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February 03, 2013As you would expect seasonally, existing home sales fell from November to December, declining 1 percent nationally. However, comparing existing home sales year-over-year (YoY), sales last year finished on a high note, rising 12.8 percent in December 2012 versus December 2011 with total existing home sales coming in at 4.94 million units compared to 4.38 million a year earlier.
The improved sales numbers should come as no surprise as existing home inventory has been declining all year long. Home buyers have been benefiting from an extremely affordable housing market due to historically low interest rates, low home prices and an improving economy.
More cities around the country have been making it onto the list of top housing markets. Las Vegas, Seattle, Phoenix, Oakland (Calif.) and San Jose (Calif.) are the top five improving markets in the country right now. Atlanta has not made a significant move up that list yet.
Not the case for Forsyth County
Forsyth County home sales in December of last year were up 15.3 percent year-over-year. Inventory levels have dropped over 44 percent in just 12 months. These changes are evident in the following chart.
Many of the same factors helping the housing market nationally have been supporting our local housing market, but Forsyth County has also seen a drastic drop in available foreclosures.
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The number of bank-owned sales in Forsyth County last year dropped 25 percent from 2011.
Homes are still being foreclosed on, at a slower rate, but hedge funds and other large investors with deep pockets have been buying foreclosures on the courthouse steps. Most of these purchases aren’t making it to the market; rather, they are being held and rented.
What to expect in 2013
There will be more new construction. We’re seeing it already, and it will continue to grow this year. New permits are up dramatically and I’m hearing from builders that they’re having trouble getting enough subcontractors on site.
Price appreciation: the tight supply of inventory has already begun to shift what has been a stabilized but “bouncing along the bottom” market. We will see modest price appreciation in the lower price ranges this year and increased demand in the $300,000 to $500,000 price points. The luxury market will see inventory decline but not enough to cause prices to stabilize quite yet.
The Qualified Mortgage rule, which won’t take effect until January 2014, could drive more buyers to purchase this year. Those home buyers in the jumbo market or buyers planning to purchase before they sell might find the loan qualifying process more difficult after the QM rule goes into effect.
Bob Strader is a local realtor with the NORTH Group of Keller Williams Realty. Visit his blogs liveincumming.com or liveinalpharetta.com or email him: firstname.lastname@example.org.