Tina & Mike McGee

Good News Week for Atlanta Real Estate

This week brought a couple pieces of good news about the Atlanta real estate market. First, a report released by Metrostudy shows that Atlanta's housing market has hit bottom, with primary indicators having reversed and now trending to the positive.  Although the trend is positive for sellers, we at Intown Elite believe that buyers continue to maintain the power in negotiations, since there’s still nearly 13 months of inventory on the market.
The other good news for the real estate market is the extension of the $8,000 tax credit for first-time home buyers until May 1, 2010. In addition, a credit up to $6,500 is available for other home buyers who have owned their current homes for at least 5 years. This opens tax incentives to "move-up" buyers who are purchasing a primary residence.  

As always, there are limits to these credits, so please contact your real estate professional for the details.   These tax credits are not likely to be further extended, so if you are considering buying a home, now is the time.

Please feel free to contact us here at Intown Elite with any questions you have about the new tax credits. Thank you and happy house-hunting!

Tina & Mike McGee
Owners
Intown Elite
real estate services
404.478.7800

"I'm looking for a really good deal." That's what just about every buyer says when they first speak with us about buying a home. Not that they're looking for a particular style of home with a specific number of bedrooms or baths, a specified location or even whether it's a condo, townhome or single-family home. We’re finding that buyers are focusing more on the type of deal they can get rather than what attributes they really want in a home.


Of course, everyone wants a good deal, but it's important not to get so tunnel-visioned that you miss out on the perfect home for you, because you're holding out for the deal of the century. Do you want a good deal on a home you love, or a great deal on a home that's just OK? You have to live there. If you don't love it, is it really that great of a deal?

Waiting for the bottom?

Many folks are sitting on the sidelines, waiting for the bottom of the market before they’ll jump in. If that sounds like you, how will you know when the market has bottomed out? Market timing is a tricky game to play. Check out the graphic below:

Let's say the graphic represents the housing market. Although the market is cyclical, with ebbs and flows,, most people tend to think in a straight line. Point A was near the peak of the market. Although the market was overinflated, many people thought that prices would continue to climb. This was a contributing factor to the "bubble" that occured in some markets.

Then, the market began to take a turn in the opposite direction.. Let’s say that now we're at the other end of the spectrum (point B). The market has turned downward and people wonder if we’re near the bottom. The big question on everyone’s minds: When will we know that we’ve hit the bottom and it’s time to get off the fence and start buying?

The answer: Just like the economy as a whole, we won't know for sure that the market has turned until data from previous months are analyzed. In other words, we won't know we're at the bottom until the bottom is already behind us.

So, at what point would you rather buy a home? Point C represents the beginning of the upswing. Both B and C are at the same level on the vertical price scale. The difference is that at point B, people (i.e. sellers) think that prices will continue to decline, whereas at point C sellers think that prices are on the rebound. At which point do you think you'll have the greater negotiating leverage?

(The correct answer here is B.)

What about interest rates?

Well, they're at historic lows, too. Buyers can get 30-year fixed-rate mortgages with rates of less than 5%. The federal government a couple of weeks ago made another move, effectively pumping $750 billion into the mortgage market, which should drive rates even lower into the 4's over the coming weeks. So, if you want to take advantage of this "perfect storm" of low rates and low home prices, the time to get in gear is now. Years from now, people may be saying, "Darn, I wish I had bought back in the spring of 2009!"

Tina & Mike McGee
Owners
Intown Elite
real estate services
404.478.7800

It’s been a while since we made a blog post, partly due to the holidays, but partly because we have been busy with several new buyers. Why, in an uncertain economy, are so many buyers jumping into the real estate market? Do they know something you don’t know? It’s really quite simple - the current market condition represents an unprecedented opportunity for home / condo buyers. So what makes now such a great time to buy?

It’s a buyer’s market.

That’s because there are currently many more people trying to sell real estate than there are people willing and able to buy. That means prices are lower and sellers are more negotiable now than in the past.

Scarcity = Leverage.

Qualified buyers have the power. Not only are there fewer buyers than there are sellers overall, but banks are being more strict on their lending standards. Gone are the no-doc “liar’s loans”, sub-prime, Alt-A and other crazy loan products that created the financial mess we’re in. These tougher standards make qualified buyers even more scarce. If you are a qualified buyer in this market, you are the rare gem. This gives you the upper hand in negotiations.

Mortgage rates near 50-year lows.

Not only can you get a reduced purchase price on a home, but your cost to borrow money is also at historical lows. Many lenders have reported rates under 5% for a 30-year fixed-rate mortgage! This also increases your buying power, enables you to buy more home for a given payment, or get a lower payment on a given home.

People are funny.

Human behavior is sometimes irrational and we often repeat our own mistakes time and time again. After stocks have fallen, people feel they need to “get out of the market” and end up selling at the stock’s lowest point. Then they wait for the market to “recover” and jump back in after missing substantial gains. Sell low and buy high? That’s not how you create wealth. The same concept is true for homes.

Real Estate is “On Sale”!

If someone told you that prices of flat screen TV’s have dropped this season, you might be more likely to buy one. Yet the same, normally logical person may hesitate buying a home because they hear in the press that the real estate market is depressed. The press reports might sound like doom and gloom, but what they’re really telling you is that houses and condos are on sale! That flat screen TV will do nothing but depreciate in value. On the other hand, that home that you buy at a bargain price today will surely appreciate in the long run. So what are you waiting for? Real estate is on sale!

Tina & Mike McGee
Owners
Intown Elite
real estate services
404.478.7800

With all the doom and gloom on the news, are there any bright spots out there?  Yes, of course there are!  One is the falling price of oil, gas and other commodities, which helps to soften any downturn in the economy.  But what may surprise you is that the resale home market is another bright spot.  

We've written in previous blog posts that the Intown Atlanta market has been doing quite well, in contrast to many other parts of the country.  But now comes news that the country as a whole is rebounding in terms of existing home sales.  In September, existing home sales jumped 5.5% as affordability has improved.  Improving affordability in some markets has to do with home prices correcting to more reasonable levels after steep run-ups in bubble markets.  But another factor that improves affordability in all markets is interest rates.

Recent actions by the federal government, including the takeover of Fannie Mae and Freddie Mac, as well as the economic "rescue" plan, has lead to lower interest rates for home loans.  Very often buyers can now get fixed-rate mortgages under 6 percent.  Check with a qualified Atlanta mortgage lender to see what kind of rate you can get.

The jump in sales last month was the largest since 2003, and outperformed economists expectations.  Many economists have said that the economy will not recover until the housing market stabilizes, to this is welcome news.  This news coupled with declining inventory may imply that the housing market has reached a bottom.  This emphasizes what a great time it is to buy now.  Read the full story at this link.

Tina & Mike McGee

Owners

Intown Elite

real estate services

404.478.7800

In a previous blog post, we mentioned how the Intown Atlanta real estate market was different than the "bubble" markets, which have lost so much in home values lately.  By contrast, single family homes in Intown Atlanta are holding their own.  In fact, many established Intown Atlanta neighborhoods can boast rising home values in recent months.  But don't take our word for it, check out this recent article in the Atlanta Business Chronicle: House prices rising in Atlanta

Tina & Mike McGee

Owners

Intown Elite

real estate services

404.478.7800