Atlanta is so Urban!

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Urban Graphic off Ponce de Leon in Atlanta

This awesome graphic about urban living is found near Ponce City Market in Atlanta.

love this billboard off Ponce de Leon near the Ponce City Market.  It encapsulates a phenomenon – a subset generation of homebuyers who are not choosing to live in the more traditional neighborhoods of Buckhead, Virginia Highland, or Decatur, but who are instead moving to the “edgier” parts of town which are now rising in popularity and in value.

For some young homebuyers, price drove them away from other intown neighborhoods.  They could not afford Buckhead, and rather than move outside the Perimeter they chose to live in a less expensive neighborhood closer in.  For still others, it is a conscious choice – in fact, some will pay Buckhead prices to live in these emerging urban neighborhoods like Edgewood, Kirkwood, Adair Park, and the like.

What do we mean by “urban”?  In real estate parlance, it means “in the city” or the more densely populated areas close to traditionally commercial areas.  It means an area where one can walk to retail and to public transportation.  In the past, the term “urban” was often used derogatively to describe a crime infested inner city area.  But these days, urban is in.  The influx of buyers into closer-in Atlanta is increasing, and it is not just the Millennials who are making the move – many empty nesters and even the elderly are moving in town as well.

The trend is particularly evident in The Beltline neighborhoods.  As you probably realize by now, The Beltline is a 22 mile walk/bike/transit loop around Atlanta that is one of the largest urban redevelopment projects in the United States and has garnered national and international attention.  It will be years before all segments are completed, but much of it is finished now and if you live close to one of these segments you have the ability to walk out your door and into the future.  Along the Beltline you can exercise, enjoy art, shop, walk to work – all without getting into a car.

But this does not mean that those neighborhoods not in the urban core are suffering.  Buckhead, Virginia Highland, Decatur …. They all continue to increase in value and many of the urban buyers will buy in one of the more traditional neighborhoods in the future.  Also, Atlanta is growing, so there are plenty of residents to go around.  Some of the neighborhoods and cities not in the core and even those not inside the Perimeter are becoming more urban themselves by creating mixed use developments (live/work/play) that become an urban center of their own.

For instance, Perimeter Center in Dunwoody has grown up around the MARTA Station there.  Once Dunwoody was almost entirely single family homes and shopping malls.  Now it is cosmopolitan and hip.  And Marietta’s square is an urban city center from another era that has new life now that we again appreciate walkability and greenspace.

The real estate world is changing, but in Metro Atlanta there is room for everyone – those who love living an inner city lifestyle and those that do not.  We are so urban!

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Hollywood’s Calling for Your Atlanta House!

Atlanta and surrounding areas have become the darlings of Hollywood. We are now the number one filming location in the world for movies!  And you have undoubtedly seen Atlanta taking a starring role in many television shows and movies. It all started with the Georgia tax credits for filming, and then seemed to snowball as production companies learned how much else our state has to offer, like temperate weather for much of the year. Also, a ready, willing and skilled workforce. A wide variety of different environments, cities, housing stock and “looks”. And voila, before you could say “there’s no business like show business”, our city became a star!

Atlanta Starred in Baby Driver

More and more movies and television shows are being filmed in Atlanta. Could your HOME be the next STAR?

With so much Hollywood going on here in Gollywood (Georgia), chances are that if your home hasn’t had a starring role in a movie or television production, your neighbors home HAS. Why not your home, and what does it take to get your home considered as the next movie set?

The first step is to be sure that you want to do this. It sounds very sexy and amazing and all, but consider the downside before you decide to allow Hollywood into your home. First, film crews have lots of heavy equipment and that equipment and accompanying crew will be traipsing through your property without your supervision (since generally the agreement will be that you stay away from the home while the filming is taking place). The price of stardom, as it were. Is this something you are willing to put up with?

Is your family willing to move out while filming takes place? Different productions pay differently, and while it is true that it can be more than worth your while, some productions will barely cover your costs of making the home available and moving into a hotel or other rental property for the duration of the shoot. And keep in mind that delays in filming are common. Damage can happen. Are these risks you are willing to take?

