This month, we cover the state of housing on the national level and then bring it down to the granular level in each of the Top 7 North Atlanta Suburbs. Those 7 suburbs are: Milton, Lake Lanier, Roswell, Suwanee, Johns Creek, Alpharetta, and Cumming. But first, let’s talk national! Dion Rabouin with the Wall Street Journal says:
“We are seeing housing prices start to pick back up again moving in the opposite direction of what the FED wants. That could have implications for inflation. Obviously this is people’s biggest outlay, the biggest thing they spend money on each month. That could have big implications for the Fed and for the market.”
It could have big implications for the Fed because prices are up and the Fed wants to see prices level out or drop.
Prices and home purchases are up nationally! Both existing home sales and new home sales are up! Builders are definitely bullish. Large home builders are betting on a strong housing market. Prices are going up a little bit nationally and a lot in the Top 7 North Atlanta Suburbs. But that’s not what Fed Chairman Gerome Powell wants. He wants us to stop buying and selling and just be still until inflation comes down to his target of 2%; we are currently at 5%. But when the Fed raises interest rates, it wreaks havoc in the housing market. So much so, that some are starting to wonder what’s worse? The disease or the medicine?
Now Powell is receiving unexpected assistance from the Federal Housing Finance Agency. Last month we described the mistakes the government had made via social engineering which caused the Global Financial Crisis of 2008. To quote ourselves, we said, “When government establishes anti-mathematic goals for mathematically-based industries, otherwise solid institutions become houses of cards. And houses of cards fall.”
They’re doing it again!! In a recent Washington Times article entitled, “Biden to Hike Payments for Good-credit Homebuyers to Subsidize High-Risk Mortgages,” author, Dave Boyer explains:
“Homebuyers with good credit scores will soon encounter a costly surprise: a new federal rule forcing them to pay higher mortgage rates and fees to subsidize people with riskier credit ratings who are also in the market to buy houses.”
He goes on to explain:
“Mortgage industry specialists say homebuyers with credit scores of 680 or higher will pay, for example, about $40 per month more on a home loan of $400,000. Homebuyers who make down payments of 15 to 20% will get socked with the largest fees.”
Some think this incentivizes bad credit and foolish financial decisions. These rules which may, once again, crash the housing market, were not implemented by our elected officials, whom we could fire. No! They were dreamed up by bureaucrats at the Federal Housing Finance Agency!
And without anyone voting up or down, they go into effect May 1st 2023.
Boyer goes on to say that,
“Federal Housing Finance Agency Director, Sandra Thompson, a Biden appointee, said the fee changes will ‘increase pricing support for purchase borrowers limited by income or by wealth.’ The agency calls the overall fee changes “minimal” and said the moves will ensure market stability.”
This sounds like government doublespeak! Boyer says in his article,
“Lenders and real estate agents say the changes will frustrate home buyers with high credit scores and homeowners seeking to refinance because the rule punishes them for their relatively strong financial positions.”
Everyone is in favor of creating a more favorable environment for lower income households to be able to purchase a home. In the National Association of Realtors’ article entitled, Middle-income Homeowners Gained More Than $120,000 in Wealth Over the Past Decade From Home Appreciation, According to NAR, Chief Economist, Lawrence Yun, stated,
“This analysis shows how homeownership is a catalyst for building wealth for people from all walks of life. A monthly mortgage payment is often considered a forced savings account that helps homeowners build a net worth about 40 times higher than that of a renter.”
The analysis to which Dr. Yun refers is NAR’s `Wealth Gains by Income and Racial/Ethnic Group. Key highlights from the article demonstrate that
“Low-income homeowners built $98,900 and upper-income households built $150,800 from home appreciation since 2012.”
It makes sense that upper-income households built more wealth because equity appreciation is earned as a percentage of the value of the home. Ten percent of $800,000 is a lot more than 10% of $350,000. Putting that fact aside, almost $99,000 of wealth built by low-income households is fantastic!! That’s nearly $10,000 a year! That’s amazing progress!
Society was already moving in the right direction. Progress is being made! There is no reason to issue this heavy-handed, social-engineering edict. It would never pass Congress!
As Kenny Parcell, president of the NAR, told the Federal Housing Finance Agency earlier this year, quote
“In the wake of a 3-percentage-point increase in mortgage rates, now is not the time to raise fees on homebuyers.”
His wise advice fell on deaf ears.
