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Buford, GA, Market Report, February 2013

Monday, 01 April 2013 11:17
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This map shows the incorporated and unincorpor...Market stats for Buford, GA, February, 2013 indicate that there were 307 properties on the market, an increase of 22 from last month. Overall, there was about an 4.9 month supply of properties (Absorption Rate or A/R). There were 63 sales for February, up from 58 last month but down from the 64 sales last Jan12. It isn’t the strongest market in Gwinnett, but the A/R is nothing to sneeze at. It is still in Seller’s Market territory.

In the sub-$200k arena, there were 140 listings, with a 3.9 month supply. This is the largest price segment in this market area, so strength here usually equals strength across the whole local market area. Sales were up from last month 34 (v 32 last month), and well down compared to last year (40 sales in Jan12). But, the A/R is well under the 6 months that would be considered fairly balanced… pointing towards a solid seller’s market. This time of year we should start seeing an increase is sales… and listings.

Between $200k and $400k, there were 123 listings for sale, and about 5.1 months of supply. The 26 sales recorded were up from the 21 last month and from the 23 sales last year for February. This had been one of the weaker segments in the county, but had improved dramatically until last month it was fairly balanced, though tilted towards buyers… now it is slightly further into Seller’s Market territory.

From $400k to $600k, there were 32 homes on the market. The absorption rate is 12 Months. There have been 8 sales in the last 3 months (1 for December, 5 for January and 3 for February). When the market is rolling, there should be 4-7 sales a month during this part of the year. Just for comparison, there were 5 sales in the Dec-Feb period in 2011-12. This segment has been bouncing all over the place…

In the $600k to $800k arena, there were 4 listings. Absorption Rate is (again) 36+ months… but it jumps around a lot. Sales in this range are pretty sporadic, but steady when looking at the long-term. The drop in inventory over the last few months from 14 homes to 4 has made things look less slow… but there were 7 sales in this segment last year including 3 sales in March, 1 in June and 0 in February.

The range from $800k to $1m, there was 1 homes listed. Trends are hardly definable. Listings are down. June recorded the first sales since December, 2010. There was 1 sale in February. So it now has a 3.0 month Absorption Rate.

Above $1m, there were 7 properties listed. There was sale in the segment in April… of 2009…and then May, 2011… and 2 sales in June, 2011… also 1 in July and September. There was 1 sale in October, but 0 sales in February. So, we have 21 months of inventory. I hope, but am not expecting, sales to be more consistent.

Buford, GA is a suburb of Atlanta in Gwinnett and Hall Counties. The population is 2000 was 10,668, but that only included the area inside the city limits, and it had seen tremendous growth since that census. Buford is home to Lake Lanier, one of Georgia’s premiere recreational areas, and Lake Lanier Islands. Recently, the City of Buford has revamped their old town. It is also home to Buford (Buford City Schools aren’t a part of Gwinnett County Schools), Mill Creek, Mountain View and Lanier High School (Lanier will open for the 2010-11 school year).

I have a page dedicated to Buford Market Data.

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Sugar Hill, GA, Market Report, February 2013

Friday, 29 March 2013 10:28
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This map shows the incorporated and unincorpor...

Image via Wikipedia

Market stats for Sugar Hill, GA , Febuary, 2013 indicates that there were 111 homes on the market. Flat from last month. Overall, there is about an 4.8 month supply (4.3 last month). There were 25 sales, compared to 16 last month and 19 last February. Of course, then there were 150 listings on the market.

For Sugar Hill homes priced under $200k, there were 69 listings, with about 4.4 months supply. There were 16 sales this February, a little below last year for the same time (18). There were 13 sales last month. Inventories have been fluid, rising and falling. This time of year we often see a slight decrease in listings… but we are already very low. In fact, sales may be stifled by lack of inventory. Christmas slowed things down, as usual, but it’s about time to pick up again.

Sugar Hill Listings between $200k and $400k, there are 37 listings for sale, and about 5.6 months of supply. Last February there was a 12.3 month supply. There was 1 sale then, this year there were also 8. Last month had 2 sales. That makes two of the last three months look pretty strong. We are in a slight Seller’s Market here again when the Holiday slowdown is over.

For listings in the $400k to $600k range, there were 5 homes on the market. The absorption rate was around 5.0 months, but with 1 sale this month, it is tough to calculate accurately. Obviously, a sale or two could make a BIG difference. I’ve finally started to see some consistency here. Hopefully we’ll have a little more action during the Spring selling season.

In the $600k to $800k, $800k to $1m and Above $1m (combined), the sales are too inconsistent to have a solid read on, but there were 0 homes listed for sale in these price ranges. No sales have been recorded in the last 2+ years.