It is important to keep in mind that terms are negotiable. If you are interested in having your home used as a “set” and a production company is interested in YOUR property, you can negotiate the terms. Of course, if you have unrealistic expectations you are unlikely to get any Hollywood types to agree and you risk the “gatekeepers” writing you off as unrealistic and not putting forth your home for consideration in the future.

But before we get to negotiating the terms, we must get interest in your home. Exactly what makes a home Hollywood worthy? Typically location managers will be looking for very specific things. For instance, for a recent shoot the producers were looking for a 1970s style home very close to a similar home right next door that would also allow shooting to take place. It was the need for two homes beside one another that eliminated many homes from consideration, since even if YOU are willing to make the sacrifices required, many times your neighbor may not agree. Perhaps the location manager needs an Italianate Palace and you own a small ranch. So just like HUMAN stardom, home stardom carries a large element of luck and of being in the right place at the right time.

But you will not know if your home is right for a particular role if it is never called to the “audition”. Sometimes the audition comes to you in the form of a location scout. Particularly if you have a unique home, you may get a flyer in your mailbox asking if you are interested in your home being considered for a particular use. The flyer will state the working name of the production and what they are looking for. If you agree to be considered, the location manager sends a photographer (or takes the photographs him or herself) and will submit them to the producer for consideration. This is the functional equivalent of being “discovered” at the Hollywood soda shop and just about as likely. So you might consider proactively seeking consideration.

​One place to start is the official Georgia Film Commission website, where you can submit pictures of your home for inclusion in their database. http://www.georgia.org/industries/entertainment/georgia-film-tv-production. Note that the property you submit does not have to be a home – it can be a business or other property. Once you upload to the database, it will be available to a wide range of producers and companies for consideration.

There are also “home casting ​specialists” in Atlanta who will ​handle the process for you. ​They can oftentimes negotiate a greater deal for you than you can do on your own because a good specialist will know the industry, the players, and what can be negotiated​​. One ​great ​specialist in Buckhead is Taryn Bowman, and her website is http://www.castmyhome.com.​ Taryn told me of a recent experience: “​I received a call from a​ n​eighbor who had a movie production company show interest in her home. She immediately called me to work out the deal. I told her to let them say a price first and that I would take it from there. They quoted her $10,000 for a set-up day, a shoot day, and a wrap day. Then I had the homeowner step out of the equation, and I worked directly with the company, 20th Century Fox, to negotiate much better terms for her. I got her $20,000 and a night in a suite at the Ritz plus per diem.​” ​ Taryn does not charge the homeowner – she negotiates a fee for her services from the production company.​

​​Perhaps instead of presenting your home as a place to film, you want to rent out a property for cast or crew housing​. To do this​ you can list your home for rent with us (or one of our team members​)​ on the multiple listing service, thereby opening up your property to a wider range of executives and professionals in addition to the entertainment industry. We list rentals that are offered on a yearly basis (rather than month to month). While we do not market properties to casting directors, we are always here as your property advisors when you want to buy, sell, or lease your home! If you will forgive the pun, you are “star” of our show and we appreciate your business and your referrals!

Falling in Love with Atlanta All Over Again….

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It would be hard NOT to love Atlanta, the City in the Forest, wouldn’t it?  I know that not everyone does.  But there’s so much to love about Atlanta, and it gets better every year.  I currently spend most of my time in Dubai, UAE, with my architect/husband who is on assignment here.  Dubai is a city of crazy architecture; one writer describes it as the city designed by drunk architects, and so it seems.  Every building is crazier than the last.

So returning to Atlanta is refreshing.  Every day The Beltline is more developed and new projects are announced.  Not crazy architecture like Dubai, but Atlanta’s version of modern.  An old Sears building repurposed to office, shopping, and events (Ponce City Market).  Old railway tracks repurposed to an amazing hiking/biking/transit trail (The Beltline).  And there is a real property boom in Atlanta right now with more than 45 new projects in Midtown alone this year, according to Curbed.com.

But Atlanta’s growth is not unfettered; the city does its best to make sure growth occurs in an orderly and smart way.  So Atlanta has announced “Atlanta City Design” – a design for future growth and development so that future growth has direction.  The emphasis is on PEOPLE and NATURE, and “people IN nature”.  Thus, the City in the Forest will remain nature focused while progressing forward.

