Atlanta Condos For Sale

Are Investors Actually Buying Up All the Homes?

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Are Investors Actually Buying Up All the Homes?

Are you trying to buy a home but you feel like you’re up against deep-pocketed Wall Street investors snatching up everything in sight? Many people believe mega investors are driving up prices and buying up all the homes for sale, and that’s making it hard for regular buyers like you to compete.

But here’s the truth. Investor purchases are actually on the decline, and the big players aren’t nearly as active as you might think. Let’s dive into the facts and put this myth to rest.

Most Investors Are Small, Not Mega Investors

A common misconception is that massive institutional investors are dominating the market. In reality, that’s not the case. The Mortgage Reports explains:

“On average, small investors account for around 18% of the market, while mega investors represent only about 1%.”

Most real estate investors are mom-and-pop investors who own just a few properties — not large corporations buying up entire neighborhoods. They’re people like your neighbors who have another home they’re renting out or a vacation getaway.

Investor Home Purchases Are Dropping

But what about the big investors you hear about in the news? Lately, those institutional investors – the ones that make headlines – have pulled back and aren’t buying as many homes.

According to John Burns Research and Consulting (JBREC), at their all-time peak in Q2 2022, institutional investors (those owning 1,000+ single-family homes) only made up 2.4% of home sales. And that number has only come down since then. By Q3 2024, that number had fallen to just 0.3% (see graph below):

That’s a major shift, and it means far fewer investors are competing in the market now than just a few years ago.

Investors are clearly more reluctant to buy in today’s market, but why? The answer is largely because higher mortgage rates and home prices have made it less attractive for them.

The idea that Wall Street investors are buying up all the homes and making it impossible for you to compete is a myth. While some investors are still in the market, they’re not nearly as active as they were in past years.

Bottom Line

Big institutional investors aren’t buying up all the homes – if anything they’re buying less than they have been. Let’s connect and talk about what’s happening in our local market. There could be more opportunities than you think.

How does knowing investors are buying fewer homes change the way you see your chances in today’s market?

The Real Story Behind What’s Happening with Home Prices

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The Real Story Behind What’s Happening with Home PricesThe Real Story Behind What’s Happening with Home Prices

If you’re wondering what’s going on with home prices lately, you’re definitely not the only one. With so much information out there, it can be hard to figure out your next move.

As a buyer, you might be worried about paying more than you should. And if you’re thinking of selling, you might be concerned about not getting the price you’re aiming for. 

So, what’s The Real Story Behind What’s Happening with Home Prices? Here’s a quick breakdown to help clear things up and show you what’s really happening with prices—whether you’re thinking about buying or selling. 

Home Price Growth Is Slowing, but Prices Aren’t Falling Nationally

Throughout the country, home price appreciation is moderating. What that means is, prices are still going up, but they’re not rising as quickly as they were in recent years. The graph below uses data from Case-Shiller to make the shift from 2023 to 2024 clear:

No Caption ReceivedBut rest assured, this doesn’t mean home prices are falling. In fact, all the bars in this graph show price growth. So, while you might hear talk of prices cooling, what that really means is they’re not climbing as fast as they were when they skyrocketed just a few years ago.

What’s Next for Home Prices? It’s All About Supply and Demand 

You might be curious where prices will go from here. The answer depends on supply and demand, and it’s going to vary by local market. And remember, a local market can be your specific neighborhood or condo building!! What is happening in the building across the street or the subdivision across the road, may be entirely different from where you are!

Nationally, the number of homes for sale is going up, but there still aren’t enough of them to meet today’s buyer demand. That’s keeping upward pressure on prices – even though recent inventory growth has caused that home price appreciation to slow. Danielle Hale, Chief Economist at Realtor.com, said:

“. . . today’s low but quickly improving for-sale inventory has ushered in more market balance than would otherwise be expected . . . This should help home prices maintain a slower pace of growth.” 

And here’s one other thing you may not have considered that could play a role in where prices go from here. Since experts say mortgage rates should continue to decline, it’s likely more buyers will re-enter the market in the months ahead. If demand picks back up, that could make prices climb a bit further.

