Is the Atlanta, GA market likely to turn around in the next 5 years?

Asked by Jen, Atlanta, GA Mon Jul 16, 2007

My husband & I have the opportunity to transfer to Atlanta for work, and we are very excited about what seem to be very good pricing for houses. The only problem is, Atlanta has the highest foreclosure rate in the country right now. That leaves us wondering if we will be able to sell our home in the next 5 years if we buy. Is the market likely to turn around?

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21
Kim Chitwood, Agent, Fayetteville, GA
Mon Jul 16, 2007
BEST ANSWER
You will have no problem selling your home provided you purchase the features that buyers are always going to look for. I'm not sure about your price range but a home on basement is always in demand. If you can go into the 300s and up then a 3 car garage is also in demand. 4+ Bedrooms on a nice, level, somewhat private lot can usually be sold fast in any market. And if your price range is under 150k, most anything will sell in that price range.
0 votes
Chahe, Both Buyer And Seller, Suwanee, GA
Sat Aug 18, 2007
Jen,

I am not a realtor so I have absolutely nothing to gain (other than flaming from the realtors) or lose. GA is victim to aggressive homebuilding and quick foreclosure process (unlike many states) amongst other things.
I am a homeowner who is looking to purchase more property in the Johns Creek area. Foreclosures in this area of GA is more than some communities, but lesser than many. To paraphrase some sound investing advise, you determine your profits at the acquisition just as much as at diposition. That is to say, choose wisely where you purchase and you will all but guarantee a sale. Make sure you have a great pitch to sell the home BEFORE you buy it. Choose wisely for a good location that has features you can tout to potential buyers when you decide to sell.
My pitch? I live in one of the top school districts. I would have less problems selling my house now than my friend whose home is in a lesser rated district. Do your homework and do not take the word of the realtor. They all say, "yes, this is one of the best districts". I have never heard them once say "this is one of the worst, stay away" and I have looked at some bad districts. Your potential pitch may be nearness to the city or highways, walking distance to cafes and shopping, a lakeview with a dock - you need to distinguish your home from the others.
One final warning for you, and realtors will surely disagree, and that is to stay as far away as possible from suburban condos and townhomes. They are relatively inexpensive, but I think that is because there is so much inventory. They are a dime a dozen and are difficult to move (resales) in the best of times. This was told by realtor and I believe her as I have seen the same townhomes listed time and time again. There is little to differentiate most of them. Certainly there will be exceptions, but in general, they appear to stay on the market much longer. Of course, take a haircut on sales price and you can sell any property. Best of luck in your decision.
2 votes
Team, , Georgia
Wed Jan 16, 2008
We are already seeing it getting better daily. That is for houses at least. I would buy a house & feel confident, even more so if it's in an ever growing and popular area such as Oakhurst, Kirkwood, Eastlake for examples
1 vote
Lee Taylor, Agent, Decatur, GA
Thu Dec 13, 2007
Jen,

Atlanta is blessed and cursed.

We are cursed with some of the worst traffic of any metro city - our sprawl is the cause of well documented commuting strife, but depending on where you live and how you manage your time, Atlanta's Intown neighborhoods and surrounding smaller cities in and around the perimeter offer fantastic options for a couple like yourselves.

We are blessed with tree lined streets, parks and retail amenities galore. We are blessed with excellent affordability; compared to many metro cities, our median prices in almost every submarket are very approachable and there is something for everyone, almost everywhere.(I'm not talking about submarkets like the Trump Tower!)

Nevertheless, condos, lofts and townhomes have been flat or down for nearly a decade - if you bought a condo, loft or townhome 8-10 years ago, it is more than likely worth about as much as you paid for it 8-10 years ago. Steve Palm with Smart Numbers, one of our local real estate forecasters, can prove that time and time again with his charts and graphs. New or newer built condos, lofts and townhomes are in voluminous supply, and the velocity in this overall market is moving like sludge.