As I watch what is going on in my beloved home city of Atlanta, I am full of pride and hope, and as I dust desert sand off our balcony overlooking the tallest building in the world, I pledge to enjoy my time here, but I cannot wait to return to Atlanta and see what is in store!

Dubai is Different

“Do not tell outright lies” the book says.

Right there in the Code of Ethics, Dubai Certified Training for Real Estate Brokers, “do not tell outright lies.”

So I, the lawyer, wonder about the ambiguity of this.  Does it mean that under their Code of Ethics it is okay to lie if you are telling a lie of omission?  To tell an untruth if it is half true?

Studying for the real estate exam in Dubai is interesting… and unnerving.  As you probably know by now, my husband the architect has been sent to Dubai to help design in the world’s most creative architectural city.  How could he refuse?  And I was eager to embark on this new adventure with him.  So while my real estate business in Atlanta is alive and well – with the help of my able colleague Cathy Lamon – I have taken the team international by getting my real estate license here in Dubai.  I now straddle both cities.  But since you are an Atlanta client, let me tell you about the city you may not know – Dubai.  Please consider coming to visit!

Dubai is a new city – Dubai as we know it came into being, really, in the last fifty years (before that time, the area was inhabited by Bedoins in the desert, without electricity), and Dubai’s RERA (the Real Estate Regulatory Agency) did not come about until 2007.  So in putting together the legal construct governing Dubai, the makers had the benefit of the collective wisdom of many other jurisdictions which have promulgated real estate laws over the course of many years.

Still, the system is far from perfect.

Some of the disconnect may come from the fact that I am reading everything in ENGLISH, and as this is an Arabic country, presumably all has been translated, sometimes invariably imperfectly, from Arabic.

In fact, Dubai has achieved some incredible things in the area of real estate.  For one, there is the first gigantic man made island – three miles by three miles, in the shape of a giant Palm Tree, and known as Palm Jumeirah.  On the Palm, it is difficult to buy anything that costs less than $500,000 US and most properties cost much more.

There are TWO other “palms” planned.   Both of them larger than the one already built.

Then there is “The World” – a series of 300 private man made islands out in the middle of the Persian Gulf that are shaped like continents.  “The World reinvents the earth and offers the ultimate in privacy and exclusivity” says the marketing.  Richard Branson already owns Great Britain.  The islands are accessible only by plane, helicopter or boat.  If you want something smaller, you can buy a “sea house” – which is a standalone house in the middle of the sea that is glass immersive – from your bedroom below you see, well, the sea – and hundreds of sea horses that will breed in the special habitat created for them close by.

So you see that Dubai’s real estate market is nothing like anything you have ever seen before.  In scale, in ambition, in creativity, it is unique.  It is a city of superlatives.  From our balcony, we see the Burj Khalifa – the world’s tallest man made structure at 2,722 feet high.   Dubai boasts man made marinas and canals.  Much of this to increase waterfront property, which is more valuable than that which is not waterfront, particularly in this desert country.

It is so much different from Atlanta.  So not surprisingly, real estate laws and rules are different also.

“Do not outright lie.”  I won’t lie period.  So I know I am within the law.  Dealing with others who follow this different code, however, will be an adventure in and of itself.   Please follow my adventures at www.yousaydubai.com.  And know that our team is available to help you in Atlanta, Dubai – or wherever you need real estate advice!

Dubai Real Estate Friends

My friends from Dubai Real Estate Class – we are from Ethiopia, Saudi, USA (me), Argentina and Croatia. Truly International!

Shining Light on “Blind” Offers

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Low Inventory, Fast Turnover

Property is moving quickly!

Low inventory and rising prices make for harried – and hurried – homebuyers.  Our client Michele couldn’t get into homes fast enough – due to her work schedule and travel, homes were under contract before she was available to even see them.  So Michele took an extraordinary step that we are seeing more and more clients take with increasing confidence.  Michele made an offer on a home that she HAD NOT YET SEEN.

This is becoming more common according to the National Association of Realtors.  Because there is so much competition over limited inventory, buyers like Michele – or buyers who are moving in from out of town and aren’t IN town to see a new listing – are more and more likely to make an offer sight unseen.  While it is always preferable to see a home before you make an offer on it, there are circumstances where a sight unseen offer can work out.  Here is our handy guide for successfully making an offer “sight unseen”.