Why You Should Work with a Local Real Estate Agent 

While national trends give a big-picture view, real estate is always local – especially when it comes to prices. What’s happening in your neighborhood might be different from the national average based on what supply and demand look like in your market. That’s why it’s crucial to get local insights from a knowledgeable real estate agent. (WINK WINK!)

 As your go-to source for everything related to home prices, a local agent can provide the most current data and trends specific to your area. (WINK WINK….again!)

So, if you’re planning to sell, I can help you price your house accurately. And when you’re ready to buy, I can help you find the right home that fits your budget and your needs.

Bottom Line

Home prices are still rising, just not as quickly as before. Whether you’re thinking about buying, selling, or just curious about what your house is worth, let’s connect so you have the personalized guidance you need.

Home Prices Aren’t Declining, But Headlines Might Make You

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Home Prices Aren’t Declining, But Headlines Might Make You Think They Are

If you’ve seen the news lately about home sellers slashing prices, it’s a great example of how headlines do more to terrify than clarify. Home prices aren’t declining and here’s what’s really happening with prices.

The bottom line is home prices are higher than they were a year ago at this time, and they’re expected to keep rising, just at a slower pace.

But a recent article from Redfin notes,

“Price Drops Hit Highest Level in 18 Months As High Rates Dampen Buyer Demand.”

And that might make you think prices are declining.

Now, while it’s true the latest report from Realtor.com also shows 16.6% of homes on the market had price reductions in May, which is up from 12.7% last May, that doesn’t mean overall home prices are falling.

The key is knowing the difference between the asking price and the sold price.

Understanding Asking Price vs. Sold Price

In essence, the asking price, also known as a listing price, is the amount a seller hopes to get for their home when they list it. In reality, sellers can’t just put any price tag on their house and expect it to sell for top dollar. Today’s buyers are savvy customers, and when they aren’t willing to pay a premium for a home because their budgets are strained by higher mortgage rates, sellers need to adjust. And that’s what’s happening right now.

Based on market factors and what offers that seller receives, that asking price can change. If a seller isn’t getting much foot traffic, you may see them revise the price and make an adjustment to reignite interest in the home – and sometimes that’s because they’ve overpriced it from the start. That’s where price reductions come in, and when you see “price drops” in a headline, it sounds like declining home prices.

Mike Simonsen, CEO and Founder of Altos Research, says:

“Not only is the share of homes with price cuts elevated compared to one year ago, but more price cuts are happening each week than last year.”

On the other hand, the final sold price is the amount a buyer actually pays when the transaction is complete.

Here’s the most important thing to note: Actual sold prices are still rising, and they’re expected to continue to do so at least over the next 5 years.

What Does This Mean for Home Prices?

So, while there’s been an increase in price reductions recently, this doesn’t mean overall home values are declining. Instead, it’s a sign that demand is moderating. And, as a result, sellers are adjusting their expectations to align with today’s market reality.

Even with more price reductions, home values are still growing on an annual basis, as they do nearly every year in the housing market. According to the Federal Housing Finance Agency (FHFA), home prices went up 6.6% over the last year (see below):No Caption Received

This map shows how prices rose just about everywhere in the country, indicating the market is not in decline.

So, while seller price reductions are often a leading indicator that prices may moderate in the months ahead, which experts have been saying for a while is expected to happen, they aren’t necessarily reason for alarm. The same article from Redfin also states:

“. . .those metrics suggest sale-price growth could soften in the coming months as persistently high mortgage rates turn off homebuyers. For now, the median-home sale price is up 4.3% year over year to another record high. . .”

And with inventory as tight as it is today, price moderation is much more likely in upcoming months than price declines.

Why This Is Good News for Buyers and Sellers

For buyers, more realistic asking prices mean a better chance of securing a home at a fair price. It also means you can enter the market with more confidence, knowing prices are stabilizing rather than continuing to skyrocket.

For sellers, understanding the need to adjust your asking price can lead to faster sales and fewer price negotiations. Setting a realistic price from the start can attract more serious buyers and lead to smoother transactions.

Bottom Line

While the uptick in price reductions might seem troubling, it’s not a cause for concern. It reflects a market adjusting to new conditions. Home prices are continuing to grow, just at a more moderate pace. 