Single family houses are offered at all price points, and many architectural styles are available. Statistics show that our single family home market has shown steady long term appreciation year after year. 2007 has been a tough year for Sellers, but a savvy Buyer with an astute agent can certainly take advantage of that, and expect good long term results from a smart purchase. Steve Palm has some very encouraging charts that show the realtive health of our single family home market. A great agent can help you understand micro trends in specific submarkets.

Good luck, and is there any chance that you are coming here to help us fix our water problem?
1 vote
J Lo, Home Buyer, California Glory, Brentwood, CA
Mon Jul 16, 2007
Hi Jen:
I just relocated from Southern California. We were ecstatic when we saw what the market was like in comparison to Orange County.

We did a lot of homework. Depending on where you are coming from you can really upgrade in Atlanta. The market is sure to turn around - we have weathered many a storm in the past few decades.

Don't be swayed by the statistic. Most of the foreclosures are directly tied to bad financing and the worst of it is related to mortgage fraud. The average consumer, if they do their homework and dont break the cardinal sins of purchasing real estate in the first place - will always stand on top.

This is a forum to answer questions - but as any good agent will tell you - I would love to have your business. But I am a "great" agent when it comes to relocating... I've only done it my entire life. You can foresee pitfalls and make good decisions just by doing your own homework and then relying on the experts to show you the "value" of your decisions.
1 vote
Scott Sambuc…, , Mountain View, CA
Tue Aug 21, 2007
Hi Jen,

Here are a couple of median home price charts for Smyrna:

http://charts.altosresearch.com/AltosCharts/GA/Smyrna/30080/…
http://charts.altosresearch.com/AltosCharts/GA/Smyrna/30082/…

And one for Suwanee:

http://charts.altosresearch.com/AltosCharts/GA/Suwanee/30024…

Depending on where you are in these two cities, the markets can be different. Local Realtors are always a great resource to interpret the local market data. Good luck!
Web Reference:  http://www.altosresearch.com
0 votes
James Dudley, Agent, Suwanee, GA
Tue Aug 21, 2007
Will the market turn around? Of course it will. Now that the mortgage lenders have been put in their place and will now qualify buyers more carefully things will start to balance out.

High foreclosure rates can sometimes effect property values, but buying in the right neighborhood is the key to securing your homes value. It's always a good idea to check the foreclosure rate in the neighborhood you are considering purchasing in. If there are many in one neighborhood there is a good chance you will have to compete with one when you go to sell your home in the future.

Chahe made some good points in his reply to your question. Choose a good location and look at the pitch for the property. I have always told my clients that the school district will dictatate the home prices in most areas of the Atlanta market. Choose a good school dist. if you have children or not! Consider areas that have amenities in place that improve the quality of life of it's residents.

Suwanee,GA is great example of what Chahe is trying to say. Suwanee has Great Schools, was voted in the top ten places to live by Money magazine, and has great park systems. There is your pitch for a great community.

And stay away from townhomes unless they are in unique areas. There is at least 1.5 years worth of inventory in the townhome and condo market. I don't know many realtors that would tell you anything different. There are unique towhome communities that sell very well and hold great value. Shadowbrook at Town Center Park in Suwanee is a great example. The village in Smyrna is another hot townhome community.

If you are considering a move to Atlanta it's probably one of the best times to buy a home here. Choose a realtor that knows the best areas, and invest as much as you can into your purchase so you have plenty of equity when it's time to sell and you will be able to beat the competition when you have to sell your home.
0 votes
Kathy Drewien…, , Atlanta, GA
Tue Aug 21, 2007
Jen, the answer to your question depends more on what you are looking for in a home, what school districts will best meet the needs of your family, where your office will be located and what price range you are budgeting.

The metro Atlanta area is much too broad to make generalizations. There are some price ranges ($800K+ for example) that have more than 6 years of inventory; a factor that would impact the resale opportunity much more than foreclosed properties. Other price ranges and areas have less inventory and the pent-up demand lessens the number of days on the market.