  1. Sight unseen only means that YOU have not seen it. As your agent, I will have seen it if you cannot, and preferably with a trusted family member or friend you designate as your eyes on the property prize when you are not available.
  2. The sight unseen tactic is most likely to work if you have a base knowledge of the inventory out there, and a good idea of the area in which you want to buy. If you know you want to live in Virginia Highland, for instance, and have seen enough in person to know what you like but are not available with the “right” listing comes on the market, a “blind” offer might be fine.
  3. To increase the chance that your sight unseen offer will be accepted, be sure that at least your agent has seen it, and write a note to the seller about why you are in a hurry to make an offer and what about the home seems perfect for you.
  4. Make sure you see the property AS SOON AS YOU ARE ABLE. Even if we feel the property will move so fast that you have to get an offer in right away, when you come to town or are free from work, SEE IT as soon as you can.
  5. Most contracts in Georgia have a DUE DILIGENCE period during which the buyer can terminate for any reason or no reason at all, making it much less risky to make a sight unseen offer than if we did not have that due diligence period. However, to be fair to the seller, to other buyers and to yourself, if the property turns out not to be right for you, you will need to know sooner rather than later and terminate the contract as soon as you know it is not the right property.

While a seller will prefer a buyer who has seen their home personally, this phenomenon is *good news* for sellers.  Buyers will to make good offers “sight unseen” mean there is great demand in the marketplace.  So if you have been thinking about selling your home, NOW is the time – please call and let us show you how to get the most money for your property.

 

FREEZE! The Exciting Property Tax Word!

Image by woodsy

Death and taxes are inevitable, and sometimes it feels that they are joined –when it feels as if taxes will be the death of us.  Many of us panicked when receiving Fulton County property tax assessments this year – and for good reason.  Across the board, property assessments were raised significantly, causing much consternation.
If you live in Cobb, Dekalb, Gwinnett, or some county other than Fulton, this issue should still be of interest to you.  Since the economic recovery is in full swing in the real estate market across Metro Atlanta, it is quite likely that your bill has gone up also – so stay tuned for tips on how to fight that. In Fulton, relief came from the government – the county commission voted to freeze assess property values at last year’s level.
 
“Today’s vote was not just a monetary or fiscal matter. It was a moral issue,” said commission Chairman John Eaves, quoted in the Atlanta Business Chronicle. “Our vote will allow all people – regardless of their zip code – to keep their homes by giving them time to adjust to rising property values over time.” 

While the biggest concern appeared to be the gentrifying neighborhoods in Southeast Fulton, where the property tax increases might have forced some long time residents out of their homes, the freeze helps everyone in the county.

So presumably if you live in Fulton County, you are fine for this year – but if you’re not, or if you live in another county and your taxes have gone up significantly, here is a step by step guide on what to do:

​1. ​Follow the directions on your property tax notice on how to appeal, and follow the directions to the letter (it varies by county).  If you did not get a notice, check online for your tax and the procedure to appeal. 
​2. Gather evidence supporting the lower price you feel that your property is “really” worth.   Best evidence will be lower sales that have taken place near your house in the last year (only the last year is considered relevant for this purpose).  You can get this information from the tax records, or you can contact us for help in gathering “comps” (comparable property sales). 
3. File your challenge.  If you are successful, your taxes will be frozen for some amount of time (in Fulton, three years) meaning that you won’t have to file a challenge each and every year. 
Sometimes clients ask us if they SHOULD file a challenge.  After all, when you go to sell isn’t a higher valuation better?  Know that while prospective buyers will check the tax records, the tax records are a notoriously unreliable prediction of value and most good agents will advise their clients of this; a low property tax valuation should not hurt if at the time you sell your home is worth more.  Therefore, I would not suggest that you avoid challenging an unreasonable assessment for this reason.
So, “FREEZE” is a great thing to hear.  Especially in the summer months.  Know that year round, our team is always available to help you with your real estate needs.  Never hesitate to call us for help!

“Ask the Realtor” #1

I am always happy to answer any question you may have – so please ask away!  I will keep your identity secret (unless you specifically give me permission to reveal who you are).

Here’s the first installment of “Ask the Realtor” –

QUESTION: What happens in the following scenario: parties have agreed to a purchase and sale agreement, the inspection contingency has expired (an inspection amendment executed) and the financing contingency has also passed. Now the purchaser wants to break the deal.