Sugar Hill, GA is a suburb of Atlanta in Gwinnett County. The population is 2000 was 11,399, but that only included the area inside the city limits. The name comes from a bag of Sugar that spilled on a hill while in transit between Cumming and the railroad in Buford. And while it is actually a big market, it is in the shadows of Lawrenceville, Duluth and Suwanee… which all are nearby. That also makes it a great location, as it is close to everything that Gwinnett County, GA has to offer.

I have a page dedicated to Sugar Hill Market Data.

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The Appraisal Came Back Low… aaarrgghh!!!

Wednesday, 27 March 2013 15:48
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Commonly heard, especially from sellers right now…

Let’s get a couple of things out of the way.

  • Back during the “boom”, it was almost unheard of for an appraisal to come back too low.  The banks wanted them high, and the appraisers were getting paid by the banks.  The thought was “real estate will always go up, so if the value is a little out of line, it’s OK”.
  • Around 2007/2008, that stopped.  There were a lot of big changes in the appraisal world…
  • Appraisers NOW are all but forced to be VERY conservative.
  • Appraisals are based on “comps” sold within the last 6 months… sometimes 12 months.

 

1939 United States Appraisers Stores Building,...

1939 United States Appraisers Stores Building, 7300 Wingate, Houston, Texas 1205201547BW (Photo credit: Patrick Feller)

So, where we find ourselves in the current real estate climate is with price appreciation happening, most noticeably at the entry level end of the market.  Homes are OFTEN drawing multiple offers and selling over listing price.

 

As a byproduct, values are outstripping appraisals.  It isn’t always that the prices are out of line with other homes in the neighborhood… it is often because the appraisal process almost demands that appraisers work with information that is out of date.

On average, after a buyer and seller agree on a price, it may take from 30-60 days for the sale to close.  After that, it may take another 30-60 days for the sale to be recorded with the county.  The local MLSs are a bit faster, generally having the sale information within a week or so of closing.

So, the Appraiser is working with sale prices that reflect where the market was anywhere from 1½ to 4 months ago… at best.  And in the market we are in, there has been about a 10% increase in pricing, dependent on location, price segment, etc.  But much, if not most of that appreciate has been more recent than the 6 months an Appraiser is looking at.

The next issue that we run into relates to condition.  Many of the properties that sold last year, or the year before that were in pretty rough shape.  Much of the foreclosure and short sale inventory has been worked through, but a year, and even 6 months ago, it accounted for a large chunk of the sales.  Now, with constrained inventories, that isn’t the case.

 

Housing

Housing (Photo credit: james.thompson)

Appraisers DO adjust values based on condition… but the problem is that often the adjustments are based on a limited amount of information available in an MLS listing for a bank-owned property.  Sorry, but many of the “REO Agents” left minimal information for the appraiser to work from.  It wasn’t uncommon to see a bank-owned listing with 4 pictures, and NO details about condition of the property.

 

Subsequently, the Appraiser might not know that the house that sold a year ago in the subdivision for $75,000 less than the house you are dealing with also happened to need $50,000 in work to bring it up to where it is now.  And his adjustment for that house might have only been $10,000…

The result is that we see neighborhoods with homes that sold for $100,000 last year, with homes that could (and do) sell for $175,000 this year.  Seems like a HUGE increase in value, but the reality is that the $100,000 house needed a tremendous amount of work to get it up to where the current houses are.  Coupled with the reduced inventory and increasing prices… the current price is NOT out of line with reality.

But then…

The appraisal hit.  And it hits HARD.

The buyer either freaks out and thinks that he wants a MASSIVE price cut because of the low appraisal, or starts freaking out that there is no way they can buy the house.

The seller either freaks out because he has to take that much more of a loss, or becomes despondent because he doesn’t think he’ll ever be able to sell his house.

Nobody wants to return anybody’s call…

Solutions…

AP of Large Residence under construction for u...

AP of Large Residence under construction for use in an appraisal article (Photo credit: Wikipedia)

Actually, there are some things that can be done…

  • Buyers – You have to realize that the appraisal is an opinion of value, often based on out of date information.  It is NOT the Appraiser’s fault that it is low… the Appraiser HAS to work within very specific guidelines.
  • Sellers – Same thing.
  • Both – Don’t yell at your agent.  We aren’t picking the appraisers.  Neither is your Mortgage person.  But, we WILL try to help.
  • Sellers – One of the best ways to start is to buy (yes, spending money) an appraisal PRIOR to listing your home for sale.  Forewarned is forearmed.  It is better to know well in advance that there could be a problem than to get slapped by a shocker appraisal just when you think you are on Easy St.
  • Agents – Do your homework.  Is the CMA for the Seller (or the Buyer) “real” or is it manufactured just to tell them what they wanted to hear?  If it is based in reality, give the Appraiser the comps you used.  You can NOT tell them what to value the house at, but you can help them get to where you are.
  • Sellers & Seller’s Agent – If you get a pre-listing appraisal, talk with the Appraiser about helping to fight the low one.  They speak the same language and might have an easier time working everything out.