Our North Atlanta Market Review http://www.AtlantaRelo.com/reports/review2006.pdf summarized the market in January 2007, and therefore dated. However, it provides a good overview of the variation across the northern suburbs and the price ranges within those communities. Other parts of the metro area will have similar variations.
0 votes
Janice Livin…, , Atlanta, GA
Sun Aug 19, 2007
If considering in Atlanta buy an older home or new build/tear down in an establised area home inside the i285/perimiter or possibly Dunwoody or Smyrna just outside. Right now most areas inside the 285 and north of i20 are still increasing nicely with the exception of an oversupply of condos and townhomes. Do not buy further out. Its the Atlanta suburbs that have suffered from low quality new builds and massive oversupply. Many people bought large new builds so they could show off in basically bad areas such as Forsythe and Gwinnett and these are the people who cannot now afford the rising gas costs, property taxes etc. As others have said the Atlanta area as a whole will survive but most at risk are the outlying suburbs. A sudy of foreclosures will also show most are in these areas.
0 votes
Pam Winterba…, Agent, Danville, VA
Sat Aug 18, 2007
I am not from the Atlanta area but have family and friends there and according to them there has been a gradual increase in values and suppose to be on the upswing. I would suggest talking with a few local Realtors and the Chamber of Commerece to get a better idea.
Web Reference:  http://pamwinterbauer.com
0 votes
Jack Berube, , Atlanta, GA
Wed Aug 15, 2007
I think anyone who studies real estate trends in Georgia will agree that market conditions in Atlanta are always in better shape than the national average. However, along those same lines, Atlanta consistently leads the US in new home starts annually. In the case of the last slump in sales you can see that alot of new home inventory, coupled with a dump of foreclosures has led to some tough times in the market. However, don't be too depressed - there are many study groups including the NAHB that are forecasting a recovery in the Atlanta market as early as this fall, but most likely early 2008. Also, another key indicator to follow is the pension fund market and bond market. There have been increased activities in the pension fund market in terms of real estate investment - without going into a long drawn out timeline - pension fund activity (very conservative) usually is the first sign of good news to come. Furthermore, Atlanta has always seen a steadiness in pricing which means that there are no expected corrections in the near future. Atlanta is definitely not California!!!!
0 votes
Susan Mccann, Agent, Marietta, GA
Tue Aug 14, 2007
Atlanta has had steady growth of about 4% for a long time. This area never had a huge surge in prices like some markets out west, so there is no "correction" coming. Prices were never over-inflated due to a boom, they have been slow and steady.

This is one of the last affordable metropolitan areas in the country. If you want a culturally rich big city, international airport, and great suburbs, you can't really find better deals anywhere.

Things have slowed slightly this last quarter but overall, if you are looking at a five year time line things should be fine.
0 votes
Paul Renton &…, , Atlanta, GA
Sun Jul 22, 2007
Jen,
Atlanta still has a strong RealEstate market especially if you are a buyer. Granted area to area has different appreciation and depreciation rates. Location to suit your lifestyle is the main concern, commute, schools etc. With the help of a full time realtor who understand their local market you should make the right choices.
Foreclosures are so high because lending was easliy avaiable and for more than most people could afford long term. When most adjustable rates changed a lot of people were in trouble. You should be able to take advantage of the Atlanta market, buy wisely and within budget. Do not cash out equity for luxuries and you will do well, checking with you local Real Estate professional is key. You Can use The Team Renton web site to check all Metro Atlanta areas. Good Luck if you need a referral for Atlanta
Web Reference:  http://www.TeamRenton.com
0 votes
Alex Wilkins…, Agent, Atlanta, GA
Thu Jul 19, 2007
Atlanta has and continues to grow rapidly. This is great for the housing market. Don't let the high foreclosure rates discourage you, in the last few years we have had some of the highest foreclosure rates in the country, yet our property values continue to increase at a steady rate. Location is everything, and right now is a great time to be buying a home in Atlanta. Let me know if I can answer any questions, or send you information on any homes. If you are looking for a great place to search for properties check out my website at http://www.alexwilkinsononline.com.
0 votes
Vicki Masell…, Agent, Duluth, GA
Tue Jul 17, 2007
Perception does not always tell the whole story. I believe that all areas of the country have been adversely affected by what the media describes as the "real estate bubble" or "softening/correction of the market," or "strong buyer's market," etc. Some have obviously been affected more than others by a variety of reasons; however, despite the high statistic of foreclosures in Georgia, I do not believe that one statistic should be used to declare an area problematic or of grave concern. Take for example the recent article published by CNNMoney.com that out of 100 places around the country, Suwanee, Georgia (located in Gwinnett County) was named the #10 pick. For most of the cities on the Northeast side of the Atlanta metro area that we serve, average sales prices have continued to modestly rise.