ANSWER:  Once the purchase and sale agreement is signed and all contingencies expired (in this case, the due diligence and financing contingencies), no one can “back out” of the contract.

This means if the purchaser fails to close the seller can keep the buyer’s earnest money.  The seller could choose to sue the buyer instead (either for specific performance, which is seldom successful, or for additional damages).  As a practical matter, particularly in a seller’s market like this one (seller’s market meaning that it is a particularly GOOD market for SELLERS) the seller will usually just take the buyer’s earnest money and go sell the property to someone else.

Should You Sell BEFORE You List?

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Should You Sell BEFORE You List?

By Mary Anne Walser, Realtor & Attorney, 404-277-3527, maryannesellshomes@gmail.com

It’s a hot seller’s market in Atlanta right now. We don’t have enough inventory for the buyers who are ready to purchase. So many times recently I have received offers on a home that I am getting ready to list BEFORE it was listed. This can occur when I am working with a buyer who is looking for exactly what I have coming up – or when another agent and/or buyer asks me “what do you have coming up?” and what I have coming up suits their needs and an offer is made.

So, from the seller’s perspective, is it a good idea to sell your property without ever listing it? Here are some considerations if you are lucky enough to have this dilemma.

From an agent’s perspective, I would typically prefer that a seller LIST the home with me before we agree on the contract. This way the home is exposed to fair market forces and we are sure that everyone who might make an offer on the home has the chance to see it and bid on it. Exposed to market forces, we might even get an offer above the list price or a buyer who is willing to pay above appraised value. So why would a seller EVER agree to sell a property prior to listing? Here is an examination of some of the reasons:

  • The most common seller who sells prior to listing is the seller for whom showings are a real hassle. My clients Vivian and Mike have four young children under the age of ten, two rambunctious dogs, and had trouble keeping their home clean, much less straightened up and staged for showings. They needed a bigger home as soon as possible, and needed to sell their home in order to buy their next home. So when I brought them a buyer (and an offer) that was more than they thought they would get if they had listed their property, they were ecstatic and chose to accept. This allowed them to get under contract for their next, bigger home and concentrate on the move rather than on the logistics of showing their current home and the fear that it would not sell fast.
  • Another seller who might agree to a contract prior to listing is the seller who has time on their hands and for whom this is a low risk proposition. Let me explain. If a seller gets under contract prior to officially listing the property on the MLS, and the buyer terminates, the seller can always then list on the MLS with no ill effect. Typically if one contract falls through, the world knows about it because it’s noted when a property goes under contract on the MLS. With a prelisting contract, however, if it falls through, the only parties who are informed are the seller, the buyer and the agents, not the world at large. If the contract doesn’t fall through, then the seller has saved the hassle of listing the property.
  • Some sellers want to sell before they list because they don’t want to pay agent commissions (or don’t want to pay two sides of an agent’s commissions). Agent commissions are negotiable no matter what, of course. But sellers will sometimes sell without involving agents and/or using only one agent to represent both parties, hoping that will save them money. Of course, a great agent will always maximize your return even with the payment of commissions, so I feel this logic is faulty. If you’re cutting out agent commissions, you’re also cutting out the marketing, advocacy, and market exposure that full agent representation provides.
  • Sometimes a buyer who makes an offer prior to listing is willing to pay more than they would otherwise for the opportunity to snag a great property before it is exposed to the market. While this sounds counterintuitive, we never know for sure what will happen when a property hits the MLS. While we can often predict, we are sometimes wrong. A property that we think will be hot gets few showings and no offers. If you hold that buyer off telling them you want to list and test the market first, if you do NOT get better offers then guess what? Often that buyer has cooled and is no longer willing to pay what they were willing to pay prior to you listing the property.

So as you see, there are many considerations involved, and every seller’s situation is unique and must be examined in light of your specific wants, needs, and goals. I hope that you too are lucky enough to have offers before listing! But whether or not you want to accept them is a separate determination. If you are ready to sell, please call the Walser Team today! We will strategize the right way to get the most money for your property.