Why Home Prices Keep Going Up

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Why Home Prices Keep Going Up

If you’ve ever dreamed of buying your own place, or selling your current house to upgrade, you’re no stranger to the rollercoaster of emotions changing home prices can stir up. It’s a tale of financial goals, doubts, and a dash of anxiety that many have been through.

But if you put off moving because you’re worried home prices might drop, make no mistake, they’re not going down. In fact, it’s just the opposite. National data from several sources says they’ve been going up consistently this year (see graph below):

 

Here’s what this graph shows. In the first half of 2022, home prices rose significantly (the green bars on the left side of the graphs above). Those increases were dramatic and unsustainable.

So, in the second half of the year, prices went through a correction and started dipping a bit (shown in red). But those slight declines were shallow and short-lived. Still, the media really focused on those drops in their headlines – and that created a lot of fear and uncertainty among consumers.

But here’s what hasn’t been covered fully. So far in 2023, prices are going up once more, but this time at a more normal pace (the green bars on the right side of the graphs above). And after price gains that were too high and then the corrections that followed in 2022, the fact that all three reports show more normal or typical price appreciation this year is good news for the housing market.

Orphe Divounguy, Senior Economist at Zillow, explains changing home prices over the past 12 months this way: 

“The U.S. housing market has surged over the past year after a temporary hiccup from July 2022-January 2023. . . . That downturn has proven to be short lived as housing has rebounded impressively so far in 2023. . .”

Looking ahead, home price appreciation typically starts to ease up this time of year. As that happens, there’s some risk the media will confuse slowing price growth (deceleration of appreciation) with home prices falling (depreciation). Don’t be fooled. Slower price growth is still growth.

Why Are Home Prices Increasing Now?

One reason why home prices are going back up is because there still aren’t enough homes for sale for all the people who want to buy them.

Even though higher mortgage rates cause buyer demand to moderate, they also cause the supply of available homes to go down. That’s because of the mortgage rate lock-in effect. When rates rise, some homeowners are reluctant to sell and lose their current low mortgage rate just to take on a higher one for their next home.

So, with higher mortgage rates impacting both buyers and sellers, the supply and demand equation of the housing market has been affected. But since there are still more people who want to purchase homes than there are homes available to buy, prices continue to rise. As Freddie Mac states: 

“While rising interest rates have reduced affordability—and therefore demand—they have also reduced supply through the mortgage rate lock-in effect. Overall, it appears the reduction in supply has outweighed the decrease in demand, thus house prices have started to increase . . .”

Here’s How This Impacts You

  • Buyers: If you’ve been waiting to buy a home because you were afraid its value might drop, knowing that home prices have gone back up should make you feel better. Buying a home gives you a chance to own something that usually becomes more valuable over time.
  • Sellers: If you’ve been holding off on selling your house because you were worried about how changing home prices would impact its value, it could be a smart move to work with a real estate agent and put your house on the market. You don’t have to wait any longer because the most recent data indicates home prices have turned in your favor.

Bottom Line

If you put off moving because you were worried that home prices might go down, data shows they’re increasing across the country. Let’s connect so you can understand how home prices are changing in our local area.

Don’t Be Afraid of Today’s Housing Market

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Don’t be afraid of Today’s housing market! Just think, there is a good potential that interest rates may go even higher than they currently are! So buying now, you could lock in a lower rate than might be around in say, 3 or 4 months. And with the equity that you have in buying a home (let’s make sure you don’t overpay…and that market has cooled enough to help us with THAT goal) you can look to refinance your mortgage when interest rates come down in the future. 

Of course, every person’s situation is different. We might even tell you that it does not make sense for you to buy a home right now. But, let’s sit down and talk and see what your options may be!!

 

 

If you would like to know more about the home buying process ….perhaps you are new to Georgia and the real estate buying process DOES differ from state to state …. check out our Atlanta Real Estate Buyers Guide. And if you still have questions….well that’s what we are here for! 

Atlanta Real Estate to outperform rest of United States

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Atlanta Real Estate to outperform rest of the United States

Atlanta Real EstateThe Atlanta real estate market is brisk and most metrics indicate positive growth. The seller’s market continues and Atlanta will likely out-perform the rest of the country in both value growth and unit volume.