Eventually, the real estate market may be reduced to only those whose life events compel them to move. There are many life events that compel a move. If your company transfers you to another state, you must sell. These real estate transactions form the foundation of the market. ELECTIVE moves of people who just DESIRE a better living situation will be severely reduced by these punitive and unnecessary fees.
Between the one-two punch of Fed Chair, Gerome Powell and Sandra Thompson at the Federal Housing Finance Agency, some think that our relatively stable housing market may experience the crash so many have predicted. There will be so much pain and suffering, but Powell admits that’s what is necessary.
What is the answer? I don’t know! Neither of these people can be voted out of office. Until a solution can be found, we will have to endure their tyranny and do the best we can.
For the moment, these are future concerns so maybe there is a solution that will prevent the suspected disaster. But for now, the Top 7 North Atlanta Suburbs enjoy a somewhat stable market. In fact, Zillow reported values in Atlanta to be up 1.68% overall. But that is an average of the 12-county area served by FMLS. When you start digging into each North Atlanta micro-market, you find much greater appreciation. Alpharetta was up by 17%, Roswell by 16%, Johns Creek by 7% and Suwanee by 8%.
As we dive into our Top 7 North Atlanta suburbs, keep in mind, these stats only cover single family homes. Condos and townhomes are not included.
The average sales price in Milton GA was $1.3 million, a 13% year-over-year decrease. There were 11 fewer homes sold in March 2023 for a total of 24. Those homes sold for an average of 96% of list price as opposed to 103% last year. Days on Market were 53 which was an increase of 27. April began with 9 more active listings for a total of 79. This means that there are about three months of inventory in Milton. Remember 6 months is a balanced market where buyer and seller have equal negotiating power.
The average price at Lake Lanier was 25% greater than last year at $989,000 for the 23 homes that were sold in 42 average days on market, nearly the same as last year. April began with 80 active listings, 16 greater year over year, and buyers paid 98% of list price, exactly the same as 2022. 42 days on market in a mostly secondary home environment is still a seller’s market. Always keep in mind that these stats only cover lake homes WITH docks.
The average price of $728,000 dollars in Roswell was up by 16% year-over-year for the 74 homes sold for 99% of list price compared with 104% in 2022. Days on market were up by 17 to 35 and active listings at the beginning of April were 83, down by four. Roswell continues to be a highly sought-after place to live. For the average price to be up 16% over last year’s hyper-appreciation is impressive.
For the 79 houses that sold in Suwanee in March, the year-over-year average price increased 8% to $712,000. Average Days on Market increased by 37 to 53. Houses sold for an average of 98% of list price compared to 105% last year. April began with three fewer listings for a total of 69. With inventory down, even slightly, buyers may find themselves in more multiple offers next month.
In Johns Creek, the average year-over-year price was up by 7% to $962,000. There were 16 fewer homes sold for a total of 24 and they sold for 97% of list price compared with a whopping 108% last March. Days on Market were up by 78 year-over-year to 85. April began with 28 active listings, almost half of last year’s 53. It appears the Johns Creek market has slowed quite a bit from last year, but next month will likely show increased prices and volume as families reposition themselves to take advantage of the highly acclaimed Johns Creek school system.
Alpharetta’s average price for March 2023 was up 17% to $882,000 for the 87 homes that were sold. Average days on market were up by 15 to 35 and Buyers paid 98% of list price compared to 106% last year. Supply, that is, active listings, increased slightly to 138. The Forsyth County part of Alpharetta right along GA400 may get a brand new live-work-play development similar to the Battery, according to a recent press release. If approved, this will send values soaring in the area. Click here to learn more.
The average price in Cumming increased by 2% from last year landing at $625,000. The number of homes sold was down year-over-year by 49 to 208. Average Days on Market increased by 39 to 55. Buyers paid 98% of list price compared with 105% in 2022. April’s active listings were up by 17 to 206. In the coming months, volume and prices are likely to rise sharply in Cumming as it is the area home builders are most active. If you want new construction at a reasonable price, you should check out Cumming.
Lastly, we wanted to do a quick brag. This month, Gail and I were honored to be recognized as Top Producers in the Atlanta Realtor Association in the top 10% for volume last year. However, when compared to all Realtors in the Atlanta area, we are in the top 5%. But we know it’s only because our clients trust us with their real estate needs and we are so grateful to all of you!
No matter the economic factors, circumstances sometimes determine that you must make a move. If that is you, we are here to help! If you want to explore selling your home or buying another, give us a call. We love to provide our clients with essential data so they can make informed decisions. 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 (or text) us at 678-807-9566. Give us a call. We would love to chat!