So what happened to change these predictions?  The financial crisis in Europe, growing concerns over the global economy and the potential conflict between North and South Korea have created a flight to safety.  Suddenly, there is significant demand for safer U.S. bonds from investors across the world.  The previous worries about the Fed discontinuing their purchases of mortgage-backed securities appear abated – for now.  However, the original long-term prognosis may still be a reality.  These economic cycles and world events tend to be cyclical.  If the perception improves, the market for mortgage securities may slow.  That combined with the looming debt in the United States will push rates higher.  Most analysts still expect to see rates higher in 2011 and 2012.  But in the short-term, it is an incredible time to buy the home of your dreams! 

Your Prudential Georgia Realty agent can tell you the latest market conditions in your local area.   Check back for our new posts with the latest facts and insight that can make you money!

Here in metro Atlanta, the story is similar.  SmartNumbers reports that 43% of local buyers in November were first-time buyers.  Their data shows that first-time buyers were 37% of the market prior to 2003.  In 2003, we saw that new home prices began escalating and essentially started pricing these buyers out of the market.  Now that prices have dropped, these buyers are able to afford properties that were previously unrealistic for them.  In the 3rd quarter of 2009, we saw first-time buyers return to historically normal levels.  Of course, the $8,000 Tax Credit and low mortgage rates are also driving this behavior.  In November, we saw the numbers jump to 43% and would expect that momentum to continue to the spring market.

Atlanta 1st Time Buyers Return To Market!

One of the biggest obstacles for many first-time home buyers is the fear of losing their job.  They know that there are fabulous properties available, low mortgage rates and tax incentives.  But they are worried about losing their job and then losing their new home.  Prudential Georgia Realty is pleased to offer Job Loss Protection which provides a “nest egg” of $10,800 to cover 6 monthly payments of $1,800 in the event of an involumtary job loss.  Conatct your local Prudential Georgia Realty agent for details – and get started now!  These low rates and exceptional properties will not be there forever.  The clock is ticking on the $8,000 Tax Credit which expires on April 30th 2010.  See our video channel for details of the Job Loss Protection program, Tax Credits plus other local real estate news – at www.AtlantaRealEstateChannel.com.

Click the chart image below to view the data for the big 4 counties of metro Atlanta – Fulton, Dekalb, Cobb and Gwinnett.   Contact us if you are interested in see the data for each individual county.  This chart shows some interesting facts:

• Pre-foreclosures are still very high (yellow bar)
• Properties that become foreclosed or bank-owned are significantly lower (red bar)
• Sales of bank-owned properties is higher than the rate of new properties becoming bank-owned (purple bar)
• Market sales (resales, new homes, land) are significantly smaller than the number of pre-foreclosures (green bar)
• The percentage of REOs or bank-owned properties compared to total sales is shrinking in recent months (green line).        

The case is clear – REO listing inventory is shrinking.  We also know this to be true from the “word on the streets” since many REO specialists do not have the listing inventory volumes they has back in the spring and early summer months.  There are two root causes for this situation.  One is that more banks are supporting and promoting short sales.  The second is that banks are simply sitting on inventory and not bringing properties to the market for sale.  Short sales make sense since it costs the bank less money to process.  But why would a bank sit on inventory and not bring to market for sale?  Some speculate that banks are holding assets to defer losses.  Others believe that banks are using these assets to negotiate with the government to establish a “toxic bank” similar to the model used for the RTC (Resolution Trust Corporation).  Only time will tell the real reasons. 

So what does this mean to sellers or buyers in metro Atlanta?

For sellers, it means that you and your agent need to carefully watch the trends for future listing inventory in your local area.  This includes notices of foreclosure or pre-foreclosures that will become short sales or bank-owned properties.  This also includes the “shadow inventory” that banks are holding.   If the banks decide to dump the inventory onto the market too fast, it will have a negative impact on market values.  Yet another category to watch includes the “sideline inventory” of sellers that are expected to come into the market if values slightly improve.  Right now our inventory levels are down 28% from last year.  Pended sales are running at about the same pace as last year.  For now, we are consuming our inventory.  If that remains the case, property values will remain stable and may even pick up slightly.  It is all about the balance for buyers and the current listing inventory.  Prudential Georgia Realty created our award-winning Advanced Property Marketing System specifically for these types of market conditions.  As the market changes, we will see the trends first and can help you optimize your value proposition to stand out from your competition.     

For buyers, there are still tremendous deals in our market.  There are fabulous resales, builder short sales, residential short sales and bank-owned properties.  Many of these are priced below their replacement costs.  It may be wise to work with a specialist who understands both the short sale and REO markets to evaluate the best opportunities.  Prudential Georgia Realty has hundreds of trained and certified specialists that can help in your local area.  These specialists have foreclosure searches powered by RealtyTrac plus our new custom Short Sale search.  PGR is the only brokerage that provides these powerful tools to our agents.

If you want THE EDGE in the market, please contact your Prudential Georgia Realty agent to get started today!

Scott estimates that Atlanta home values have dropped by 10-25% since the peak in July of 2007 depending upon your local area.  As always, real estate is local and every market is different.  Scott suggests that many of our local markets are now stabilizing and showing some signs of recovery.  However, that may not be reflecting in the appraisals used by lending servicers.   

Scott discusses big changes with the new HVCC process and the new 1004MC form.  He also makes specific recommendations for sellers and real estate agents to impact the process.

Prudential Georgia Realty agents are receiving specific training on this process and using the right information tools for CMAs (competitve market analysis) and the 1004MC forms.

• For all FMLS counties, the report shows 4481 pending versus 4853 last month and 4410 in July of 2008.  Therefore, pending sales are up on a year-to-year basis but down from last month. 
• Closed sales were 3734 versus 4413 last month and 4378 in July of 2008.  Therefore, actual closed sales are down on a year-to-year basis and down from last month.  Closed sales have been running 10-20% less than pending sales in the last 4 months.  This is due to the longer timeframes for closing short sales & foreclosures which represent over 50% of the transactions in the market.  The new Truth in Lending disclosure rules will also have an impact on closing timeframes.  See our post and audio podcast for details.  
• Inventory for all FMLS counties continues to drop to 42,521 homes for sale.  Inventory is down 3% from last month and down 35% from July of 2008.  We expect to see inventories rise as more short sales and foreclosures come on the market in the next few months.
• Equity Depot announced 14,000 new “notices of foreclosure” for the September auction.  Last fall, these pre-foreclosure notices were running aroun 7,000-8,000 per month.  In August, there were 12,000 and July 16,000 pre-foreclosure notices.      

Click Here To View The Trendgraphix Market Summary Chart

 If you have additional questions about the local real estate market, please contact your Prudential Georgia Realty agent.  They have access to many market reporting tools plus foreclosure information, short sale information, tax records, liens, mortgage balances and more.  You may also contact us directly by submitting a question below. 

This audio podcast provides a detailed review of the new changes and some of the considerations for buyers and sellers.  

Just Click on the Audio Podcast to hear the Interview with Melissa Hancock from SunTrust Mortgage

We have also attached a flyer that gives a brief summary of the new changes. If you have additional questions, please contact your Prudential Georgia Realty agent or contact us by leaving a reply at the end of this post.  

Click This Link To Download The Informational Flyer