 

Mary Anne Walser is a licensed attorney and full-time REALTOR, serving buyers and sellers in all areas of Metro Atlanta. Her knowledge of residential & commercial real estate and her legal expertise allow her to offer great value to her clients. Mary Anne is a member of the Atlanta Board of Realtors, the Georgia Association of Realtors, the State Bar of Georgia and the Georgia Association of Women Lawyers. Contact Mary Anne at 404-277-3527, or via email: maryannesellshomes@gmail.com.

 

Are You READY to Sell?

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Are You READY to Sell?

By Mary Anne Walser, Realtor & Attorney, 404-277-3527, maryannesellshomes@gmail.com

How do you know when it is time to sell and move to your next home? For some of my clients, it is easy. They are outgrowing their current home and have more children than bedrooms. Or on the opposite end of the spectrum, the children have left and the home is much too big without them. Other clients just like to move every five to seven years or so. And sometimes it is a major life event – a marriage, a job change, a death – that creates the need to sell. But one of my first steps as a Realtor is to gauge your motivation to move. (Or, if you are an investor wanting to sell property, to gauge your motivations in selling so that we can target your goals.)

One client, Martine, seemed eager to put her home on the market. We staged, photographed, listed, marketed, and soon she got a full list price offer on her home – but then would not sign it. She panicked – all of a sudden, she decided that moving might not be the best idea after all. She was not finding a home to purchase that she liked better (within her price range) and she was second guessing whether she wanted to move at all.  She asked me if she HAD to sell just because she received an offer at list price for her property.

If she refuses to sell, is Martine in breach of contract? Stated another way, if a buyer offers exactly what the seller asks for the property, is the seller legally obligated to sell? The answer is NO.

When we put your home in the multiple listing service and offer it for sale to the general public, in legal parlance the listing is not an “offer” – it’s an “invitation to offer.” This means that even if a buyer offers your exact list price and doesn’t ask you to pay any of their closing costs, you are not obligated to accept the offer. And this is because the listing itself does not contain all of the elements necessary to create a binding contract. For instance, the listing doesn’t state exactly when the deal will close, where it will close, how the deal must be financed, or any of the conditions of sale.

So as a seller, you can refuse even an offer that is above list price. You aren’t required to sell just because you listed your home. Of course, it’s advisable not to list your home unless you are certain you want to sell your home. And depending upon the listing agreement, you may be responsible for paying a commission if you receive a full price offer but refuse to sell. But thinking through things before it gets to that point can save a lot of heartache.

What I recommend for clients who are not entirely sure about a move is that we test their motivation by going out to see just a few properties currently on the market that they might wish to purchase. If we find properties that they can live with and live in, it makes it easier for them to agree to a sale when an offer comes in. Sometimes the “water testing” can take place entirely online; the seller does not feel as if they need to go look at properties in person in order to determine that the right property for them is out there. But one way or another, having a plan and knowing the purpose of the move makes for a smoother transaction all around – and no frustrated buyers threatening to sue.

There are also sometimes alternatives to selling that make more sense. If what you need is more space, you may want to add on or renovate your existing home. One thing that makes that very attractive is the deductibility of home mortgage interest.  If you take out a normal consumer loan – to buy a car, say, or to pay for a wedding – the interest is not tax deductible. But for a loan that is secured by your primary residence, all interest IS tax deductible (at least currently. Things could change as national fiscal policy changes). This is a bigger deal than most people realize.

The best time to meet with a Realtor is early in the process. We can help you evaluate your options and determine whether selling your home and moving or staying and renovating is best.

So KNOW BEFORE YOU GO. Know why you are moving and have a plan for where you are going to move; and keep your purpose in mind as you move forward. Knowing what you want is the only way to get what you want, so let’s figure that out before you put your home on the market.

 

Mary Anne Walser is a licensed attorney and full-time REALTOR, serving buyers and sellers in all areas of Metro Atlanta. Her knowledge of residential & commercial real estate and her legal expertise allow her to offer great value to her clients. Mary Anne is a member of the Atlanta Board of Realtors, the Georgia Association of Realtors, the State Bar of Georgia and the Georgia Association of Women Lawyers. Contact Mary Anne at 404-277-3527, or via email: maryannesellshomes@gmail.com.