The intown market has experienced the greatest appreciation, with many communities seeing more than a 20 percent increase in value since early 2013. Empty-nesters and millennials alike continue to migrate to the intown market to take advantage of the lifestyle benefits that urban density offers … including restaurants, shopping, public transportation, entertainment … and of course the Beltline. The Beltline phenomenon may be the single biggest driver for intown growth outside of the rebound of key intown employment sectors. Professionals are seeking communities that offer a walkable live-work lifestyle and are abandoning expensive commutes. The announcement that NCR will move 3,500 employees into the city only reinforces this trend.

With prices having accelerated to 2007 levels in many intown and Buckhead sub-markets, I think we can expect only moderate value increases in 2015. Inventory has stabilized into the four-month range (six is considered normal) as seller pent-up demand levels off. Clearly, there appears to be a normalizing in the market. Sellers can sell at prices that motivate them and buyers, anxious to lock in — in advance of rising prices — and at low rates, continue to step up.

311 Harp Road Fayetteville GA 30215The suburban market was subject to some of the market’s worst foreclosure rates and value declines in the recession. The evaporation of foreclosure notices has helped property values rebound. Suburban values are edging close to 2004 levels, according to Case-Shiller. Also, the tide of foreign purchasers continues to be a positive factor for suburban — and to a lesser extent — intown sellers. Anecdotal reports suggest that as many as 20 percent of all suburban purchases are driven by international buyers. This is true at all price points. The Atlanta market continues to be a magnet for inbound international migration as well as foreign investment.

Exurban markets continue to lag, but are showing unit and price growth as well. Only the second home market remains for value hunters. Prices in the North Georgia and North Carolina mountains — as well as the Georgia coast — have not yet approached a full rebound, though anecdotal reports from our brokers are that signs of vibrancy are returning. That said, absorption is still slow in those markets.

New home construction is at a seven-year high. Intown infill building has led the way with players scouting the market for tear-downs. With builder margins in the 20 percent range and so much buyer pent-up demand for new construction product, it’s clear that home-building will be a leader in the 2015 market. Of course, leading corporate homebuilders are selling new homes as fast as they can build them in the suburbs.

MyMidtownMojo Sells Viewpoint Midtown AtlantaThe vibrancy of the intown and Buckhead condo markets continues to surprise. Inventory is at a record low (one to two months) and prices are rising at the rate of 1 percent per month and have been doing so for 24 months. Buckhead uber-luxury projects such as Sovereign and The Ritz-Carlton Residences, which had been sluggish, are now long sold out. The Mandarin Oriental – with unit prices in the $2 million range – only has some 18 homes remaining. The Midtown market’s key recession-plagued projects — 1010, Luxe, Viewpoint, and lower Buckhead’s The Brookwood — are also long recovered with recession buyers in those projects being rewarded richly in this seller’s market. With few or no new condo projects over 100 units on the horizon, lack of inventory will continue to drive price gains. In Midtown, only The Atlantic (some 250 units remain) and The Lowes project (60 units, give or take) are scheduled to release new inventory in 2015. Alta, a Wood Partners proposed 250-unit project on Piedmont Park, has yet to confirm whether its units will be built for sale or lease.

Interest rates continue to remain at historical record lows and lending requirements appear to be softening. Good or bad, Fannie Mae and Freddie Mac have just unveiled new mortgage programs that will allow qualified homebuyers to put down as little as three percent and President Obama has announced reductions in private mortgage insurance (PMI) rates. This should aid first-time buyers, buttressing the foundation of the marketplace, and allow trade-up buyers to migrate through the cycle.

In short, 2015 looks to be a fine year to be in the residential real estate business whether you’re a broker, a builder, a lender, a closing agent … or a buyer or seller.

Kevin L. Palmer is the CEO and founder of PalmerHouse Properties, a residential and commercial real estate agency. Prior to founding PalmerHouse Properties in 2006, Palmer spent 25 years in the financial services industry within Atlanta

Thomas Ramon Realty is affiliated with Palmer House Properties. MyMidtownMojo.com is owned by Thom Abbott. 

Thom Abbott

Associate Broker, REALTOR(R)
905 Juniper Street, NE Suite 110
Atlanta, Georgia 30309
770.713.1505 Direct
404.876.4901 Office

 
 
 
 
 
 
 
 
 
 

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