Last month we handled the recession! We’re still in it, but it hasn’t gotten worse! That’s good news, right? But what happened in the real estate market in July 2022… nationally AND locally! The national numbers are interesting but are not all that helpful if you live in one of the hottest Top 7 North Atlanta suburbs. They don’t tell you what you need to know. But we will!
The national headlines declare the real estate market to be cooling. And it is. But in the Top 7 North Atlanta Suburbs, it is cooling slowly. National averages do not capture our local markets. For that matter, neither do Atlanta averages. Our local multiple listing service shows that the latest average price in Atlanta is $456,000. None of our Top 7 Suburbs has an average THAT low. So if you are planning to move to North Atlanta, you need to be aware of the prices in the particular area you want to be in.
Remember the heat map of Atlanta we introduced last month from Roofstock.com?
Dark green is 4-5 star neighborhoods, light green is 3-4 star, yellow is 2-3 star, and so forth. Let’s zoom into our Top 7 Suburbs.
As you can see, much of the Top 7 Suburbs are dark green. It is important to know the local markets in which you are buying or selling as well as the overall national economic picture. With this snapshot of our local market, let’s zoom back out and talk about the overall housing market.
There’s a lot of talk about a potential market crash!
After clutching onto this supersonic real estate market ride over the past two years, the suddenly slower feeling of the market feels weird. That’s the Matrix Effect as it is applied to real estate; the suddenly slow-motion feeling you have after moving at high speed. That feeling can be a source of anxiety. And anxiety causes us to look for additional reasons to panic. And the media is ready and willing to help!
But there’s lots of positive movement in the market!! Unfortunately, positive doesn’t cause us to obsessively watch the news or desperately search for information on social media. Positive news causes us to relax and enjoy our family and friends and lives in general. It doesn’t sell!
Fear sells! I have seen so many videos entitled “Is the market crashing?” Or “Market IS Crashing!” with exclamation points galore only to find that the actual video says the opposite. It actually tells us why the market is NOT crashing! In order to discern truthful data from cheap scare-tactic click-bait, try this litmus test: If you see a headline that screams foreclosures are up 150% in 2022 over 2021, that is not an honest resource for information. Keep scrolling! The government put the kabash on foreclosures for 2020 and 2021! It is not scary that foreclosures are up in 2022! It is the market returning to normal! This is not 2008! The sky is not falling!
And foreclosures will not return to 2008 levels and here is why. Lending standards are still under control.
Back when the housing bubble burst, we had much looser lending standards. This chart shows credit availability. The higher that green line is, the easier it was to get a loan.
It used to be said that if you could fog a mirror, you could get a loan. This resulted in unqualified buyers getting mortgages they simply could not afford to repay. It was a very sad time! But look how things changed and remain today. Those who are securing loans today are much more qualified buyers and are less likely to ever end up in foreclosure.
That’s exactly what we see has happened with foreclosures once lending standards tightened. They have decreased every year, from 2.9 million in 2009 down to 493,000 in 2019.
Have they increased in 2022? Yes they have. This chart compares the first half of each year going back to 2005 for comparison. There were 165,000 foreclosures in 2022. By comparison, in the first half of 2019 there were 296,000. The sky is not falling!
What about the forebearance program? Won’t the market be flooded with people exiting the forebearance program? Of all the people who were on the forebearance program, 36% paid in full, 45% worked out repayment plans, and only 18% remain in the program, about 400,000. Of those, only 1.2% are headed to short sales or foreclosures. That’s a tiny percentage and our hearts still go out to anyone who has to go through that! But we are grateful that it is collectively a small number and will not cause us to relive the housing bubble of 2008!!
So what do experts expect for the remainder of 2022? Experts expect a strong market. With interest rates hovering around 6%, increased inventory drawing buyers back into the market, and a good Consumer Price Index indicating inflation will not continue unabated, eight major experts forecasting a strong finish for 2022 with some predicting growth from 2.7% to 16%.
These national economic indicators affect our local market too. The real estate market in the Top 7 North Atlanta Suburbs is quite healthy! It is returning to normal and that is a great thing!
So let’s dive into our micro-markets?
As always, let’s start with Milton. The average price in Milton decreased 15% from $1.5 million in June to $1.28 million in July. And the price of the 38 homes that were sold were on average 100% of list price, compared to 104% in June. The month of August began with 89 active listings. The fact that 20 fewer homes sold in Milton in July is indicative of how this market is returning to normal.
The average price in the Lake Lanier housing market was down 25% from $1.2 million in June to $904,000 in July. Now, just a reminder, These numbers only represent homes WITH docks. The sales price to list price ratio went up from 96% to 100% and days on market went down from 33 to 29. Even with a month-over-month 25% price decrease, the Lake Lanier market remains steady. It would be a different story if that were a year-over-year number. As more and more people choose to work from home and commuting to Atlanta is no longer an issue, life on the lake will continue to be very appealing.
For the 118 houses that sold in Roswell in July, prices rose 2% from $782,000 to $794,000. Buyers paid 101% of list price, down from last month’s 106%. Days on Market rose from 8 to 12. With 134 active listings at the beginning of August compared with 146 active listings at the beginning of July, Roswell will be one of those exceptions to the rule; an anomaly that does not jive with the national numbers. Still, multiple offers are decreasing and that is great news for buyers in the Roswell area.
For the 98 houses that sold in Suwanee in July, prices were down 11%, from $762,000 in June to $677,000 in July. At the same time, average days on market went down by one from 11 to 10. That is still a very competitive market! Houses sold for an average of 101% of list price as opposed to last month’s 104%. August began with 174 active listings so perhaps days on market will increase as we head into the fall.
In Johns Creek, where the average price was down 11% in July, just like Suwanee, from $872,000 in June to $773,000 in July but the 57 homes that sold still maintained a sold price to list price ratio of 103% with 15 days on market, up from June’s 10 days. August began with 98 active listings compared to 102 in July. With only four additional active listings in August, you can see that the “increased inventory” touted by the national media is not always the case when you get down to the local market.
Let’s go on to Alpharetta which was one of three suburbs that showed a price increase of 7% from $774,000 in June to $830,000 in July. Days on market went up by 4 to 15 and buyers paid about 101% of list price for the 138 homes that were sold; that is 27 fewer homes than sold in June. There were 218 active listings in August so Alpharetta will continue to be a hot market.
Finally, average prices in Cumming went up about 1% which we can call even, $617,000 in June to $625,000 in July for the 270 homes sold. Average days on market increased by 6 to 16 and buyers paid 101% of list price. Similar to last month’s 404 active listing, August began with 407 so we can expect the Cumming market to maintain about these same levels next month.
As we said last month, we are returning to normal, which means the market at pre-pandemic levels. This is great news!!
So is it a good time to sell? Absolutely!! If you are considering selling, it is more imperative than ever that you have a representative in this market who knows the local market and can navigate you through the chaos, advise you on staging, marketing and timing.
If you are ready to buy, this couldn’t be a better time as interest rates have pushed many buyers to the sidelines. But you need an advocate! We are very much in touch with the changing market and can save you time, money, and headaches with our proven strategies.
You can find us on Facebook and Instagram at The Best of North Atlanta or visit our website at mccowngroup.com. Of course, you can go old school and call us at 678-807-9566. We look forward to speaking with you.