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Mortgage Shakeups Will Affect Atlanta Real Estate
By Ryan Ward | August 10, 2007
With the average price of a home in Metro Atlanta right at about $225,000, the latest mortgage fallout may very well force the Atlanta real estate market to slowdown even further. The subprime market and what is known as the Alt-A loans have all but dissappeared as options for home buyers. Until the Feds add some heat to Fannie and Freddie to free up capital, lenders are unwilling to take any additional risk lending money to anyone without excellent credit.
Basically this will have the negative effect of keeping potential buyers out of the market unless they have excelent credit. Since many homebuyers who purchase homes in Atlanta at price points below $500,000 don’t have excellent credit, they are now out of the market. This will add to the days on market of current inventory, increasing the absorption rate of homes and as new homes come on the market, the supply will continue to rise. The Feds look to be moving towards adding some money to the market and stabilizing the fall on in the stock market and at least calm them down some. We will watch carefully over the next several weeks to see what direction the Atlanta real estate market will be heading as we look towards fall and the beyond.
Topics: Atlanta Real Estate |
August 12th, 2007 at 4:53 pm
I for one welcome the credit crunch. I am a first time homebuyer, and I hope that house prices come way down. I am looking in the 275-325k price point. I have excellent credit and am hoping I can get a favorable interest rate. We’ll see what happens.
August 12th, 2007 at 7:33 pm
Hi Tyrone,
As a real estate agent here in Atlanta, I am not in fear of the changing market. However, it is not as easy to forecast how much prices will come down as a result of the slowdown. I do not suspect that prices will drop dramatically for a number of reasons. For one, prices did not skyrocket as they did in other parts of the country so they don’t have as far to fall.
What you are hoping for is correct, sort of. What you should be looking for more explicitly is when you are near the bottom. That would be the time to buy.
As a result of what has happened over the course of the last few weeks, interest rates are on their way back down and last month we saw a huge increase in mortgage applications. The market is sending mixed signals - this might be an indication that waiting much longer will not dramatically effect the price you ultimately pay. This is just a blog comment, not a detailed post and it is DEFINITELY market dependent so you need to get hooked up with a REALTOR who can explain the details of the specific market you are considering buying a home in. Here in Atlanta, there are far too many markets to speak in generalities much beyond what I have done here.