 

How is the Atlanta Real Estate Market? “FANTASTIC” (Always)

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How is the Atlanta Real Estate Market? “FANTASTIC” (Always)

By Mary Anne Walser, Realtor & Attorney, 404-277-3527, maryannesellshomes@gmail.com

EVERYONE, it seems, is interested in real estate, and the most common question I get is “how’s the real estate market?” I always say, “IT’S FANTASTIC.” Because when you think about it, the market IS always fantastic for SOMEONE. Sometimes it’s fantastic for buyers. Sometimes for sellers. Sometimes it is a fantastically BALANCED market. Right now, as you are likely aware, we are in a strong seller’s market in most locations (since real estate is very local, the “market” varies widely from one location to the next, even within Atlanta, but generally speaking we are in a recovery phase where prices continue to rise).

So given the fact that any real estate market can be “fantastic” in some respect, at a cocktail party if I say the real estate market is “fantastic” I also have got to go beyond the “fantastic” and explain. Right now we’re in an expansion phase in Atlanta. Generally, we are in a fantastic market for Sellers. But eventually and inevitably we will again be in a fantastic market for Buyers.

But our human tendency is to think that when things are good, they will stay good, and when things are bad, they will stay bad. That explains those clients in the years from 2008 to 2012 who would say “I don’t want to buy now – the market is bad.” In that time frame, prices were extremely low and inventory was high. Those buyers were correct that the market was bad…for SELLERS. It was great for buyers. The market has steadily improved since, and those who did buy in that time frame are now reaping the benefits if they are selling, since right now we are in a seller’s market – the market now is great for SELLING a home.

Psychologists have documented many logical fallacies and biases to which humans are prone – one of which is the “status quo bias.” The potential buyers in that time frame often fell into this bias. Making great real estate decisions depends upon recognizing any potential bias you may have, looking at the current market objectively, examining trends, and realizing that things will not always be as they are now.

If you look at real estate pricing over the years, starting when the US starting selling land in 1800, real estate prices peak about every 18 years, and the worst downturns are preceded by high prices and great demand. Here are the two most recent 18 year cycle examples. In 1990, we experienced a downturn after the broad expansion of the Reagan years (when tax incentives helped fuel housing increases). 18 years later – in 2008 – another downturn, this time a huge one. It really needn’t have taken us by surprise; the depth of the disaster was due to banks giving away money far too freely, but most experts would argue that some sort of slump was inevitable. The real estate cycle is somewhat predictable.

So the next downturn? If you follow the 18 year formula, should be in about 2026. But of course it’s never entirely predictable, and it depends upon many factors. Interest rates, for instance. If they go up (they have risen a little, and will likely rise again this year), then buying power is greatly reduced. When the real estate market is improving and expanding and prices are increasing, there is pressure on the Fed to increase interest rates. This makes many new developments financially unfeasible and lessens the buying power of the homebuyer. So interest rates are an easy indicator that we watch weekly and sometimes daily. Right now there’s a huge uptick in activity because interest rates went up and homebuyers became nervous that they will continue to rise.

So for now, in Atlanta, the housing recovery continues. Interest rates rising will restrict that recovery, but there are other factors that will come into play in the next few years, both on the national and local levels. Our President Elect is a real estate developer, so while on the one hand, he will likely do what is good for real estate and loosening regulation might mean real estate financing flows more freely, on the other hand, immigration restrictions will likely increase construction costs and trade limitations could stem the foreign dollars for real estate that has helped bolster pricing.

Here in Atlanta, we are blessed with the fact that more and more companies want to move to Atlanta or expand their Atlanta based operations. This population influx gives us a buffer – even when prices go down again (as they inevitably will) as long as we have net population growth our real estate prices will remain strong.

So when asked “how’s the real estate market” – say FANTASTIC. But then dig a little deeper.

 

Mary Anne Walser is a licensed attorney and full-time REALTOR, serving buyers and sellers in all areas of Metro Atlanta. Her knowledge of residential real estate and her legal expertise allow her to offer great value to her clients. Mary Anne serves on the Committee that drafts and reviews the contracts utilized by all REALTORS in the State of Georgia. In addition, she is a member of the Atlanta Board of Realtors, the Georgia Association of Realtors, the State Bar of Georgia and the Georgia Association of Women Lawyers. Contact Mary Anne at 404-277-3527, or via email: maryannesellshomes@gmail.com.