing in housing is nothing like buying a home.
"Corporate property investors usually buy with cash. Their acquisition and maintenance expenses are paid by rental income, and they're taxed on only the difference between their revenue and expenses. There are other real-estate tax advantages, including depreciation, that enhance cash flow but are unavailable to individuals. Losses can be carried over year after year and used to offset profits elsewhere. And real-estate investors have a leg up even on stock investors because they can avoid capital-gains taxes completely if they sell and buy "in kind" properties...
Homeowners, in contrast, usually borrow money, which means that, even at today's ultralow interest rates, the cost of a home over the 30-year life of a mortgage will be 70% or more above the purchase price. On top of that, homeowners must cover their maintenance costs with after-tax income."
5. Interest rates are on the rise.
"As interest rates rise to their traditional levels, generally between 5% and 7%, you can expect either prices to stabilize or sales volumes to decline. Ominously, the Mortgage Bankers Association this month noted a decline of more than 70% in refinance-loan applications since rates began rising in May and about a 15% falloff of purchase-loan applications.
That said, mortgage money is still a remarkable bargain. Today's 30-year fixed rates are still far cheaper than in 40 of the past 42 years. Even today's more elevated rates (4.57% as of last week)â€”more than a percentage point higher than in Januaryâ€”are less than the average rate for all of 2010.
Two years ago, like today, no one believed rates could fall further. Indeed, the warnings were that rates were bound to rise. And then, like today, it was a great time to buy a house."
The pattern of depressed to active to peak to depressed is a steady pattern in many Atlanta markets. Speculators, fraud, flipping and now major investors buying in bulk and driving up prices combine to make things exceptionally unpredictable. What's not unpredictable is that we will see a retreat from all of this investor action - it's already started in other cities where they jumped in heavy.