There is one other tidbit.  If the appraisal is done for an FHA loan, it sticks with the house for 90 days… that mean ANY subsequent FHA loan from another buyer for the next 3 months will use the same appraisal.  And if you think it is out of whack now, think how out of whack it will be in 3 months…

 

The bottom line is…

Don’t freak out.  Work with the professionals that you hired and see if they can get everything worked out.

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Suwanee, GA, Market Report, February, 2013

Monday, 25 March 2013 11:13
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This map shows the incorporated and unincorpor...Market stats for Suwanee, GA, February, 2013 indicate that there were 315 properties on the market (down from 332 last month). Overall, there was about a 4.8 month supply of properties (up from 4.7 last month). February had 66 sales. Compared to February, 2012 (64), this year was up, but inventory was down compared to 2012 (433). There were 50 sales last month, so this month was up a good bit. There is generally a dip in January, so the bump in sales isn’t really a shocker.

In the Under $200k arena, there were 64 listings in Suwanee, GA, with about a 2.7 month supply (compared to 4.3 months supply last year). This February’s sales were 24 (30 last year, 15 last month). It used to be a county leader, though, for now it is moving back to one of the best price/locale segments again. The next level up is coming up fast, though. Sales were likely limited by constricted inventory. Last year at this time, there were 133 listings.

Between $200k and $400k, there were 167 listings for sale (201 last year, 148 last month), and 5.5 months of supply. Sales in February, 2013 were 32 (27 in January), compared with 27 for the same period in 2012. Sales have been consistent for the last few months, but have fallen off somewhat for the last five months. I’d like to see it get up to around 40 sales or so for the next couple of months. This shouldn’t be a “peaky” market/price segment. Unlike most of the county, this is the largest price segment in the area, and its direction plays a major part in how the area looks. Make no mistake, this is still pretty much in Seller’s Market territory.

From $400k to $600k, there were 44 homes on the market. The absorption rate was at 6.0 months (4.7 in January). There were 6 sales in February (5 last month)… flat from 5 last year at this time. Looking at the three month average, there were 22 sales this year and 15 for the same period last year. This segment has become dramatically stronger in the last couple of months.

In the $600k to $800k arena, there are 18 listings, with about a 5.4 month supply. Sales at this level are not consistent, but there was 4 sales this month (3 last month). Looking at one month makes the numbers jump around. For the last three months, sales were 10… For the same time last year, the sales were 3. With the huge decrease in listings over the last couple of months, I was looking for this to become one of the strongest $600k-$800k area in the county. It is fairly strong right now… we’ll have to see if it holds.

The range from $800k to $1m, there are 7 homes listed and 21 months of inventory on the market. There were only 4 sales at this price level in 2011. There were 7 in 2012. This is a tough segment to try to sell in right now, but if inventory stays low, it won’t be quite as rough. But there still needs to be some more sales activity. There was 1 sale each in March, July, August, September, October, November and December last year.

In Suwanee, GA, Above $1m, there are 15 properties listed. The current absorption rate indicated about 45 months of inventory, but because of the smaller numbers of sales, this could be significantly impacted by just a couple of sales. In this segment, we should be seeing reduced inventories… There were 24 homes listed in this segment at this time last year. There were 0 sales in February, but 1 in the Dec-Feb time frame, 3 the year before.

Suwanee, GA is a suburb of Atlanta in Gwinnett, Forsyth and (just a little bit) in Fulton Counties. The population is 2000 was 8,725, but that only included the area inside the city limits, and it had seen tremendous growth since that census. Money Magazine rated Suwanee in the “Top 10 Best Places to Live” in 2007, and it is one of the wealthiest parts of Georgia. Recently, the City of Suwanee has revamped their old town, adding a large park with a bandshell, condos, town homes and small businesses. It is also home to North Gwinnett High School, Peachtree Ridge and Collins Hill. I have a page dedicated to Suwanee Market Data.

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Home Price Appreciation by State

Friday, 22 March 2013 12:20
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Last week I posted an infographic from Active Rain saying that Real Estate is Back…  Here is another one from 29doors that makes it look like in Georgia, it isn’t so much.  But, looking at the market reports for Gwinnett, as well as Case-Schiller numbers for the Atlanta statistical area, prices look to be up year over year by more than 9%.  That tells me that there are some places in Georgia that are still pretty slammed.  What do you think?

HousePriceRanking0213-3

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