In all the years I have been selling & studying real estate, Georgia has had historically slow but steady appreciation (in the neighborhood of 3-5% per year) while some markets like FL, AZ, NV, & VA had seen double-digit appreciation over the past 3-5 years. Joshua's post with "the tortoise and the hare" analogy definitely fits. Relocation clients that I frequently work with from the West coast, mid-West or Northeast are consistently amazed at the amount of home that they can purchase in the Atlanta metro area and absolutely fall in love with the climate, attractions, proximity to the beach & mountains, and overall qualify of life.

If you & your husband have an opportunity to travel to GA for an interview and preliminary house-hunting trip, you owe it to yourselves to come for a visit and check us out!

Warm regards --- Ted Shoop
0 votes
Pat Albert, , 30342
Mon Jul 16, 2007
Absolutely, and it will only take as long as it takes to shake out all the ARM and interest only loans that are/ or will soon readjust. Many lenders made loans that should never have been made. Those lenders are now going out of business.

I feel confident that by late 2008 we will be headed north in rising real estate prices. Just be sure that you buy in the best areas for appreciation. You will want to find a full time Realtor who really knows the market.
0 votes
Joshua Jarvis, Agent, Duluth, GA
Mon Jul 16, 2007
Atlanta has always been a foreclosure leader and we've always had a steady rate of appreciation. I compare Atlanta to the tortoise (and the hare), it just steadily plods along. I don't seee any big changes in 5 years. I do see prices rises dramatically in the next 10 years though, do to all the relocation.
Web Reference:  http://www.jrjarvis.com
0 votes
Tary Drouault, Agent, Duluth, GA
Mon Jul 16, 2007
The Atlanta market has always had a nice, steady appreciation. The reason we are seeing it become a buyer's market is because a lot of the interest only and adjustable mortgages are tripling and that is causing a record number of foreclosures. I believe that in the next year or two, the market will turn around and go back to the steady appreciation we are used to seeing. Good luck! Tary Drouault
0 votes
Lisa Farmer, Agent, Flowery Branch, GA
Mon Jul 16, 2007
You are in the best possible situation. It is a great time to buy a home in the Atlanta area. You will have many homes to choose from, and there are some great deals to be had right now. Buying a home now and then waiting 5 years to sell will give the market time to pick up and your home should have appreciated considerably by then.
You can search the MLS on my website shown below to see homes for sale now in Atlanta. Please let me know if I can help you in any way.
Best wishes, Lisa Farmer
0 votes
Kim Chitwood, Agent, Fayetteville, GA
Mon Jul 16, 2007
Oh I forgot to offer my services to you. I'd love to help out with your relocation. Please feel free to call me or email 770-328-9169 or kschitwood@yahoo.com
0 votes
Chris Tesch, Agent, College Station, TX
Mon Jul 16, 2007
Jen,

One thing that you can be sure of is that the markets are always changing. Five years is a fairly good time for a turnaround. The good news here is that you can probably negotiate a wonderful deal on your new home in Atlanta now and you will have time to wait the market out and get some decent appreciation.

Good luck!

Chris Tesch
RE/MAX Bryan-College Station
Web Reference:  http://www.ChrisTesch.com
0 votes
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